When an individual or a couple decides how and when to claim their Social Security benefits, life expectancy is one of the foundational factors that must be considered. Americans are living longer, and nearly half of them claim their retirement benefits as early as possible. Nearly all of the remainder claim their benefits prior to their full retirement age.
As you meet with clients and obtain their Social Security statements, there are a few things you should review. First, take a look at the second page of the statement, where it states “We based your benefit estimates on these facts: Your estimated taxable earnings per year after 2015…” If you keep reading, you’ll see that the Social Security Administration is assuming you’ll continue to work and make about the same as you did in 2013 or 2014, all the way until the age of the estimate.
Social Security turned 80 this year, and as you might expect, it has generated a lot of press — some good, some bad, and some just off the wall. At times, it may feel like you need storm gear to protect yourself from the barrage.
In the Social Security Timing software you have an option to use the long-term median or you can enter what you like for the annual inflation rate. Our median is a reflection of what the Trustees report sets as the ultimate long-range average annual growth rate in the CPI-W, which was recently set to 2.7%. Read the full report here. Our software has been updated accordingly.