While every retiree is entitled to social security benefits, how much of the payments that trickle down to your bank and how you enjoy them largely depends on your retirement plan. According to David Giertz, the sales and distributions president at Nationwide Financial Distributions, there is a growing dissatisfaction about the amount of social security payments received by current retirees.
David’s claim is backed by a study by Nationwide Retirement Institute reporting that more than 30 percent of retirees receive less benefit than they anticipated. He attributes this difference between the retirements befits received versus the anticipated to common mistakes and misconceptions about social security. These include:
The land-grab mentality
Most retirees believe that they should start enjoying the social security benefits as soon as they hit the benefits application age, 62 years. David Giertz refers to this as the land-grab mentality. They, however, fail to consider the fact that delayed benefits result in a higher monthly check while early applications attract deductions.
Social security taxation
Did you know that social security payments are a taxable income? This means that if you apply for social security benefits before your set retirement age, you stand to pay income tax on the benefits. Most importantly, note that if you apply for benefits while working, the government takes away $1 form your benefit for every $2 you earn above the annual limit of $15,720. Therefore, if you hope to maximize your benefit payments by eliminating taxes, consider delaying the application for your benefits until you reach the retirement age and after you quit employment.
Additionally, David notes that health problems form the leading source of dissatisfaction during retirement. Nevertheless, he points out to a study suggesting that retirees working with an adviser are less likely to have health care costs keep them from enjoying retirement.
About David Giertz
David has over 30 years of experience in the progressive financial services industry with his most recent position being the President of Nationwide Financials. He also specializes in retirement plans and advise and has throughout his career life led a successful distribution of private-sector retirement plans, annuities, and insurance through banks, regional firms, and independent brokers.