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By Christine Benz and Mark Miller | 10-06-2014 04:00 PM

Make the Right Decision on Your Social Security Start Date

Double-check your Social Security statement, understand the importance of your 'full retirement age,' and weigh the benefits of delaying, says retirement expert Mark Miller.

Note: This video is part of Morningstar's October 2014 5 Keys to Retirement Investing special report.

Christine Benz: Hi, I'm Christine Benz for Making the right decision on your Social Security start date can make a big difference. Joining me to share some tips on this topic is Mark Miller, he is a Morningstar contributor. Mark, thank you so much for being here.

Mark Miller: Always great to be here, Christine.

Benz: Mark, before we get started on Social Security planning and key takeaways that people should have in mind, let's talk about why Social Security planning really seems to have caught fire recently. There is so much interest in this area.

Miller: I think there are a few factors. I think one is that a lot of the political stuff around Social Security has quieted down and people sort of are back to a fundamentals understanding of how important Social Security is in most retirement plans--so, that's one. The clouds have parted, if you will. Two, I think there is more focus on help and advice to people around Social Security. I actually wrote about this for Morningstar recently--the different ways you can access advice and help. Workplace retirement plans are starting to add Social Security advisory services. There is a whole cottage industry of companies that can help people make plans and optimize their benefits. So, there is more marketing around it, if you will, from the commercial sector. 

So, I think those are some of the factors as to why there is more focus on it. And I think the last thing is, in the defined-contribution space, we're seeing more and more focus on retirement income and the importance of thinking not just about accumulation of wealth but [also the question of] "How do you spend it down?" And so the retirement-income conversation naturally leads to a conversation about Social Security because it's the grandmother of all retirement-income programs.

Benz: So, you brought some key takeaways that people should have in mind as they are navigating Social Security. Obviously, it's a pretty complicated topic when you dig into it, but you think that if people are armed with a few key things that they will be better situated to make a decision.

Miller: The first thing I would say is that I don't like to say it's a hugely complicated topic. I think that's kind of off-putting to people. You often hear people say there are 7,000 rules.

Benz: Exactly. And there are, right?

Miller: I guess technically that's the case. Don't ask me what they are. I can tell you it boils down to a handful of things. I don't think people should find this as daunting as sometimes it's made out to be. I think there are four or five key things--if you will, a checklist. One is that I always urge people to start with their statement. The Social Security Administration prepares an annual statement updating you on what your benefits will be at retirement. Now, they stopped mailing out the statement a handful of years ago to save money. They are now resuming statement mailings as of this fall on an every-five-year basis. But the thing to know is that you can download your statement every year if you've created a my Social Security account on the [official Social Security] website. And if you do that, you'll receive an email prompt once a year reminding you to go take a look at your statement. And you can log on and just download your statement and have it. So, there is no reason not to have it.

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