Ron Kelemen from our Salem office posted this excellent piece about how we think about Social Security. Another great example of how our perceptions influence our decisions about money matters.
One of our bigger challenges with clients approaching retirement is to convince them that—in many cases—it makes sense to delay taking Social security benefits. A recent article on CBS MoneyWatch discusses how words used to describe benefits can significantly influence decisions. Behavioral scientists call this phenomenon "framing."
Maybe instead of saying “You can file for early benefits at 62” (who wouldn't want an early benefit of any kind?), we should be advising “You can file for reduced or the lowest benefits at 62.” Or instead of “Consider delaying your benefit to age 70,” it should be phrased “Consider filing for your maximum benefit at your maximum retirement age of 70.”
Regardless of the Social Security terminology, the decision of when to file, suspend, and take benefits is a complex with lifetime consequences. Sometimes claiming early does make sense, but you won’t know until you’ve considered the BIG picture. Your Social Security decision needs to integrate spousal age differences, projected benefits, work, other assets, health, earnings history, and more. We’re here to help you with that complexity.