How to Get the Best Deal from Social Security

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Jessica Bost, COO/Wealth Advisor

For many folks, the decision for when to begin Social Security benefits is one of the most important retirement income decisions they will make. Because of this, it is incredibly important to evaluate all the risks and potential outcomes of your Social Security withdrawal options and to make the decision as part of your comprehensive retirement income plan.

Everyone wants to get the best possible deal from Social Security. This is – in fact – a benefit they have paid into over their working years! One helpful way for evaluating the best strategy would be to determine the percentage of your overall income that Social Security will replace if triggered at various ages.

For a couple earning $120,000/year pre-retirement and looking to take the same income after retirement, triggering benefits at age 62 would replace 23% of their annual income needs, versus  replacing 45% of their income needs at age 70. Furthermore, if the couple only needed 80% of their pre-retirement income in retirement (because many couples work to reduce liabilities and spending in their post-retirement years), Social Security would replace a whopping 57% of their income needs if delayed until age 70.

Working with the same figures above, a married couple delays taking benefits from age 62 to 70 – over these eight years, they will forego $294,000 in benefits. However, by doing so, the couple makes a profitable tradeoff of:

  • $491,000 additional income if they live to 85
  • $709,000 if they live to age 90
  • $963,000 if they live to age 95

And along the way, that couple would garner a significantly higher percentage of their income needs from an inflation-adjusted source that comes with a survivor benefit.

Alternatives for supporting the loss of Social Security benefits include continuing to work or using alternative assets. In fact, continuing to work can have a significant impact on your Social Security benefit if you have been working and/or contributing to Social Security for less than 35 years. If Social Security benefits have already begun, there is typically an option to stop benefits and capture the growth during the years when benefits are not being taken. These decisions, like the others, should be made with a financial advisor in light of the overall plan.

Checking your current Social Security benefit is easy – simply go to and set up an account. After going through the verification process, you will be given a current benefit amount and have the opportunity to print off a copy of your most recent statement. The next time you meet with your financial advisor, bring this statement with you and ask and your advisor to help you incorporate the best Social Security withdrawal strategy into your comprehensive retirement income plan.

The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results may be more or less than those shown. This does not represent any specific product [and/or services].

Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor.

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