Social Security Isn't Chump Change

I want to bring your attention to an article that was published in the Wall Street Journal. The author (Ash Ahluwalia) is a close colleague of mine and he is a premier expert on Social Security Income Strategies.  He even won the National award last year for the Social Security Advisor of the Year... the WSJ article is below.

 
Even for High-Net-Worth Clients, Social Security Isn’t Chump Change
Wealth managers should help clients leverage the benefits as part of their overall financial plans
March 16, 2017 10:11 a.m. ET
Ash Ahluwalia is president of National Social Security Partners LLC in New Brunswick, N.J. Voices is an occasional feature of edited excerpts in which wealth managers address issues of interest to the advisory community. As told to Alex Coppola.
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Ash Ahluwalia, president of National Social Security Partners LLC in New Brunswick, N.J. … advisers have to put Social Security on their radar as a retirement topic that demands a little more attention. 

When it comes to retirement planning, I see many high-net-worth clients and their advisers ignoring one of the most powerful financial-planning tools available to them: Social Security.
I think that oversight stems from the misconception among wealthier clients that the benefit is almost trivial—particularly when compared with their other retirement assets. And while they’re right that their other assets will dwarf what they receive in Social Security payments, that’s not a reason to discount them. For wealthy couples, Social Security is still a guaranteed income stream that could pay out in excess of $1 million over their lifetimes, making it an integral retirement-income and estate-planning tool.

Even if a client won’t depend on that income stream to fund his or her retirement, the role of an adviser should be to find ways to strategically leverage that money to achieve other financial goals. For example, instead of deferring the benefit, which is often the strategy for a more traditional investor or client, you might encourage a HNW client to claim Social Security as soon as age 66. The benefit will be 32% smaller than if he or she had waited until age 70, but the size of the benefit isn’t as critical as it would be for someone with a smaller estate. By starting the Social Security income stream earlier, however, a HNW client can begin putting those payments to work—directing the money into an irrevocable life-insurance trust that can be used to help cover estate taxes, making charitable gifts, or leaving a legacy for heirs.
Another smart use of Social Security benefits is as protection against the potential cost of long-term care. It’s not unusual for someone with a chronic or debilitating illness to pay upward of $10,000 a month for medical care—a significant expense regardless of net worth. And because those services aren’t covered by traditional insurance policies, using at least some of a Social Security benefit to fund long-term care insurance can be a wise decision.

Advisers have to put Social Security on their radar as a retirement topic that demands a little more attention. Most advisers don’t have specialized knowledge in Social Security planning and the system is complicated: There are more than 700 rules governing Social Security and the typical couple has over 500 filing options. But there are educational and certification programs available nationwide that can help advisers become more knowledgeable and familiar with these strategies.
Learning how to use Social Security to your clients’ benefit can strengthen their financial foundation regardless of net worth. As an inflation-protected, guaranteed lifetime income stream, Social Security shouldn’t be an afterthought but rather a building block of any client’s retirement plan.

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