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Secure Decisions About Social Security

The COVID-19 pandemic has changed our lives significantly and it has forced people to think about aspects of their lives that maybe they took for granted, including Social Security planning. Older Americans have been the most vulnerable to the damaging health effects of the coronavirus, any many have been forced to change their retirement plans because of the pandemic as well.  Some have lost their jobs and have decided to start retirement earlier than planned, while others have decided to start retirement later than they wanted because of lost income. Whatever the situation, most people need Social Security to have the retirement they want.

 “Social Security is so important to so many people, said Elaine Floyd, author of “Savvy Social Security Planning for Boomers” and the Director of Retirement and Life Planning at Horsemouth. She is considered one of this country’s leading authorities on Social Security rules and strategy.

Many people are concerned about the overall financial health of Social Security. Floyd says the trust fund as it’s being run right now would run out of reserve money in 2034, but she says there is legislation in the works that would provide money for the fund well beyond that point. If nothing was done to correct the situation by 2034 the fund will still be able to pay 79 percent of the benefits scheduled. That percentage would drop to 74 percent in 2092.

“We think Congress will act to restore solvency to the system,” said Floyd.  “We are concerned right now about the impact of the pandemic. We just don’t know how it will play out.”

Because so many people have lost their jobs during this pandemic, aggregate wages will likely drop significantly for 2020.  That could be really bad news for anyone who is turning 60 this year. Because of the way Social Security benefits are calculated those people will have significantly reduced benefits when they need them. It’s estimated that reduction could be as much as $2000 per year, $170 per month.

Congressman John Larson of Connecticut has introduced a bill that would prevent that from happening. It’s called the Social Security COVID-19 Correction and Equity Act. Very basically, it would prevent the devastating cut to Social Security benefits for those who reach age 60 in 2020, and it would boost benefits for people who need it the most during this pandemic.

Floyd believes people should be more aware of the big picture when it comes to Social Security and they should communicate their concerns with their representatives in Congress, but she is more concerned about people planning their own personal use of the funds.

“People must put more time into planning how they will use Social Security and how much money they can expect from it,” said Floyd. “It really comes down to everyone’s own individual strategy. What are you going to do? Make sure you know all your options.”

Erik Brenner is the owner of Hilltop Wealth Solutions, an independent investment advisory firm in Mishawaka, Indiana and he believes people don’t think about Social Security as a pension, but they should.

“A lot of people are not fortunate enough to have a pension from their employer, but they do have a pension, it’s Social Security,” said Brenner. “It’s retirement income that you can count on and it has cost of living adjustments attached to it. People need to think of it more seriously and make decisions like it is a pension. They also need to remember that it’s money you cannot outlive. And with increased life expectancy the decisions we make about Social Security become even more important”

One of the biggest questions people need to answer is when to start taking Social Security. You become eligible at age 62, but that is at a significantly reduced (about 28% less) amount from your full benefit retirement age.  If you were born in 1954 or before you became eligible for your full benefit at age 66 and you are probably already enjoying it.  The full benefit retirement ages then increase gradually for people born in 1955 to 1960. If you were born in 1960 or later your full benefit retirement age is currently 67. You can also increase your benefit if you can wait until you are 70.

“We always advise people to wait as long as they can before they take Social Security,” said Floyd. But she acknowledged that these are difficult times for many people and their options may be limited.  She said if you feel like you must retire before your full benefit Social Security age try to use other funds, such as your 401K or savings, to pay your bills for as long as possible.. The closer you can get to your full benefit retirement age for Social Security the more money you will be eligible to receive.

Taxes are another consideration when you choose to receive Social Security before your full benefit age.  If you receive between $25,000 and $34,000 in Social Security benefits before your full benefit age you will pay federal income taxes on about 50 percent of the amount you receive. If you receive more than $34,000 you will pay federal taxes on about 85 percent of what you receive. Developing a strategy that helps you avoid paying those taxes can save you a lot of money.

Floyd also encourages people who choose to take Social Security early because they lost their job to continue looking for work, even if it’s only part time. You can make about $1500 a month working part time before your social security payment would get reduced. The government will deduct $1 from your benefits for every $2 you earn above $18,240. You also must factor in how much your monthly Social Security payment adds up to annually because the government will also deduct $1 from every $3 you earn above $48,600 when you combine your work pay and Social Security benefit. 

Once you reach your full benefit retirement age you can earn as much as you want and still receive your full Social Security payment.

If you land a full-time job and no longer need Social Security, you can suspend it and start earning back some of the payment amount you lost by taking it early. You may not reach the full amount you would have received had you not taken it at all, but you might earn back a good portion of the money you lost. So, if you feel taking Social Security early is your only option, it may be advisable to keep looking for work.

These decisions become even more critical for married couples. Spousal benefits and survivor benefits can be tremendously affected by the timing of the decisions. Spousal benefits can be a great option for spouses who didn’t work or had lower incomes for many years. It pays 50 percent of the higher earning spouse’s benefit. But again, the longer you can wait to apply the more money you would receive. Once you commit to receiving that benefit you cannot change the amount.

The survivor benefit allows a person to claim the benefits of a deceased spouse. In this case you can claim the benefit as early as age 60, but it is a significantly lower amount than it would be at the full benefit retirement age.

When both spouses are receiving benefits and one of them dies, only the benefits of the higher earner will be received as the survivor benefit. It’s important for the highest earner to maximize his or her benefit because that amount will eventually become the survivor benefit.

There are so many decisions and calculations that must be made when it comes to getting the most out of Social Security, including consideration for Cost of Living Adjustments (COLA). Make sure your financial advisor understands these decisions and all the potential ramifications when you develop your retirement plan.  

“We attend training seminars on Social Security and we constantly get updated information about changes and strategies to consider,” said Brenner. “We also have relationships with Horsemouth and Elaine Floyd that keep us informed and we have sophisticated tools to help with calculations that are critical to making the best decisions.”

A recent Harris Poll of two thousand people conducted for the Nationwide Retirement Institute found that 80 percent of the people questioned said they would seek another financial advisor if their advisor could not answer their questions about Social Security. People are starting to understand more and more how important these decisions can be and why it’s critical to receive good advice. Smart Social Security decisions can help secure a great retirement plan.

This letter is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.  The opinions expressed are as of the date noted above and may change as subsequent conditions vary.  There is no guarantee that any forecasts made will materialize.  Reliance upon information in this post is at the sole discretion of the reader.

Additional information about Hilltop Wealth Solutions is available in its current disclosure documents.  Form ADV, Form ADV Part 2A Brochure and Client Relationship Summary report are available online via the SEC’s Investment Adviser Public Disclosure (IAPD) database at, using SEC # 801-115255. Registration with the SEC or state regulatory authority does not imply a certain level of skill or expertise. 

This article was researched and written by the staff of Hilltop Wealth Solutions. It is one of many that are published on our website at

For more information on this article contact
Tim Ceravolo at 574-675-9277 or 574-889-7526

574.889.7526 | toll free: 833.889.7526
fax: 574.889.5392


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