I’ll say it. I want to be someplace warmer right now. Here we are in November, and the temperatures in Florida sound pretty tempting right now. I understand why there are snowbirds.

Last week on America’s Wealth Management Show, Dean Barber and I discussed finding opportunities in the market. One of the opportunities that most people 62 years old and older have is Social Security benefits. There is a fantastic opportunity for every person that will receive Social Security to maximize those benefits. That is what Osiwala Financial Group Advisors do week after week for our clients. The first step in that process is to put together a plan. Without a plan, you can’t figure out what the best Social Security strategy is for you.

People always ask us what the best Social Security strategy is. When do I take it? Which one is it? The exciting thing is that there are many options, sometimes over 100 options that a married couple could take. But again, which option should you take? The answer is that it depends on how the rest of their financial situation looks. As we always say in our office, all roads lead to the tax return. When you make a financial decision, how does it affect your tax return? Then we need to discover if that action will impact another financial decision that you’re making. We refer to that as the “ripple effect.” Making a particular financial decision could be advantageous in one area while causing a consequential disaster in your Social Security situation.

We always tell people that if Social Security was your only asset and the only decision you had to make, it would be an easy decision. The reality is it’s usually more complex. It’s not typically as simple as stating that you’re “X” age and my spouse is X age, so this is the date that we begin taking our Social Security. At Osiwala Financial Group, we have a tool to calculate all the different iterations of claiming Social Security benefits. It’s as simple as taking the Social Security statement, plugging in all the history of earnings for both the husband and wife and running the scenarios where you see all the possible outcomes. Then everyone can see clearly which claiming strategy will give you the most, given a specific life expectancy. What you can’t see is how that decision impacts everything else. Once you know all the Social Security strategies, you build the plan, put in different methods, and decide which one will give you the best outcome possible. That, in turn, tees up the conversation for a host of other decisions that need to be made as far as tax planning.

It’s hard to believe, but we’re going to be getting into the tax season soon. Parlaying Social Security decisions with tax opportunities is a crucial benefit, especially if you’re approaching retirement or already retired because those are the days that it becomes easy to do tax planning instead of when somebody is working. Unfortunately, there’s not a lot of creativity we can do with W2 income, but there are many innovative strategies that one may use in that distribution phase of life.

I want to clear up a common myth that people sometimes bring up in our retirement planning meetings. Just because your friend, neighbor, coworker, aunt, or uncle claimed Social Security one way has nothing to do with how you should claim your Social Security. The reason why is because it’s all about you. It depends on your resources, how much income you want to spend, how much money you want to leave behind, etc. To determine the right Social Security claiming strategy, I guess you could do it if you took Social Security in a vacuum. However, there are many other pieces to consider, and most people don’t take the time. They might take the time to do the analysis on the Social Security decision, but they don’t take the time to coordinate and integrate that decision with all of the other ripple effect decisions that they’re going to be making. When do you take your pension? When do you take money out of which bucket of funds, including their taxable bucket, tax-deferred bucket, or the Roth bucket? When you coordinate and integrate your need for income, where those income sources are coming from, and then parlay your Social Security strategy along with those other decisions, it could be a completely different strategy out of hundreds of strategies. The one that looks the most logical isn’t always the most logical when you put it into the retirement plan.

The impact that Social Security and tax planning may have is often overlooked. Suppose you can create additional income by paying fewer taxes while increasing your amount from Social Security. In that case, you have an opportunity to remove part of the risk that might be in your portfolio. At the same time, you’ll still have the ability to accomplish all of your objectives. Another opportunity that people need to be aware of is the ability to reduce risk.

As most of us know, Wall Street may take money away in the form of volatility in the stock market, as can the government. Sometimes I think people look at a financial advisory firm like Osiwala Financial Group with a preconceived idea of what we do. They believe we manage money, and that’s it. The reality is that managing money is only a tiny piece of what we do. While we can’t control the risk of the market, we can control how much risk we have. Often, we can manage the risk we have on the taxes, especially in that distribution phase of life.

I want to extend this invitation to you today. If you’re not 110% confident in your Financial Advisor that you’re working with, click HERE or call us at (248) 828-8000 to request a complimentary consultation. We can meet with you by phone, virtually, or in person.