http://www.digitaljournal.com/life/personal+finance/op-ed-retiring-early-may-hurt-you-says-advisor-know-the-options/article/433939

Op-Ed: 'Retiring early may hurt you' says advisor. 'Know the options' Special

Posted May 28, 2015 by Jonathan Farrell
With the baby boomer generation now moving along into retirement, financial advisors like Daren Blonski are trying to get word out that baby-boomers need to understand the complexities of retirement in today's society.
Robert Gustavis was the guest speaker at the retirement and  SSA benefits talk and dinner held at th...
Robert Gustavis was the guest speaker at the retirement and SSA benefits talk and dinner held at the Sonoma Community Center on Thurs. May 21. He was invited by Daren Blonksi of Edward Jones to speak about the details concerning the rules of taking one's retirement benefits, either early or later. "It all depends on which is best for you and your situation," Gustavis said.
"No one can say for certain when they are going to die, Blonski said. It is really important that those in retirement or are about to enter retirement understand what their options are." He and his staff at Edward Jones of Sonoma provided a dinner and talk on being "Social Security Savvy" on May 21. The free dinner and talk was to help his clients and the general public have a better understanding of what the options are for people entering retirement. And, to ask themselves the important question of whether or not they can or should retire early.
The guest speaker for that Thursday evening was Robert Gustavis, Divisional Vice President of AIG Financial Distributors. He works with Edward Jones Investments and specializes in the details of Social Security retirement benefits.
He started his presentation with the analogy of having to take pills. Pills and medications are a part of getting old. But the point of his analogy was the fact that it is important to know what pill or medication you need to take. And, in doing so, is it the right one for you and your situation? "Know what the pills look like," Gustavis said.
"Many people don't know or understand what their options are when it has to do with Social Security retirement benefits. And, clerks at the Social Security Administration office, he said are not prepared or able to provide you with all the information in detail." Gustavis noted it is very important that baby boomers understand the options and figure out the best strategies for their retirement income. Taking time to get all the info about the SSA calculation of benefits is crucial. If there are some discrepancies make time to investigate and be sure the info SSA has is accurate and up to date. "And, you should talk it over with a trusted/licensed financial advisor."
"If you take your retirement early, (at age 62), said Gustavis your benefit allotment will be less. But if you wait until full retirement age (age 67) you will get your full benefit allotment allowed, based upon your earnings and circumstance."
Gustavis talked about utilizing "maximizing strategies" especially for married couples. When married you are generally eligible to claim the greater of either your own benefit or that of your spouse's (up to 50 percent). Checking out options like "file and suspend" could be helpful to a couple's situation. Yet again, rules apply and is reduced if collected at 62 before full retirement age.
Divorced spouses can receive benefits. But the collecting spouse must be unmarried and had to have been married to the ex-spouse for at least 10 years or more. Survivor/widowed benefits (even for a divorced) spouse are available. But the details of each circumstance must be reviewed and considered as SSA has rules and regulations on each.
There are also rules about working after taking retirement early and so again, Gustavis said to pay close attention to what option is best for you. Ideally if possible it is good to work until age 70 to ensure full retirement benefits. Yet one must know and understand the circumstance one is in.
"If your longevity is strong, and you like to work, then do so," said Blonski. But if your health is not the best then perhaps consider taking an early retirement."
Each month financial advisor for Edward Jones  Daren Blonksi tries to have a talk or presentation ab...
Each month financial advisor for Edward Jones, Daren Blonksi tries to have a talk or presentation about subjects concerning finances, retirement and estate planning. This past May 21, he and his staff provided a dinner and talk about the importance of understanding the details of Social Security benefits and retirement. Over a dozen people attended that Thursday evening at the Sonoma Community Center.
Benefits information advocates like Herb Levine of Senior and Disability Action of San Francisco noted "yes, it is important to understand the ramifications. But it is important not to demonize the idea of taking retirement early." There are many who have few options as they get older. Levine who has spent his entire career working in social work and issues concerning disability said, "income and benefits gets complicated depending upon one's circumstance, especially for seniors. For the average person, Social Security is the only source of retirement income they have." According to the Social Security Administration, nine out of 10 individuals age 65 or older receive Social Security Benefits.
And, according to a US News and World Report back in 2011, more than a third of retirees (35 percent) receive 90 percent or more of their income as a monthly payment from the SSA.
Levine also pointed out that while Social Security is benefit, it is a mandatory one that almost all working people pay into, automatically. The complexities and shortcoming of Social Security benefits are systemic. "It has its own logic and was created over 70 years ago, when the times and conditions were much different than today." "Despite the Cost of Living Income Adjustments and the revision of some formulas and regulations, these measures are not entirely balanced with the rate of inflation."
One other aspect about retirement besides income and longevity is the realization of how one spends the bulk of their time over the next 10 to 20 or 30 years. Travel is a dream many have. But even if that ideal goal has been reached, what will a retiree do with the rest of her or his life?
Working at something or investing in a business or income property could be to one's advantage. Yet, as both Gustavis and Blonksi noted, look carefully at the options and possibilities before making any decisions.
With regards to any additional income, Gustavis pointed out the importance of understanding how your benefits may be taxed. "SSA rules on other income is very strident," he added. Depending upon one's earnings and other sources of income you could end up paying 85 percent of of your Social Security benefits for an annual amount of over $25,000.
This is why Gustavis and Blonski recommend having a financial advisor and estate planner is essential to help ensure a stable retirement. People need to plan their retirement, and not expect Social Security to meet all of their retirement income needs. "Develop a comprehensive retirement income strategy to help integrate your Social Security benefits with other sources of retirement income," said Gustavis.