ProNet presentation - Getting the Most from Social Security

This week's presentation was quite timely for many of the members of ProNet that are over 50.  While all of us are thinking more about getting our next job, retirement is one of those things that is looming in the background.  And a big component of that retirement equation is Social Security.

While there may be some that will preach "doom and gloom" about Social Security, this was not the focus of our time with a regional representative from Principal Financial Group.  The strong message was that while the federal government is making cutbacks in service (no longer printing reports and not printing checks soon), there are many investment organizations such as Principal that have retirement experts that can help wade through the complicated process of how to best manage your decisions on when to claim and when to wait.

A nice, shiny handout covered the main points: know your benefit, understand your options and determine a plan to maximize your benefit.

First, in knowing your benefit, the primary issue is knowing your full retirement age and whether you choose to start receiving benefits at 62, full retirement age or age 70.  There are many factors involved in making this decision.  There are no cookie cutter solutions.  Much depends on your financial situation regarding how much you have saved, your current health, your marital status and your spouse's social security status.  This is where good advice is a must.

Second, in understanding your options, there are choices that you have that will make a significant difference in your overall retirement income and your tax situation.

• Regarding eligibility, you need to determine if you are eligible by working the minimum number of quarters (right now it's 40).  
• Regarding timing, you need to make a decision if you are going to elect to take benefits early or late (big difference in the amount of the permanent benefit).  
• How about working?  You need to consider if you want to continue working and earning a wage.  If you do, it could mean an issue with having benefits being withheld.  
• Taxes are always a concern and you should consult your tax person to determine the tax impact of receiving social security benefits.  
• There also is a spousal benefit.  If there is a significant difference in individual benefits you may want to consider the spousal benefit to help maximize your total household benefit.
• And, of course, there are special provisions - "claim and suspend", "claim now, claim more later" and "do-over". To find out if these apply to you, ask you investment representative, CPA or go to the Social Security website.

And last and the bottom line - just like anything these days, you need to determine your plan of action in order to get the most out of a government program, such as Social Security, that will be even more instrumental to our retirement going forward.   Just so you are prepared before you go to that first meeting with a financial professional, get all the following items together: your most recent Social Security statement, your most recent tax return, your most recent pay stub (if applicable), your latest statements from your IRA's, 401K's and other retirement plans, your latest statement of mutual funds and investments, copies of your life and disability insurance policies, copies of annuity contracts and your latest wills and trust documents.

A big thank you again to staff from Principal Financial Group and Wells Fargo Advisers for taking the time to present to ProNet on this critical and valuable subject.