It's suddenly everywhere, and for good reason. Baby boomer retirement means more education and observation about the "right" way to take Social Security. A plethora of online tools and techniques are now available to aid in the complicated and often overwhelming decision about when to begin receiving benefits.
Great news for clients heading for retirement and contemplating their optimal claiming strategy; not so for those already receiving benefits who now realize they made a mistake.
Fully 70% of recipients begin taking their benefits before full retirement age, and it's safe to say some regret their decision. This represents opportunity for advisors. Unfortunately, too many advisors avoid Social Security planning either because they feel they can't make money at it or they believe high-net-worth individuals don't need or care about Social Security benefits. They couldn't be more wrong. Helping to fix the problem, or at least alleviate some of the sting associated with a mistake, will lead to increased trust and more referrals.
I'll go further than that—what kind of risk are you putting yourself and your practice in if you don't offer Social Security planning? I question if you're acting in a fiduciary capacity if you don't. Every advisor should be going through their book to see which clients began their benefits early and whether or not they're happy with the decision.
Here's why.
Recipients were once allowed to pay back the amount of benefits received prior to their full retirement age in order to begin again with a more advantageous strategy. That ended in 2010, and once begun, a strategy is irrevocable. However, a mulligan is still offered if clients are within 12 months of the date they started their benefits and they repay the full amount received thus far.
