Social Security benefits make up about 30% of the overall income of people over 65, so the conversation about when to claim Social Security benefits may be one of the most critical and consequential conversations you can have with your clients.

This article and the corresponding downloadable guide linked below can help you prepare for such conversations and answer clients' questions about the right time to claim their Social Security Benefits.

Client: "What Kind of Monthly Income Can I Expect From All My Investments?"

Assuming that this client is not someone you are meeting for the first time today, you should already have a lot of this information from previous meetings and access to their portfolios. If you don’t have the information or this client is brand new, a pre-meeting qꦓuestionnaire, including investment totals and types of accounts, will help you give your clients a fair estimate.ꦐ 

There are many methods out there for calculating investment income, but before you can use any of them, you need to have a life-expectancy conversation with your client. As a whole, we are living longer. The life expectancy of someone over 65 is now at least 20 years, whereas it was only 14 years in the 1940s. The age when your client wa☂nts to start the trans𝄹ition from the accumulation phase to the withdrawal phase will determine how far those investments need to stretch to provide income for life. 

To quickly calculate the income for your clients from their investments, you can use the 澳洲幸运5官方开奖结果体彩网:safe withdrawal rate projection. The safe withdrawal rate assumes a 30-year lifespan after withdrawals begin. Some advisors may prefer using the 澳洲幸运5官方开奖结果体彩网:Monte Carlo simulation method to more accurately predict monthly income and whether or not the client will outlive their investments. Your firm may also use a simulator for this with predetermined withdrawal ra𝓡tes, as affected by life span. No matter how you illustrate this, the most important client takeaway from this conversation is that these are merelyꦫ predictions and not guarantees. 

If your client is seeking more certainty in their retirement income, this is a pivotal point in introducing the concept of annuities. An an🌸nuity can be a valuable tool for guaranteeing a portion of your client’s income in retirement, providing them with a sense of security and stability. 

Client: "Will My Other Retirement Income Sources Affect My Social Security Benefits?"

You already know that your client's Social Security benefits are determined only by the amount of money they paid into Social Security during their working years. In other words, your client's benefits will be unaffected by any pension payments, annuities, or income from savings and investments. But before you answer this question, consider why your c🌠lient is askinဣg it. 

If your client asks about how retirement income affects their Social Security benefits, they may not understand the basics of taxes during retirement on income from Social Security or 澳洲幸运5官方开奖结果体彩网:investments. They🎶 may also be confused about how all of their sources of income will work together to create their monthly income in retirement. 

When clients approach you with questions about their retirement, they're essentially seeking your guidance on what their future will look like. By understanding the root of their concerns, you can provide a more comprehensive and reassuring explanation of their retirement prospects. This reaffirms the trust they place in your expertise and strengthens your professional relationship. 

Client: "What Happens If I Continue to Work While Collecting My Benefits?" 

You anﷺd your client may determine that their Social Security benefits, combined with other income sources, will not meet their monthly needs in retirement. In this case, it will be especially important to determine what will happen if y💞our client continues to work while collecting benefits. 

If your client is not at 澳洲幸运5官方开奖结果体彩网:full retirement age when they plan to continue working and drawing Social Security benefits, explain to them that their benefits may be reduced if they make more than the yearly earnings limit. The annual earnings limit for the benefits reduction is not all that high, and the easiest way to show them how this affects thei🅰r Social Security benefits is to ൲use the . While preparing ahead of time is best, this quick calculator can run the numbers on the spot. 

Client: "How Can My Spouse and I Maximize Our Social Security Benefits?"

Even if your married clients do not ask you this question, you should broach the topic when you are discussing Social Security. A couple of key decisions turn the tide for married couples and the Social Security benefits they receive. As their fin🌸ancial advisor, you should, at a minimum, disclose these factors to them since the decisions cannot be undone.

Previously, the Social Security Administration allowed married beneficiaries to file for spousal benefits while delaying their own retirement benefits. The Bipartisan Budget Act of 2015 changed this rule so that beneficiaries who file for spousal benefits are deemed to file for retirement benefits as well. In this case, beneficiaries will automatically award the higher amount to each spouse of their own Social Security benefit or the spousal benefit. 

Only some of your clients will understand how waiting until full retirement age can affect their benefits. A straightforwa🌟rd way to show your clients how to maximize their payments is to use the , which will determine the benefits your clients can expect based on their age and retirement date. 

Remind your clients who are at least 62 years old, divorced, and not remarried that they may be eligible for their ex-spouse's retirement benefits as long as they were married to the ex-spouse for 10 years. 

Client: "What Happens to My Social Security Benefits When I Die?"

This question from your clients may be straightforward. If that is the case, the Social Security Administration provides a regularly updated that can answer this question for nearly every scenario. You don't have 💫to have all the answers here, but you need to know where to look.

However, discussing what happens to your client's Social Security benefits when they die might also open the door to conversations about providing for those they love even after death. 

Once you answer the basic benefits question using SSA tools and information, you can discuss options for legacy planning. While you will likely need additional appointments to complete legacy planning, addressing the importance of this issue with your client will show them that you care about their 🍎overall financial health and that of their loved ones. Unless you are also considering retirement soon, creating this kind of generatio😼nal trust is what keeps your practice in the family. 

The Bottom Line

Considering that Social Security income makes up one-third of monthly income for r✅etirees over 65, your clients must factor it into their overall retirement financial picture. You do not have to be a Social Security expert to offer sound advice to your clients about when is the right time to take their Social Sec💞urity benefits. 

Anticipating your client's questions about Social Security can lead to more meaningful conversations about their financial health in retirement. By familiarizing yourself with updated SSA regulations, understanding your client’s retirement needs, and being ready to discuss sensitive topics like life expectancy and current assets, you can be well-prepared for these important conversations.