Typically, the advisor/client conversation regarding Social Security revolves around when to claim benefits. As the Social Security Administration (SSA) details, a client can claim benefits as early as age 62, but the longer that claiming is delayed up until age 70, the greater the benefits received.
Usually, that’s the extent of the Social Security conversation, but advisors can do more for clients when it comes to Social Security – an objective made easier by the National Association of Registered Social Security Analysts (NARSSA).
NARSSA provides the tools and resources for advisors to attain the Registered Social Security Analyst (RSSA®) certification. Before an advisor scoffs at having to deal with gaining yet another professional license, there are some points to remember. First, preparation for the RSSA competency exam consists of five self-study modules, which can be completed in as few as 15 hours. After that, the advisor can take the exam. The modules also count toward National Association of State Boards of Accountancy and Certified Financial Planner (CFP®) Board credits.
Then there is simple math. As in the sheer number of folks claiming Social Security benefits makes the RSSA designation appealing for advisors.
“There is a tremendous demand for professionals that understand Social Security. More than 70 million Baby Boomers will collect Social Security. They will need personalized answers. As a Registered Social Security Analyst, you can help clients potentially gain tens or hundreds of thousands of dollars in incremental Social Security income,” according to NARSSA.
NARSSA Brings Strategy to Social Security
As noted above, the traditional approach to strategizing around Social Security begins and ends with age at the time of benefits claims, but there’s much more to the story. NARSSA co-founder and President Martha Shedden points out there are significant benefits for couples that take more strategic approaches to Social Security.
“Personal claiming decisions such as for couples, for families with minor children, couples with greater age differences and greater benefits, can see big differences in their benefit amounts because of the way dependent benefits work,” says Shedden. “There are claiming strategies that couples can use to really maximize that income.”
Advisors have other compelling reasons to consider the RSSA certification. Chances are they already know some of those factors, including increasing life expectancies and the point that Social Security serves as a vital, if not the primary source of income for millions of retirees.
On a related note, Shedden points out that today the average monthly benefit for Social Security recipients is $1,660, or about $20,000 a year and $400,000 over two decades. For affluent couples – prime territory for advisors – the Social Security ballgame is different, making the RSSA designation all the more meaningful.
“They're (high-net worth couples) not just getting that 100% benefit at their full retirement age, they're increasing that 8% a year until age 70,” notes Shedden. “And that benefit amount for this year for high earners is about $4,200 a month, over 50,000 a year, which equates to over $1 million per individual over 20 years. So it truly is an asset. It should be considered an asset by financial professionals and retirees and it should be treated as such when planning how to collect it.”
Myth-Busting Social Security
August 14 marks the 87th anniversary of Social Security -- plenty of time for misinformation, misnomers and myths to form.
There’s an upside to that problem – Social Security, particularly strategies for boosting benefits, is territory rich in client engagement opportunities.
“There are so many myths and misunderstandings about Social Security. And the fact that you can basically increase the yield on this asset is not commonly understood at all. It doesn't take much once people listen to even a very short presentation of 20 or 30 minutes of going over some of the rules and showing case examples,” says NARSSA’s Shedden.
Plus, it’s never too early for RRSA-certified advisors to broach the subject of enhanced Social Security benefits with clients, including those that are in the early stages of their working lives.
“First of all, as soon as you start working, you should sign up for a “My Social Security” account on SSA.gov,” concludes Shedden. “You should be reviewing your earnings each year. If you do not sign up for an account, the SSA is now sending out statements to those who have not signed up for an account. I am really encouraged with that move by the administration. It's putting the benefit amount in front of people again, hopefully making them more cognizant of Social Security, the amount they're paying into it and how their benefit is growing. So it's never too soon to be educated on it, especially if they're self-employed.”
Related: Assessing Affordability of Increasing Life Expectancy