With about 270 rules on social security and the complexity associated with it, many financial advisers shy away from talking about it to their clients. Some are afraid that they will not be able to comprehensively respond to their clients. Others do not think that the matter is very vital in retirement planning. However, David Luther Giertz says that it is time that financial advisers understood the concept and discussed it with their clients.
David is the senior vice president of Nationwide Financial Distribution and sales. This is a subsidiary of the Nationwide Investment Services Corporation. He has over 20 years’ experience in the finance industry and thus he fully understands this sector. He has assisted many clients make huge financial and investment decisions.
According to a study by Nationwide Retirement Institute, 30 percent of retired people receive a benefit that is less that what they expected. Most of these people are caught by surprise given that they have budgeted for that money. As a result, they experience financial inconvenience. However, with proper knowledge on social security, people will understand about deductions and taxes associated with retirement benefits. Thus people will cater for that in their retirement plans.
Additionally, David urges the advisers to educate the people on the importance of delayed application for retirement benefits. They should also discourage them from taking up their retirement benefits early. The reason is that when benefits are delayed, the amount received per month tends to grow. It can grow with rates of up to 8% per year based on the amount. However, if taken early, the expected amount per month tends to be less.
The research also showed that in every 5 of the interviewed people, 4 would move away if their advisers failed to talk to them about social security obligations in retirement. This should be a wake-up call for all advisers otherwise they risk losing these clients.