One of the most important considerations everyone should have going into retirement is cash flow. Planning around not just what you have in total assets, but what liquid funds you have coming in and out each month to cover your expenses should be a crucial part of the pre-retirement planning process. For most, Social Security will be a significant portion of their cash flow in retirement. In 2021, Social Security benefits represented about 30% of the income of the elderly.
Social Security is calculated through a complex formula that takes your 35 highest paid years into consideration as well as the age you elect to begin receiving payments. Therefore benefits fluctuate from person to person and why it is important to proactively plan your Social Security benefits around your cash flow needs. Beyond these basics, Social Security is a highly complex program with a wide array of caveats and exceptions. For most, it is a confusing and intimidating subject to tackle with an overwhelming number of options to choose from. Getting it right on the first try is crucial to having a financially secure retirement. As advisors, we can walk you through the Social Security process step by step and create a unique plan so that you can spend less time worrying about your finances, and more time enjoying what is important to you!