Planning to maximize Social Security benefits is becoming a service that clients expect advisors to provide, according to a new survey from a Nebraska-based software provider.

Of couples with assets over $250,000, 67% expect their financial planner to provide advice on Social Security claiming options, according to a survey by Social Security Timing, an Omaha, Neb.-based firm that offers software of the same name.

The survey found that 70% of couples with household income over $100,000 would expect their planner to provide advice on Social Security claiming options. And 57% of the survey respondents -- 532 married couples between the ages of 60 and 66 -- said they would look for another advisor if their current advisor didn't or couldn't analyze these options.

“The most surprising takeaway to me was how many consumers value that sort of advice enough to go outside what may be a really strong relationship,” said Omaha-based financial planner Joe Elsasser.

Elsasser developed the Social Security Timing product and is also the director of advisory services for the company known as Senior Market Sales, Inc.

Social Security Timing is a software program that allows retirees, pre-retirees and financial advisors to decide the smartest way to take their Social Security benefits.

The difference between the best and worst Social Security election decisions can mean between $20,000 and $40,000 over a lifetime, Elsasser said. That’s important because Social Security benefits in 2008 accounted for an average of 64.8% of total income for recipient households with members aged 65 or older, according to the Social Security Administration.

Strategies like “file and suspend” and “restricted application” were recognized by just 27% of survey respondents, although higher-income respondents were more aware of their options.

The survey results demonstrate that advisors have the opportunity to both educate less-sophisticated clients and advise those who are more knowledgeable, Elsasser said.

The Social Security Timing software was first released in April and 350 advisors are actively using it so far, according to Elsasser. The software “basically calculates hundreds of scenarios simultaneously” to help Social Security recipients decide when and how to take their benefits.

A hypothetical example of a shrewd strategy might involve a wife taking her benefits immediately and her husband delaying for four years -- but claiming himself as a spouse under the wife’s record, Elsasser explains. That way, the husband can tap an income stream alongside his spouse without affecting his own account.

“These strategies often tilt the playing field toward delaying for a lot people who otherwise would not have considered delaying,” Elsasser said.






Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access