Social Security benefits are important -- even to the wealthy, says Tim Steffen of Baird.

Questions about Social Security benefits are the most common questions Baird financial advisors receive from their clients, most of whom are in upper income brackets, Steffen says.

Steffen is director of financial planning for Baird’s private wealth management group. Baird is an international wealth management, capital markets, private equity and asset management firm with $100 billion in client assets.

The questions are relevant to everyone from high-net-worth individuals, who are well represented among Baird’s clients, to those of more modest means. The average Baird client has $1 million to many millions in assets and is nearing retirement. Most of those questioning their Social Security benefits are couples, who have a variety of strategies available to them to maximize their benefits.

Social Security planning is the No. 1 concern among Baird’s wealth management clients right now, Steffen says. “After all, the way these people became rich in the first place was by maximizing their earning power. Social Security can be a fairly significant dollar amount over a lifetime,” he adds.

“Wealthy people want to maximize their benefits because that is the way they are wired,” he says.

Wealthy individuals are more able to use the strategy of waiting to take Social Security benefits until they are at least at full retirement age, which is now 66, and many have the resources to wait until age 70. Benefits are reduced if a person begins taking them before full retirement age and they build each year the person delays taking them until age 70.

“Individuals who wait to draw benefits earn a delayed retirement credit of 8 percent per year, plus any cost-of-living adjustments. Where else can you earn this type of return on your investment?” asks Steffen. “It makes sense to not take benefits any earlier than you have to.

“By deferring the start of benefits as long as you can, from age 62 to 70, your annual benefit will increase by 76 percent,” Steffen says. The increase in the annual benefit received by deferring will make up for itself in roughly eight years, ultimately providing the maximum lifetime benefit. “By age 78 or so, you will have earned back all the money you didn’t receive by deferring benefits.”

Another strategy for maximizing benefits for couples that is particularly attractive to the wealthy is known as file and suspend. A wealthy couple may find that one spouse often has a much higher earnings record than the other. When the high earner reaches age 66, he or she can file for benefits but then immediately suspend them.