Call it the great Social Security debate: the desire to get benefits immediately versus delaying to increase payments in the future.

Forget for a moment the convoluted Social Security claiming strategies for couples. Put aside the intricacies of benefits for divorced clients and survivors.  What clients will continue to resist is the most basic, and widely applicable strategy: to simply delay filing for benefits.

Most people will be better off delaying filing for Social Security to as late as 70, the latest beneficial time to wait to file.  Delaying will give them higher lifetime income, better longevity protection and maximized survivor benefits.


There are, of course, exceptions -- clients who have no other savings or income and simply cannot wait, single clients with shorter than average life expectancies, or an individual whose spouse has made dramatically higher income throughout their life. Yet the majority of our clients do not have these exceptions; they have adequate savings and average or better than average health. 

When we encourage them to delay filing for benefits, we encounter a number of common objections.  Here are the three most frequently cited:

1. I want my money back.

2. I don't want to dip into savings.

3. Social Security is broke. I don't trust it.   

Financial planners need to anticipate these challenges and be prepared to respond with balance of facts, patience and compassion.

One response to the first point is longevity risk, which is now an unavoidable fact: One of the greatest retirement risks that clients face is the challenge of planning for a long lifetime. There is now a 50% probability than one spouse of a couple who are both 65 will live until at least 92. Annuity-like, guaranteed income is a powerful and important tool to manage this risk.

Managing longevity risk is much more important than the less likely scenario of people "not getting their money back."


Another point to make: For each year between the ages of 62 and 70 that clients delay filing for Social Security, their benefits grow approximately 8%.  In addition, future Social Security benefits will include cost of living increases. That's a tremendous deal!

The investment returns clients might forgo by spending down some savings would be very hard pressed to match these types of returns.  Furthermore, the Social Security enhancements are guaranteed compared to the unpredictable market returns on investments.

Another fact that is often forgotten or entangled by politic rhetoric is that the Social Security Retirement Trust Fund had a surplus of almost $2.7 trillion at the end of 2013.  The current system projects the capacity to fund full benefits until 2033 and 77% of promised benefits thereafter when the Trust Fund is used up.

There are a handful of well-defined changes that can bring the system back into balance.   Many observers expect that, at some point in the next 15 years, sufficient political will develop to drive the required changes.


Those are some of the facts.  However, an important aspect of working with clients is walking in their shoes: respecting, honoring and hearing the emotional currents that, whether expressed or implied,  drive their reactions and behaviors.

Be ready for a "bird in the hand" -- as opposed to "two in the bush" -- mentality. It's hard to deny the allure and immediate gratification of collecting the earliest possible benefits with immediate income. Even when I hit 62, that little voice in my head said "You can collect thousands in benefits, right now!  Come on!"

Conversely, spending down finite savings in order to delay filing forces clients to confront the basic human fear of the uncertain future and of scarcity.  Spending down savings which will never go up, when there is no other income coming in, can be very hard to choose to do if there is another option such as filing for immediate Social Security benefits.

Listen patiently to (and respect) these types of responses from clients. Consciously try not to judge, counter these concerns or respond in any way.  Doing so can help a client relax, feel respected and finally, be more receptive to the rational facts you want to present.

Finally, remember to have compassion for yourself, the intrepid planner, as you work to help clients navigate the minefield of complicated financial considerations and emotional reactions.

Paul Norr is a CFP in Westlake Village, Calif., who specializes in retirement planning for Bucks County Financial Planning Group.

Read more: