Social Security Planning

Matthew Allen

Social Security Advisor

How to Avoid the Short End of the Stick When It Comes to Your Social Security Filing

When Matthew Allen’s parents became of age to claim Social Security benefits, they turned to him for guidance. It was a totally logical and natural request. As a seasoned financial advisor and market maker, he had the knowledge of finance and investments. But even with this financial background, the more he looked into Social Security, the more he realized how complicated the benefit is.

Originally, his dad was planning to file at 62, his mom shortly thereafter. But Matthew suggested that only his father file and suspend and his mom file for a spousal benefit only, and he demonstrated to them that over the long term they would be pulling in $115,000 more in benefits.

“If my parents were having difficulty, lots of other folks were surely having the same problem,” he says. Following thousands of hours of client-focused research, Matthew came to understand that with Social Security’s 2,728 rules and over 9,200 strategies, most people don’t know the best way to file for benefits. In fact, seven out of 10 Americans are missing out on their full Social Security benefits. The average couple is leaving approximately $120,000 in lifetime retirement benefits on the table.

Determined to ensure that retirees would no longer get the short end of the stick, he partnered with Catherine Hormats, an economist with experience working at the intersection of government and finance and someone who’d helped her own parents navigate the Social Security maze. In 2008, the two began to offer clients a simplified version of Social Security. They outline strategies to help clients get every penny they’re owed and help clients execute on that strategy. They also offer a Social Security filing service and completely handle the filing so that clients never have to interact with the Social Security administration.

It’s fair to say their work has been groundbreaking. Up until 2008 when Matthew and Catherine joined forces, there were few resources to whom people could turn for guidance and information. The Social Security Administration could not provide advice and there was little discussion by financial advisors. Even today, Certified Financial Planners are not adequately schooled to know the ins and outs of Social Security filing. Up until recently, Social Security was glossed over in the Certified Financial Planner certification curriculum and only included about two paragraphs of information and it is only now, with the influx of as many as 10,000 Baby Boomers retiring every day that the Certified Financial Planner Board of Standards is beginning to expand its Social Security educational requirements.

In years past, Social Security was viewed by individuals as a rite of passage when they became of retirement age. They simply applied for the benefit without forethought or questioning. “This is by far, the single biggest mistake that most Americans make,” says Matthew. “Social Security benefits are not automatic. Knowing when to claim and how to claim in the smartest way possible to maximize your benefit rests on your shoulders.”

For example, by delaying claiming your benefit—taking what’s called a Delayed Retirement Benefit and postponing filing past your full retirement age of 66 (if you were born between 1943 and 1954)—your unclaimed benefit will continue to accrue Delayed Retirement Credits. Therefore, your benefit will be higher when you later claim it because it will increase by 8% a year or two-thirds percent each month. Using a hypothetical calculation, that could mean the difference between $2,687 monthly filing at 66 or $3,546 per month at age 70.
Matthew says he finds scenarios involving a surviving spouse particularly upsetting. “One of the biggest surprises many widows and widowers run into is finding out that they should have filed for a survivor benefit when their spouse passed away, but they didn’t.”

People have to be aware of the benefit and then file an application to receive what may be the deceased spouse’s higher benefit. Social Security survivor benefits are NOT paid to surviving spouses automatically. “So here are widows or widowers, shocked by the passing of a spouse, facing some complicated questions regarding when to take a survivor benefit,” he says.

The Social Security Administration does not proactively let you know that a surviving spouse should file for a higher benefit, Matthew says. That’s why teamwork is important up front when a couple first files. Generally, the higher-earning spouse should be especially careful about when to claim Social Security benefits on his or her own record. This is because the Social Security benefit of the higher-earning spouse is going to be the benefit that lasts the longest for the couple or, in other words, is “inherited” by the surviving spouse.

“Pursuing a strategy that increases the survivor benefit as much as possible can make a significant difference,” says Matthew. “Most couples miss another $70k to $80k by failing to maximize the survivor benefit.”

It’s imperative to understand that each situation is different, and there are multiple factors unique to an individual and to couples: benefit amounts, age differences between spouses, dates of death in survivorship situations. And, when it comes to couples, most overlook the fact they need to be coordinating spousal benefits. “All this needs to be considered before people initially file,” Matthew says. “Ironically, people often spend more time planning for a vacation than they do for Social Security which has long-term fiscal ramifications for individuals and couples.”

Too often couples focus on only their own Social Security benefit and fail to recognize they may be eligible for a spousal benefit of up to 50% of their spouse’s benefit while waiting to claim their own benefit. “Failing to employ these filing strategies often costs a couple $40,000 to $50,000 in lost Social Security benefits,” he says. “Also, filing the wrong type of application or filing at the wrong time can cost you dearly.”

Matthew spends a considerable amount of time in Washington and is involved in the monitoring and discussion of the Social Security Trust Fund which finances Social Security benefits. “Working with a specialist as opposed to a traditional financial advisor is invaluable,” he says. “We know the ropes and can help people understand and execute on what’s necessary to make a successful Social Security filing.”

How to Chose a Social Security Claims Filing Strategy That Meets Your Needs

Social Security’s more than 2,000 rules and 9,000 possible filing strategies make it difficult, if not impossible, to figure out how to maximize your benefit. Matthew Allen discusses the way in which a private Social Security advisor can help you steer clear of claims filing pitfalls and avoid the loss of thousands of dollars to receive the benefit you rightly deserve.

Don’t Be Part of the Crowd that Loses $25 Billion in Social Security Annually

Cumulatively, Americans lose $25 billion a year because they don’t file for Social Security at the right time. With almost 3,000 filing rules for this benefit, it’s extraordinarily complicated to know how and when to file. But Social Security Advisor Matthew Allen is a financial professional expert on the ins-and-outs of this benefit. His specialized and personalized service will help you maximize this important guaranteed income component of your retirement portfolio.

FAQs

Can't I just ask the Social Security Administration for free what I should do?

No. By law, the Social Security Administration is not allowed to provide you with specific recommendations based on your personal and unique circumstances. In order to receive the maximum benefit to which you are entitled, it is critical that you employ a strategy that will be coordinated with the numerous personal and financial variables that need to be considered in making your decision.

You can obtain a great deal of general information from the Social Security Administration; the organization is a wonderful resource and performs an important service administering Social Security on behalf of the American people. What they cannot provide is advice, and it is custom advice that you need—advice that is geared toward your specific circumstances and objectives. We have in-depth knowledge of Social Security, finance and investments and not only interact with the Social Security Administration on a daily basis but also are involved with the monitoring and discussion of the Social Security Trust Fund which finances Social Security benefits.

As a team of expert advisors, we advocate for you and work on your behalf to provide you with an in-depth analysis of the many factors that will impact your benefits. We will clearly demonstrate the differences those factors can make in your benefit payments as well as your overall retirement income and identify the strategy that is right for you and your family.

How do I know that your advice is valid and trustworthy?

We’re glad you asked. We value your trust and take our work very seriously. We maintain a leading in-house research and development program and team dedicated to producing strategies to maximize your Social Security. As such, our experts are frequently quoted and have contributed to numerous published articles on the topic of maximizing your Social Security.

The Social Security strategies that we offer are based on leading academic research and quantitative analysis as well as actual hands-on experience in working with clients and the Social Security Administration. Our team of Social Security experts has years of experience in the field, and we have an in-house training and continuing professional education program in place to ensure that our advisors are always up-to-date with the latest changes and opportunities that may be available to our clients.

I already work with a financial advisor; why should I seek advice from you in addition or instead?

The bottom line is that Social Security is complex. It has taken us years of dedicated research and experience to develop the level of expertise we have achieved. The unfortunate fact is that most financial advisors are not properly trained in the nuances and complicated rules—in fact, the more than 2,700 rules—that are contained within Social Security’s Program Operations Manual System.

Basically, the majority of financial advisors don’t have the Social Security-specific tools or in-depth knowledge required to help you maximize your Social Security. In general, it is a great idea to work with a financial advisor; however, when it comes to Social Security it is important that you make sure that you are receiving the best advice possible. Therefore, we will gladly work with your financial advisor if you are already working with one.

Will I have to give you my Social Security number?

Generally, no; this is not required. We will only need your Social Security number if your situation is exceptionally unique and our advisor needs to gather more information in order to assist you. Of course, even in these cases, you have the right to refuse to provide your Social Security number at any time.

Can I do everything over the phone, online, and/or through the mail?

Yes. We are dedicated to making everything as easy and convenient as possible for you. Additionally, we will work with you to identify a mutually convenient time to discuss your situation even if this means doing so on a weekend or in the evening.

What if I don't understand the strategy you send to me to maximize my Social Security?

If you have any questions during or following your review of the strategy we suggest for you, your advisor will be available to assist you and will work hard to address any questions that you may have.

Are you at all affiliated with the Social Security Administration?

No, we are not affiliated with the Social Security Administration in any way.

Do you handle Social Security disability claims?

We work with an industry-leading partner that handles disability claims for our clients. Please call us to speak with one of our advisors to learn about the discounted partner rates that are available to our clients.

Can you file for Social Security for me?

Yes, through our Social Security Filing service, we will file for your Social Security so that you don’t have to. You will benefit from the expert guidance from one of our Social Security advisors to help ensure that you application is completed correctly and that your strategy is implemented as planned. Additionally, the vast majority of clients that use the filing service never even have to interact with the Social Security Administration which tends to save a tremendous amount of time and hassle.

With the Social Security rule changes, are they still strategies that are available that I should be considering?

Absolutely; although the File and Suspend strategy is no longer available, there are many Social Security strategies that are still available to married couples, singles, divorcees, and survivors in order to maximize benefits. In some ways the recent rule changes have made it even more complicated to determine what is best for you, so working with an advisor is more important than ever.