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Social Security Planning

By Fred Banbury 1 April, 2023 2 mins read

You should consider the various benefits that you may be eligible for when you plan to retire. You can claim benefits early to help you achieve your goals and still have enough money to live comfortably in later years. Delaying benefits could have tax consequences. Delaying benefits can be a smart financial move if you're still earning a decent living.

There are several things you should consider before you claim benefits

There are several considerations to be made before claiming Social Security benefits. Benefits are a complicated decision that can have major tax and income consequences. It is a good idea to consult with tax and financial advisers before making any decisions. They can give you advice about the best course.

Your life expectancy is one of the most important considerations. You can delay your claim if your FRA is reached. However, if you are certain that you will not live past 75, claiming benefits earlier may be the best option.

Tax implications for claiming early or later

While you can claim Social Security benefits early or late, you should consider the tax implications of claiming benefits early. Delaying your claim is better for your heirs. Delaying your claim will allow you to secure a higher survivor award if your spouse earns less. This additional income can make a huge difference in the financial future of your heirs.

There are many tax consequences to claiming Social Security benefits early or late. The amount of income you have each year affects the tax rate. In other words, if you make less than your benefit, it might not be enough to pay taxes. The good news is that you can reduce your tax rates if you plan to take more distributions from your retirement account. You can do this by using nontaxable sources like cash reserves or Roth accounts. If your benefit is nearing the 85% Social Security tax limit, you should consider taking additional taxable distributions. This will help you save money for the future.

There are many options available for high-earning spouses

For high-earning spouses, there are many options for planning for social insurance. The spouse who is working can defer the higher earning spouse's benefits until the age of 70, if the spouse is still employed. While the lower earner still receives benefits based upon their earnings record, the higher earning spouse will receive a larger payout. These options will not be available to all age groups.

Social security benefits are best for one spouse depending on many factors. These include the ages at retirement, the earnings history of each spouse, and the difference in age. Bessemer Financial Advisors are experienced in helping clients plan for retirement based on these variables and have assisted dozens of clients evaluate the election options available.

FAQ

How to beat inflation with savings

Inflation refers to the increase in prices for goods and services caused by increases in demand and decreases of supply. Since the Industrial Revolution, when people started saving money, inflation was a problem. Inflation is controlled by the government through raising interest rates and printing new currency. There are other ways to combat inflation, but you don't have to spend your money.

For example, you could invest in foreign countries where inflation isn’t as high. There are other options, such as investing in precious metals. Silver and gold are both examples of "real" investments, as their prices go up despite the dollar dropping. Investors who are concerned about inflation are also able to benefit from precious metals.

Who Can Help Me With My Retirement Planning?

Many people consider retirement planning to be a difficult financial decision. You don't just need to save for yourself; you also need enough money to provide for your family and yourself throughout your life.

When deciding how much you want to save, the most important thing to remember is that there are many ways to calculate this amount depending on your life stage.

If you're married, you should consider any savings that you have together, and make sure you also take care of your personal spending. Singles may find it helpful to consider how much money you would like to spend each month on yourself and then use that figure to determine how much to save.

You could set up a regular, monthly contribution to your pension plan if you're currently employed. You might also consider investing in shares or other investments which will provide long-term growth.

Contact a financial advisor to learn more or consult a wealth manager.

Why it is important that you manage your wealth

You must first take control of your financial affairs. It is important to know how much money you have, how it costs and where it goes.

You must also assess your financial situation to see if you are saving enough money for retirement, paying down debts, and creating an emergency fund.

If you don't do this, then you may end up spending all your savings on unplanned expenses such as unexpected medical bills and car repairs.

Where to start your search for a wealth management service

The following criteria should be considered when looking for a wealth manager service.

Reputation for excellence
Is it based locally
Free consultations
Supports you on an ongoing basis
Has a clear fee structure
Excellent reputation
It's simple to get in touch
Support available 24/7
Offers a wide range of products
Charges low fees
Hidden fees not charged
Doesn't require large upfront deposits
You should have a clear plan to manage your finances
A transparent approach to managing your finances
This makes it easy to ask questions
Have a good understanding of your current situation
Understands your goals and objectives
Is available to work with your regularly
Works within your financial budget
Good knowledge of the local markets
Would you be willing to offer advice on how to modify your portfolio
Is available to assist you in setting realistic expectations

What is retirement plan?

Retirement planning is an essential part of financial planning. You can plan your retirement to ensure that you have a comfortable retirement.

Retirement planning means looking at all the options that are available to you. These include saving money for retirement, investing stocks and bonds and using life insurance.

What are the best ways to build wealth?

Your most important task is to create an environment in which you can succeed. It's not a good idea to be forced to find the money. You'll be spending your time looking for ways of making money and not creating wealth if you're not careful.

You also want to avoid getting into debt. Although it is tempting to borrow money you should repay what you owe as soon possible.

You're setting yourself up to fail if you don't have enough money for your daily living expenses. And when you fail, there won't be anything left over to save for retirement.

You must make sure you have enough money to survive before you start saving money.

What are some of the different types of investments that can be used to build wealth?

There are several different kinds of investments available to build wealth. Here are some examples:

Stocks & Bonds
Mutual Funds
Real Estate
Gold
Other Assets

Each of these has its advantages and disadvantages. For example, stocks and bonds are easy to understand and manage. However, they are subject to volatility and require active management. However, real estate tends be more stable than mutual funds and gold.

It's all about finding the right thing for you. Before you can choose the right type of investment, it is essential to assess your risk tolerance and income needs.

Once you've decided on what type of asset you would like to invest in, you can move forward and talk to a financial planner or wealth manager about choosing the right one for you.

Statistics

As of 2020, it is estimated that the wealth management industry had an AUM of upwards of $112 trillion globally. (investopedia.com)
A recent survey of financial advisors finds the median advisory fee (up to $1 million AUM) is just around 1%.1 (investopedia.com)
As previously mentioned, according to a 2017 study, stocks were found to be a highly successful investment, with the rate of return averaging around seven percent. (fortunebuilders.com)
If you are working with a private firm owned by an advisor, any advisory fees (generally around 1%) would go to the advisor. (nerdwallet.com)