Social Security is a lot more valuable than most people realize. Here are a few things to consider. First, it is a lifetime annuity. Once you start getting it, it keeps coming until you die.
Second, it's inflation-protected. A nice benefit, indeed, thanks to annual cost-of-living adjustments (COLAs). With the power of compounding, these annual bumps can really start to add up over the years. This aspect is often overlooked by individuals and advisors.
Third, there is right of survivorship. So when one spouse dies, the other can continue to receive the higher of the two benefits until they die, too. Consider this example. In 2008, the maximum benefit for a person turning full retirement age is $2,185 per month. If that person lives for 30 more years, assuming an annual cost-of-living adjustment of 2.8% (which is what Social Security trustees project under their intermediate-cost scenario), he or she will collect more than $1.2 million in benefits.
"Given the great potential of Social Security benefits over a person's lifetime, (Elain Floyd) it makes sense to treat this resource as a significant asset and to make decisions that will maximize it to the greatest possible extent."
In addition, "retirement," or whatever it may be called in the future, will be different for the Boomers.
We already know that. Youth was different. Marriage is different. Career paths are different. Recreation is different. Health is different. Longevity is different. Religiosity is different. It keeps going.
So when it comes to figuring out Social Security, that'll be different, too. Unlike previous generations, they won't just pad on down to the local Social Security office and sign up.
We've got a lot of questions. Should we apply now? What if we keep working? How will our decision affect their spouse's benefits? FBG can help you through a dissection of all things. This is part of our planning process.
