The Truth About Your Social Security Retirement Benefits Part 1
Social Security Retirement Benefits are critical to retirement income planning, in fact, when to elect Social Security may be the most important decision of your retirement. This one decision can impact your retirement by tens of thousands of dollars!
Social Security is always a hot button topic during the political campaigns, and for good reason. A great number of people rely on it as an important part of their retirement income and that number of people relying on it will only grow higher.
Social Security has become the elephant in the room; people know it is there, but do not know much about it and may be afraid to ask. Social Security is far from simple and people need help as more people will rely more on the strength of this benefit to see them through increasingly longer retirements. Without being informed or getting the necessary assistance, retirees can make costly, often irreversible, mistakes.
In the past, retirement has been seen as a three-legged stool with defined benefit plans, Social Security, and personal savings as the three legs. Today, however, the stool is in danger of collapsing. Defined Benefit plans are going away and being replaced with 401k plans, putting more responsibility on individuals, the growing uncertainty around the future of Social Security, and the fact that people are living longer, easily 20 -30 years or more in retirement, is making the traditional three-legged stool approach pretty unstable. When you look at these issues, the uncertainty of retirement today becomes terrifyingly evident.
People need advice for how to make their income last for their lifetimes. Surprisingly, the most common benefit to all of them may also be the least understood. According to the Social Security Administration Annual Statistics in 2009: 74% of those receiving retirement benefits today are collecting a reduced amount.
Social Security can make the difference between outliving their income – or not. Too often, little thought is put into when and how to claim your benefit and the effect it may have on you and your spouse during retirement.
Determining when to elect Social Security benefits may be the most important decision a couple makes about their retirement. The difference between the best and worst Social Security election decision is easily $20,000, $30,000, even up to $100,000 in lifetime benefits.
Read Part 2 of The Truth About Your Social Security Retirement Benefits