Social Security can be a prime concern for baby boomers, so focusing on that topic can help an advisory practice grow.
“We’re big proponents of using Social Security Analyzer software for developing strategies,” said Lars Phillips, an associate advisor with Avier Wealth Advisors in Bellevue, Wash.
“Since 2013, we’ve used it with over 175 clients and prospects,” he said. “Of all the tools we use, it gives our clients one of the biggest ‘wow’ factors.”
Phillips tells of a 68-year-old prospect who had been collecting Social Security for two years.
“His wife had just turned 66 and was not taking any benefits,” Phillips said. “She was unaware of her ability to file a restricted application for spousal benefits.”
Avier Wealth informed her that she was entitled to about $1,100 a month from Social Security, which wouldn’t affect her own future benefits -- “free money” being left on the table, as Phillips put it.
“The couple called us 20 minutes after our meeting, ready to become clients,” Phillips said.
But legislation passed late last year limits the use of restricted applications for spousal benefits in the future, among other tweaks.
Phillips said he reached out to clients who would be affected by the new rules and covered the changes in quarterly webinars, so planning can continue for viable Social Security strategies.
CHOICES TO CONSIDER
Social Security advice is also vital for Larry Rosenthal, a CFP who is president of Rosenthal Wealth Management Group in Manassas, Va.
“We help clients analyze their Social Security choices, pension choices, etc.,” he said. “Taxes on Social Security benefits affect cash flow, and we guide that conversation with clients.”
Rosenthal recently met with a client couple who wanted to take money from their individual retirement accounts.
“They wanted to stay in the 15% tax bracket, and they have money in the bank they can use to supplement other income,” he said.
With the proper level of IRA withdrawals, the couple will pay less tax on their Social Security benefits.
George Middleton, an advisor with Limoges Investment Management in Vancouver, Wash., was “shocked” by how many people were taking Social Security at 62.
“It was a call to action,” he said. “Besides contacting my own clients, I developed a course [using Social Security Solutions software as the primary resource] that I offer at the local community college.”
Middleton described his teaching as public service.
Even so, he has received a few hourly engagements from the class.
Moreover, Middleton’s knowledge of Social Security “absolutely” has strengthened relationships with existing clients.
“There have been clear cases where you can see clients have the ‘aha’ moment when they see the benefit of waiting for Social Security benefits, for example,” he said.
“Many people did not know how the spousal benefit worked. Such information is invaluable to clients,” Middleton said.
Donald Jay Korn is a New York-based financial writer who contributes to Financial Planning and On Wall Street.
This story is part of a 30-day series on smart ways to grow your practice.
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