Boomers: Make the Most of Social Security Benefits While They Last

Posted: Sep 2, 2020 2:00:00 PM


bbh-singapore-Z2MCFqEQiMw-unsplashSocial Security woes are expected to increase as baby boomers retire. Why? The number of these beneficiaries cashing in on the program is far greater than the workforce numbers to pay for it.  Chalk it up to a decline in birth rates, longer life spans and a number of economic crises including Covid-19 and the result is indicative of the state of affairs on the system — for the first time this year since 1982 benefit costs exceeded the amount of collected income forcing a dip into the program's $2.9 trillion trust fund. Social security experts predict the trust fund will cover benefits until 2034 before it runs dry. 

Given the last of the baby boomers will reach full retirement age in 2031, there’s a high likelihood that the benefits of today will be less and far most costly in the coming years. How can boomers ensure they are making the most of their hard-earned dollars? Granite Group Advisors’ Lyle Himebaugh shares a few helpful tips to be aware of in preparing for retirement:


Review your expenses and income for a full retirement picture

With rising healthcare costs, stagnant wages and few available options for savings during their careers, it’s no wonder a growing percentage of boomer retirees are depending on social security as their single source of income. Social security was always designed as a supplemental source of income. According to the Bureau of Labor Statistics, the average Social Security benefit is $1,503 per month in 2020 far below the average wage of approximately $3,668. 

Himebaugh suggests looking at the entirety of your retirement savings including social security and accessing and adjusting your lifestyle needs a few years in advance of retirement. Living on your expected retirement income will provide a financial roadmap and allow time to make larger life decisions like downsizing your home. 


Understand how Social Security benefits work

Even if you are years away from retirement, it’s good financial practice to understand how much your estimated future benefit will be. Statements can be obtained online by creating a Social Security account at Check your correct past earnings and fix any possible errors before claiming benefits. Social Security benefits are calculated from your highest 35 years of earnings taken at your full retirement age - now 66 years or older depending on your date of birth. The caveat is you don’t need to work 35 consecutive years but you are penalized for not working a full 35 years with $0 benefits for those lost years factored into your calculation. 


Determine what retirement age will reward you with the most benefits

The age you begin claiming benefits can result in collecting hundreds of dollars more or less each month. Himebaugh suggests to start by looking at different age retirement scenarios by going to your online social security account and using the Retirement Estimator. If you need the extra income each month, as best you can, plan to work until your full retirement age calculated by the year you were born. You can claim benefits starting at age 62 before your full retirement age but this comes at a price — a 30% reduction in benefits of what you could receive. Himebaugh adds the best-case scenario is prolonging retirement past your full retirement age up to 70 years old. By waiting, you will receive your full benefit plus 32% more each month. This decision may be a necessity versus an option given the pandemic’s recent economic setbacks.


Retirement planning experts can help you with a financial wellness strategy 

Taking the time to partner with an investment advisor who specializes in retirement planning well in advance of your retirement can provide financial peace of mind and ensure you are making the right investment decisions at the right time. If you don’t already have an advisor you can connect with, Himebaugh suggests selecting one at least five years in advance of your intended retirement to have a transition plan in place. 
What retirement plan is best for you? Whether you are an employer, financial advisor or an employee, GGA is here to help you and advocate for your financial wellness. Give us a call at (203) 210-7814 or click the Learn More button.