Hi everyone. Uh we still have it looks like two more minutes and it looks like people are still signing on. I hope y’all are having a fantastic day here in Houston. It is some blue sky which is always nice. Uh, and it’s only 89° with humidity feeling like 100, which is still better than 100 plus humidity. I’ll take 89 versus versus that. So, wherever you are joining us from, I hope everything is going great and I hope you are looking at blue skies.
So hopefully the uh skies are much brighter than the market today. Obviously we’re dealing with a little bit for those of you who follow. It’s a little bit of a turbulent time right now with everything going on. Interest rates got a little war going on overseas. Uh, we got another minute. We’ll give that another minute or two as people are still signing on.
We’ll save questions for the end.
If you have any questions, go ahead and pop those in the Q&A box or the chat. I will I will I plan on fielding those at the end. If it’s something that’s somewhat timesensitive, I’ll try to answer it then. It just kind of depends on where we’re at. Um ah nice in Florida. I bet that is in Palm Beach.
So I’m looking at 2:00 straight up. We’ll give it maybe one more minute.
and then we will start our uh today’s topic on social security.
It is good to see some familiar names and a lot of new names out there
as always. if this is so I know this is a webinar I I love the in person because it’s far more interactive so we’re going to do our best so if there’s any questions or comments hello to North Carolina um most of most of the attendees because we kind of handle the region is Texas obviously uh Louisiana North Carolina I think those are it an occasional one from California. We’ve had some folks up north, too. So, but it’s pretty much usually kind of the southeastish.
All right. So, with that said, I think we’re going to go ahead and and start. Uh again, formally welcome everyone. Uh thank you so much for joining me for this webinar, Social Security, Choice of a Lifetime. It’s always my pleasure to join you. on these webinars uh and share a little information on social security. I will tell you just a little bit of a caveat. This is on social security and income. But but I do want to say right when we look at social security we’re looking at it from just a social security perspective in a vacuum. There’s really a lot more things to consider right age difference. We’ll talk a little bit about that. also your cash flows, your need, your time, your life expectancy as well as maybe income tax now, maybe income tax later, right, for your legacy uh your Medicare impact on income. So, we’re going to talk about this, but but really it’s always good just to just to sit down with us if you’re not sitting down with anyone else and we can go over some of the well planning side so we can look at all of those moving parts that might impact it. Uh, someone already opened with a question and that actually will be something that we’re going to be talking about on a very high level. Um, so if you are here for the first time, an extra special welcome. For those of you who don’t know me, I’m Michael Marx, certified financial planner and a financial consultant with Alliant Retirement and Investment Services, or ARIS for short. I live right here in Houston, Texas. Uh, I’ve been doing this for over 30 years, and oh, we are fiduciaries. That is a question that someone asks inevitably. And uh for those of you who don’t know, my family has been tied to the credit union for longer than I’ve been alive since the 1960s uh through United. And for those of you who don’t know, this used to be or technically still is the credit union for United Airlines, but we’ve changed our name a while back because we deal with many companies now. So whether you have joined us through United or Continental or Google or Tesla CBS, Susie Orman, we’re happy you’re here.
And if I can get this slide to change. So before we dive in, uh just a quick housekeeping item. Oh, it has started. So can you not hear? Let’s see. Did I do something?
Can everybody else or can anyone else hear me? Someone said someone said they cannot hear me. Oh, perfect. Okay. So So the one who can’t hear me, you might want to um maybe log out, log back in. That that might help. Or maybe or maybe turn up the volume. That might be something. Sorry about this. You know, this technology and stuff sometimes gets the best of us. So um we’re going to move forward on that. So just a quick housekeeping uh item. Today’s session is for educational purposes. It includes proprietary materials, protects both the content and everyone’s privacy. So we ask that attendees do not record or capture the presentation whether that is by video, audio, screenshot, AI tools, any other method without prior consent. We appreciate your understanding and I am very much glad you are here. So I’m not sure what brought you to this webinar if you joined us via an email directly from us or if you uh signed up through alliance website directly. So let me just take a couple of minutes and talk to you about ARIS. So in addition to the weekly webinars that we host, we are a full-ervice wealth management investment planning division of the credit union. We offer a broad variety of investments planning strategies from fixed rate guaranteed to as aggressive as you want to be in the market. Uh maybe a little bit of life coaching always makes me laugh when it comes to your retirement years. Uh we’re actually a really good resource to utilize. So we offer multiple webinars throughout the week with different presenters. Each of us try to host twice a month. It changes a little bit right over the holidays. um ARIS were really focused on helping you understand the ins and outs of investing, saving for retirement, tax structures, tax strategies in retirement, legacy planning, etc. So, if you haven’t, I take a I I encourage you to take a look at our website and that’s uh a ris.creditun.com uh and you can see a list of our weekly webinars. you look at our podcast which is investsavvy our blog and other financial resources that are available to you. So speaking of webinars, uh my next webinar will be called anatomy of a recession and we’ll talk about recessions from a historical perspect perspective and and uh I’ll apply that to our current situation. Uh and I will sprinkle in some of the current events, you know, like we’re looking at Fed rate hikes, uh possibly a cut, but really not. We’re looking at hikes, tariff impacts, some of the geopolitical decisions, some of the wars that are going on, etc. So, that will be Tuesday, September 22nd at 6:00 p.m. Central, 700 p.m. Eastern. And then I’m back in the afternoon, Thursday, October 1st, and we’ll be talking about Roth conversions. This is a really a big one. it can greatly impact and save you a lot of taxes over the course of your life as well as income taxes uh to your children, grandchildren. So, we’ll talk a little bit about how that will be that should be at least part of your long-term retirement tax strategy,
how we can help, right? We do complimentary financial planning. Uh we are also the estate planning. We’ll have a slide later that we add trusts and wills, some of that basic planning. Obviously, we do the investment management since we’re an investment management firm. Uh really broad range of choices that we can do. And actually, we can do some things that are just outside of your traditional retail that uh breath of products out there and some of the advanced planning, right? Roth Roth conversion, tax planning, flow analysis. So, things like that. All right. So today’s presentation, we’re going to focus on how to maximize what is for many the single most importantly monthly paycheck that you’re going to receive in retirement, right? And that’s your social security benefits. So I I want you to come away knowing that social security benefits provide like a protected level of income, right? And they can’t be outlived. So that’s important. So before we get into some details, uh we’re going to talk about today we’re going to say that social security is complicated or at least it can be complicated. Uh you’re not alone if you feel this way. Many people do. So this is a great opportunity to work with a professional. Uh we can help you lay that solid foundation for the solution that works best for you in your personal circumstances. Right? Because it’s not just about maximizing social security. You also want to look at those decisions and how they impact other things, right? your cash flow, tax implications on your RMDs, etc.
So, this is not a recommendation for a buy or sell on any particular products. This is really just kind of general information. So, if we’re looking at a specific situation, it’s probably best to schedule an appointment and that opportunity will be later. So, and and we’ll talk a little bit about that. So, big thing, right? Um, in this assumption, assuming you earn 54,000 a year and your full retirement age is 67, which is probably, if you’re on this call, most of you, if you’re not already retired. So, the difference between an early retirement at 62, which is the earliest you can draw social security or claim social security, uh, is $1,465. If you waited until 6 until 70, you’re looking at 2634. So that’s a big difference, right? $1,200 a month, 14.5 a year, that’s quite a bit. Now, are you making more money from social security? Not necessarily, right? The theory behind that is assuming you live to a certain age, the reason why the check is lower at 62 than it is at 70 is that you’ll be getting checks for 8 years longer, 96 payments more than someone who started it at 70. So in theory, um you would receive the same total amount of money. Obviously, there is a tipping point and we’ll talk a little bit about that.
So this is our agenda, right? We’re going to talk about social security. We’re going to talk about social security basics and we’re going to give you some general guidance built for you
choice of a lifetime. So as a reminder, right, we can we can apply for social security as early as 62. Maximum amount received is age 70. a little background on the 63 to 65. So a fair a fair amount of people fall into this category, right? And they didn’t plan on retiring early. So if you look at this slide, there’s people who plan on retiring and then when they actually retired. So if you look at 62 and 63, you’ll find in these studies that a lot of people who wanted to retire at 66 or 67, which is your full retirement age, many people are forced to retire early. And a lot of that, a lot of that is due to health reasons, right? Either their own or a loved one. They have to look after a spouse. They have to look after parents or correction force where they got laid off and they’re having a difficult time finding new a new job. And I know agism is illegal. I know that can’t be held against you, but we know that happens every day and it is very difficult to prove. So what I would say is this is more of a cautionary tale when it comes to your retirement planning in the whatif scenarios because we do many what if scenarios, right? What if I retire at the wrong time? What if inflation is too high? What if the market um falls right when I’m retiring? The other what if is what if I’m forced out a couple years earlier than I had planned. So, always be aware that can happen. We live in the real world. Hopefully, it doesn’t happen to anyone on this call. But that’s a fair amount of number of people who actually retire earlier than full retirement age. So we’re going to use an example. I think there’s a couple of examples here. So we’re going to talk about Pat and Kelly. They’re a married couple. So what we’re going to talk about here is is so social security is not really black and white and we’re going to talk about FRA which is full retirement age right so you can see Pat and you can see Kelly Pat’s social security benefit at FRA which is full retirement age Kelly 61 Kelly social security benefit is full retirement age we’re going to talk a little bit about something about maximizing for survivor as well as you’re both alive. We’ll cover that. But again, there’s no oneizefits-all.
So, the formula that’s social security, there’s something called PIA, which is your primary insurance amount. And what they do is there’s there’s percentages under that for survivor. Let’s see if we have these. You know what we’re going to do? We’re going to just calculate this later. So, this will this will build this. So, what they’re doing if they both file as soon as possible, right, at 62 that their total benefit was going to be 1.5 million. If they optimized it, they would get just under 1.8. So, you can see that there’s a cumulative benefit loss by filing early. Now, when we look at these, I don’t want to just look at these in in a silo, right? Where it says, “Hey, you know what? I lost that benefit early, so that means I need to wait.” It depends on what you’re doing during those extra years, right? Are you saying, “Hey, I want to use this because I want to enjoy those things while I’m younger, right? I want to take that money now and do those those trips that I’ve always wanted to take while my health is there. There isn’t necessarily a right or wrong answer. Generally speaking, you really want to look at your particular situation. And that’s why working with someone, it gives you a little bit better idea and gives us a better idea on getting to know you, cash flow, come sources, tax impact, um, legacy planning, which is your beneficiaries, etc. So Mary, she’s approaching retirement, right? So she’s 60. Her social security benefit is just over $1,200 at her full retirement age of 67. So if she files early, her lifetime is 353. Hopefully you can see my cursor. If she waits until full retirement age is 430,000. If she waits until 70, it’s 478. So there’s a fairly big difference, right? Cumulative 79,000 versus 125,000 over that period. And and what happens is there’s a break even, right? If you remember me saying this, so if we only knew when we were going to die, this this this calculation would be so much easier. But as a general rule of thumb, if you are expected to live past 81 years of age, you are better off deferring social security until age 70 for more for total dollars. Now, obviously, there’s a lot of moving parts, right? Because you still have to get money from somewhere and that’s usually from your investments. Um, you’re talking about your quality of life. But again, just for this scenario, we’re talking about total dollars. And I can’t stress that enough because the calculators just look at total dollars. And I think that really misses the point of working your whole life and your quality of life and the things that you do in your retirement. So social security is like a major part of of a person’s total retirement income, right? So when you’re looking at those households 65 years and older, about half of them, you’re looking at social security is a primary part. Um if you are fortunate enough to have a pension, that’s a wonderful thing when you combine that to with your social security. We’re finding that is a dying breed um and a dying benefit in most because it’s really expensive for companies to do that. that is that’s being replaced by the incredibly expensive health care provision that they are now providing. But just like this, right, just like planning, this is a really good visual of how you want your retirement income to look, right? Social security is not everything. It’s just a part of your income. Now, I will tell you the more money you make, the smaller percentage that social security will uh will be for your retirement income if you plan properly.
So, some of the basics, let’s talk about the basics with a little history lesson. Find this interesting. So, what does it offer? Old age survivors and disability insurance, which is what it was originally called. So, it’s guaranteed income for your life. They index it for inflation. There are survivor benefits and there’s a preferential tax treatment on that. And we’ll talk about each one of those. So,
so because it’s guaranteed lifetime income, you know, they do index this for inflation. They call it a COLA ca, which is cost of living adjustment. I can tell you historically when you look over the decades it doesn’t quite keep up with historical inflation but you are still getting getting increases. So the preferential tax treatment is that social security is taxed not all of it is taxed. So you might be earning $1,000 but not not all $1,000 is actually taxed. So to give you an idea, if you’re single,
if you’re single and you make under 25,000, none of your social security is taxed. If it’s 25 to 34,000, half of that is taxable. Above that, 85. For married couples under 32 is zero. Above 44 is 85. For most people who’ve done any planning, you’re going to be taxed at well 85% of your social security will be taxed. And often people are really surprised about the fact that it’s taxed at all. But yes, it is. You pay social security tax into the system and then when you pull it out, you’ll pay income tax on that. Um, but here’s a funny thing though, right? Social Security wasn’t always around. So it’s actually less than 100 years old. And if you remember learning about the crash and the depression in 1929 that created a law that created social security. So this was 1935. Now it took 11 years for them to actually make this happen. So, you can’t see the amount on that check, but that check was $22.54, which in 1940, that was a decent amount of money. So, we had talked a little bit about PIA, or at least we had briefly touched on it, your primary insurance amount. And the way they calculate it is they look at your highest earnings for your last for your last 35 years. So, it doesn’t have to be consecutive 35 years. It’s just your highest years. And there’s a maximum earning as far as calculation. And for 2026, it’s 184,500. So, if you earn more than that, it doesn’t really matter because that’s the most you’re going to pay into social security. Uh there is a calculation on your social security, but but you don’t you only pay up to that threshold. So, if you look at your payub, we don’t really get payubs anymore, but if you look at your electronic payub, uh you’ll notice there’s something that’s called FICA, FICA, and and it’s a total of 15.3%. So, if you divide that by two, it’s 7.65, where your employer will pay half of that, 7.65%, and you pay the other half, 7.65, and that’s broken down. So, of that 7.65, 65 6.2 is for social security and the rest goes for uh Medicaid and Medicare. So,
so if you haven’t already done this, I encourage you to sign up for your Social Security account, right? That way you can see your benefits. Now, obviously you can go directly to the Social Security website. They have quick calculators in there to calculate what what roughly your benefit would expect it to be. But if you actually log into your account, it’ll have a history of your earnings and you can see exactly what what is being reported over your working life. It’s secure and it’s free to do. I encourage everyone to go out there and do that. They used to send out uh hard copy statements and then they kind of stopped doing that. So around around retirement age they send it and I think they send it out every 5 years now.
So if you’re under age 60, you have to look online.
At age 60, you’ll get them around your birthday. And that’s what this looks like. So, I don’t see on these cuz I haven’t gotten the statement yet, right? Cuz I’m not quite 60. Uh, but when they used to send these out, they had something called a break even where it was, hey, if you live to this age, you were expected to receive more more total benefits. So, just so you know, it’s about age 81.
So we talk about full retirement age or FR8 and you know we often say hey somewhere between 67 and 66 and the reason for that it depends on your birth year. So there’s a table on when you are eligible for your full retirement age and we’ll talk a little bit about what that means.
Please put the website for social security statement back up. Yes, I’ll go ahead here. Hang on. Someone asked about that. It’s um so it’s really ssa.gov. So, let me see if we can find that. Sorry about that. Yeah. So, ssa.gov and you can go ahead and log in, but it’s ssa.gov myac account, but ssa.gov and they’ll have the quick calculators and everything that go along with that. So just note where your full retirement age is. For most people it will probably be 67.
So early and delayed how that affects your monthly benefit. So this is an example if someone filed at age 70 which is your maximum benefit or age 62. So you remember in this case full retirement age is 67, right? And it’s $2,000. So if I retire early, I’m going to take a little bit of a haircut at 66, a 65, so on and so forth to a 70% of my full retirement age benefit if I return if I retire early. And just so you know, when you take that at 62, as you get older, that’s still there. Other than your cola benefit, which is your cost of living, that’s still there. So, it matters, right? This isn’t when you start and then as you get older, you keep getting closer and closer. Once you take it, it’s there. So, if you take it early, you’ve kind of limited yourself for the rest of your life. And that’s why we call it the choice of a lifetime. Conversely, if you say, “Hey, you know what? I’m still working or really don’t need the money um and I wait.” You get an 8% increase every year up until age 70, which is your maximum. So, there is no benefit of waiting past age 70 to take Social Security because then you’re just giving the government money.
Nobody wants to do that. So, binding rules for different situations. So, we’ll talk a little about this. Surviving spouses, spouses, divorced spouses, dependent children, um disabled individual and government employees. So, let’s take a look. So, we’re going to look at spousal filing rules. Now, you are eligible at age 62, right? As long as you’re married for at least one year. And the spouse has to file in order for you to claim your other benefits. So, this includes samesex couples. They same sex couples, sorry about that. They changed the laws a while back. And what your benefit is is you are eligible for up to 50% of your spouse’s PIA. Remember that your primary insurance amount. So, for example, if I am getting $2,000, my spouse would be eligible for either one half of mine, which is $1,000, or her own. She’ll get the higher of those two.
Now, for surviving benefits, now you have to be married for at least 9 months, unless it’s a death, right, by an accident or military. Uh, and if you are currently widowed, you can’t remarry unless you wait until after age 60. So,
so you’re actually, so, so here’s one of the things that matter, right? So, we talked to married couples when we look at these. So, your benefit is that you’re you’re eligible for up to 100% of your spouse’s PIA, right? So, this includes if they delay it. So if they if they were like, “Hey, look, you know, I’m going to wait until 70 to take mine.” And they pass away, your spouse actually gets that higher amount instead of versus if you had taken it at 67 or 65 or 62. So, and these benefits are actually independent of your own individual benefits.
Oh, you know what? So, let me just add this because this isn’t part of it. So they changed the law as of went to effect as of June of this year. So they eliminated and it’s it’s really impacting a not a huge amount of people but but a fair amount but I think I should mention it. So, so if you are on something that is a uh like some kind of government pension like you were a police officer or a teacher uh or worked for the federal government and you did not pay into social security before there was there was an elimination provision where it just said, “Oh, hey, your spouse died and you wanted to claim their social security. Well, what we’re going to do is we’re looking at the pension you get and then we’re going to reduce that benefit that social security benefit as far as what you’re eligible for.” And it could be reduced down to zero. So they changed that law uh which was a good thing. So now that that has actually been uh eliminated. So if you are receiving TRS here in Texas or some kind of government pension your spouse and someone passed away, you’re still eligible. So that’s a big one that made a huge difference in people’s lives. So for divorce spouses, so you have to be married for at least 10 years, right? And you have to be currently unmarried. So now the expouse doesn’t have to file for you to be eligible for this. So you’re eligible for your spousal benefits and then survivor benefits if they pass away. There’s no impact on the expouse’s benefit and you’re not subject to this family maximum. So I’ll give you an example. So let’s say I met the love of my life in high school and we married at age 17 and we were married for 10 years and then at age 27 we divorced because I met the new love of my life at 27 and I lived and I married that person and we were married for 10 years and then we divorced because I met the new love of my life at age 37 and so on and forth so forth. So 47, 57, 67. Now, as long as none of those spouses remarried, they could all claim my spousal social security benefit and subsequently that benefit too. Um, and it would not impact me. It would not impact my current love of my life. So, you know, you could have, let me see, 17, 27, 37, 47, 57, 67, and currently married. You could have seven spouses claiming claiming uh a spousal benefit. That’d be a lot, but that’s true. Just a side note, there’s a George Straight song that all my exes live in Texas. So, if you had a bunch of them, that could be it. I could imagine what his social security would look like. So, um, just as a reminder, if you’re subject to a reduction in benefit, right, they calculate a loss. And what this means, so for those of you who are thinking about retiring early, 62, 63, 64, 65, whatever that is, you have an earnings cap. Um, it’s not much, 24,000 or 25,000. I don’t remember what that is. Um, so if you are retiring, oh yeah, there we go. It’s $24,000. So for every dollar you make over that, your social security is going to be reduced for every $2 you make. They’ll reduce it by $1. Now what happens there is it’s not fully lost. So when you get to full retirement age, they will recalculate your benefit to include those loss benefits. So, it would it wouldn’t be for not, but it’s more of a an FYI because if you’re planning on taking that and if working is still part of your plan, you need to be aware of your earnings. And earnings are your earnings, right? Or or net profit if you’re self-employed. It doesn’t include annuity benefits or investment benefits or interest or dividends or any of those things. It’s just working income um or self-employed income. So now the year you hit full retirement age. So if I’m born in November for example uh and I decide to retire early in January, that is the age of my full retirement. That’s the year of my full retirement age. So the limit is higher. So just in case you’re like, “Hey, I’m close. I’m just going to walk away.” The limit goes from 24,000 to 65,000 what I could still earn. Um, and also it’s every $3 above that limit. So the reductions later. Now full retirement age is important because at that point there’s no earnings limit. You can make a million dollars a year and you’re and you are still eligible for your social security and we don’t have time. We’re doing fine here. Um, guidance built for you. Let’s just talk about some filing strategies. And again, this is optimizing like for early filing versus like a hybrid filing versus waiting till the till the end. Part of that is about your lifetime, your life expectancy. So,
so what they do is they just really look at like the best outcome given a set of mortality assumptions, which is basically when you’re going to die. So, I always I always look at this with I always take this with a grain of salt, right? Because the reality is we generally speaking we don’t know when we’re going to die. But as a general rule when we are doing question I’ll ask is hey let’s talk about longevity in your family and they might say oh you know what everybody in my family lives into their 90s or the reverse is nobody in my family has made it to 70 right that can impact the decision because there’s assumptions on how long you are going to live. So take that into account when we’re talking about optimal social security strategy planning. And again, I can’t stress this enough. This is done in conjunction with looking at how your impact on on Medicare, right? Social Security is going to is going to is going to impact you. Uh look at taxation for income tax over the course of your life and afterward, right? To your beneficiaries. So if you’re filing in this scenario, Pat waits until 70. He would maximize his social security. Now Kelly waits at till 66. That benefit is 1744. So if they did it this way, they would get just over a million. Now there are income gaps. So there’s a couple things on income gaps that I always think is Oops. bear with me.
We had an update and my system wanted to restart. Um, and so, right, if if if this is for like a survivor or something like that where there’s like this widow income, you go through these blackout periods. Um, so we want to look at those things if something like that happens. But frankly, there’s also income gaps when you’re through your retirement planning, right? Which is all your expenses. Then you look at your social security. um you have to fill those gaps. So this is really just looked about looked at like the blackout period your earned income social security and then if you wait what do you do in that in between right I need x amount of income and that’s usually where your planning is and what order you take that your brokerage accounts your savings accounts your Roth IAS versus your regular IAS that depends on the individual. So what they do is they look at this and what happens is is this scenario where you can see that big blue box where Pat passes away and Kelly begins her her survivor benefit right so what happens we’re looking at the 1.3 because she continues on with that benefit they’re looking at 1.6 6 million. It is not uncommon for women to outlive men. As a general rule, that is the case. So, you want to look at the income gap when your spouse passes away and how that impacts your your your uh income taxes as well, right? Because when you’re married, you’re filing jointly. When someone passs away, you’re filing as an individual and your tax bracket changes as oftentimes, not all the time, but oftentimes. So, you want to look at that, right? You want to look at your own health, your life expectancy, create that strategy, look at taxability.
So, when you file, obviously, it’s an important decision. Now, you want to learn how you can make those claims, right? To maximize that with you and your spouse, right? You want to look at your income, and we can help you with that, by the way. But one of the other things that I think are really, really important is all of those other things that we had talked about, right? Your life expectancy, social security being taxed, conversions, right? Is there a better way to pay the government less? Um, is there a better way to pass this on to your beneficiaries? And I will tell you this, and I can’t stress this enough. I’ve had people say, they say, “Well, you know what? That’s a great idea as far as the beneficiaries or my children go, but whatever I get, they get.” And I say, “That is true. Except taxes will have to be paid.” So the choice will ultimately be, do you want that to be given to the federal government or would you rather have that given to your children? So at the end of the day, it’s your money and you always have that option. But I can say, look, at the end of the day, there’s a lot of issues when you build your retirement income plan and it takes all hands, right? Both yours, your advisor, your spouse, your whole family, anybody’s that included on this. Um, you want to protect and you want to manage that savings and subsequently that income that it produces. So when you look at planning and visualizing your future in retirement, right? How do you want to how you want to live is very important. Um and some of the things you might not even thought about it yourself, right? It affect but it affects your next 30 years. So as you move into retirement, these are the questions that you’ll want to talk about. So our job is to get you thinking on about the kind of life that you want to lead in retirement, right? because the kind of life you want to lead will translate into the cash flow that’s necessary, which translates into how you structure that and what’s the most tax effective way to get you there. Um, so if you need help budgeting or something like that, we can help you.
If you’re looking at how you manage it, rollovers, conversions, that withdrawal plan, maybe looking at your RMDs, right? How do you imp how do you reduce that impact of your required minimum distributions? For most of us, it’ll be 75 years old. Um, but the obvious thing that we do is a portfolio management. And all of those other things are things that we take into account as far as when you’re managing your portfolio. If we’re doing something a certain way, you want to talk about how that impacts you, how we think that’ll impact you. It’s really not just about, hey, this is what the expected return is. Yes, it did this percentage. Great. how does it impact you later because that’s really part of the holistic planning. That’s what we do here. Um, one of the things that I briefly said that we had added is that our trust and wills we had a lot of we had a lot of inquiries about this. So what we do is we work with our third party right through our broker dealer and we do some of that basic stuff. So it’s your wills, trust, power of attorney, living will, uh your advanced medical directive, etc. If you need help with that, we can help you. uh if you’re if you’re clients of AIS then it’s it’s at a no cost. If you are not then it’s at a reduced cost but you really should have a lot of these things in place already and I hopefully you do. With that we’ve come to our Q&A and we do have some questions. Uh now what I’m going to do is while we’re fielding these questions and if you have any questions go ahead and please add those. I’m going to put up a survey if you want to schedule a meeting uh for us to look at your plan in specifics, right? Your cash flows, budgeting, taxation, forecasts, things like that. Again, we’re actually a full service wealth management division here and we are fiduciary, so we do have to work in your interest. Let me see what questions we have while we put that question up. All right. So, first question. You’re going to be 67 in December. Try and decide if you should start taking security social security in January or you should tap your 401k. That is a great question. That one actually came in really early. So, hopefully we know the answer to that by the webinar, right? It’s going to depend. It’s going to depend on a few different things. It’s going to depend on your cash flow. It’s going to depend on the available sources that you have, whether you’re single, whether you’re married. What I would tell you in that scenario is the ideal situation is why you meet with us so we can go through look at your situation and say, “Hey, you know what? You’re probably better off waiting um taking it early, taking it now, waiting until age 70, see where your spouse is.” Um and it’s part of the budget. If you don’t have the budget from us, we can send that out to you because it really gives you an idea of your cash flow. Um, and we really kind of maybe it jogs your memory on like something like, oh, you know, I hadn’t even considered that as far as retirement in my cash flow budget. Let’s see. Is there a benefit to taking social security at 62? If you’re going to be making more than the limit, it can be, but it depends. It depends on how much over the limit you are making, right? So, so that would be a question. Again, give me a call on that because it’s a very specific situation. So, what we would look at age, what’s your estimated social security, what’s your estimated earnings and what you’re going to be using those earnings for, right? Is it something you’re like, “Hey, I just want to retire early. I want to work part-time or something, um, but I want to travel.” And that would be very difficult to do while you’re working. So that is part of the overall plan. When we look at that and we look at cash flow, these are great questions. They’re very specific questions. So um let’s see what else we have here. Uh credit union member uh fees to work on this. So our planning is actually complimentary. Uh and many of the and frankly many of the the investment products that we have out there uh are are no fees on those and then we’ll do everything like the manage money or it’s percentage of assets to just traditional transaction. Again, we’re fiduciaries so we will we do have to work in your best interest on that. I can tell you we are pretty competitive with everybody else out there. Oftentimes a little less expensive because we can blend in some of those things that we don’t have to charge you. Um,
if I choose to retire after age 67 and keep working, how does that affect my social security? Uh, it doesn’t. So, if you wait until your full retirement age and let’s say it’s 67, you’re like, “Look, I love my job. Um, I want to keep working.” You can make a million dollars and it will not impact how much social security rece you receive. it could impact how much social security is taxed. Um, but as far as your benefit that you receive, there wouldn’t be any different. Uh, let’s see if we have another question here.
How early can you apply? Um, so the earliest you can draw is 62. So you can apply four months prior to that. So 61 and 9 months. So as soon as you hit that 62, your your benefit starts,
let’s see.
Should I worry about social security? Um, oh, that’s a loaded question. Okay, but that’s a great question. I hear that a lot. So as part of planning, the question would be is, hey, do we include social security? Personally, I would. However, at the and I can tell you why. So, at the end of the day, everything that we see social security is going to run out is true, but that’s if nothing’s done. So, if you remember how FICA is calculated, if they increase that just a little bit, if they do that in conjunction with maybe pushing out retirement ages, right? If if when social security first started,
mortality was like 59 or 60. So if you actually made it to 65 years old, you were kind of on borrowed time at that point where now you could effectively live in your 80s. So they never made that adjustment, right, for longevity. So, I I’m not advocating for them to go from, you know, like 67 or 70 all the way to age 80 for you to get that, but but there is and those little adjustments are already ch making those changes from 65 to 66 to 67. Um, and they’ll probably continue doing that. Um, additionally, if they make changes to some of the amount of social security tax that we pay, because they are pre-tax, it would be a it would generally speaking be a pretty small difference to your um to your actual paycheck, right? Because it comes out before taxes. So, and I understand things are tight and things are expensive, but I know the fear-mongering out that they’re like, “Hey, it’s going to be a 25% pay cut to social security.” And that could very well be. But I can tell you, and I mean this to any politicians out there, if your family’s a politician, this is a joke, but once you get elected, what’s the most important job of a politician? And that’s to get reelected. So, if that is the case and that is our premise, right? If you are the person responsible for cutting social security benefits by 22% or having social security fail completely on your watch, that doesn’t bode well for you. That certainly doesn’t bode well for your party. So, there’s really a lot of things that can be done to shore up social security and it doesn’t have to be as draconian um as as what they’re looking at. They’re looking at extremes if nothing is done. And I know Congress is notorious for doing nothing, but oftentimes they wait until the last minute. Hopefully, they don’t this time. So, I wouldn’t worry about it. We can exclude it if you like. I actually had one member say they just don’t believe in it. They want to exclude it. I’m like, that’s fine. Uh, so let’s see. All right, we have some questions.
Please put that legal resident that started late in the US seven years now. How’s that going to affect my retirement? Oh, so the way that is, you remember, they look at your last 35 years. So, I don’t know how old you are. Um, but what they’ll do is they’ll look at your last 35 years. Now, if you don’t have 35 years, you don’t need 35 years to be eligible for you only need 10 years to be eligible for social security. What will happen though is that if you don’t have 35 years, let’s say you only have 20, what you’ll do, I mean what they’re going to do is those those other 15 years are just going to go she zero earnings. So it will reduce that. Um someone had sent me it and then lost the zoom. Uh if you would be so kind to resend that because I didn’t get the question, my apologies. Um so you are 61. So you um on that seven years, so your full retirement age, you’re looking at another six more years. You could work until 70 without knowing what you do. I’m just talking about in general. Um but you can look at social security. If you continue working to your full retirement age, you’ll be eligible for social security because you’ll have enough credits. You need 40 quarterly credits to be eligible for social security. Um, I would I would recommend you look into that social security account and and calculate that benefit for you. Um, Laura, if you’d resend that question, cuz I cannot find it. Um, let’s see.
If I retire in 57 and wait until 67, will I get the full amount? If I had gotten if I worked until 67. So along those very same lines with the other question that was asked, um the answer is no because remember they look at your highest 35 years. So the reality is you would most likely um be earning more, right? We we we tend to earn more until we retire, maybe in the last couple years, something happens. Um but but you tend to work more. So, if you retire 10 years, like the peak of your earnings, you’re going to show zeros there. So, they’re going to have to go backward 10 years, you know, when you were in your 20s, um maybe not making as much as you were in your 30s or 40s or 50s. So, your social security would be reduced based on based on those years of zero earnings. I think that is it. Uh Laura, I didn’t see your question. I’m sorry if you do resend that. But I think we are coming to the end. I think that was all the questions. Those are fantastic questions. Uh thank you so much to everyone who participated in the questions. Um with that, you can access my information through that QR code. It’ll give you access directly to my calendar. Um, whoops. Did we get Oh, I’m sorry. There’s the question. All right, one more. I’ll be 67 in December. I’m trying to decide if I should start social security in January or if I should pull it from my 401k. If you haven’t, that’s exactly the scenario that we were talking about. We could run both of those scenarios based on the cash flow you need. Uh, I can tell you there’s a strategy where sometimes you want to wait and delay it because uh for Roth conversions, right? It’s a way to do a spend down against your required minimum distributions. It’ll save you some tax money over your lifetime. Uh but if you haven’t, go ahead and either click yes or schedule some time. You can use that QR code. Um if you need to meet outside of regular business hours, let me know. I’ll always do my best to accommodate. There’s my phone number. There’s my email. I want to thank everybody for attending. Uh, it’s always been wonderful. It’s always a good time. I wish everybody a wonderful rest of your day. Be safe and we’ll see you on the next webinar. Take care. Thank you so much.