Claiming early can be tempting for clients, which means advisors
have to overcome their behavioral biases with analysis that
maximizes the value of this critical retirement income stream.
When should individuals claim their Social Security income benefits? According to a recent report by the Bipartisan Policy Center, more than one-third of Americans still claim at age 62 and two thirdsclaim before their full retirement age (FRA).
Nearly a quarter of males claim at FRA, many without considering that bydoing so they are making an active choice to receive less income than theycould receive by claiming later. Others fail to consider the implicationsclaiming may have on their spouse’s benefits.
While many without adequate savings aren’t able to choose when toclaim if they retire involuntarily, everyone else has a choice. An analysis ofactual claiming decisions by retirees made by United Income Inc., a wealthmanagement software firm owned by Capital One, found that suboptimalclaiming decisions cost households an average of $68,000 in lost wealth.
BY JASON FICHTNER AND MICHAEL FINKE
Social Security
Strategies:
How Advisors Can Best Help Clients
Build Retirement Income
