Beau Henderson joins us to dive into the often misunderstood world of Social Security planning. Beau highlights how only 4% of people claim their benefits in a way that maximizes lifetime value. We discuss why Social Security is so confusing: its overly complex rules, lack of personalized advice from the SSA, and the financial planning industry's limited focus on optimization due to low compensation incentives. Beau also breaks down a three-step process to make better Social Security decisions.

We discuss...

Beau Henderson worked in retirement planning for over 25 years, focusing heavily on Social Security optimization.
A mentor's poor Social Security decision inspired Beau to dig deeper into the system and help others avoid costly mistakes.
Many people take Social Security based on incomplete or misleading advice, often lacking proper context.
The Social Security Administration cannot legally give personalized advice, which leaves many without adequate guidance.
There are over 500 possible combinations of how a household can claim Social Security benefits.
Beau breaks Social Security planning into three key steps: organize your financial picture, understand the rules for your household, and model different claiming scenarios.
Most households leave over $200,000 on the table due to suboptimal Social Security decisions.
Social Security decisions should be integrated with income distribution planning and tax strategy.
Sometimes taking benefits earlier can make sense if it supports personal goals like retiring earlier.
Many people don't realize that the Social Security decision affects not just them but their spouse's future as well.
Common fear about Social Security cuts are largely media-driven; legislation changes tend to happen slowly.
The worst-case scenario is likely a 20% benefit reduction, not elimination, and future generations will see more significant changes.
Up to 85% of your Social Security benefit may be taxable depending on your income level.
Proactive tax planning, like Roth conversions, can help reduce the tax burden on Social Security income.
Survivor benefits are an important yet often overlooked aspect of Social Security planning.

Today's Panelists:

Kirk Chisholm | Innovative Wealth
Barbara Friedberg | Barbara Friedberg Personal Finance
Phil Weiss | Apprise Wealth Management

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For more information, visit the show notes at https://moneytreepodcast.com/social-security-planning-beau-henderson-702

267. Marieke Elsinga