Frequently Asked Questions

The general rule of thumb is to delay claiming as long as possible - ideally until age 70 - to maximize monthly benefits. However, as every situation is different and depending on your marital status, health and income need/timing , it may be beneficial to start benefits earlier.

Currently, many people confuse their PIA or Primary Insurance Amount with their maximum potential benefit. The PIA is the monthly benefit you receive if you retire at your full retirement age (FRA), while your maximum potential benefit is the highest amount you could receive by delaying applying for your benefit beyond your FRA.  Currently the highest amount of benefit is achieved at age 70. 

At the end of  the day, this question always comes back to the age old saying - "Don't put all your eggs in one basket." Remember that diversification does not just apply to your market based accounts, it also applies to the overall types of financial products you have, and the taxation of each. For example, layering in annuity and life insurance products allows you to benefit from tax minimization and growth options that are not correlated with the financial markets. We can advise you on how to adopt a holistic approach.

This really does depend on your specific situation and to “whom" or "what" you want to transfer wealth.  However, there are some fundamental things to consider. 

A key step in tax efficient wealth transfer is working with the right financial and estate planning team. Your financial advisor’s team should include trusted tax professionals and estate planning attorneys skilled in the areas that meet your specific needs.

Effective estate plans utilize diversified financial products, often including life insurance and annuities. Many people do not understand the ways these products can help them leave a lasting legacy while maximizing both present and future tax advantages. Our team can show you the advantages of a truly diversified portfolio.

Health care costs are a big issue as we age and their impact on our retirement savings can be devastating. We recommend making this topic a key part of your financial conversations so that you have a written plan for how you are going to face the challenge of long-term health care costs that are not covered by your health care insurance plan. Remember, Medicare is not a long-term health care plan. A strategy that we often use is looking for options that combine multiple solutions offering flexibility over the years.

Many people (especially in CA) own rental property as part of their overall retirement plan - which is great, until it is not. Income from rental property could be interrupted unexpectedly, and your financial plan should take that possibility into account. One way to think about it is, how much income do I have to have on a monthly basis to ensure I can meet my basic retirement needs, and how would that be affected if I had a lapse in my rental income for a period of time - let's say six to twelve months?  If that would create a hardship for you, you may need to add an addtioinal non-correlated income stream option into your mix. 

Running future forcast scenarios using your pension and social security amounts will help better answer this question. One strategy is to delay payments from both your pension and Social Security for as long as possible to maximize the benefits. If you need income before benefits begin, and/or to supplement your benefits after they begin, a good option may be to consider a guaranteed fixed income annuity. Also, it's very important, if you are married, to think about how your spouse would be impacted if you were to pre-decease them. Check out any survivor options with your pension plan and share those with your financial advisor so they can assist you in making the best most informed decision. 

The way to think about this question is,” How much income do I need to have monthly?” vs. “How much do I want to have?”  The portion of your portfolio that provides “need to have" resources should be comprised, as much as possible, of products that ensure guaranteed income, such as, Social Security, pensions and insurance products, including annuities.

Planning for the income you "want to have" once your basic needs are covered opens the door to market-based investments that may produce greater income, but also face greater risks and taxation.

Insurance products and annuities can provide many tax advantages to reduce risk and offset the taxable gains from market-based investments. Here is a link to an Ernst and Young report that runs through this very question - you might find their results surprising: 

Ernst & Young: Benefits of Integrating insurance products into a retirement plan.

There are many ways to address this question and in an ideal world, you would have considered all or most of the options within your holistic portfolio. It is important to note that Social Security currently benefits from around a 2% COLA (cost of living adjustment) and that's great, except when inflation is higher than 2%. Ideally you want to be able to pull funds from the most tax and inflation efficient accounts as needed to create your monthly retirement paycheck. If you have taxable and tax-free accounts to pull from, you will benefit from the best of both worlds.

The short answer is to create a planning strategy that combines guaranteed income with growth income opportunities. Specifically, your plan should include market and insurance options paired together to minimize the possibility of you outliving your savings.

To ensure a predictable, lifelong income stream you can take steps to maximize your Social Security benefits, and consider adding options like guaranteed income annuities to your portfolio to offset the unpredictability of the return on market investments.

Step one is to find out what your specific options are and then share them with your financial advisor. Together you can work out an optimal plan based on your specific situation. The sooner you know your options, the better your plan will be.

If you want to or need to retire before your FRA (full Social Security retirement age) you should consider options including creating an annuity income stream and potentially consider electing your Social Security benefits at an earlier date. The most important step is to talk this through with a financial professional so that you know all of your specific options, and the pros and cons of each option.