PLANSPONSOR - October/November 2019 - 16

Upfront
Social Security: The Facts vs. Fiction
PRE-RETIREES-those within 10 years
of retiring-expect to receive $1,805 a
month in Social Security benefits, but what
they will see on their check stubs may be
quite different. According to Nationwide
Retirement Institute's sixth annual survey,
retirees collect an average of $1,408-a
28% difference.
" Many HR [human resources] professionals
take it upon themselves to learn
about Social Security and teach employees
about the basics. Or, during benefits fairs,
they bring in a Social Security expert, "
says Brogan O'Connor, senior financial
planner, Sentinel Benefits & Financial
Group. " Employers also guide employees
to the correct resources. "
O'Connor says his firm offers Social
Security education materials to plan
sponsor clients. " We have a library of
presentations we can tailor to each audience
and sophistication level, " he says.
Importantly, O'Connor says, Sentinel's
financial planners also do one-on-one
consultations. " We can explain [better]
what each person's Social Security benefit
is, how much income they will need in
retirement and how much Social Security
factors into that, " he says.
According to William Meyer, founder
and managing principal of Social Security
Solutions, that kind of personalization is
what is needed. He notes that when a group
of people attend Social Security education,
many still come away saying, " What
does this mean for me? " Participants need
to be given next steps, Meyer says.
The first, he says, is to consider Social
Security by itself and work out a strategy
to maximize it, versus taking benefits
early. " A difference of a couple hundred
dollars a month is no big deal, but adding
that up over 20 or 30 years in retirement
can be hundreds of thousands of dollars. "
The second step is to coordinate
Social Security with other savings. " What
16 PLANSPONSOR.com October - November 2019
Art by Jeffrey Decoster
we do in our financial wellness program
is show two bars, side by side-one of
which shows the result of tapping into DC
[defined contribution] plans while waiting
to maximize Social Security, " he says.
Meyer explains that if a single person
starts drawing Social Security as early as
possible-at age 62-he will get approximately
72% less per month and will have to
take more out of his DC plan in retirement.
According to Meyer, his company's
wellness tool provides a push report
and an analysis individualized to every
employee. " We get personalized information
from recordkeepers and sponsors and
deliver five different diagnostics via email
or a plan sponsor's intranet, " he says.
O'Connor recommends pinpointtype
education. Education should not
only include Social Security, but also
Medicare, the insurance coverage retirees
may need, and estate planning, he says.
-Rebecca Moore
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PLANSPONSOR - October/November 2019

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