As the retirement planning world awaits the latest annual Social Security Trustees report—expected to drop any day now—one new calculator was recently released and another updated to factor in exactly what benefit reductions in the world’s largest government program could mean to beneficiaries.
Earlier this month, Omaha-based retirement software solutions provider Covisum released a free Social Security benefit cut calculator for consumers, and updated its Social Security Timing benefit calculator for advisors to help them answer client questions about claiming decisions.
Throughout the pandemic, many people have decided to claim their Social Security benefits early because of market volatility and high unemployment. The influx of new Social Security claimants, in addition to the reduced income from fewer people working, has some experts estimating that the Social Security system will run out of funds as early as 2029—rather than 2035 as the last Social Security Trustees report indicated.
“The possibility of benefit cuts due to the insolvency of the Social Security system is not enough to suggest that most people should claim benefits early,” said Covisum’s Founder and President, Joe Elsasser, CFP. “These calculators allow both consumers and advisors to see what the future could actually look like if they were to experience Social Security benefit cuts.”
The free consumer-facing Social Security benefit cut calculator can help individuals quickly and clearly see the impact of a benefit cut. Consumers are encouraged to use the outcome from the calculator to start a conversation with their financial advisor and jointly identify the impact of potential benefit cuts on their individual situation.
The new, and more robust, advisor calculator is featured in Covisum’s Social Security Timing and Income InSight software solutions. It accounts for the interactions between benefits for married couples and widows, as well as the Retirement Earnings Test, Government Pension Offset and Windfall Elimination Provision (features only included in the professional version of the software). Advisors can use these programs to demonstrate the impact of potential benefit cuts on a client’s retirement strategy and determine the optimal time to claim Social Security.
“Every dollar counts when it comes to retirement income, especially right now. A smart Social Security claiming decision can make a huge difference when it comes to meeting your retirement goals,” Elsasser added.
For current Social Security Timing and Income InSight subscribers, there is no added cost to begin using the Social Security benefit cut calculator—it is included as free upgrade.
SEE ALSO:
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- Social Security: Safety Net or Snare?
- Social Security 2021: What Will and What Might Happen
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.