Imagine that 30 years into your retirement you suddenly found out that you had made a whopping mistake when you claimed your Social Security benefits—a mistake that resulted in your leaving more than $100,000 in benefits on the table.

The unfortunate reality is that electing Social Security benefits is a one-time decision that most people get wrong. They don’t realize that when and how they elect Social Security can have a profound impact on their income for the rest of their lives.

Just how much of an impact? Let’s look at a case study involving a typical couple.

Details	Assumptions
John and Jane Both retiring at 62 Need $65,000 in after-tax income $600,000 in IRAs	IRA grows 6% annually Inflation grows 4% annually

Social Security Mistake	Social Security Maximized
John takes his benefit at age 62 - $1,544 per month Jane takes her benefit at age 62 - $1,163 per month	John takes his benefit at 66, then requests a voluntary suspension Jane elects only her spousal benefit at 66 - $1,204 per month Jane switches to her own benefit at age 70 - $2,800 per month John reinstates his benefit at age 70 - $3,718 per month
Result	Result
IRAs exhausted at age 80 Social Security covers 50% of required income Total federal taxes paid $147,000	IRAs last until age 87 Social Security covers 88% of required income Total federal taxes paid $80,000

*Excerpted from the forth-coming book Maximize Your Social Security, by Joe Elsasser, CFP®

Thousands of Americans make this mistake every year, leaving tens, even hundreds of thousands of dollars on the table. They don’t realize that how much you receive from Social Security depends on three primary factors:

Your earnings record
When you elect
How long you expect to live

While you can’t go back and change your earnings record, and you have minimal control over how long you live, you are in full control of when you elect your benefits. So, while timing isn’t necessarily everything when it comes to maximizing your Social Security benefits, it’s certainly critical to the long-term health of your finances.

We encourage you to continue learning about What’s At Stake on our web site, and to find an advisor who uses Social Security Timing so you can make the right choice.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Social Security Timing.

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