Covisum Blog

Every two years, we get a small dose of election campaign rhetoric regarding Social Security, and every four years, we get a big dose. Candidates claim their opponents’ plans to save Social Security will bankrupt grandma, rob children of their future, or worse. This year, New Jersey Gov. Chris Christie kicked off the tradition with a bold proposal to scale back Social Security benefits for some Americans. Christie, a potential presidential candidate, proposed means testing that would reduce the size of benefits for people earning more than $80,000 annually and phase them out completely for those earning $200,000 or more. He also wants to raise the full retirement age from 67 to 69 for people born in 1960 or later. When the rhetoric heats up, we inevitably get panicked calls from advisors asking for our prognostications on what will happen and how it will impact the strategies we help you identify. Our answer can be summed up this way: This is a big ship, and it doesn’t turn quickly. 

Most of you are probably already familiar with a simplified version of the widow calculation which says that the surviving spouse receives the higher of his or her own benefit, or the benefit of the deceased, which may have been reduced or increased depending on if and when the deceased filed for Social Security benefits. See Figure 1 below.

We’ve all seen break-even calculators that show the exact age at which you can expect your decision to delay Social Security to pay off. It shows one line if you elect benefits early and one line if you elect benefits later and at some point those lines cross. That’s the break-even point. If your estimated life expectancy is beyond that break-even point, conventional wisdom says you should delay benefits.

Social Security Timing has refreshed our brand to reflect the value that we bring to our advisors. Subscribers might have already noticed the entirely new look of SocialSecurityTiming.com before logging in to the software — with a simple, bold and modern design that is easily compatible with tablet, laptop or desktop display (Don’t worry — our patented software hasn’t changed!)