By Norm Miller, Senior Wealth Counselor
My wife and I moved to Arizona from California in 1999 and I took some time off from work to explore whether I wanted to remain in engineering or pursue a new career in my late 40s (it’s great to have such a supportive wife). I’ve always had financial planning in the back of my mind (took a course in the 80s) and I was fortunate to land a position with an independent firm. I had dual motivations: To improve my own personal situation and to learn about this emerging profession where I could make a difference in people’s lives.
A couple of months ago I called a professional colleague about an issue with our mutual client. Versant uses a client relationship management (CRM) software application that has a dashboard containing elements such as phone numbers, email and physical addresses, photo (great way to humanize the relationship) and birthdays. As I’m making the call to my colleague, I notice that he turns Social Security full retirement age (FRA) in the next three months. As soon as we concluded our client business, I explored he and his wife’s situation to see if there were claiming strategies that he could employ to maximize his Social Security benefits. I found out that his wife is already collecting benefits, so he could employ a grandfathered provision where he files a restricted application, thereby receiving a spousal benefit from age 66 to age 70, and then file on his own earnings record at age 70. This allows him to collect tens of thousands of dollars during these four years and he will then collect a 32 percent higher benefit (delayed retirement credits) over his FRA benefit when he applies at age 70 – this new benefit will be at least $40,000 per year. This “Claim Now, Claim More” strategy is only available to beneficiaries born before 1954.
I share this story to illustrate that advisors are “hard wired” to spot planning opportunities, not only with clients, but with others we meet in their day to day travails. Helping people enrich their lives is what motivates individuals to become advisors. After multiple nudges, my colleague went to the SS office (about as much fun as oral surgery) and implemented my recommended strategy. I just heard from him that everything went well – he will start collecting a spousal benefit, and Social Security even increased his wife’s benefit due to old deemed disposition rules. A random act of kindness sure feels good!
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