According to the Social Security Administration’s recent estimates, funds will be depleted in 2035, at which point just 79% of promised benefits will be payable–stoking fears for many who are nearing retirement. A recent CNBC article outlined some of these concerns and highlighted a few potential potential solutions that could shore up the Social Security system. Additionally, the article detailed how financial advisors can educate clients about the state of the Social Security system, the potential changes on the horizon and how all of this could impact their retirement strategy.
Covisum Founder and President Joe Elsasser, CFP®, was interviewed for this CNBC article and offered this reminder about some of the potential benefits of delaying.
"For those already collecting Social Security, next year’s 1.3% COLA may feel like a meager increase. However, it’s also a reminder of the power of delaying benefits. Take a high wage earner who would receive $2,600 per month if they claimed at full retirement age. If they instead claim early at 62, a 1.3% COLA on their $1,950 benefit would be $25. On the other hand, if they waited to claim until 70, their $3,300 monthly check would see a $43 per month raise.COLA when it’s applied to a bigger benefit is a bigger increase."