Top 10 reverse mortgage lender Reverse Mortgage Funding, LLC (RMF) announced on Wednesday the availability of new consumer guides designed to help older Americans maximize their benefits from Social Security in response to a record-breaking cost of living adjustment (COLA) of 5.9% in 2022, as previously announced by the Social Security Administration (SSA).
“Many seniors preparing for retirement are woefully unprepared to maximize their retirement benefits,” the company says in its announcement of the guides’ availability. “68% of workers aged 50+ are unaware of their full retirement age, and of them, 62% believe they are eligible for full Social Security benefits earlier than they actually are, which can lead to claiming benefits earlier than necessary, permanently reducing check totals by up to 30%.”
These assertions are based on data compiled by the Motley Fool in 2019. In terms of the impetus for these guides, the change in Social Security benefits is likely to impact the retirement plans of affected seniors according to Kurt Czarnowski, Social Security consultant for RMF and a former regional communications director for the SSA in New England.
“The 2022 COLA adjustment is a significant announcement affecting everyone who is collecting or will soon be collecting Social Security benefits,” said Czarnowski. “The cost-of-living adjustment will likely raise many questions retirees have on whether the increased benefit will support their long-term retirement plan. It’s more important than ever for seniors to know how they can maximize their benefits.”
In terms of the content of the guides, one is designed to help consumers maximize their retirement benefits with an emphasis on the new COLA, while the second aims to support planning professionals in better serving the long-term financial goals of their clients. RMF makes annual adjustments to their Social Security guides and has released them in January over the past couple of years. 2022 marks the fifth consecutive year the company has made such guides available to seniors and professionals.
Late last year, SSA announced that Social Security and Supplemental Security Income (SSI) benefits for roughly 70 million American seniors will rise by 5.9% in 2022, the highest increase in the benefit amount seen in nearly 40 years. Since Social Security benefits often serve as a cornerstone of seniors’ finances in retirement, higher benefit payouts will likely make a difference in seniors’ overall bottom line.
However, reverse mortgage professionals did not see any diminished need for the industry’s product after the news broke, telling RMD shortly afterward that the higher benefit payments are not likely to make enough difference in seniors’ finances to diminish the need for a product like a reverse mortgage.