20 // Social Security Considerations

What options are available regarding Social Security, and how do we determine the best time to access these benefits? As we enter our 60s, we encounter irrevocable decisions about our future, including those related to Social Security. The goal for most of us is to maximize these benefits, considering both tax and estate planning. 

Sam, along with Wealthquest's Director of Financial Planning, Megan Hammann, delve into three practical aspects to consider when navigating your Social Security options. We talk about whether Social Security will be here in the future and possible ways to remedy future shortfalls. We also talk about your options and what should be considered in your decision. 

Episode Highlights: 

[02:28] Megan is extremely knowledgeable about Social Security. 

[03:02] Should Social Security even be included in your financial plan? According to current data, by 2034, only 75% of Social Security revenue will be covered by current Social Security taxes. 

[04:27] Ways to solve this revenue shortage would be to generate more taxes, push back the retirement age, and reduce benefits.

[07:00] The main goal of Social Security is to supplement losses in income. 

[07:33] Social Security was created in the 1930s as a type of social insurance that would create economic stability.

[08:30] Full Retirement Age or FRA is the age when we can collect our full Social Security benefits.

[09:41] There's a reduction in benefits when you take Social Security early.

[10:31] After full retirement age, there's an 8% benefit increase every year up until age 70.

[11:14] You can claim on your own work history, as a spouse or an ex-spouse, or survivor benefits.

[13:38] Start in advance to apply for benefits. 

[14:50] Look at your own personal health, longevity, and how you want to care for your spouse.

[15:31] You need 40 credits to be eligible, and you can earn four credits a year. Your benefit is based on your highest 35 years of working history.

[17:13] Consider your health when choosing to delay your benefit. If you live longer, you may want the higher benefit. If you have poor health, it may make sense to take it earlier.

[18:12] It's also important to look at your cash flow needs.

[18:45] We also need to consider our loved ones, because when one spouse passes the other spouse becomes eligible for survivor benefits.

[21:42] We need to weigh the pros and cons of what's more important. There isn't always a cut and dry answer.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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