The $214,000 Mistake
How to Maximize Your Social Security and IRAs
Proven Strategies for Couples Ages 62-70
Please… take a second and reread the title of this article. For years, I have been screaming from the rooftops that most people should delay taking Social Security benefits beyond their full retirement age. Our latest book (to be published in the next couple of months) will offer the numbers and the analysis. But for now, here is a quick summary of our conclusions. Our new book focuses on Social Security strategies, but I could not resist including some Roth IRA conversion analysis. The opportunities for timing Social Security benefits and Roth IRA conversions, a marriage I have always supported, may never be as great as they are now with the new tax brackets.
Here are our conclusions…the supporting analysis is forthcoming, but trust me, we have thoroughly run the numbers as we always do.
Here are the key points you need to remember about Social Security.
- If you apply at age 62, or as soon as you are eligible, your benefit amount starts lower and stays lower for the rest of your life.
- COLAs magnify the benefits of delayed claiming, as well as the detriments of early claiming.
- Delaying your application for benefits becomes more advantageous the longer that you live.
- Since the surviving spouse will get the higher of the two benefits, it generally makes sense to plan for one benefit to be as high as possible. This can also be a game-changer for the surviving spouse.
- If you are married (or were married, but are now divorced), filing a Restricted Application for benefits could be a way for you to get more money from Social Security.
Here are the key points you need to remember about Roth IRA conversions.
- The 2017 tax reform reduced tax rates for many individuals. If you believe, as I do, that this reduction is temporary, then it may be beneficial to consider a series of Roth IRA conversions sooner than later.
- A series of Roth IRA conversions executed in conjunction with optimal Social Security strategies is a powerful combination.
Finally, don’t leave these decisions up to guesswork—guessing the wrong way could be very costly. Have a qualified professional run the numbers for you.
All of our clients and business friends that we think would benefit from this information are slated to receive a copy of our new book as soon as it is published. If you are concerned that you don’t fit into one of those categories, or if you know someone who you think would benefit from the information, please call Alice at 412-521-2732 and request that we add your name and the names of any of your friends to our list or to see if you qualify for a free second opinion consultation. We will happily send copies as soon as they are available. If you are interested in more financial information (we have written 5 best-selling financial books, many peer-reviewed articles, have 185 hours of our radio archives, etc.), we encourage you to visit our website, www.paytaxeslater.com. It has a wealth of valuable free material of special interest to IRA and retirement plan owners.