4 Ways to Maximize Your Social Security Benefits

Source: Thinkstock

Source: Thinkstock

Speaking at the Morningstar Investment Conference in June, John Bogle, founder of The Vanguard Group, hit the nail on the head. Bogle, who is pretty much the father of modern retirement planning strategy, said that “Social Security’s the greatest fixed income you’ll ever get,” and went on to argue that “It doesn’t matter what the stock market is worth as long as the income keeps coming from dividends. In the long run, focus on the dividend stream, and focus on the fact that Social Security will keep coming.”

Bogle isn’t the only person to champion an income-focused approach to retirement planning. Dave Littell and his colleagues in the Retirement Income Program at The American College are literally writing books on the subject, and they are encouraging both financial advisers and the public to adopt a new mindset when it comes to retirement planning. Instead of thinking about the $1 million or $2 million nest egg that is traditionally targeted by savers, think about how your savings will translate into future income — dividend streams from investments, payments from annuities, and, yes, Social Security payments.

“For years, financial services companies have downplayed the role of Social Security in bolstering financial security in retirement,” reads a report from James Mahaney, vice president of strategic initiatives at Prudential Financial, a major insurance and investment management company. “However, considering the increased financial risks retirees now shoulder, the tax preferences that Social Security receives, and the income options that Social Security now offers, a strong argument can be made that Social Security should play a greater role in a retiree’s financial planning.”

Here are a couple of strategies to maximize Social Security benefits.