Social Security | January 12, 2017

Social Security: What You Need to Know

by  Timothy Pinch, GW & WADE PRINCIPAL

GW & Wade recently hosted a presentation in Wellesley, MA called: Securing Your Retirement: Transforming Social Security into a Winning Retirement Strategy. With humor and deep knowledge of the Social Security system, our presenter, Rob Kron, Head of Investment and Retirement Education for BlackRock, discussed some of the opportunities and pitfalls of filing for this benefit. One important point is to understand that Social Security benefits MUST be planned out in the broader context of retirement planning. Beyond that, this post recaps some of the most important takeaways.

Here are three Social Security need-to-know takeaways from his presentation:

Takeaway #1 - Sign Up for Your Online Social Security Statement

Every working American 18 years and older should create an online “my Social Security” account, which then gives you access to your personal Social Security Statement. According to the Social Security Administration (SSA), your online Statement gives you secure and convenient access to your earnings records, and reflects estimates for retirement, disability and survivors benefits that you and your family may be eligible for1.

Keep in mind that you’ll want to review your online statement regularly to ensure you’re receiving credit for the money you’ve paid into Social Security. In fact, you only have three years, three months and 15 days following the year of the mistake to report an income correction, according to Kron. What’s more, you’ll need proof of the error, such as a tax return or pay stub.

[Ready to learn more? Click here to watch our latest recorded webinar, Essential Steps to Maximize Social Security.]

According to a Consumer Affairs article2, mistakes in Social Security calculations are surprisingly common, adding that government watch groups estimate that the SSA makes mistakes on at least three percent of the total official earnings records it keeps. Another source3 claims that the SSA processed 92,000 complaints about statements in the 2016 fiscal year, and that the official figure may vastly understate the problem.

Once you sign up for your online account, the following occurs:

  • You'll receive an email three months before your birthday reminding you to review your online statement. However, you can view your most recent online statement at any time. For security purposes, the SSA does not email a statement. 
  • You will no longer receive a physical statement. Also, once you begin collecting benefits, you will no longer receive a statement.

Physical Statements if Desired:

  • Your first physical statement is sent three months before your 25th birthday and then every five years (30, 35, 40…..) up to age 60. After age 60, the SSA sends one every year.
  • You can request a physical statement at any time by completing and submitting this form.

Reporting Social Security Income Errors

To report errors found on your Social Security Statement, follow these guidelines provided by the SSA.

Takeaway #2 – Determine How Much Social Security You’re Entitled To

In general, your Social Security benefits are based upon your best 35 years of reported earnings. Additional sources of entitled benefits can come from a spouse, an ex-spouse and disabled children.

One approach in determining how much Social Security income you can anticipate, is to use the SSA’s Social Security Retirement Estimator, a tool that provides estimates based on your actual Social Security earnings record.

Actual benefit amounts may differ from the estimates provided.

Overview of Benefits

For an overview of Social Security retirement benefits, including what beneficiaries are entitled to collect off your benefits, delayed retirement credits earned when postponing payments, retirement earnings limits, historical cost-of-living adjustments, and many more facts, download BlackRock’s complimentary Social Security Retirement Benefits Quick Reference Guide.

Takeaway #3 – Understand When to Start Collecting Social Security Benefits

Deciding when to begin taking Social Security benefits is an important and multifaceted consideration. However, keep in mind that it is just one factor out of many that make up your overall retirement plan. And like any other asset, your goal should be to maximize your Social Security payments.

Overall, if you wait until your full retirement year, which for many of us is age 67, you’ll receive approximately 30 percent more in benefits, as compared to taking benefits early, at age 62.

A Key Warning: Spousal Survivor Benefits

According to Kron, there is a 50 percent chance that when a married couple reaches age 65, that one of the two will live to age 93.

The problem…

Kron says that it’s not uncommon for the higher earner to think: “I’ve paid in a lot. I’m not very healthy; therefore, I’ll start collecting Social Security early, at age 62.”

However, this decision greatly impacts spousal survivor benefits. If you take your Social Security benefits early, you and your surviving spouse both receive fewer benefits. Therefore, the decision regarding when to begin drawing upon Social Security should be a joint-life decision, not a single-life decision.

Determining what is owed to you, as well as deciding when to start taking payments, is a  complex financial decision.

Furthermore, some of these decisions cannot be reversed.

At GW & Wade, we use comprehensive  Social Security benefit estimators that can help you clearly understand the benefits you’re entitled to, taking into consideration your unique situation, including: past and future earnings, marital status, government pension offsets, retiring early versus later (including the impact on your spouse), working past retirement, life expectancy assumptions, cost-of-living increases, and many more factors.

If you have questions regarding Social Security and the impact on your overall retirement plan, please contact us so that we may provide you with information that’ll help you feel more confident when making long-term financial planning decisions regarding Social Security.

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The information provided above is general in nature and is not intended to represent specific investment or professional advice.  Any results cited do not necessarily represent the experience of other GW & Wade clients.  No client or prospective client should assume that the above information serves as the receipt of, or a substitute for, personalized individual advice from GW & Wade, LLC, which can only be provided through a formal advisory relationship.  

Any insights expressed by Rob Kron are the views only of Mr. Kron and do not necessarily represent the views of GW & Wade.  Any such views are subject to change at any time, and GW & Wade disclaims any responsibility to update such views.

Clients of the firm who have specific questions should contact their GW & Wade Counselor. All other inquiries, including a potential advisory relationship with GW & Wade, should be directed to:

Laurie W. Gerber, Client Development
GW & Wade, LLC







Social Security

Timothy Pinch



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