| Social Security Information |
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"We can never insure 100% of the population against 100% of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age"
President Roosevelt ~ upon signing the Social Security Act
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| The value of Social Security is far greater than most people realize. |
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Under the formulas, a person who starts out receiving the maximum monthly benefit of $2,185 in 2008 will receive a total of $298,000 if he/she lives another 10 years, $690,000 if he/she lives 20 years, and more than $1.2 million if he/she lives 30 years, assuming benefits are increase by 2.8% annual cost-of-living adjustments (COLAs). These amounts may be increased or decreased by decisions made very early in the process - long before boomers realized the lifetime impact of their decisions.
A baby boomer who claims a reduced benefit at age 62 could end up leaving hundreds of thousands of dollars on the table if he/she lives well into his.her 90s. On the other hand, claiming early benefits may make sense when a client is coordinating spousal benefits, has a short life expectancy, or will be investing all the money instead of spending it. It all depends on the situation. |
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| The bottom line is that Social Security is very complex and there are few rules of thumb that apply to everyone. |
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| Each case must be analyzed individually and coordinated with the rest of a clients financial and life plan. Most boomers don't have the tools or knowledge to do this on their own. They need an advisor who knows Social Security and who will take the time to analyze their individual situation and do financial projections that assess the impact of various what-if scenarios. |
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