How to Address Underappreciated Risks in Social Security Planning

Social Security claiming strategy is at the core of most people's retirement plan, and the topic of optimal planning is a lively area of debate. Many assume that Social Security planning is a simple matter of calculating monthly benefit amounts and projected total lifetime benefits. However, effective planning goes beyond the basics to explore important but underappreciated risks like (i) the uncertainties of lifespan (mortality risk and longevity risk), (ii) the effects of claiming on retirement portfolios (sequence-of-returns risk), (iii) the risk that the program may change in the future (policy risk), and (iv) the tax effects of aligning Social Security benefits with significant tax events (tax risk). This session will explore all of these considerations and give practical, real-world insights you can apply with clients right away.

Learning Objectives:

1. Analyze how longevity and mortality risk and risk perception affect Social Security choices.
2. Evaluate how Social Security claiming choices affect other parts of a retirement plan, such as portfolio balances and expected taxes.
3. Illustrate the history of Social Security funding and changes to the program.