How important is your Social Security decision in serving your retirement financial plan? The answer is, it’s critical. In a recent article from Investment News, an industry journal that I subscribe to, they asked the top ten Social Security questions you should be asking. I knew these questions because I work in the industry, but it’s kind of dizzying seeing some of the questions you should be asking about Social Security benefits.

We think it’s an easy decision, but it’s not. Your Social Security timing of how you elect payments, how you elect spousal benefits, some of the opportunities with file & suspend and restricted applications all play important parts; I’ve talked about these on my radio show. There are around 157 different combinations, but it literally could mean a swing of six figures of income over your lifetime. It could be as much as $100,000 or in some rare cases over $200,000 of additional income that you’re leaving on the table if you do it the wrong way depending on your life expectancy.

Do you file and submit at full retirement age? There are real opportunities, particularly with spousal benefits using file & suspend or restricted applications. The Social Security timing decision is a critical component of a comprehensive financial plan. Just as important in many cases, is how you invest your money and how you draw income from your savings.
From age 62 to 66, your Social Security income goes up 33%. From age 66 to 70, if you delay benefits, it goes up 32%. That is 8% per year from 66 to 70. Where else can you get a guaranteed 32% increase in four years? You just can’t in this world that we live in.

Your Social Security decisions are critical. If you delay, are you going to have to draw more money from your life savings? How much stress and strain does that put on your money? There is no easy one-size-fits-all answer. It is not as easy as somebody saying “you should always do it this way,” it is much, much more complex than that. The Social Security decisions you make are an essential part of your retirement income plan.