Do You File for Social Security Early to Allow Your Retirement Account to Grow?, by Aaron Steele

What lengths are you willing to go to avoid making withdrawals that can limit the growth of your retirement savings? If you are forced to retire earlier than anticipated, the likely move will be to file for social security benefits to give your retirement savings more time to grow. But is that the best idea?

Do You Allow Your Benefits to Grow or Your Savings?

You’ll become eligible to file for social security benefits once you reach age 62. But you will not get the full benefits that you would have received if you’d waited until the full retirement age (FRA). Your year of birth will determine your FRA. For individuals born in 1955, the FRA is 66 years and two months. It increases by two months up to the highest age of 67 for anyone born in 1960 or later.

You will lose 6.67% of your social security benefits every year for the first three years if you file your claim before your FRA and 5% each year after. If your full retirement age is 66 and two months and you make your claims at 62, your benefit will shrink by 30%.

If you delay filing your claim by a few more years after hitting the FRA, your benefit will grow by 8% each year up until you reach 70. So, if your FRA is 66 and two months, and you wait until age 70 to file your claim, your benefit will grow by about 32%.

Now, assuming you find yourself in a situation where you have to choose between making your claims and making withdrawals from your retirement plan, as mentioned earlier, the typical response is to leave the savings alone to grow and sign up for social security. But then you forget something. Delaying your social security benefits by a few years guarantees you extra money. However, delaying withdrawals from your retirement plan does not.

No one can predict how the stock market will perform over a specific time. While a stock-heavy portfolio can guarantee a 7% return or higher, there’s also the possibility that the investment will lose money if the market experiences a downturn.

Furthermore, delaying your claims guarantees higher benefits. For instance, if your FRA is 66 years and two months and you delay filing your claim by a year, your benefit will increase by 8%. Your retirement in the stock market can’t guarantee such returns.

These are some reasons why leaving your retirement plan alone to file for social security may not be a good strategy. Another thing to consider is the fact that seniors are often advised to move to safer investments as they get closer to retirement. If you invest in safer assets, you won’t even get such high returns from your 401(k) and IRA plans.

A 50/50 stock/bond portfolio will give you a 5%-6% return over ten years. While that doesn’t seem bad, when you compare it to an 8% yearly increase by delaying your social security benefits after FRA, it falls short. Also, bear in mind that the monthly benefits are for life, while your retirement savings can end up depleted at some point in time.

People now live longer than before, so it’s essential to do all you can to secure a higher monthly benefit – and that means filing your claim years after eligibility.

Contact Information:
Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure:
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.

Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.