In a recent ThinkAdvisor article, Joe Elsasser discusses the biases advisors face when structuring processes around Social Security analysis.  One key assumption is the selection of a discount rate - specifically whether we should discount future benefits by a conservative discount rate, or a more aggressive discount rate, such as the portfolio's rate of return.  Advisors need to examine motivations for accepting or rejecting those arguments.  Both narrow framing and rationalization biases may influence the decision framework.      

Social Security decisions don’t happen in isolation. Claiming strategies interact with taxes, longevity planning, and risk.  A consistent process applies a similar decision framework across all the relevant decisions an advisor assists a client in making.  

Joe’s article is a timely reminder that stronger Social Security advice starts with using appropriate assumptions and confronting the potential for biases.  

Read the full article in ThinkAdvisor to see how awareness of bias can elevate your planning conversations.