Continuing our Plan for Retirement series, we take a closer look at Social Security and what it takes to get the decision right.
Most financial decisions leave room to adjust. A withdrawal rate can be revised. An asset allocation can be rebalanced. Even a retirement date, once set, can often shift by a year in either direction without lasting consequence. Social Security does not offer that same flexibility.
Once a claiming age is chosen and benefits begin, the decision is effectively permanent, a fixed amount of income for the rest of a retiree’s life, and often a surviving spouse’s life as well.
The mechanics of the decision are simple enough to state. A worker can claim Social Security as early as sixty-two, at full retirement age (sixty-seven for most people retiring today), or as late as seventy, and each year of delay raises the eventual monthly benefit. What is simple to state is not always simple to decide. The right choice depends on health, family history, other income sources, tax exposure, and the needs of a spouse, not on a single formula that applies evenly to everyone.
Spousal and survivor provisions add another layer worth getting right. One spouse’s claiming age can affect what the other receives, both while both spouses are living and after one of them has passed, which means the higher earning spouse’s decision often ends up setting the income the surviving spouse relies on for the rest of their life. Treating each spouse’s claiming age as its own separate choice, rather than as two halves of one household decision, is an easy place for a plan to fall short.
Taxes are part of the equation as well. A portion of Social Security benefits can become taxable depending on total household income, and the timing of other income, such as portfolio withdrawals, required distributions, or Roth conversions, can shift how much of that benefit ends up taxed. Running the full picture together, rather than looking at Social Security on its own, is what allows a recommendation to hold up once every piece is accounted for.
This is the kind of decision Gryphon’s planning process is built for. We do not treat Social Security as a single line to just fill in. It gets weighed against a client’s full financial picture, tested under different scenarios, and coordinated with the rest of their income plan, so that the claiming decision supports everything else rather than standing apart from it. The result is a recommendation built specifically for that household, not a generic answer pulled from an online calculator.
Gryphon works with individuals and families to build retirement plans with this level of detail, Social Security included. If it would help to talk through your own situation, we would welcome the conversation.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, though Gryphon cannot guarantee their accuracy or completeness. Gryphon does not provide tax, accounting, or legal advice. Individuals should seek such guidance from qualified professionals based on their specific circumstances.