Page 15 - Investment Advisor October 2022

“Shouldn’t they claim now?”
There are some small trade-offs.
Assuming a January claim date, Juan
Carlos will only get a 6-month bump,
and Tessa will take an 8% reduction for
claiming early.
Together, they will bring in about
$4,500 per month from Social Security.
Medicare Part B premiums will reduce
benefits to about $4,100. That’s an annu-
al income of roughly $50,000.
Claiming sooner allows them to
reduce their portfolio draw by $200,000
between now and age 70. Assuming a 7%
investment return, that’s over $1 million
more in the portfolio for their legacy.
Connect the Dots on the Family Side
of the Equation, Too
When the advisor connected all the Social Security COLA for
current dots — market downturns,
goal — the question about when to claim 2023 Estimated at 9.6%
high inflation, and his clients’ new top

became much more than about 8% While lower than last month’s 10.5% prediction,
delayed retirement credits.
When planning for retirement accu- it would be the biggest increase since 1981.
mulation, advisors are adept at connect-
ing dots on the financial side. But when he consumer price index data for Security and Medicare policy analyst,
it comes to retirement income, it’s criti- TJuly, released on Aug. 10, shows bases monthly COLA estimates on
cal to connect dots on the family side of 8.5% inflation over the past 12 months changes in the consumer price index for
the equation as well. before a seasonal adjustment and was urban wage earners and clerical work-
When considering family legacy and unchanged from June to July on a sea- ers, known as the CPI-W.
inheritance goals, Social Security cannot sonally adjusted basis. In June, prices “A high COLA will be eagerly antici-
be bequeathed. Only personal assets can rose by 9.1% over 12 months and 1.3% pated to address an ongoing shortfall in
pass to the younger generation. from May. benefits that Social Security beneficia-
Juan Carlos and Tessa decided to Based on this data, the Senior Citizens ries are experiencing in 2022 as infla-
claim in January. They would rather League estimates the Social Security tion runs higher than their 5.9% COLA,”
start Social Security now, preserve more cost-of-living adjustment, or COLA, Johnson said in a statement. “A $1,656
of their personal assets, and meet their for 2023 could be 9.6%, lower than the benefit is short about $58 a month and
most important family goals of the future. 10.5% it predicted last month. A 9.6% by a total of $373.80 year to date.”
COLA would be the biggest increase The annual COLA underscores the
Marcia Mantell is the founder and president since 1981. The adjustment would financial pressures that many Social
of Mantell Retirement Consulting Inc., a increase the average retiree benefit of Security recipients face.
retirement business development, mar- $1,656 by $159, according to the league. Thirty-seven percent of participants in
keting & communications, and education If inflation runs “hot” or higher than the Senior Citizens League’s new Seniors
company supporting the financial services the recent average, the COLA could be Priority Survey reported they received
industry, advisors, and their clients. She is 10.1%; if inflation runs “cold” or lower low-income assistance in 2021. This
author of “What’s the Deal with Retirement than the recent average, the COLA appears to be more than double the 16%
Planning for Women?,” “What’s the Deal could be 9.3%, according to the advo- receiving needs-based assistance before
with Social Security for Women?” and blogs cacy group. the pandemic, as reported by the U.S.
at BoomerRetirementBriefs.com. Mary Johnson, the league’s Social Census Bureau, according to Johnson.

OCTOBER 2022 INVESTMENT ADVISOR 13