By Barron's Advisor Staff
One of the biggest financial decisions that a financial advisor's client must make is deciding when to claim Social Security. On Barron's Advisor's The Way Forward podcast, host Steve Sanduski interviews Mary Beth Franklin, a longtime Washington, D.C.-based journalist, certified financial planner, and one of the country's leading experts on Social Security, Medicare, and retirement income planning.
During their conversation, Franklin explains why fear about Social Security's future is causing some clients to claim benefits too early. She also discusses how advisors can coordinate Social Security with Medicare premiums, Roth conversions, and survivor benefits. She also says that one of the biggest mistakes she sees advisors make is misunderstanding how survivor benefits work, which can cost widowed clients years of cash flow.
Franklin also underscores the trade-offs involved with claiming Social Security benefits sooner than later. "That difference between claiming at 62 versus 70 increases my monthly Social Security benefit by 77% for the rest of my life," says Franklin. "As a certified financial planner, there is no investment I can recommend that is guaranteed to increase a monthly income by 77%."
Below are additional highlights from the conversation, which have been edited for clarity. (You can listen to the podcast and read the full transcript here.)
Social Security concerns are hardly new. "I've had a lifelong relationship with Social Security. Back in 1983, I was a Capitol Hill reporter for United Press International, if you remember that name, one of the big powerhouses of wire services, and that's when Social Security was actually in danger of running out of money and not being able to meet their checks. We look at how perhaps dysfunctional Congress is right now, but it was no picnic back in 1983."
Why Social Security requires political compromise. "At this point, employers, employees each pay 6.2%, a combined 12.4%. If that was immediately raised to 16.4%, a four-percentage-point increase, it wipes out the entire problem. It solves the entire financing problem, but politically you are never going to solve the entire problem on the tax side because the Republicans hate tax increases, the Democrats hate benefit cuts, and just like in 1983, you are going to have to find a compromise that makes both parties equally unhappy."
The advisor's role with Social Security. "It isn't your job as an advisor to tell them [clients] what to do. It's to lay out their options and arguments, pro and con, and listen to what they want to do and then explain the consequences of their decision. You want to take it early? OK. Are you prepared to take a 30% cut across the board for the rest of your life? If you're fine with that, your eyes are open, OK. If you think having a bigger guaranteed monthly income later in life and you're willing to wait for that, OK, that's the benefit of delayed retirement credits if you're willing to wait."
How to incorporate Social Security payments into planning. "Social Security is probably the best annuity you could ever buy. It's guaranteed to last the rest of your life no matter how long you live and it's cost of living adjusted, but it was never designed to finance your entire retirement. It's a base. If you can look at your fixed costs in retirement, and Social Security is unlikely to cover all those, what else do you need to do to build in some safety net?"
A common and egregious mistake. "The biggest mistake I see advisors make is saying, 'I have this widowed client. I told her to wait until age 70 to get the biggest survivor benefit possible.' And I say, 'No, no, no. Only a worker's own retirement benefit continues to grow by 8% a year up until age 70. A survivor benefit is worth the maximum amount at the survivor's full retirement age.' Someone who tells their widow's client to wait till 70 to collect a survivor benefit just wasted four years of cash flow for that widow."
Running the numbers. "The greatest chart that I like to show clients and advisors is the difference between claiming your Social Security benefits as soon as possible at age 62 versus waiting till the latest age of 70. My full retirement is 67. That's an extra three years at 8% a year. That's a 24% increase in my benefits at age 70."
Making sense of Medicare. "The other thing is to be generally versed in Medicare, at least knowing that if you have clients whose income exceed certain thresholds, which right now is $109,000 for singles, double that, $218,000, for married couples, if your modified adjusted gross income exceeds that amount of money, then they need to know they're going to be paying more for Medicare, and in some cases a lot more. The challenge is it's based on a look-back period from two years ago. So, 2026 Medicare premiums are based on the last available federal tax return, which was your 2024 federal tax returns you filed in 2025. So, it's a little hard."
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