The Future of Social Security

The Future of Social Security

April is National Social Security Month. With the future of Social Security in peril, proper planning will become increasingly important for Americans seeking a financially secure retirement.

By Richard W. Stout III and Thomas Britt

Social Security has long been a key component of the American retirement. In fact, 97% of older Americans (aged 60 to 89) either receive Social Security benefits or will receive benefits, according to data from the Social Security Administration (SSA). And many of these beneficiaries have no other retirement savings at their disposal.

Unfortunately, a recent report from the SSA finds that retirees will only receive 78% of their full benefit beginning in 2034 if Congress doesn’t address the program’s funding issues. As the future of Social Security hangs in the balance, proper retirement planning will be critical for Americans who hope to stop working one day.

How Social Security Works

In the United States, Social Security is funded through payroll tax deductions. Both employers and employees contribute to Social Security.

Currently, employees contribute 6.2% of their income, and employers pay an additional 6.2% for each employee. Self-employed individuals pay the entire 12.4% payroll tax. In 2022, payroll taxes apply to up to $147,000 of a taxpayer’s annual income.

When you pay Social Security tax, you aren’t paying into an individual account that’s designated for your retirement. Instead, taxpayers contribute to a Social Security Trust Fund that pays the benefits of all current beneficiaries. That means there’s no guarantee the money you contribute to Social Security will be there for you when you retire.

The status of the Trust Fund depends on the worker-to-beneficiary ratio. When this ratio is healthy, the amount of money the SSA collects through payroll taxes exceeds the amount of money it pays out in benefits. However, there’s likely to be a funding problem when beneficiaries exceed workers.

Why the Future of Social Security Is Now Uncertain

The Social Security Trust Fund hasn’t always had funding issues. In 2020, for example, an annual surplus of $10.9 billion increased reserves to $2.91 trillion, according to the SSA.

However, the outlook for Social Security has worsened since the 2020 report. Over the next decade plus, the SSA will need to draw down its reserves as a decreasing number of workers pay for an increasing number of beneficiaries.

The future of Social Security is uncertain largely because there’s been a steady decline in the birth rate in recent years. In fact, U.S. Census data shows that the number of U.S. births has been declining every year since 2008 (except for 2014). At the same time, the average lifespan has been steadily increasing in the United States.

That means that if left alone, the Social Security Trust Fund can pay full benefits through 2033. Beneficiaries will then receive a lesser benefit beginning in 2034 if Congress doesn’t act in the meantime.

Will Social Security Ever Dry Up Completely?

The last time Social Security faced a reserve deficit was 1983. At that time, massive bipartisan legislation was necessary to resolve the solvency issue. Among other changes, Congress increased the full retirement age from 65 to 67 over time. In addition, they began to tax Social Security benefits as ordinary income for high-earning beneficiaries.

Following these events, Social Security became known as “the third rail of American politics.” In other words, Social Security is the one entitlement program policymakers know not to touch. Unfortunately, that also means politicians haven’t been particularly motivated to address Social Security issues in the absence a looming crisis.

Now, with crisis on the horizon, a solution is necessary for the Social Security Administration to continue paying full benefits. Congress essentially has two options: cut Social Security benefits or increase tax revenue.

House Democrats recently introduced the Social Security 2100 Act. This would increase benefits for low-income workers, change the cost-of-living-adjustment (COLA) index, and reapply the payroll tax rate to the highest-earning individuals. However, legislation regarding Social Security can’t pass with a simple 51-vote majority in the Senate. That means any new legislation will once again require bipartisan support.

Ultimately, the future of Social Security depends on the ability of Congress to agree on a proposed course of action. Given the potential political implications, it seems unlikely that either party would let the Fund dry up altogether. Nevertheless, American workers may want to consider taking steps to reduce their reliance on Social Security benefits in retirement.

Preparing for an Uncertain Future

Waiting on Congress to shore up Social Security may not be the best approach, especially if you’re nearing retirement age. Although 12 years may seem like a lifetime in government, it’s merely a stone’s throw when it comes to your retirement timeline.

One way to minimize the role Social Security plays in your retirement plan is to supplement it with additional retirement savings—for example, contributing to an employer-sponsored retirement plan and/or individual retirement account (IRA). And the earlier you start, the better.

In 2022, individuals can contribute up to $20,500 to a 401(k), 403(b), and most 457 plans. Meanwhile, you can contribute up to $6,000 to a Roth or Traditional IRA ($7,000 if you’re age 50 or older). However, if you’re not able to max out your contributions, contributing even a little bit to retirement each month can yield meaningful results over time.

If your employer matches your retirement plan contributions, maxing out your matching contributions should be your top priority. Otherwise, you’re leaving money on the table.

Lastly, depending on how far from retirement you are, it’s important to invest your retirement savings to grow your nest egg and outpace inflation. Qualified retirement accounts offer certain tax advantages that allow you to grow your funds tax-free until you withdraw them in retirement. This benefit amplifies the power of compounding that long-term investors typically enjoy.

Bottom Line: Don’t Rely on Social Security to Fund Your Retirement

Though Social Security may never dry up completely, it’s possible your benefits will be meaningfully reduced by the time you reach retirement age. No matter the future of Social Security, proper planning is key for a successful retirement.

Benchmark Wealth Management provides holistic financial planning and investment management services for high-net-worth professionals and retirees. If we can help you plan for a financially secure retirement, we encourage you to connect with us to see if we’re a good fit.

 

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional and holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed.) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

The Russia-Ukraine Crisis and Market Volatility In Perspective

By Richard W. Stout III and Thomas Britt

In a speech on February 23, 2022, Russian President Vladimir Putin announced that a “special military operation” would begin in Ukraine. Russian military forces attacked a broad range of targets across Ukraine last night while Russian President Putin vowed to replace Ukraine’s government. Many are worried that Russia’s aggressive stance and wide-scale military attack could potentially spiral into the largest European military conflict since the Cold War.

How Did We Get Here?

When the Soviet Union broke up in the early 1990s, Ukraine, once a cornerstone of the former Soviet republic, was the third-largest nuclear power in the world. Ukraine eventually made the decision to denuclearize, and in a series of diplomatic agreements, Ukraine gave its nuclear arms back to Russia. In exchange, Ukraine was provided with security assurances that protected the country from Russian attack.

These assurances were tested in 2014, when Russia illegally annexed the Ukrainian territory of Crimea. Though relations between the two countries have been strained since, tensions escalated in early 2021 when Ukrainian President Volodymyr Zelenskyy pressed President Biden to let Ukraine join NATO.

Putin sees NATO’s expansion eastward as an “existential threat” and has demanded a legal guarantee that NATO will not hold any military activity in eastern Europe and Ukraine. Last spring, he began sending troops near the Ukraine border for “training exercises” and has steadily increased Russia’s military presence near the border.

Despite diplomatic efforts to diffuse the situation, Russia invaded its ex-Soviet neighbor Thursday morning, days after Putin announced that Moscow would officially recognize two Russian separatist regions in eastern Ukraine, Donetsk and Luhansk. This move prompted Germany to halt certification of Nord Stream 2, one of two pipelines that Russia has laid underwater in the Baltic Sea. These pipelines are in addition to Russia’s land-based pipeline network that runs through eastern Europe, including Ukraine.

Why Nord Stream 2 Matters

Many believe Putin is using Nord Stream 2 as a tool to weaken Ukraine and make the EU more dependent on Russian natural gas. If certified, Nord Stream 2 would likely send pipelines across Ukraine offline, depriving Ukraine of approximately $2 billion in transit fees from Russia and undermining any previously perceived protection from Russian military action.

The price of oil spiked to a seven-year high following Russia’s invasion of Ukraine, as it remains unclear what the near- and longer-term impact of the certification delay and a possible Russia

retaliation will be on Europe’s economy. Almost 38% of the natural gas used by the European Union last year was imported from Russia, according to Eurostat. Meanwhile, government figures say Russian natural gas accounted for nearly 27% of the energy consumed by Germany.

The Crisis’s Effect on U.S. Stocks

U.S. stocks fell sharply Thursday morning. The Dow Jones Industrial Average fell 859 points during the day, and the Nasdaq opened in bear market territory, down over 20% since peaking in November. In addition, the S&P 500 Index has declined just over 11% year-to- date, placing it squarely in correction territory. (As a reminder, a correction is generally defined as a market decline of more than 10%, while a decline of 20% or more is considered a bear market.) At the close Thursday, the S&P 500 closed up 63.20 and Dow Jones Industrial Average finished the day up 92.07.

It’s not unusual for geopolitical and other external events to shock financial markets. Yet historically, stock volatility has been short-lived following such events. In fact, since World War II, stocks were higher three months after a geopolitical shock. And following about two-thirds of those events, they were higher after only one month. The chart below helps illustrate this point.

Source: What history says about geopolitics and the market

What Does This Mean for Long-Term Investors?

While volatility is always unsettling, it’s not usual given the many uncertainties this conflict creates. While we don’t know how this will play out, nor do we know how long it will last, we are likely to see more volatility in the near-term. However, there are a few aspects of the current situation that may help ease your anxiety.

  1. In the United States, the median stock market drawdown due to geopolitical shocks was
  2. -5.7%, according to data from Deutsche Bank. Moreover, these drawdowns tend to take around three weeks to reach a bottom and an additional three weeks to recover. On average, the market was 13% higher from the bottom 12 months after.
  3. The U.S. economy remains relatively strong, making us more resilient to broader economic repercussions. It may be worth noting that the last crisis in Ukraine in 2014 had little impact on the U.S. economy. That said, it’s unclear if the current crisis will change the Fed’s plan for increasing interest rates.
  4. Volatility often provides investors with the opportunity to purchase stocks at discounted prices, which can boost long-term investment results.
  5. We have been here many times before and it is important and helpful to put current conditions into perspective. Declines in stock markets are regular events. In fact, drops of 10% or more happen about once a year on average: (1)

In general, we don’t believe external events like the Russia-Ukraine crisis warrant dramatic changes to your long-term investment plan. Historically, investors who stay the course during periods of uncertainty are ultimately rewarded, and we have no reason to believe this time will be different. As today’s wild swings show, trying to predict markets is a fool’s errand. History has shown that investors, who remain prudently invested throughout corrections, have witnessed attractive returns.

We’ll be monitoring the situation closely and will keep you updated as appropriate. As always, we’re here to support you if you have any questions or want to discuss your financial plan in more detail.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional and holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

____________

(1) https://www.capitalgroup.com/individual/planning/market-fluctuations/past-market-declines.html

10 Questions to Ask Your Financial Planner

By Richard W. Stout III

We have no lack of options these days. Whether it’s choosing a restaurant or finding a doctor, there are so many choices that it’s easy to feel overwhelmed. When it comes to choosing a financial planner, the stakes are even higher. How do you know which one will be the right fit for your situation or personality? How do you know if you’ll like them or work well with them?

The financial professional you choose to handle your family’s wealth will have a significant impact on your investment strategy, the fees you pay, and your confidence in your financial future. This is not a decision to take lightly, especially since each planner has a different level of service, experience, and ability. Taking all that into consideration, it’s vital to take your time to find a planner that meets your needs and makes you feel at ease. When you start your search, asking potential candidates the following questions will help you gain a better understanding of who they are and how they do business.

1. Are You a Fiduciary?

There’s a reason this is the first question—its importance cannot be overstated! A planner who serves as a fiduciary accepts a responsibility to put his or her clients’ interests first and foremost in all decisions. A fiduciary is legally required to avoid conflicts of interest and remain unbiased in their recommendations and advice.

How can you know for certain that a planner you’re interviewing is a fiduciary? The firm will either be listed as a Registered Investment Advisor or the advisors on the team will hold certifications that hold them to the fiduciary standard, such as the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, or Certified Public Accountant professional designations. Keep in mind, if the financial planner doesn’t fit those descriptions, they may still act as a fiduciary in certain situations, like sharing a recommendation, but not necessarily when selling products.

Benchmark Wealth Management is a Registered Investment Advisory firm and abides by the fiduciary standard of professional conduct. We do what we say and finish what we start—all for your benefit.

2. What Credentials Do You Hold?

Credentials and education play a critical role in your planner’s competence. There are hundreds of designations in the financial services field, and some are more applicable to your needs than others. (1)

Advisors on our team hold the CFP® certification, which requires comprehensive education and experience. In addition, our team members hold other credentials, including the Accredited Investment Fiduciary® (AIF®), Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. We pursue education and credentials because of our commitment to continuous learning and dedication to providing unparalleled client service.

Use a designation-check database to learn more about the credentials financial planners can earn, and ask the planners you are researching what they do to continually hone their skills and stay up to date in the industry.

3. What Is Your Planning and Investment Philosophy?

It’s important to work with a financial planner who shares a planning and investing philosophy similar to your own. Does your planner stick to a scientific, evidence-based approach? Do they believe in buy-and-hold or do they move to cash when the market looks shaky? Talk with a financial planner about how they guide clients’ investing and financial decisions.

At Benchmark Wealth Management, we know that a sound asset allocation strategy is a key way to turn your wealth into new ways to live your best life. Our investment strategies are customized to your unique goals and needs so you can maximize your growth while protecting your wealth. We utilize passive investments, adopting sound processes and empirically driven solutions, which allows us to focus on what we can control while reducing the risk and stress to the extent possible surrounding what cannot be controlled.

Our personalized approach to financial management is the foundation of our services, taking into account both your individual goals and your entire financial situation. Before we look at any numbers or dive into strategizing, we get to know you and what you want out of life. We ask deep questions and seek to understand the nuances of your financial situation. As time goes on, we compound our understanding of you and your needs, allowing us to deliver independent,

objective, and tailored strategies that help you rest easy today and in the long term.

4. How Are You Compensated?

Financial planning and investment costs can be confusing, and often financial planners don’t readily disclose their fees. As fee-based planners, our clients always know what they’re paying and what they’re receiving for their money. We want our clients to feel comfortable with their strategies and confident that there are no hidden fees eating away at their hard-earned savings.

At Benchmark, we are compensated by an assets under management (AUM) fee, which is paid quarterly, based on the value of your assets. There are no other hidden costs from us and we do not earn money through commissions.

5. Who Do You Serve?

Some financial planners focus on serving a specific demographic or level of investable assets, so you’ll want to find this out before choosing a planner. Why is this important? Because you deserve advice and services tailored to your unique needs.

Our clients are high-net-worth individuals who come to us for help because they desire a customized, disciplined strategy and a holistic approach to managing their assets and reaching their realistic long-range goals. Our clients expect and deserve the highest level of personalized service and care. To support this commitment, we limit our relationships to ensure that we can deliver proactive planning, investment management, and concierge-level client service consistently and dependably. Tom Britt’s requirement for new client relationships is $2 million or greater. Rick Stout’s requirement for new client relationships is $5 million or greater. Limiting new relationships in this manner enables us to safeguard the service experience our existing clients know and appreciate while ensuring an exceptional service experience for new clients. Because we prioritize personal relationships with our clients, relationships that often extend for generations, many of our clients find their way to us through referrals from existing clients. We serve clients of different ages and from a variety of professions, including business owners, professionals, entrepreneurs, executives, and retirees. Despite their differences, they have all worked hard for their wealth and created their own path to success.

6. Who Will I Be Working With?

At some firms, you may work with multiple financial planners depending on your appointment time or needs, while other firms may pair you up with one financial planner with whom you’ll work one-on-one. This is important to know so you can meet the team members with whom you might be collaborating.

You will build a strong relationship with your primary planner at Benchmark, and we have stellar support staff in place to ensure you receive the highest level of service. Everyone at Benchmark works as a team. We spend a lot of time getting to know our clients and their goals, and we strive to put your dreams at the heart of your financial plan.

7. What Financial Planning Services Do You Offer?

Not all financial planners can provide comprehensive financial planning. Some cannot sell insurance or securities, such as mutual funds or stocks, if they don’t have the appropriate licenses. Ask a financial planner what services they provide, whether or not they have a focus or niche, and if they offer a broad spectrum of solutions to meet your needs. When creating a plan together, be sure to ask your planner why they are recommending particular services and solutions over others. Benchmark Wealth Management’s comprehensive services include retirement planning, asset management, cash flow analysis, estate planning, tax strategies, philanthropic strategies, and more.

8. What Sets You Apart From Other Financial Planners?

We know you have plenty of options to choose from, but there are a few things we do differently:

  1. We don’t use cookie-cutter plans or algorithmic technology to develop your investment portfolio. Our plans are centered around you and your life, and you can have confidence knowing that your future is being looked after.
  2. Our client relationships are built on integrity, dependability, and accountability. We are passionate about what we do and confident in how we do it.
  3. We provide a “white glove experience,” offering a level of care and attention to our clients that sets us apart. Our unparalleled service commitment means we treat every client as if they were our only client. We communicate regularly, remain accessible, and are with you on this financial journey every step of the way.
  4. Our specialized expertise allows us to develop plans that maximize the resources available to you, reduce taxes, prepare for retirement, and protect your family. Instead of trying to be your own financial planner, worrying something will slip through the cracks, or making innocent mistakes, you can rest assured that someone you trust is carrying your financial burden and watching out for your future like it’s their own.

9. How Do We Meet??

These days it’s not unusual for firms to offer both in-office and virtual appointments. If you’re someone who travels a lot, you may prefer a planner who is easily accessible in a virtual environment. For those who prefer a more personal touch, make sure the planner is someone who is available to meet in their office.

At Benchmark, in-person meetings are welcome and encouraged. We enjoy the opportunity to see our clients in person and believe this is an important part of our relationship with them. We do understand, however, that time is valuable and that it can be difficult to get away. Our services and systems have been designed so that all of the information you need to understand your finances are accessible to you at any time via eMoney and Schwab Alliance. With this accessibility, we can easily have impactful conversations about your finances virtually or via telephone, without the need for you to leave your home or office, thus disrupting your routine.

10. How Will I Know if Your Firm Is Right for Me?

When selecting your planner, the relationship should feel right, and you should never feel pressured to make a decision quickly. We offer a complimentary consultation during which you can ask questions, evaluate our processes and services, determine if our personality is a good fit, and get the information you need to make an informed decision.

Don’t Rush Into Anything

A financial planner should be happy to answer these questions—and any others—about how they do business. If you don’t know where to start, ask friends and family for referrals to set you down the right path.

At Benchmark Wealth Management, working with us is about the experience. It’s at the core of what we do and why we exist. If you’d like to learn more about who we are and what we do, don’t hesitate to reach out to us for an introductory meeting by contacting us at 860.434.6890 or emailing richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results.

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

___________

(1) https://www.finra.org/investors/professional-designations

Jump-Start Your Financial Plan for 2022!

By Thomas Britt

It’s hard to believe it’s already 2022. It seems like just yesterday we began 2021 with high hopes for a fresh start. Given that those hopes didn’t quite pan out, after an intense two years, a new year can be overwhelming to think about. But as we continue on the slow road back to “normal,” the good news is that there are actionable steps you can implement today to take back control of your finances and truly make 2022 a fresh start. Here are three ways to get started.

1. Set Financial Goals

The first way to jump-start your financial plan is to set financial goals. Do you have a goal for your finances or are you just crossing your fingers and hoping you have enough for the lifestyle you want?

Specific goals with defined timelines will help to determine the best course of action, including how much risk you can and should take with your money. Every dollar in your portfolio should be working toward a specific goal.

Remember that the best goals will be SMART:

  • Specific: The more you can identify exactly what you’re saving for, the easier it will be to work toward it.
  • Measurable: As much as possible, try to identify how much your financial goal will cost. Do the research to figure out what you need to save so that you’re able to see tangible progress along the way.
  • Attainable: Make sure your goal is realistic and achievable. This might require some self-reflection or reevaluation of your priorities.
  • Relevant: Ask yourself which goals align with your core values. Remember that your finite assets will be split amongst your seemingly infinite list of wants. The more you can scale back your list to what is truly relevant, the quicker you’ll be able to achieve each goal.
  • Timely: Identify the timeline for each goal so that you can prioritize which ones need to be addressed first and how much risk you can afford to take.

2. Build Up Your Savings

If there’s one thing the last two years have taught us, it’s that it’s crucial to prepare for the unpredictable. Whether it be a pandemic, a lost job, or rising rates of inflation, sufficient savings can mean the difference between staying afloat during uncertain times and not having enough when you need it most.

If you’re not saving already, take steps to start putting a portion of your income away every month. Usually 10-15% of pre-tax income is a good guideline. Ideally, it is recommended that most people should have at least 3-6 months’ worth of non-discretionary expenses saved in a highly liquid, easily accessible emergency fund before saving toward other goals. Either way, consistent savings are the cornerstone of any solid financial plan.

Though risk is fundamental to investing, it’s also crucial that you aren’t overexposed to unnecessary risks. Take steps to evaluate your risk tolerance, based on your unique financial circumstances, stage of life, and personality, and be sure your investments align.

3. Partner With a Financial Professional

When facing any challenge in life, sometimes the perspective of an objective third party can prove invaluable. Enlisting the help of an experienced financial planner is a great way to take control of your finances and get a jump-start on the future. No matter where you’re at in the planning process or what goals you’ve set for your financial life, Benchmark Wealth Management is here to support you, guide you, and help you navigate your financial challenges.

We have the tools and expertise to help you set financial goals, build up your emergency fund, and reevaluate your risk level. In fact, by combining our skills based on education and experience with our commitment to proactive and responsive service, our ultimate goal is to deliver unsurpassed wealth management. We care about what is important to you, and strive to adhere to the highest principles, ethics, and values.

If you’re ready to start planning for the new year with a team that puts you first, please call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation today.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional and holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Happy Holidays and Well Wishes From Benchmark Wealth Management

By Richard W. Stout III

This year, the holiday season is a time for friends and family to come together for a much-delayed convergence, albeit with lingering precautions and a hint of concern as the country and the world adjust to our new “normal.” With festivities and cheer, this time of year invariably brings reflection on the past year and a sense of renewal with a new year on the horizon.

A Time to Reflect

As part of our planning process, our Benchmark team gets to know you, our clientele, intimately, which leads to participating with you in the good, the happy, the unexpected, and sometimes the sad that each year brings.

As we look back on 2021 and ahead to 2022, we are reminded how each year unfolds along its own path—with short-term predictions that often prove incorrect, and surprises (both good and bad) that rise and pass. Every year, this realization reinforces Benchmark’s commitment to our informed, cautious, common-sense approach to shepherding the financial plans of our clients, our friends, and their families, all of whom we view as extensions of our own family. It is an honor to earn a spot at your “holiday table,” so to speak.

Undoubtedly, when this next year passes, we will marvel at what transpired during 2022. At the same time, we will be reassured, just as we are today when we reflect on 2021, that our disciplined focus on the long-term and reasoned planning assumptions will serve all of us well—despite news headlines, economic cycles, and the inevitable unpredictability of the markets.

In closing, please accept our well-wishes for you and your families during the holidays and our gratitude for the trust and confidence you place in us. We look forward to serving you in the new year.

Let’s Connect

If either Tom or I can answer any questions, offer our insight, or if you’d like to check in on your financial plan before the end of the year and make sure your finances are prepared for a successful 2022 and beyond, reach out to us by calling 860-434-6890 or emailing us directly at thomas.britt@bwmllc.net or richard.stout@bwmllc.net.

Happy Holidays!

Rick, Tom, Aileen, and Heather

You’ve Inherited Money, Now What Should You Do?

By Thomas Britt

Many people dream of one day receiving an inheritance, planning what they’d do with the money and how it could impact their future. But when it comes down to it, the news that an inheritance is coming your way is usually accompanied by conflicting emotions. Losing a loved one is hard, but inheriting money can be a blessing. An inheritance can improve your financial situation and offer peace of mind, and it can also remind you of your loved one’s legacy and how much they cared for you.

The unfortunate reality is that sometimes people who receive an inheritance don’t know how to properly manage it. In worst-case scenarios, inheritors blow their inheritance in a matter of years or even months, sometimes falling into more debt as a result of overspending.

You want to use these new funds wisely and avoid risking the legacy your loved one left for you, so it’s critical to approach your inheritance thoughtfully and strategically. Allow yourself time to work through this transition and explore the options available to you. As you navigate this process, keep the following in mind.

Work Through the Grief

Before making any decisions about the money, you need to process the loss of your loved one. Failing to deal with your grief can result in emotional spending that compromises the money you’ve just received. If you give yourself some time, you may become more sensitive to your loved one’s wishes or have the chance to clear your head of complex emotions.

If your loved one spent their life building and protecting their wealth, they probably hoped you’d do the same. Letting your inheritance sit for a minute can help you overcome the initial temptation to splurge on something like a fancy vacation or expensive new home. If it’s important to you to honor their legacy, don’t forget to take care of your own emotions to protect the wealth they’ve gifted to you.

Understand the Type of Inheritance You’ve Received

It’s probably a good idea to consult with a tax planning or financial planning professional so you understand what type of inheritance you’ve received. Common types of inheritances include:

  • A trust account or cash
  • A retirement account such as an IRA or 401(k)
  • A house or other property

Knowing the type of inheritance you’ve received impacts how you access the funds, any taxes that may be associated with it, and what your options are to move forward.

For example, if you inherit a home but don’t want to live in it, you may need to learn more about potential capital gains taxes before deciding to sell the property. If you find that a capital gains tax would be too costly, you might explore another option, such as renting out the house or living in it temporarily as you assess your situation.

Likewise, inheriting a retirement account comes with its own set of considerations, particularly if you inherit the retirement account from a non-spouse. Regardless of the inheritance you receive, it’s best to contact a tax planning or financial professional who understands the intricacies of inheritance situations.

Take Stock of Your Financial Situation

Once you understand the type of inheritance you’ve received, you’re better equipped to align your plans for the inheritance with your other financial goals.

For example, if you have high-interest debt to pay off, you could improve your financial situation by paying down that debt with money from the inheritance. If your emergency fund could use a boost, you might want to set aside a portion of the money to better protect yourself from unexpected life events.

If you’re debt-free and already have a comfortable emergency fund, there are other areas in your life you may need to catch up on, such as:

  • Contributing to your retirement account
  • Paying down your mortgage
  • Saving for your children’s college education
  • Giving to a charity or foundation you care about

Consult With a Professional

As with any major financial decision, consulting a professional is the most important step. Experienced and objective advice can help curb temptation and ensure you’re not misusing the inherited money, and a trusted financial professional can also help you optimize the inheritance to build a better financial future for the long run.

We at Benchmark Wealth Management want our clients to live confidently with their future in mind. We take a holistic view of their situation to help incorporate the inheritance into their overall financial plan, boosting their financial security and reaching other financial goals. If you want to partner with a financial planner who has your best interest as their number-one priority, ​call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional and holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

What I Wish I Had Known About Money When I Was Younger

By Richard W. Stout III

We all have to be young before we can be wise. For many, this mantra mirrors their relationship with money. To become financially wise, we need to learn key principles, many of which we wish someone would have shared with us earlier in life.

Whether you’re a parent, grandparent, or young adult, I want to share a few principles I wish I had grasped at a younger age. Whatever stage you’re in, I hope they either help you directly or you take the time to share them with someone who looks to you for guidance in life.

This isn’t just a blanket “start saving and avoid debt” message—it’s deeper than that. What I wish I had known about money when I was younger:

  • The power of compound interest and returns
  • How money can be a tool for both good and bad
  • How our emotions affect our money habits

The Power of Compound Interest and Returns

Gains on gain, interest on top of interest—that’s the power of compound interest or returns in a nutshell. Compound interest is most often received from a savings account that earns interest through a bank. It’s a concept most easily understood through examples.

Each month, the bank pays you interest. The payment is a percentage of your account balance. If your interest rate is 0.5% and your account balance is $10,000, you’ll see a deposit of $50. If you leave the account untouched, next month your interest rate will still be 0.5% but your balance is now $10,050, and the interest payment increases to $50.25.

While at 0.5%, compound interest doesn’t give you much to talk about, putting this same money into the stock market and seeing compound returns may have you running to the rooftop. When your money is in the stock market, the balance will fluctuate. Using our $10,000 example, let’s say you saw a 10% return last year. That means your new balance is $11,000. Likely the easiest $1,000 you ever made.

While downturns in the stock market are inevitable, if you play the long game, history shows that the stock market has seen a nominal rate of return of 10.9% over the last 50 years. (1) Generally speaking, this means an average return of 10.9% before considering taxes, fees, and inflation. (2)

So what happens if you leave that $10,000 in the stock market for 30 years and receive an average rate of return of 10.9%? You’ll be sitting on $222,816.01. Many new to these concepts have a more conservative take; after all, most of us have lived through recessions. Even at a rate of 5%, your $10,000 will grow to $43,219.42 after 40 years.

In both cases, the growth potential is too great to ignore. The problem comes when people learn this lesson when they’re 55 instead of 25. While these examples speak for themselves, the key takeaway is that putting away money today is how you work smarter, not harder. Time is precious when it comes to compound interest and compound returns.

How Money Can Be a Tool for Both Good and Bad

In the last example, you saw how a relatively small amount of money can be used as a tool to accumulate wealth. You don’t have to be rich to invest $10,000. But coming up with $222,816.01 later in life, if you missed the boat early on, is impossible for many. (3)

Concepts like paying yourself first—where you put away a small amount of your money from each paycheck or every month—are solid principles for leveraging time and accumulating wealth without leaning on luck or hoping for an inheritance.

Apply this idea to maxing out an IRA. Those under 50 can contribute $6,000 per year. Divide that out over 24 paychecks in a year, and you’re looking at $250 in contributions. While it may take a bit of budget finagling to come up with that every paycheck, many will spend that money either way. Using money as a tool, for good, is a choice. Foregoing an auto loan is a perfect way to come up with that money without cutting back on your regular spending.

Speaking of auto loans, debt is an easy way to use money as a tool for the bad. A seemingly little bit of money can get you an awful lot in today’s world. New cars and homes outside our budget are two ways many leverage debt to get things they want instead of prioritizing retirement saving and living within their means.

Remember the compound interest example where you were effortlessly making tens of thousands of dollars over time? The same principle applies here, except this time it’s turned around, and you’re lining someone else’s pocket with money by paying interest instead of receiving it.

How Our Emotions Affect Our Money Habits

Are you a spender or a saver? Many of us naturally lean toward one over the other. But think about these other factors: safety net, social status, helping others, supporting your family, name brand, budget. Each of these will spark emotion and play into how we handle money.

Understanding your emotional ties to money will help you pivot in some areas and learn where you need to make improvements. In the same frame of thought, it can point out strengths and areas where you’re using money as a tool for the good.

Generally speaking, if we are greedy or self-centered by nature, our spending habits often reflect these characteristics. Remaining grounded, thinking about those around us, and prioritizing the future we truly want are great ways to overcome negative emotional ties to money.

Getting it Right With a Financial Planner

With these principles in mind, you’re in the right frame of mind to make sound financial decisions. After all, success with money is often more about discipline and consistency when you’re young rather than mastering complex financial concepts.

When you’re ready to make good decisions, but need a hand in assuring you’re maximizing the dollars you’ve saved, a financial planner can guide you through the planning, savings, and investing strategies required to meet your personalized goals.

This is best done in person so we can get to know you and share our approach firsthand. For a consultation to see if our services can help improve your financial situation, please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon only when coordinated with individual professional advice. Past performance is no guarantee of future results. Diversification does not ensure against loss

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results.

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

__________

(1) https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/

(2) https://www.investopedia.com/terms/n/nominal-rate-of-return.asp

(3) https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

Financial Planning Challenges for Children With Special Needs

By Thomas Britt

Parents of children with special needs typically face unique challenges at various points along their journey: increased medical expenses, highly specialized care, and the need for extra support (just to name a few). On top of this stress is the added burden of worry about what will become of your child when you pass away. One way to lighten the load is to ensure the financial aspects of these needs are covered. So, how do you plan for these challenges and secure a sound financial future for your child?

Consider the practical steps below that you can take now to not only give yourself peace of mind that your child will be secure if something should happen to you, but also help to provide your child with safeguards while you’re still here.

Look into Government Assistance

Do you qualify for government assistance? While some qualifications vary by state, here are two programs we suggest you investigate.

Supplemental Security Income

Supplemental Security Income (SSI) is a federal income supplement program that provides cash to meet basic needs for food, clothing, and shelter. (1) If your child meets the Social Security Administration’s definition of a disability, then they may qualify for assistance. While your child is under age 18, Social Security considers all household income when determining eligibility. Once your child turns 18, benefits are calculated on his or her income alone. (2)

Medicaid

Medicaid is federally funded, but it’s administered and operated by the State (which means eligibility may vary from state to state). In most cases, if your child qualifies for SSI, they’ll qualify for Medicaid too. Medicaid funds can be used for healthcare expenses, home health services, medical equipment, and more.

Save for the Future

529 ABLE

Even with government assistance, you may still have ever-growing out-of-pocket costs as you care for your child. A 529 ABLE account helps fill in this gap.

529 ABLE plans, which are similar to 529 college savings plans, can be used for qualified disability-related expenses in addition to education-related expenses. These expenses may include housing, transportation, employment training, healthcare, and anything else needed to maintain your child’s quality of life.

As of 2021, you can make an after-tax contribution of up to $15,000 per year into an ABLE account. (3) The money is withdrawn tax-free for qualifying expenses. As long as the account balance is below $100,000, it doesn’t count toward calculating SSI eligibility.

Special-Needs Trust

For most high-net-worth families, opening an ABLE account is the first step in securing their child’s future. The second step is establishing a special-needs trust. Assets placed in this type of trust don’t interfere with your child’s ability to receive government assistance (as long as all assets list the trust as the beneficiary, not the child).

If your child is named the beneficiary of assets totaling more than $2,000, they’ll no longer qualify for government assistance. Keep this in mind to share with well-intentioned family members or friends who would like to leave assets to your child. They’ll need to list the trust as the beneficiary in order for your child to remain eligible for benefits.

Hope for the Best (But Prepare for the Worst)

Letter of Intent

You know your child better than anyone. If anything were to happen to you, you’d want your friends and family to be aware of all those personal details. A Letter of Intent does just that. While this document isn’t legally binding, it can include incredibly helpful information, such as:

  • Your child’s daily, weekly, and monthly routine
  • Your child’s personal likes and dislikes
  • Your hopes and dreams for your child
  • Your child’s medical history
  • Contact information for doctors
  • Any other pertinent information

Adult Guardianship

Once your child is 18, they’re legally an adult in the eyes of the law. If you foresee your child needing guardianship beyond the age of 18 (because they’re unable to make their own medical and financial decisions), speak with a professional about how you can become their legal guardian. This process may include creating a power of attorney or healthcare proxy in the event of an emergency.

Your First Step

As the parent of a special-needs child, you’re no stranger to both profound challenges and extraordinary joys as you experience the ups and downs together. This unique role deserves support in every possible area, but especially in the area of finances. As the father of a child with Asperger’s, my personal knowledge and experience inform the work that I do. I am honored to support you on this journey. The Benchmark team and I can help you navigate these complex financial issues by providing resources tailored to your specific situation. Please call 860.434.6890 or email me at thomas.britt@bwmllc.net to arrange a consultation. Together we can assess if we’re the right fit for your family as you move closer to financial security in this unique area of need.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional and holds the Master Planner Advanced StudiesSM (MPAS®), Certified Investment Management Analyst (CIMA®), and Chartered Retirement Planning Counselor (CRPC®) designations. He earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.adviserinfo.sec.gov/firm/160192

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

___________

(1) https://www.ssa.gov/ssi/

(2) https://www.ssa.gov/ssi/text-eligibility-ussi.htm

(3) https://www.finra.org/investors/learn-to-invest/types-investments/saving-for-education/able-accounts-529-savings-plans

Do Your Friends & Family Need Financial Guidance? We Can Help.

By Richard W. Stout III

On both a local and global scale, the unprecedented uncertainty of the past year and a half has been the cause of increased stress for many people. Corporations and individuals alike are having to constantly adjust to an ever-changing world.

In times such as these, many people respond by putting their financial planning on hold in an effort to avoid adding to their stress. Rather than putting off taking action, let our team at Benchmark Wealth Management act as your support system, helping you to manage the financial stress that you have in your life, and working with you to create a comprehensive financial plan that will meet your needs in this rapidly changing world.

Guiding You Through Challenging Times

We understand that the financial decisions you make can have a lasting impact on those around you. When planning for the future, you may not only need to consider your own needs but also those of the people you love and who may depend on you. Creating a financial plan that takes into consideration where you are financially, where you want to be, and how you are going to get there can be a tall order in this challenging environment.

Planning for retirement, buying a home, and saving for a child’s college education are some of the financial challenges many individuals face today. A dedicated financial planner in your corner can ease the burden of making some of these stressful decisions. Our background and education have informed our ability to analyze our clients’ lifestyles and create a personalized financial plan for them. We want our clients to have confidence in their finances regardless of market conditions or the state of the world around them.

Providing Exceptional Service to You & The People You Care About

Benchmark Wealth Management offers a personalized, white-glove experience. We listen to your needs and provide advice that aligns with your values and expectations. We know the importance of creating a financial plan that helps you take control of your life no matter what challenges you face.

For us, providing trusted fiduciary care is just the beginning of our process. The care and attention we give our clients is what truly sets us apart from other firms. We treat each and every client as if they are our only client. Not many execute a service model to the level we deem necessary. It’s how we do business. No exceptions.

Friends & Family Are Welcome

If you know someone you believe would benefit from our insight and guidance, we welcome the opportunity to meet them. In addition to arranging to meet in person, we can also have impactful conversations by video chat or phone. We know time is valuable – when and how we meet can be personalized to accommodate the busiest of schedules. Please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results.

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

Social Security Claiming Strategies for Single, Divorced & Widowed Women

By Richard W. Stout III

Social Security is an important piece of your retirement puzzle, even if you won’t be relying on it to pay the bills. However, just because you may already have a nest egg to provide for your later years, don’t overlook Social Security. After all, those benefits are rightfully yours and you should take the time to optimize them for your unique situation.

For the Single Women

Many women make the mistake of claiming Social Security as soon as they’re eligible. Few wait until full retirement age, and even fewer wait until age 70. But your benefit amount increases by 8% each year from 66 to 70, plus cost of living increases for inflation, so it pays to wait. (1)

For example, let’s say your full retirement age is 66 and your monthly payment is estimated to be $2,000. The chart below shows how much you’d get every month if you started collecting at age 62 (reduced benefits), 66 (full benefits), and 70 (increased benefits).

If you start collecting benefits at this age… your monthly payout will be this much…
62 $1,500
66 $2,000
70 $2,640

 

Just by waiting until age 70, your monthly payout increases by 32% each month, which could lead to thousands of more dollars throughout your retirement. (2)

But when you should claim benefits isn’t as simple as waiting until age 70. Your health, home, and personal circumstances could indicate otherwise. Maybe you find out you have advanced-stage breast cancer, so you start taking benefits at age 62. Or maybe you are in good health and have plenty of other resources, so you use other accounts to fund retirement while you wait until age 70. Tailoring your claiming strategy to your unique life circumstances is key, and a professional can help you take all factors into account.

For Those Who Are Divorced

This may come as a surprise, but divorcées can claim their ex-spouse’s benefits as long as they were married for at least 10 years. The amount you receive is equal to 50% of your ex’s benefits. If you qualify for your own benefits, you either receive 100% of your benefit amount or 50% of your ex’s, whichever is higher. (3)

If your ex passes away, you receive benefits as a widow, which means you get 100% of your ex’s payout. The best part? Your ex never has to know you’re collecting spousal benefits. Social Security doesn’t notify them and you’re not required to reach out. There is one caveat to this rule, however. You won’t qualify for spousal benefits if you remarry. Your ex can, but you can’t. Although, if you happen to remarry and your second marriage ends in divorce or your spouse dies, you’d once again be eligible for your first spouse’s benefits.

For the Widows

Widows and divorcées who were married for at least a decade are eligible for survivor benefits when a spouse dies. Just keep in mind that you won’t qualify for survivor benefits if you remarry before age 60.

As with regular Social Security payouts, you receive reduced benefits if you claim them before you reach full retirement age. But unlike regular payouts, you don’t have to wait until you’re 70 to get the highest amount.

The chart below shows what percentage of survivor benefits you’d get based on your situation: (4)

Widow Type Benefit Amount Before Retirement Age Benefit Amount At Full Retirement Age
Widow 71.5% to 99% (starting at age 60) 100%
Disabled Widow 71.5% (starting at age 50) 100%
Widow With Child Under Age 16 75% (at any age) 100%

Meet With a Financial Professional

Social Security is an intricate puzzle with many pieces, so attempting to go at it alone may not be the best course of action. To gain clarity and help maximize your benefits, it’s best to work with a financial professional.

Our team at Benchmark Wealth Management can help you evaluate your options and choose a claiming strategy based on your unique situation. We are here to walk with you as you navigate Social Security, and the rest of your financial journey as well. If you have questions about Social Security or you need help developing a big-picture financial plan, please call 860.434.6890 or email me at richard.stout@bwmllc.net to schedule a consultation.

About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary (AIF®) designation. He has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning and holds the Master Planner Advanced StudiesSM (MPAS®). He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. He also completed the Accredited Wealth Management Advisor (AWM®) program through the Estate and Wealth Strategies Institute at Michigan State University. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site, www.iapd.com, searching with our company name or unique identifier, CRD # 160192. Past performance is not a guarantee of future results

Securities offered by Registered Representatives through Private Client Services, Member FINRA, SIPC in the following states: AZ, CA, CT, FL, KY, MA, ME, MI, MN, NH, NJ, NY, RI, TX. (Securities-related services may not be provided to individuals residing in any state not previously listed) Advisory services offered through Benchmark Wealth Management, LLC a Registered Investment Advisor. Benchmark Wealth Management and Private Client Services are unaffiliated entities.

__________

(1) https://www.ssa.gov/benefits/retirement/planner/delayret.html

(2) https://www.ssa.gov/oact/quickcalc/early_late.html

(3) https://www.investopedia.com/articles/financial-advisor/112216/divorce-and-new-social-security-rules-what-know.asp#:~:text=The%20basic%20rules%20for%20divorced,age%2062%20and%20currently%20single

(4) https://www.ssa.gov/planners/survivors/ifyou.html