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Social Security missteps, part three

A misconception that I see very often is that, when someone retires, they have to file for Social Security almost immediately.  Or, if not that, that they have to file at full retirement age (FRA). That strategy, for the types of clients that come to me, is almost always not optimal.

"But wait!" you may say.  "How am I going to pay my bills?"  Well, you take the money you need from your portfolio that you've been saving for just this occasion!  I know that after decades of getting a paycheck, it's weird to think about another way to get "paid" but very often, it's best to start tapping your savings and waiting to file Social Security.

If you're not familiar with Social Security filing strategies, the longer you wait to file, the greater your monthly check (there are plenty of places online that can explain in more detail if you need it).  So if your portfolio value at retirement will support it, it's often better to start tapping retirement assets to fund your financial goals until you eventually file for Social Security.

There is, however, an interplay between portfolio value, relative ages, financial goals and Social Security strategies.  To not fully understand the relationship of all of these could cost hundreds of thousands of potential lost revenue or "free money" from your Social Security benefit or prematurely erode your retirement savings.

Therefore, instead of just filing "because you're supposed to", take the time to fully grasp and understand how filing earlier or later impacts your portfolio value, and chances of meeting your goals.