Looking for Social Security Consultant
March 10, 2023 9:13 AM Subscribe
My partner who is now 67, will probably quit working this year and intends to live off investments until they take maximum social security at age 70. They have a complex financial situation.We are looking for a consultant to help us deal with this. A lot of the search results under social security consultant look somewhat scammy. Help us find a reliable consultant we can work with remotely anywhere in the US. Not looking for a financial planner or suggestions about the problem nor to work with internal social security agents.
I just had exactly this conversation with a financial planner, as part of a broader (but still small) engagement. The summary result was that -- depending on the details of your partner's investments, it might actually make sense to take social security earlier, and allow the investments to continue to compound. I was surprised by this, but understood the reasoning.
I'd be happy to share contact info via MeMail if you don't mind that their job title. (It's not like they make commissions from selling me investments or anything.) Alternatively, if your partner understands the tax status and distribution requirements of their investments, it shouldn't be super hard to do the comparison themselves in a spreadsheet. But making sure the details are correct is important.
posted by Winnie the Proust at 10:18 AM on March 10, 2023
I'd be happy to share contact info via MeMail if you don't mind that their job title. (It's not like they make commissions from selling me investments or anything.) Alternatively, if your partner understands the tax status and distribution requirements of their investments, it shouldn't be super hard to do the comparison themselves in a spreadsheet. But making sure the details are correct is important.
posted by Winnie the Proust at 10:18 AM on March 10, 2023
Individual situations vary, but it's very unusual to find a case where waiting until 70 is not the best approach, after you account for the fact that the returns from delaying Social Security claim are risk free, whereas investing in the market is risky.
But I agree that you should probably find a financial planner, especially if your partner has already decided to claim at 70.
MaximizeMySocialSecurity is a reputable software system. The same company makes MaxiFi software, and here they have a list of advisors that use it, which might be one place to start.
posted by Mr.Know-it-some at 10:43 AM on March 10, 2023 [3 favorites]
But I agree that you should probably find a financial planner, especially if your partner has already decided to claim at 70.
MaximizeMySocialSecurity is a reputable software system. The same company makes MaxiFi software, and here they have a list of advisors that use it, which might be one place to start.
posted by Mr.Know-it-some at 10:43 AM on March 10, 2023 [3 favorites]
> the returns from delaying Social Security claim are risk free
The reason that the question even comes up is that this is not true. There is a risk. If the worker waits until age 70 to start drawing benefits, and then dies at age 75, he will not have maximized his benefits. (He will not care, of course.)
If that worker had to choose whether to begin drawing benefits or to continue working, he could have started receiving benefits at his full retirement age, or at any other point of his choice between that date and his 70th birthday. As a result, he may have been able to retire earlier instead of working 3-4 more years. This could have been a real benefit to him and his spouse at a very important point in their lives. The economic freedom to do certain things in your late 60s vs. having to wait until after age 70, when health conditions and other issues may arise, is very important to many people.
posted by yclipse at 6:43 PM on March 10, 2023 [1 favorite]
The reason that the question even comes up is that this is not true. There is a risk. If the worker waits until age 70 to start drawing benefits, and then dies at age 75, he will not have maximized his benefits. (He will not care, of course.)
If that worker had to choose whether to begin drawing benefits or to continue working, he could have started receiving benefits at his full retirement age, or at any other point of his choice between that date and his 70th birthday. As a result, he may have been able to retire earlier instead of working 3-4 more years. This could have been a real benefit to him and his spouse at a very important point in their lives. The economic freedom to do certain things in your late 60s vs. having to wait until after age 70, when health conditions and other issues may arise, is very important to many people.
posted by yclipse at 6:43 PM on March 10, 2023 [1 favorite]
Yes, "risk-free" is a simplification - there's the risk of dying. But for most people, the goal is not to maximize the total financial return, but to provide needed income when you are alive. To put it bluntly, your expenses are low when you're dead.
In terms of work: Some people have to claim benefits as soon as they stop working. But other people, like the questioner, have assets or other sources of income to cover the time between retirement and claim.
posted by Mr.Know-it-some at 8:05 PM on March 10, 2023 [1 favorite]
In terms of work: Some people have to claim benefits as soon as they stop working. But other people, like the questioner, have assets or other sources of income to cover the time between retirement and claim.
posted by Mr.Know-it-some at 8:05 PM on March 10, 2023 [1 favorite]
If you are partnered, you want to consider the assets and social security payments that will be available to your partner upon your death. You might also want to consider how much money you will leave to your children or to a cause you believe in. Retaining tax free investments and drawing social security earlier can have benefits for those who survive you. That’s why it’s good to model your projected investment growth and inflation if you really want to answer this question.
posted by Winnie the Proust at 6:35 AM on March 14, 2023
posted by Winnie the Proust at 6:35 AM on March 14, 2023
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posted by neutralhydrogen at 9:31 AM on March 10, 2023 [3 favorites]