From Retirement Now Newsletter April 22nd 2021

I came across an article recently on how married couples with large age differences between them can approach the decision of when to claim Social Security benefits.

I had actually addressed this same issue in an article I wrote back in September of last year that goes into a bit more depth. Here’s the link.

On the surface the article goes through details of possible strategies for couples with the unique situation of having 10+ years of gap in their ages. But on a deeper level it shows that (regardless of age difference within a married couple) when to claim Social Security benefits can be a complex decision for married couples. This decision is made all the more critical since Social Security will be a pillar of most retirees’ income.

But for a lot of people Social Security won’t be enough to support their retirement lifestyle.

So while the decision to determine when to draw benefits is unique to every individual, it’s not the only unique decision that must be correctly chosen.

How people handle their other assets is also a critical decision.

For example, some people have the bulk of their retirement savings in 401k/IRA’s, while others don’t. How they choose to handle that asset can have huge implications on their retirement, especially considering they will have to pay taxes on their withdrawals, future tax rates are unknown, Required Distributions will eventually force them to show higher income on their tax returns, and they may not be able to stay in a lower marginal tax bracket if they don’t take preventative actions now.

Or another example… some people may retire years before drawing their Social Security. They may even have funds to live on that are not taxable upon withdrawal. As a result, they may be in a low marginal tax bracket. They may have the luxury of “filling up those lower tax brackets” with Roth IRA conversions at a very low tax cost. Thus, creating accounts they can draw from in the future without incurring additional tax, and even possibly setting themselves in a position that when they do draw Social Security it may not even be subject to taxation.

These are just two examples of scenarios that may apply to a person. There are hundreds more and everyone’s situation is different.

Anyway, at the end of the day most retirees share some things in common. These include:

-They want to know they have saved enough to retire

-Know their savings will last them throughout retirement

-Know which accounts to withdraw money from and when

-Lower their taxes in retirement so they can keep more for themselves or their heirs

-Have a simple plan in place that makes sense (as opposed to a 400 page “financial plan” that is incomprehensible).

Conclusion: Hope this helps. And if you need help with these types of issues for your retirement, click here and scroll down to schedule a 15-30 minute phone chat with me to see how we could possibly serve you and help improve your retirement security.


Chris Hammond

P.S. We specialize in helping retirees (and those retiring in the next 5-10 years) determine how much they need to save, how to not run out of money, and help them lower their taxes throughout their retirement years.
Click here to schedule a call and start planning for your retirement now.