Monthly Archives: September 2014

Why benefits at age 62 and 70 are different from official Social Security statement

An advisor recently pointed out that her client born in October 1954 (FRA = 66) is having different benefits at age 62 and 70 than what’s reported on the official Social Security statement.  age Why is it so?

Here’s the answer:

Let’s say that official Social Security statement has the benefits at FRA (66) as $2,207 per month. In this case, this client’s benefits at age 62 will be 25% lower. That comes to (1 – 0.25) * $2,207 = $1,655 per month. This is based on zero COLA (Cost of Living Adjustment). The delayed benefits at age 70 would be 32% higher (8% per year after FRA). So benefits at age 70 would be (1+0.32)*2207 = $2,913 per month.  These two numbers can be different from those reported on the official Social Security statement for two reasons:

1.  Assumptions around this client’s future income and Social Security tax payments until retirement.

2. The official Social Security may have a different COLA assumption.

J.P. Morgan Chase analysts say employees need help planning for retirement health care costs

An individual departing the workforce today will see out-of-pocket health care costs grow 7% annually throughout retirement, an analysis from J.P. Morgan suggests.

A client’s health care costs during retirement are based on his/her location, selected Medicare plan, health condition, lifestyle, and family health history. Plan for your client’s healthcare expenses using GoWealthPro’s easy to use Retiree Healthcare Planner™. Offer clients a free sneak preview of their healthcare expenses via an interactive Life and Healthcare Cost Planner tool.