Posts Taged retirement

5 Compelling Reasons to Rethink Social Security

Relying extensively on social security may not meet your retirement needs


When it comes to planning for retirement, Social Security benefits have traditionally been viewed as a safety net for many individuals. However, in recent years, there has been growing concern about the long-term viability and sustainability of the Social Security system.

As a result, it is becoming increasingly important for individuals to reconsider relying solely on Social Security benefits as a retirement plan. Here are five compelling reasons why you should not solely depend on Social Security as part of your retirement plan.

Uncertain Future

One of the key reasons to be cautious about relying heavily on Social Security benefits is the uncertainty surrounding the future of the program. The Social Security Administration has projected that the trust funds supporting the system will be depleted by 2034. While this doesn’t mean that Social Security will disappear entirely, it does suggest that future benefits may be significantly reduced. Depending solely on a benefit that might be subject to cuts or modifications is a risky proposition.

Demographic Challenges

The aging population is placing immense strain on the Social Security system. As baby boomers retire and life expectancy continues to rise, there is an increasing number of retirees relative to the number of workers paying into the system.

This demographic shift is expected to result in a decline in the worker-to-beneficiary ratio, potentially leading to reduced benefits in the future. Relying solely on Social Security benefits means exposing yourself to the risk of diminished financial support in retirement.

Inadequate Replacement Income

Social Security benefits were never intended to replace one’s entire income in retirement. The formula used to calculate benefits replaces a higher percentage of income for lower earners and a lower percentage for higher earners. For individuals with higher incomes or those who have invested in building substantial retirement savings, relying solely on Social Security benefits may not provide the financial security needed to maintain their desired standard of living. It is essential to consider other income sources and savings to supplement your retirement plan.

Rising Healthcare Costs

Healthcare expenses are a significant concern for retirees, and Social Security benefits alone may not be sufficient to cover these costs adequately. As medical advancements and inflation drive healthcare costs higher, individuals may find themselves struggling to afford necessary medical care and long-term care services. Planning for retirement should include provisions for healthcare expenses, which may necessitate seeking additional sources of income beyond Social Security benefits.

Lack of Control

Dependence on Social Security benefits puts your financial future in the hands of government policy and economic factors beyond your control. Changes to legislation, such as adjustments to the retirement age or modifications to benefit formulas, can have a substantial impact on the amount of benefits you receive.

By diversifying your retirement plan and not solely relying on Social Security, you gain more control over your financial destiny, allowing you to adapt to changing circumstances.

Your Financial Professional

While Social Security benefits can be an important part of retirement income, relying solely on them may not be sufficient to meet your financial needs.

Engaging the services of a financial professional can provide valuable expertise, tailored advice, and a comprehensive approach to retirement planning. By understanding your unique goals, creating a diversified investment strategy, managing tax efficiency, and providing ongoing guidance, a financial advisor can help you build a robust retirement plan that goes beyond accounting for Social Security benefits.

Investing in professional assistance today can set you on the path towards pursuing a confident and fulfilling retirement tomorrow.



Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
This article was prepared by FMeX.
LPL Tracking #1-05373781

Crossing the Bridge to a Satisfying Retirement

One of the more important—and hopefully enjoyable—events you will face in life is retirement. After spending many years building your career, you have likely accumulated a comfortable nest egg. If you have reached a point where retirement is the next big step, you need to develop a strategy that will help you cross the bridge from the world of work to the world of leisure.


While most retirement planning discussions focus on the financial aspects of securing a comfortable retirement, few look at the nonfinancial issues that need to be addressed. Indeed, when retirees report being dissatisfied with retirement, it is more often the nonfinancial aspects they find troubling. Specifically, lifestyle changes and loss of self-esteem due to loss of work often create the most difficulties.


Perspective is Key

Maintaining perspective is really the key to enjoying one’s later years. While the word “retirement” suggests that something is coming to an end, cultivating a more positive view can help you learn to see retirement as the beginning of a new phase of life—a phase in which you can do all the things you never seemed to find the time for while you were working. Volunteer work can enhance your sense of making a contribution, while taking courses in areas of special interest can challenge your intellectual curiosity. If thoughtfully chosen, these activities can help bring a great deal of happiness and meaning to your life.


Easing the Transition

From a psychological standpoint, some individuals find that separating from a lifetime of work is a more emotional experience than they ever expected. It is possible that it may take from two to five years to disengage from the personal investment required of work-related activities.


One solution for dealing with these stresses is to slowly phase into retirement. The fact is, many individuals wouldn’t mind continuing to engage in some form of work, either by consulting, job-sharing, acting as a mentor, or providing back-up management. Mentoring, in particular, enables an individual to transfer his or her lifetime of learning and experience to a friend, relative, or younger colleague. Also, phasing into retirement can provide an “anchor,” while offering the opportunity to explore other activities.


Reexamining Priorities


Obviously, it’s a lot easier for retiring individuals to pare down their work schedules and begin considering other pursuits if financial considerations play a secondary role in deciding whether, and how much, to work. Some people believe it costs less to live in retirement, yet many retirees may actually increase their expenditures, especially in the early years. This is when individuals in good health may spend more on entertainment, dining out, travel, and recreation than they did while still working full-time.


During your working years, it is common to take your lifestyle for granted. During retirement, with more time available for reflection, it is both appropriate and wise to carefully examine how you have been living and to consider reordering your priorities. You may find you just don’t need to do some of the things that seemed so important when you were working.


On the other hand, if you wish to maintain your pre-retirement lifestyle, you may need to consider your financial position carefully. The best approach is to prepare a budget based on your adjusted income level and update it on a regular basis. You will also need to keep an eye on inflation. At a 3 percent annual rate of inflation, an item costing $100 at age 65 will cost $156 at age 80. Your ultimate aim is a retirement plan that will not only work for you “at” retirement, but will also carry you “through” retirement.


If you view retirement as an opportunity for exploration, you can help make this transition an exciting and enjoyable process. Your horizons are limited only by the bounds of your imagination. Through your hard work, you have earned this opportunity—enjoy the journey!




Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was prepared by Liberty Publishing, Inc.

LPL Tracking #1-05230885

Ask Jake: What is FIRE (Financial Independence, Retire Early)?

When it comes to discussing retirement planning, it’s hard to overlook trends that come in this area. One current trend that’s getting attention in the financial world is financial independence, retire early (FIRE).

Today, we’re talking to Jake Sturgill about the FIRE trend, which investors might qualify for FIRE, and some takeaways that can strengthen any retirement plan, regardless of investor age.

How Early is FIRE Retirement?

Financial independence, retire early. Investors who choose the FIRE route want to retire earlier, rather than later. For some, this could be extremely early, say, in their 30s or 40s, but the goal to become financially independent and retire early certainly isn’t limited to younger investors.

FIRE is more about how you approach retirement planning than when you retire. It’s a lifestyle choice that shapes your entire approach to financial planning. When you choose to set a goal to retire early, you choose to save aggressively to achieve that early financial independence and set aside savings to see you through an extended retirement.

Typically, people who choose FIRE are higher income earners who opt to live a minimalist lifestyle in order to save even as much as 50-80% of their incomes annually until they achieve their retirement savings goals. If you are able to maintain this lifestyle and desire to leave the workforce early, the strict savings required can pay off with that early retirement date.

Even if, for reasons of age, income, or other life circumstances, FIRE isn’t a reasonable retirement objective, it doesn’t mean that ambitious savings goals and a desire to prepare your lifestyle for retirement aren’t for you.

In fact, if anything, the FIRE movement should inspire you to re-evaluate your retirement savings plan and determine whether it is aligned with your desired retirement age — even if it’s a more traditional one.

I Missed the FIRE Truck. Do I Have Other Options?

Maybe you think you’re beyond the point of saving for an early retirement. You missed the boat… Or in this case, you could pardon the pun and we could even call it the “FIRE truck”. I think my toddler, who frequently plays fireman, would appreciate this phrase!

Truly, it’s never too late to consider your financial future and look for ways to double down on important savings goals. If your goal is early retirement, you want to work your way back to the present moment and evaluate how you can balance your investments, savings rates, and lifestyle choices to enable your future self the option to reduce the number of years you “have” to work.

If your goal isn’t early retirement, or if that’s not a realistic goal, provided your age and/or circumstances, there are still ways that FIRE thinking can apply to your retirement planning, especially when you consider how your current lifestyle plays into your financial future.

It’s all about balance.

Whether you are aiming for early retirement or want to explore options for a more traditional retirement, you want the scope of your financial planning to encompass the things that are important to you personally. Your career, your family, your desired retirement lifestyle… All of these are factors to bear in mind when strategizing for the future.

Retirement planning typically isn’t something that you finalize in one session and recognize within the next year or decade. Yes, FIRE is an attractive option, but it’s not the only route that leads to a satisfying, well-funded retirement. At the end of the day, you and your financial planner need to be on the same page about planning a retirement that makes sense for you, your priorities, and your ideal financial future.

Want to learn more about retirement planning? Have another burning financial question? Reach out to Jake Sturgill today with your financial questions or for an in-person consultation!

    Ask an Advisor: How Much Do I Need for Retirement?


    David: 00:08

    Hello, I’m David Hemler, and we’re here with Jake Sturgill on our Ask An Advisor series with Puckett & Sturgill Financial Group. And Jake, one of the questions that I know you’re often asked as well as I am is: how much do I need to retire?

    Jake: 00:23

    Saving for retirement is an incredibly complex decision and conversation. And, to your point exactly, it’s got to be one of the most common questions that we’re asked. And there’s a lot of rules of thumb out there. But, at the end of the day, it’s an incredibly personal decision, and there’s no ‘one size fits all’ approach.

    David: 00:42

    Those rules of thumbs, they can be both a benefit and maybe, at times, a detriment as well. Yeah.

    Jake: 00:48

    Especially if you don’t understand the decisions and the pros and cons involved with all the decisions. Some basic tenets that you are going to want to consider and then really factor into this decision-making framework are: what sort of lifestyle do you want to live? In other words, how much money do you think you’d like to spend? When would you like to retire? And how long do you think you’re going to need that money to last? Because, at the end of the day, nobody knows when their final day will be. There’s no way of predicting that, but these are all critical elements.

    David: 01:19

    A lot of pieces to the puzzle to put together, figuring it all out.

    Jake: 01:24

    Absolutely, but I think if you’re like most people, you don’t want to necessarily live a lesser standard of living, you want to maintain your standard of living throughout retirement.

    David: 01:34

    I know I’ve read and see a lot of things in the literature in financial planning about this 60 to 80% of your preretirement income needed in retirement. Would you agree with that rule of thumb? Does that fit into the picture a lot?

    Jake: 01:47

    Certainly, and I think it’s well-documented that you don’t necessarily need to replace all of your income in retirement. Because, after all, in retirement you’re not going to be saving for a retirement. You might pay a little bit less in taxes, and you might even spend less or just spend differently than you were in those years saving up to retirement.

    David: 02:05

    Mm-hmm (affirmative). Where do we go from here then, Jake?

    Jake: 02:08

    I would encourage you to meet with your financial advisor to get an objective opinion and look at things like: how much have you accumulated so far? What’s your asset allocation? What’s your savings rate? And what’s your time to retirement?

    David: 02:22

    Mm-hmm (affirmative). So, a lot of pieces to this puzzle for us to figure out. And we, the folks here at Puckett & Sturgill, the advisors, we’re happy to help you. Just give us a call, or click on our email and send us a question of your own. Thanks.

    It’s Your Turn to Ask

      Ask an Advisor: What Do I Need to Know About Social Security?


      Jake: 00:08

      Hi, I’m Jake Sturgill, with Puckett & Sturgill Financial Group, and our Ask An Advisor series. Today, I’m going to be asking Paul Sorenson about Social Security, and the things that our clients need to know about Social Security.

      Paul: 00:24

      Social Security, Jake, as you know, is one of the first things that many clients ask us about, is, “I know I have a decision to make at some point in the future, whether it’s now, or 20 years from now, or next year, or I already made a decision.” It’s something that we get asked about a lot.

      Paul: 00:41

      The bottom line is, everybody’s circumstance is different when it comes to Social Security. So the planning surrounding Social Security is very specific, and there’s a lot of complexity involved with that decision. It’s something we talk about regularly. And as a part of that, people ask us, “When should I start thinking about it?” With our clients, we start thinking about it, no matter their age, we at least add it as a part of the plan. Because we do approach things from a holistic standpoint. So it’s always top of mind as a part of our planning, as a baseline, a foundational piece of the planning that we do for a client.

      Jake: 01:12

      Right, and so if we’re starting and incorporating it into the planning process, really as soon as possible, when should people start to think about actually taking it or claiming Social Security?

      Paul: 02:28

      Right. Just because you can start at 62 doesn’t mean you should do it as early as possible.

      Paul: 02:33

      Yeah, yeah. You may have a whole pool of assets that help you delay that decision, or help change that decision for you. It’s a very individual decision.

      Jake: 02:41

      It’s such an important decision, because pensions are, as I’m sure you’ve seen with your clients, largely going away. Maybe fewer and fewer people have them. So Social Security is becoming such a foundation and core component of a retirement income plan. Taking all these factors into consideration, there’s a lot that goes into that process, and it’s unique to everybody.

      Jake: 03:06

      If you have any questions about Social Security or your retirement income plan, please contact us. Visit our website, email us, give us a call at the office. We’re always just a phone call or an email away.

      It’s Your Turn to Ask

        Don’t Forget the Quantity – Quality Balance when Planning Your Retirement

        Finding balance in your retirement planning goes beyond having a diversified portfolio or a monthly income number to match your projected budgets. After all, you’re probably not going to spend your entire retirement watching every penny come in and go out.

        Yes, planning financially for retirement is crucial. However, planning for quality of life during retirement is an important aspect of retirement planning that is often overlooked.

        As Americans prepare to live longer during retirement than previous generations did, you need to consider how the shift toward a longer life expectancy impacts your retirement as a whole. Are you planning for a quality retirement alongside the quantity of retirement savings you’d like to have in place?

        Quality of life conversations contribute to the financial projection for retirement, since the type of retirement lifestyle you plan on is an essential aspect of the retirement budget. But beyond your weekly tee times or macrame classes, what are some other quality of life issues to focus on in retirement planning?


        Your Location

        Your retirement location contributes to many of the financial factors of your retirement plan. From tax rates to cost of living, you will need to factor in the cost of where you plan to retire.

        If you don’t already live in the city or state to which you plan to retire, consider how a move will impact your financial situation. If you move sooner, are there benefits to be gained? How will a house sale factor into your financial plans, present and future?

        Your financial advisor can provide insight into how these factors will contribute to your retirement planning and can provide advice on timing these steps.


        Your Network

        You’ve probably heard that having a solid support network of friends and family can make all the difference during your retirement years. And research supports the idea that individuals in community tend to live longer, happier lives than those who are isolated.

        If you want to enjoy the quality of life associated with being in a community of people you care about, it’s time to start making those connections now. If you want to maintain close relationships with your siblings, children, and/or grandchildren, make it a point to foster those relationships right now.

        For other connections, look into hobby groups, charitable organizations, and community groups that focus on something you care about and would like to make time for during your retirement years. For example, if you enjoy crafting and would like to spend your retirement making quilts for the homeless, try to find crafting groups or classes that will help you to hone your skills and meet others that share common goals.


        Your Health

        While longer life expectancy is good news for everyone, it’s important to consider how your health might fare during your extended retirement years. If you’re dealing with health issues, the quality of these extra years may not be as high as you’d like.

        Of course, you certainly can’t look into a crystal ball and predict exactly what your health will do as you age, but there are steps that you can take now to improve your odds moving forward. For starters, you can work to prioritize your health now so that making healthy choices becomes habit.

        Look into ways that you can adjust your diet or lifestyle to combat the likelihood of developing chronic conditions. And consider insurance options that will support your healthcare needs, should you require long-term care or care for a unique situation.

        The consideration of retirement quality of life is an important one as you navigate the path toward retirement. For more information about developing a personalized plan to balance the quantity-quality factors in your retirement, contact Jake Sturgill for a consultation!

          Ask an Advisor: What Do I Do With My 401k?


          Paul Sorenson: 00:09

          Hi, welcome to the Puckett and Sturgill Ask An Advisor segment. We’re glad you joined us. I’m Paul Sorenson, financial planner with Puckett and Sturgill Financial Group. I’m here today with David Hemler, certified financial planner professional. David, we’re here to ask today, and discuss, I have a 401k plan. This is one of the questions we get almost every day. I have a 401k plan. What do I do with my 401k plan? Can you help me?

          David Hemler: 00:33

          That’s a great question, and yes, we can help you. The first thing is to define, are we talking about a former employer plan or a current employer plan? For the former employer plan, you have four options there. Those options are to leave it with the current custodian. To withdrawal it, which is called a distribution. To roll it into your current employer, if that current employer plan offers roll ins, and many do. Or, move it to an IRA. That’s the four options with a former employer plan. With your current plan, the key ingredients for you to understand are what is the matching program so that you can fully gain access to 100% of the match that’s available to you. If there’s a match available, not every 401k has to offer you a match, so that’s an important piece of the summary plan description, which governs that, that you want to understand. And we can help you to discern through that, to get those types of answers on behalf of your plan. Getting 100% of the match, and also understanding your allocation and how it aligns to your risk acceptance and your time horizon for the goals that you have for those retirement assets.

          Paul: 01:46

          Great, great. I think that answers a lot of it. For a former plan, we’re looking at keeping it where it’s at, rolling it into another 401k plan, potentially diversifying it into an IRA. Those are all great options. I think that’s …

          David: 02:02

          A lot of complexity there too, so our best advice would be to talk to a professional advisor. Get some guidance before you make a final decision on an old employer plan.

          Paul: 02:12

          Great. That’s really helpful, David. Thank you so much. We look forward to hearing from you, should you have any additional questions, and please feel free to submit additional questions to us online.

          It’s Your Turn to Ask

            Tax Considerations for the Retiree – Qualified Plan Issues

            Now that you’ve worked through your family and filing issues, as well as your investment income and other issues, it’s time to take a look at the last category for tax time consideration: qualified plan issues.

            Qualified plans often play a large part in the retirees income equation, so it’s essential to properly account for distributions taken throughout the year. Additionally, each account type carries slightly different rules, so you want to stay on top of when you can begin distributions from one account or what your distribution requirements are for another.

            This article is third in a series on Tax Considerations for the Retiree. Read of the series here:

            1. Tax Considerations for the Retiree – Family and Filing Issues
            2. Tax Considerations for the Retiree – Investment Income and Other Issues
            3. Tax Considerations for the Retiree – Qualified Plan Issues


            Here are some questions to ask as you approach your qualified plan issues this season.

            Are You Above Age 70 ½:

            • With an Inherited IRA?

              Ensure that your RMD has been met and reported (Form 1040, Lines 4a and 4b).
            • And Have Completed a Qualified Charitable Distribution?

              Double check that this amount if properly accounted for and that the amount is excluded on Form 1040, Line 4b.


            Did you Fail to Take the Required Minimum Distribution?

            Your Required Minimum Distribution is the minimum amount of money that you should withdraw from your retirement account(s). If you failed to take the RMD, you will need to pay a penalty, which can be calculated on Form 5329 and carried over to Schedule 4, Line 59.

            Have You Made a Non-Deductible IRA Contribution?

            Look at Form 8606 for more information about your non-deductible IRA contribution. Then, ensure that the cost basis for this contribution is properly tracked.

            Have You Taken a Non-Qualified Distribution from a 529 Account?

            If you took a non-qualified distribution from a 529 account, you’ll need to pay the penalty on the withdrawal amount. File form 5329 to account for the penalty and then carry it over to Schedule 4, Line 59. Your tax professional can provide personalized guidance if you want to understand more about whether your 529 distribution(s) is qualified.

            Did You Withdraw from a Non-Deductible IRA?

            You can use Form 8606 to ensure that the taxable and non-taxable portions of your distribution were calculated correctly.

            Did You Convert Funds from a Traditional IRA to a Roth IRA?

            Conversion of funds from a traditional IRA to Roth IRA can impact your bottom line at tax time. Use Form 8606 to report the converted amount and to ensure that non-deductible IRA contributions were converted and treated as non-taxable. If you made any conversions of this type, you’ll want to enlist your tax professional in assisting you to calculate this properly.

            Have You Rolled Retirement Funds from One Account Type to Another?

            Similarly, if you’ve converted retirement funds from one account type to another (ex. Moving funds from a 401(k) to an IRA), you want to ensure that this is reported and calculated properly. Ensure that funds are treated as a rollover and not as a distribution by double checking that Form 1040, Line 4a displays the rollover amount. Meanwhile, Form 1040, Line 4b should show $0.

            Did You Rollover Retirement Funds and Utilize NUA?

            If yes, you will need to review Form 1040, Lines 4a and 4b to see that your IRA distributions are recorded and to ensure that the basis was taxed.

            These are only some of the considerations that you need to make as you review your 2018 tax return and prepare for the upcoming tax season. To learn more about tax considerations for the retiree, see our posts on family and filings issues, as well as what to do about investment income.

            This article is third in a series on Tax Considerations for the Retiree. Read of the series here:

            1. Tax Considerations for the Retiree – Family and Filing Issues
            2. Tax Considerations for the Retiree – Investment Income and Other Issues
            3. Tax Considerations for the Retiree – Qualified Plan Issues


            This information is not intended to be a substitute for specific individualized tax advice.  We suggest that you discuss your specific tax issues with a qualified tax advisor.

            Tax Considerations for the Retiree – Family and Filing Issues

            As tax season approaches, it’s time to take a look at your 2019 tax strategy. Thankfully, if you filed taxes in 2018, you can use your 2018 return as a sort of cheat sheet to help you get a better idea of what you may be responsible for this time around.

            Whether you’re dealing with a fixed income, investment payouts, or any other unique financial situations, your status as a retiree means you have some different considerations to make than you did as a working individual. To start, you will want to take a look at your family and filing issues.

            This article is first in a series on Tax Considerations for the Retiree. Read of the series here:

            1. Tax Considerations for the Retiree – Family and Filing Issues
            2. Tax Considerations for the Retiree – Investment Income and Other Issues
            3. Tax Considerations for the Retiree – Qualified Plan Issues


            Did You Take the Standard Deduction?

            Did you claim the standard deduction of $12,000 ($24,000 married, filing jointly) in 2018? (Consult Form 1040, Line 9) If so, you may want to consider bunching charitable contributions into one year and look into ways to accelerate certain expenses, such as your property taxes.

            Are You Married?

            Your marriage can have some tax benefits — though in retirement, there can be some complicated factors to filing jointly. Do any of the following apply?

            • You have a large disparity between your and your spouse’s incomes
            • You can claim large, itemized deductions
            • You have an income-based student loan


            If you answered “yes” to one or more of these scenarios, you may wish to prepare a return as married filing jointly alongside a return as married filing separately to see whether one of these statuses provides a greater tax advantage.

            Have You Been Divorced or Lost Your Spouse?

            If you’ve experienced a divorce or death of a spouse, you need to review your filing status. Look at the top of Form 1040 to see whether you’re filing correctly.

            If you entered into a divorce agreement in 2019, after the first of the year, alimony is not taxable for the recipient. If your agreement began before 1/1/19, alimony is deductible by the payer (Schedule 1, Line 31a) and taxable to the recipient (Schedule 1, Line 11).

            Did You Have Any AMT?

            If you paid AMT in 2018, you may want to consider strategies to reduce it for this tax year. Strategies like minimizing large capital gains and lowering income by maxing out retirement contributions can help. If you paid a large amount of AMT in 2017, look at Form 8801 to determine whether you received a credit for this payment.

            Do You Have Certain Age or Disability Factors?

            If you and/or your spouse are over age 65 and/or if you or your spouse is legally blind, you may be eligible for a deduction of $1,300 for each married taxpayer ($1,600 for each unmarried taxpayer).

            Did You Have Any Tax Surprises in 2018?

            If your 2018 tax responsibility was much higher or lower than you thought it was going to be, it’s important to check into what caused the change and whether that factor will impact your tax responsibility this time around. For those who experienced a higher refund, look to see whether you had a unique situation by comparing your taxable income from the past two years’ returns. On the other hand, for those who didn’t withhold enough for tax time, look at Form 2210 to review the penalty and determine your current tax liability for that amount.

            These are only some of the considerations that you need to make as you review your 2018 tax return and prepare for the upcoming tax season. To learn more about tax considerations for the retiree, stay tuned for information about reporting your investment income and other issues.

            This article is first in a series on Tax Considerations for the Retiree. Read of the series here:

            1. Tax Considerations for the Retiree – Family and Filing Issues
            2. Tax Considerations for the Retiree – Investment Income and Other Issues
            3. Tax Considerations for the Retiree – Qualified Plan Issues


            This information is not intended to be a substitute for specific individualized tax advice.  We suggest that you discuss your specific tax issues with a qualified tax advisor. 

            Considerations for Married Couples Claiming Social Security Benefits

            If you are a married couple approaching retirement, no matter how long you’ve been married, you’ve weathered both great joys and storms. To best enjoy each other’s company in your retirement years, it’s essential to have a holistic retirement plan. And if you’re like most American couples, one important aspect of your joint retirement plan is the use of Social Security benefits.

            Today, we’re going to address some of the top considerations for married couples claiming Social Security benefits.

            When Should I Start Collecting Social Security Benefits?

            Timing plays a big role for couples when they are planning to start collecting Social Security. Waiting to collect benefits until you reach your Full Retirement Age (FRA) can make a big difference in the amount of spousal benefits that you can claim. Your financial advisor can help you to determine the optimal time to begin claiming Social Security benefits.

            How Does Circumstance Impact the Benefits I can Collect?

            All couples arrive at retirement with a unique set of circumstances that must be taken into account in order to maximize benefits through their timing. Here are some common situations to consider:

            Long Life Expectancy and Even Incomes

            If both you and your spouse have a long life expectancy and have maintained similar yearly earnings throughout your careers, a strategy that involves waiting as long as possible before claiming could help you to maximize your Social Security benefits. In general, the longer you wait to claim your benefit, the better the payout.

            Long Life Expectancy, Uneven Incomes

            In the case that both you and your spouse are planning for long life expectancies, but one of you has earned significantly more than the other, the higher-earning spouse might delay their collection while the lower-earning spouse collects their own earned benefits. Once the higher-earning spouse has begun collecting their benefits, the lower-earning spouse may switch from their own benefit and apply for spousal benefits instead. 

            Other Circumstances

            There are, of course, other combinations of life expectancy and income comparisons to consider. In some cases, it makes sense to begin collecting Social Security benefits immediately at age 62. In others, a delay is advisable. As always, your financial advisor is the best person to ask in regards to how your unique circumstance impacts your when to claim benefits.

            What Other Factors Might Impact my Claim and Benefits?

            There are other factors that influence when and how you and your spouse should claim Social Security to maximize your benefits. 

            Updates to “File and Suspend”

            You may have heard of the “file and suspend” strategy where the higher earning spouse waits to collect their benefit while the lower earning spouse cashes in on the spousal benefit. If you’ve considered this strategy for your own filings, you’ll likely need to think again.

            In November 2015, Congress passed the Bipartisan Budget Act, which got rid of the potential for the higher earning spouse to “file and suspend.” Unless you and your spouse were born before 1954 or turned 62 before 2015, this option is off the table.


            Depending on your income during retirement, you will have to pay taxes on your benefits. A formula that determines your Provisional Income (PI) determines the level of taxable Social Security benefits you are receiving.


            Your healthcare, which may include Medicare premiums, may be taken out of your Social Security benefits. Depending on the Medicare plan and other healthcare expenses you have, this can affect how you plan your Social Security benefits collection.

            Government Employment

            Lastly, if you or your spouse are/were employed by a governmental organization, your Social Security benefits (both from benefits you earned or spousal benefits) can be reduced to reflect the pension you receive or for not paying Social Security taxes as a government employee.

            Bottom Line: Your Situation is Unique

            There are so many factors that contribute to you and your spouse’s optimal time for claiming Social Security benefits. Thankfully, you do not need to navigate these waters on your own! Our CFP® professionals know the questions that need to be asked in order to get you on the right track to get the most out of your Social Security benefits.

            To learn more about retirement planning and Social Security, contact us today for a complimentary consultation!