Beau Henderson joins us to dive into the often misunderstood world of Social Security planning. Beau highlights how only 4% of people claim their benefits in a way that maximizes lifetime value. We discuss why Social Security is so confusing: its overly complex rules, lack of personalized advice from the SSA, and the financial planning industry's limited focus on optimization due to low compensation incentives. Beau also breaks down a three-step process to make better Social Security decisions.
We discuss...
- Beau Henderson worked in retirement planning for over 25 years, focusing heavily on Social Security optimization.
- A mentor’s poor Social Security decision inspired Beau to dig deeper into the system and help others avoid costly mistakes.
- Many people take Social Security based on incomplete or misleading advice, often lacking proper context.
- The Social Security Administration cannot legally give personalized advice, which leaves many without adequate guidance.
- There are over 500 possible combinations of how a household can claim Social Security benefits.
- Beau breaks Social Security planning into three key steps: organize your financial picture, understand the rules for your household, and model different claiming scenarios.
- Most households leave over $200,000 on the table due to suboptimal Social Security decisions.
- Social Security decisions should be integrated with income distribution planning and tax strategy.
- Sometimes taking benefits earlier can make sense if it supports personal goals like retiring earlier.
- Many people don’t realize that the Social Security decision affects not just them but their spouse’s future as well.
- Common fear about Social Security cuts are largely media-driven; legislation changes tend to happen slowly.
- The worst-case scenario is likely a 20% benefit reduction, not elimination, and future generations will see more significant changes.
- Up to 85% of your Social Security benefit may be taxable depending on your income level.
- Proactive tax planning, like Roth conversions, can help reduce the tax burden on Social Security income.
- Survivor benefits are an important yet often overlooked aspect of Social Security planning.
Today's Panelists:
- Kirk Chisholm | Innovative Wealth
- Barbara Friedberg | Barbara Friedberg Personal Finance
- Phil Weiss | Apprise Wealth Management
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For more information, visit the show notes at https://moneytreepodcast.com/social-security-planning-beau-henderson-702
