For many Malibu residents, Social Security is just one piece of the retirement puzzle. While it may not cover the cost of a Malibu lifestyle on its own, maximizing Social Security benefits can provide a valuable source of reliable income.
As Senior Financial Advisor, I work with clients across California who want to get the most out of their Social Security while coordinating it with other retirement income sources. Here’s what Malibu professionals and business owners should know.
Why Social Security Still Matters in Malibu
Even for high-income families, Social Security has unique advantages:
- Guaranteed lifetime income: Payments last as long as you live.
- Inflation protection: Benefits adjust each year with the cost of living.
- Spousal and survivor benefits: Your spouse may qualify for benefits based on your record, which can be crucial in long-term planning.
For Malibu residents facing high living costs, Social Security provides a stable income stream that can reduce the pressure on investment accounts and other assets.
Timing Is Everything
The age at which you claim Social Security has a major impact on how much you’ll receive.
- Claim at 62: You’ll receive reduced benefits for life.
- Claim at full retirement age (66–67 depending on birth year): You’ll receive 100% of your benefit.
- Delay until 70: Your monthly benefit grows by about 8% per year beyond full retirement age.
Example: A Malibu physician eligible for $3,000 per month at age 67 could increase benefits to nearly $3,720 by waiting until age 70. That’s over $8,600 more each year.
Spousal and Survivor Strategies
Married couples in Malibu can coordinate claiming strategies to maximize household benefits.
- Spousal benefits: A spouse may claim up to 50% of the other’s benefit, even if they didn’t work or earned less.
- Survivor benefits: Widows or widowers can receive up to 100% of their late spouse’s benefit.
Example: A business owner claims benefits at 70, maximizing the monthly payment. If they pass away, their spouse continues receiving the higher survivor benefit for life.
Tax Planning for Social Security in California
While California does not tax Social Security benefits, the federal government does—depending on your income.
- Up to 85% of Social Security benefits may be taxable if your combined income (adjusted gross income + nontaxable interest + half of Social Security) exceeds certain thresholds.
- Malibu retirees with multiple income streams (pensions, investment income, real estate) are especially at risk of higher taxation.
Example: A retired Malibu couple earning $200,000 annually from investments may have most of their Social Security taxed. By shifting some assets into Roth IRAs before retirement, they can reduce taxable income and lower their federal tax on benefits.
Coordinating Social Security With Other Assets
Maximizing Social Security isn’t just about timing—it’s about how it works alongside your investments, retirement accounts, and real estate.
- Draw from taxable accounts first: This may allow you to delay claiming Social Security, locking in higher lifetime benefits.
- Use Roth conversions in low-income years: Helps manage future tax brackets.
- Integrate with real estate income: Many Malibu residents own rental properties; coordinating this income with Social Security can reduce tax surprises.
Estate Planning Considerations
For wealthy Malibu families, Social Security may not be the largest income source, but it still plays a role in estate and legacy planning. Coordinating benefits with trusts, charitable strategies, and business succession ensures that all parts of the plan work together.
Bringing It All Together
Social Security alone won’t fund a Malibu retirement, but maximizing benefits can provide a dependable foundation for your broader plan. The right claiming strategy, paired with tax-smart investing and estate planning, can help you keep more income and create more flexibility in retirement.
At Manna Wealth Management, I help clients evaluate when and how to claim Social Security while aligning it with their full financial picture. You can learn more about my background and approach in my advisor profile.
Final Thoughts
For Malibu professionals and business owners, Social Security isn’t just a government check—it’s a strategic piece of the retirement plan. By choosing the right claiming age, coordinating with your spouse, and managing taxes, you can make Social Security work harder for you.
Your retirement should reflect both your lifestyle and your long-term security. Social Security, when used wisely, helps support both.
