Close Close

Retirement Planning > Social Security

Why Social Security planning expertise pays huge dividends

Your article was successfully shared with the contacts you provided.

“How can I maximize my Social Security benefits?”

That is a key question most 55- to 65-year-olds are asking today, and it is presenting a major opportunity for advisors to counsel them and start up a new business relationship.

The reason for this opportunity is that most people approaching — or already in — their early 60s don’t know where to turn for individualized help, and perhaps by default they start claiming Social Security benefits as soon as they become eligible. In fact, most people begin taking benefits at the minimum eligibility age of 62. But this decision, while right for some, can end up costing most people tens of thousands of dollars in the long run.

See also: When to begin Social Security? Even advisors aren’t sure

Dollars and sense

If someone takes Social Security at age 62, they are only getting 75 cents on the dollar. At the “full retirement age” of 66, people are getting that full dollar, but for those that can wait until age 70 to begin claiming Social Security, they receive $1.32 on the dollar.

Here’s another way to look at it. At age 62, a client can receive a maximum monthly Social Security benefit of $1,855. If he or she delays receiving Social Security benefits until age 70, that maximum monthly benefit jumps to $3,266 per month. Instead of $22,260 per year, the client would receive $39,192 per year. That can make a big impact on a retiree’s lifestyle.

Now certainly, waiting until age 70 isn’t the right choice for many people. But the important thing to remember here is that the average person — married, single, divorced, etc. — more often than not doesn’t know the optimal time to begin claiming benefits.

“We need to get to people age 55 to 60 to educate them about Social Security planning. By age 62 it’s too late,” says Charles Osmond of Western & Southern Financial Group, who spoke on the subject during a breakout session on retirement income and benefit planning at the recent NAILBA 32 conference in Dallas.

Many advisors are getting to these people, and it’s been a huge win-win for everybody.

“Social Security workshops have been the driving force of our business over the last year and the results have been tremendous,” says Suzanne M. Buska, president of Buska Retirement Solutions, Inc. in Rothschild, Wis. “We have brought in several million in premium just from the Social Security workshops. This is a great way to corner the market on income planning.”

Buska says you don’t have to be the first firm to offer Social Security planning in your area —you just have to be the best at it. “A few of our competitors tried it before us and they all stopped doing it,” Buska says. “We have taken a lot of time to perfect our process to make sure we do it better than any of our competition.”

Buska’s eldest son, Cole J. Bruner, the company’s vice president, does the speaking at all of their Social Security workshops after extensive studying to become an expert on the subject. “He spent about six months reading about all the different benefit strategies available. You definitely need to know what you are talking about because the people that have been coming to see us after the workshop are really relying on our recommendations when choosing their benefit strategy,” Buska says.

Investment Advisor Representative Cristina Acosta of Money Wise in Scottsdale, Ariz., says offering classes specifically on the topic of Social Security planning has made a big impact on the practice she co-owns with Nancy Fromm. Prior to getting into this niche, the two of them found themselves sitting down with clients and asking questions on the best way to take Social Security benefits. They wanted to help, but knew it would take some effort.

“It was a major time commitment on our part to learn the system inside and out,” Acosta says. “Advisors need to be prepared to address and answer all types of questions with accurate information. We researched different software on the marketplace to find accurate and detailed reports.”

The effort is paying big dividends in the form of new business and larger case sizes. “We offer an area of expertise that is in demand. When individuals attend our class, they will find we have in-depth knowledge to assist them with the decision-making process,” Acosta says. “Once they sit down with us it’s a natural segue to discuss their financial assets and they now see us as a trusted advisor.”

See also: 24 Social Security facts you need to know

Software can help

The subsequent appointments generated from seminar attendees typically lead to personalized analysis of a person or a couple’s specific situation. There can be a lot of dynamics at play. Clients are often asked to bring any recent Social Security statements showing estimated benefits at full retirement age and early retirement age, and to inquire about possible benefits available from former spouses that could be integrated into maximization plans.

Advisors frequently rely on specialized Social Security optimization software to help them provide recommendations. With it being such a hot topic, there is no shortage of software solutions available. As an example, in December, Penn Mutual Life Insurance Company introduced “Social Security Explorer,” a software tool designed to help maximize Social Security benefits, for use by Penn Mutual affiliated financial professionals to use when advising clients.

“This tool helps financial professionals work with their clients to determine the best claiming strategy to ensure they’re getting their optimal benefit while comparing all the options they have available,” says Lynn Nolan, director, Penn Mutual Retirement Services. “It also provides an opportunity for advisors to determine proper retirement income strategies. For some, there may be a need to supplement benefits with other income sources, like the cash value of life insurance.”

Expertise a differentiator

According to a Nov. 2011 Financial Literacy Center working paper, nearly nine out of 10 professional financial advisors believe it is their role to educate clients about Social Security, but only 22 percent of them describe themselves as “very knowledgeable” about the topic.

With “retirement income planning” being the hot catchphrase in the industry, clearly there is still room in this space for advisors to do the research and position themselves as experts. Buska’s firm is a prime example.

“It only made sense for us to incorporate Social Security planning into our client process as we have positioned our firm to be the retirement income planning specialists in our area,” Buska says. “This has greatly helped to differentiate us from the Edward Jones, Ameriprise, etc. of the world.

“Any advisor that is looking to add another value for their clients, plus separate themselves from their competition would be foolish not to take the time to learn the quirks of the Social Security program,” Buska says. “It does take time and research but the benefits to your business can be tremendous if you position it correctly.”

See also:


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.