Kevin Kroskey's Money & Mind

The value of delaying Social Security has been written about a lot recently. In the current low-yield environment for bonds and low expected return environment for many stock asset classes, it is a particularly attractive strategy now. But should retirees include Social Security as part of their bond allocation? Watch the short video to learn one expert's perspective.  

An important paper has recently released by the Social Security Administration called   Behavioral and Psychological Aspects of the Retirement Decision . It delves into some of the non-financial reasons why people choose to retire when they do. Following are some highlights from the paper. Many future retirees do not understand the interplay between claiming age and Social Security benefits.   Even when they understand the claiming rules, many people claim benefits when it is not economically advisable to do so, as m ore than half of retirees claim benefits at 62.  Retirees tend to   anchor   on ages that have some retirement significance.   Why do so many people claim to be "burnt out" at work when they turn 62? Why not 60 or 64 or 68? It's because 62 is the age of eligibility for Social Security benefits. But what if they were to anchor on age 70 instead? Might they push through the burnout, as they would if it occurred at 55 or 60 when retirement cle...

I find that retirees often have erroneous beliefs of Social Security and are blind to planning opportunities in claiming their benefits. Elaine Floyd, CFP is one of the foremost experts on Social Security planning within the financial planning community. In a recent newsletter she listed common mistakes both retirees and advisors make in addition to common misperceptions. These are posted below. 3 of the most common mistakes RETIREES make: Thinking of 62 as being "Social Security age" without realizing the penalties they pay by claiming early benefits.  Filing for benefits without understanding all the ramifications as to spousal benefits, survivor benefits, the earnings test, etc.  Failing to consider the lifetime value of Social Security over a long life expectancy and how it provides longevity insurance in the event of a very long life. 3 of the most common mistakes ADVISORS make: Focusing too much on the breakeven age without considering the importance of income...