July 2019 Commentary: Social Security and AbsolutesSubmitted by MidWestOne Investment Services on July 8th, 2019
I don’t know about you, but sometimes walks spur the strangest conversation topics. Well, my wife and I were on a walk the other day and we got onto one of those strange topics, the topic of absolutes. She had read an article that championed a recent study about Social Security, and it loudly proclaimed the trillions of dollars that people left on the table by claiming social security too early. Later, in doing some research for this, a study (possibly the same one) claims only 4% of people take social security at the “optimal” time.
To determine the “optimal” age for you to take social security, you need to know one important variable: how long will you (and your spouse) live? If you don’t know that (and who does, or even wants to), everything is based on percentages and probabilities, which means sometimes you win and sometimes you lose. It isn’t particularly fair to criticize decisions after the fact when you know the answer to the critical question that you can’t possibly know when you are making the decision. The fair point from the survey though is that more people make the mistake of taking the benefit too early rather than too late. However, if there was a perfect, singular time to take Social Security benefits, you wouldn’t be given a range of 8 years to do it. There are always individual circumstances that might lead to taking your benefit at a time that allows you to lead the life you want to lead, when you want to do it, even if that time doesn’t squeeze the maximum dollars from the Social Security Administration.
To avoid the absolute mentality, we work through the options available to you, making sure you understand what the benefits and drawbacks are of each strategy. We want to apply your own percentages and probabilities instead of the general population. Planning starts early, especially if you think you would like to retire early. Get in front of the curve!
My apologies if you have already turned on social security, as this will be of little benefit to you. If that is the case, I would remind you to visit our website, www.midwestoneinvestmentservices.com and check out our new team members in Dubuque.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.