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How your clients’ health can influence their Social Security strategy

August 13, 2021

For more on this and other useful insights you can use with clients, check out the latest issue of Current from the Nationwide Retirement Institute.

As a member of the Insights & Solutions Field team within the Nationwide Retirement Institute® (NRI), I’m regularly asked great questions by financial professionals about Social Security planning. Social Security is one of our pillar programs in the NRI, and I speak often with financial professionals and clients about the nuances of the program and its filing situations.

Recently, a financial professional who is starting to speak more with his clients about Social Security planning asked, “Should my client’s health play a role in their decision on when to file?”

That’s a great question, right?

With every conversation I have around Social Security there is always one constant: The decision on when to file is personal and different for everyone. As a rule, it is recommended to delay filing for Social Security if financially possible, particularly for anyone considered to be in good health and expecting to live well into their golden years. I believe most financial professionals automatically steer their clients to wait as long as possible, but this story is a great example of why you should understand your client’s situation.

This client was a self-employed business owner whose Social Security benefit was based on her self-employment income, which could vary considerably depending on the business’s profitability each year. She had a relatively concerning medical history and relied on her current, pricey private health insurance. This client’s spouse was continuing to work in a job unrelated to the wife’s business, and his income had been very stable over the years. It’s also important to know that the husband’s employer-provided health care did not extend to spouses.

After consultation, the financial professional and the client decided that it was best for the client to file for her modest Social Security benefit at age 62, so that it could be used to offset the cost of her private health insurance premiums until she could enroll in Medicare.

Her husband intends to work as long as possible and file for his benefit when he reaches age 70.

This story really drives home the point that the decision on when to file for Social Security truly is unique to every person and situation. This husband and wife will file for their benefits at the two ends of the filing window. This strategy made sense for them, and the strategy that a financial professional helps develop for their clients should do the same.

It’s important for financial professionals to know that clients want to talk about Social Security planning, and that they would be in a better position by understanding the program. Knowing the ins and outs can lead to worthwhile conversations with their clients that may open the door to other planning opportunities.

The Nationwide Retirement Institute’s Social Security program was developed to provide financial professionals and their clients with the information and tools they can use to plan effectively. I invite you to ask your clients whether they’d like to discuss Social Security planning and then reach out to us at the NRI to learn more about our Social Security program