By Kevin Estes

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Someone who recently left T-Mobile and whose spouse still works with the company asked me the following:

Is it best practice to ignore Social Security benefits when planning for retirement?

No!

Social Security benefits are a big deal.

Assume a household will receive $3,000 per month in after-tax Social Security benefits.

Replacing that income might require a $900,000 portfolio!

1. Ignoring Them Can Reduce Benefits

Knowing how Social Security works may help a couple decide who works when.

2. Understanding Them Can Help Optimize Timing

Starting Social Security benefits at age 62 instead of age 67 could result in up to a 30% reduction in benefits every year for life.

Delaying Social Security benefits beyond the full retirement age increases the benefits 8% each year delayed (up to age 70).

3. Ignoring Them Can Cause Someone to Work Longer Than Needed

It could take years or even decades to save the $900,000.

If someone dislikes their job, considering the benefits might improve their life.

4. Changing Them Rarely Happens and Takes Years

Simply increasing the full retirement age from 65 to 67 is scheduled to take 44 years!

If you’re interested in a review of your situation, feel free to…

Disclaimer

In addition to the usual disclaimers, neither this post nor this video includes any financial, tax, or legal advice.