Maximizing Benefits via a Bridging Strategy - Smart Money Minute
Many folks looking ahead to the decision on when to begin drawing Social Security benefits often seek ways to make their eventual monthly payment as high as possible, and most financial advisors tell them it’s simple: wait until age 70. For some, that’s easier said than done though, since there’s an eight-year gap between age 62 and completion of the delayed retirement credit cycle. If leaving the workforce is the objective, then alternative income sources obviously need to be realized to make it work.
Here’s where a “bridging” strategy comes into play, and an article by certified financial planner Brandon Renfro appearing today on the Smart Money Minute website illustrates how this approach can work. In this analysis, Renfro explains how a conservative rate of withdrawal from a deferred compensation account can fill the gap while, depending on the balance available at the start, minimizing the risk of fully depleting reserves. The trick, of course, is to build the bridge first with a balance high enough to allow for withdrawals of a size that fits the need after the paycheck stops.
Since Renfro presents the details in his analysis, it’s fairly simple to plug one’s own numbers into the equation in order to see if a bridging strategy would be viable for you. Check out his article here.