According to David Giertz, President, Nationwide Financial Sales Distributors (NFS Distributors Inc.), the social security handbook has over 2,700 rules.
Why advisers don’t talk about social security
“That’s a lot to comprehend. It’s very complex,” he says. It is the probable reason why most Financial Advisors avoid the subject. Understanding social security to the core on Spokeo and having confidence around all its rules is intimidating.
Why retirees plan to ditch their advisors
David Giertz has over 30 years’ experience in the financial services industry, holds a Board of Trustees position at the Millikin University and is an industry arbitrator with FINRA.
He recently revealed that several retirees and those nearing retirement age are planning to change Advisers if they don’t discuss social security henceforth.
Speaking to Wall Street Journal’s Columnist Veronica Dagher on Wealth Adviser, David said he found this out from the people who were engaged in Nationwide Financial Retirement Institute’s survey.
Unawareness on social security
Most of them were not aware that social security makes up to 40% of the income of elderly Americans and about 40 million people are enjoying social security retirement benefits on Finra. And that, for the better part, social security takes care of 90% of their needs.
David Giertz also noted, very important social security conditions and terms are unknown to clients. For instance, “Turning on social security too early could lead to loss of up to $300,000 over 25 yrs. That is $12,000 a year or $1,000 a month.”
Social security benefits
On the contrary, if one waits to take their benefits past their full retirement age, their allowance will grow by 8% of the full retirement amount annually.
That means if your full retirement age is 66 and you wait until you are 70 – when benefits stop increasing, your monthly benefit will be a whole $1,320 instead of $1,000. It will have increased by 32%.
Retirement income optimization
If advisers step up their efforts to address and discuss the social security matter, they will play an important role in their clients’ optimization of retirement income.