Social Security may be just one piece of the puzzle, but the decisions you make about when and how to claim your benefits can be crucial to the stability and strength of your overarching retirement income plan. Nicholas J. Colantuono, CFP® joins Better Money Boston with WCVB Channel 5 to explain the importance of getting this financial decision right in retirement.

Navigating an Uncertain Future

It’s no secret that our changing retirement landscape, where a large cohort of the population is at or near retirement age, has put the Social Security system under a lot of stress. With such an uncertain outlook, most people have been left wondering whether they’ll see their benefits, and if so, how much they can expect to receive.

If you’re like many of the clients we work with who are retired or approaching retirement age, you can be assured that a portion of those Social Security benefits will be there for you. How much that is will depend on certain factors such as your earnings history, birth year, and claiming age.

Envisioning Your Whole Plan

Your Social Security claiming strategy must be viewed within the context of your total financial plan. It’s no longer realistic to rely solely on your benefits to provide the income you’ll need in retirement. Social Security was enacted at a time when life expectancy was a lot lower, and benefits were only meant to support a 10- or 15-year retirement. The program was never intended to become the 20-to-30-year pension plan that it is now.

While longevity is a gift, it also means planning for more income in retirement. We caution you not to expect Social Security to make up a fairly large portion of that monthly income but recognize that it is a key part of your plan that you want to get right.

Optimizing Your Benefits

Social Security is complex and can sometimes be confusing, but there are plenty of opportunities to optimize your benefits that you should be aware of. In fact, there are over 500 ways to claim Social Security. Some of your options include collecting as soon as you’re eligible for partial benefits at 62, waiting until you reach your full retirement age (67 for anyone born in 1960 or later), or delaying until age 70 to get the maximum amount.

Another factor that may affect your claiming strategy is your marital status. Whether you’re married, divorced, or widowed, opportunities for certain spousal benefits or survivors benefits all come into play as you plan for Social Security.

Making the Right Choice

Only a small percentage of Americans file for Social Security at the optimal age. When and how to claim your benefits is a huge financial decision, so you want to make sure you’re not one of the people getting it wrong. This is where a financial advisor can really take the reins and guide you through this process. With their insight and experience, an advisor can help you choose the right claiming strategy, one that supports your unique vision of retirement and serves you well throughout the rest of your life.