Winning in Retirement

Social Security - Will it be there for you?

• Akers Financial Group

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Unknown:

The following is a pre recorded Show. Welcome to winning in retirement with your host, Brian AKERS, Certified Financial Planner, professional and founder of AKERS Financial Group, now helping you win in your retirement. Here's Brian AKERS, welcome

BRIAN AKERS:

to winning in retirement. I'm Brian AKERS, president and founder of AKERS Financial Group, and the host of the winning and retirement radio show. Here with me today is Sam Payne. Sam Payne is a financial advisor, but also a certificate holder from the National Social Security Association. We have him today. We have him once a year where we sit down and talk about Social Security. Sam Payne, good morning.

Sam Payne:

Hey, good morning. It's great to be back here talking about my favorite subject. Good to be with you here. Brian, yeah,

BRIAN AKERS:

I appreciate that. Sam, we're going to tap on all your knowledge today, so you're going to have to really be ready. You'd be juiced up.

Sam Payne:

I got all the cobwebs out earlier this morning, I believe, but let's see. All right,

BRIAN AKERS:

so the idea is this, Social Security is a piece of our retirement planning, and what we need to do is make sure we know what's going on. So Sam and I have been talking for the last couple of months about what to talk about, and what we came up with is this, we want to have a show called Social Security. Will it be there for you? And then we want to apply it to the decisions that we need to make. Those decisions are, when should we start Social Security? And we're going to talk about that throughout our show today. All right, so we're going to start out with some basics, the Social Security. You think you are a certificate holder from National Security Association, so you've done a lot of training and ongoing classes with that, yes, yep. And how do they train you? They put you in classes, tie you down and throw information. Oh,

Sam Payne:

yeah, no. Yeah, no. Typically, it's usually a two day class where there's in depth training, stuff that you probably don't need to know, but we certainly helps us say the the bend points and how they calculate Social Security and all that, all that information. But the reality is, Social Security is an important, important tool for retirement, for a lot of clients, a lot of prospects, a lot of people who are looking to retirement and being able to communicate the value of Social Security is really what they teach

BRIAN AKERS:

us, right? So the idea today is we're going to tap into your knowledge for us to think this through about Social Security. So we're calling it, will it be there for you? And we've taken that from the Social Security website. What is the Social Security website?

Sam Payne:

Ssa.gov, or social security administration.gov, got a great website, really robust. You can go on there if you if you have not gotten on there yourself and created your own username and password, your own account, I would suggest you do so, because you can actually look at your current Social Security benefit and the benefit going forward,

BRIAN AKERS:

and that's any age. Can go on there, you will have to go through an ID process with them, and then you need to remember your information so that you can log in later. Now you can always reset it, but the idea@ssa.gov you can go in there and see your earnings record. Yes. Why is that so important

Sam Payne:

to make sure that the earnings that you actually earn are being credited to you and to your benefit, because your benefit is all based on your average annual index, monthly earnings, right? If those earnings are not correct in your record, then your benefit is not going to be

BRIAN AKERS:

correct. All right. So what's the number that they use in the calculation? How many years of work Do they count when they do that calculation? It's 40 quarters. 40 quarters is to qualify, yes. But when they do the average income, they use like, 35 years, 30 years, I think it's 30 years. Yes, all right. And so the idea here is you got to check your records, your earnings records online, make sure that you know what's going on there. Make sure it's right, because you need to prove to them that it's wrong if you ever find a mistake. Yes. So it's always good to keep those W twos, no matter what, if people tell you, save things seven years. Save it longer. All right, so on that website, there's actually a tab of them you can click right into. It says, Will it be there for you? And the idea is to talk about Social Security, and the idea of, will it be there for you? And so the reason that's important is that Social Security has been telling us since the 90s, that if things don't change, then they're going to have to offer less payout because of the fact that money coming in is going to be less than money going out.

Sam Payne:

Yes, that's true, and it did. It has been something that is not new, and there have been substantial changes to Social Security to prolong that that date, as we both know now, that date is pushing 2033, so it's coming up pretty quick, unless something is done and it's it's apropos that this year is the 90th anniversary of the founding, the beginning of Social Security, sure. And we're still even for the last 2025, 30 years, we've been concerned about it. At some point running out of money, and it yet to date, has not correct.

BRIAN AKERS:

I believe right now, we're currently on a negative cash flow, yes, meaning the amount of payroll taxes coming in versus what goes out. And that's been going on since 21 yes. Now there's been a lot of things. Things going on. There's a lot of concerns out there. So here, in the first quarter, I want to give, like an overview of some ideas so, but I thought we'd hit this one about the end of last year, there was a fairness act that came out, yes, and can you explain what that was and how it worked? And we'll talk a little bit about why that's important.

Sam Payne:

Yeah, it's kind of funny that we're talking about, will Social Security be there for you? Because the the Fairness Act reverses an act that was created in 1983 to prolong social security because they thought it was going to run out of money, right? And that act added a Windfall Elimination program and a Government Pension Offset for public employees. They had non covered work under Social Security, but also had some income that they were paying Social Security on. It limited the amount of income they were able to take from Social Security last year or this year, beginning this year that that elimination is waived, it's gone. It's no longer so there is no longer a will follow Elimination Provision or a Government Pension Offset applicable to anybody who's claiming Social Security.

BRIAN AKERS:

And so what happened? Let's say you're like a bottom Baltimore City police officer, and you've never paid in Social Security while you're working, but you had side jobs. Those side jobs you did Social Security, and that Social Security would build up records, and you'd pay in, you'd fully pay in, but you would not get your full benefit that they calculated to get a piece of it, yes. So what has occurred is that they basically took the elimination period away. You got your full payment now, based on whatever you paid in, it's not a freebie, it's not a gimme. Is basically restoring a benefit that I think, I think the Fairness Act is actually a very good thing and the right thing because they paid into it. Yes, I agree. Also started a, you can get a spousal they have the right for a spousal benefit.

Sam Payne:

Yes, there's always been a spousal benefit. Okay,

BRIAN AKERS:

the the idea on the Fairness Act, the Fairness Act is going to it was something that actually, because of it paying out money, it actually hurts the Social Security long term. So if we were moving towards 2034 it brought it back to 2033 because of the money going out the door. Now, through June, Social Security has announced that they are finished paying everybody out. So the only issue I would have for people would be people that are new or how we say, never applied for social security because they didn't think they would get anything anyway. I would if you're not getting anything or never got notified, I would really want you to go apply for Social Security. Yes, I agree. And that would mean if you're old federal like in the old system on federal government, if you're in a local, state or local situation where you did not pay into Social Security, but you had other jobs that you did, it's well worth looking into if, for some reason, you

Sam Payne:

did not get paid. That's exactly the in the type of individual who needs to look at it, somebody who had a side job, teachers, maybe in the summer, who did construction or some other type of thing that they paid social security premiums on, they should be able to generate that and get that benefit.

BRIAN AKERS:

All right. So the other thing about the fairness act that concerns me as a financial planner is the fact that some people got lump sums they received multiple months on paying back. And the problem is, is that if you didn't have tax withholding set up in your Social Security, that's all taxable money, at least a portion of it, right? Sense,

Sam Payne:

and that's one of the things I was gonna ask, is it taxable? Absolutely, it's

BRIAN AKERS:

taxable. Yeah. So that leads to the next topic, is that the President, that the current president, came out and said that Social Security is not going to be taxed. That was something he ran, ran on, ultimately, through the way you run things through Congress, he had to settle for different type of credit. Rather than social security being tax free, it's a an exemption for those over 65 Yes, and so that starts this year,

Sam Payne:

yes, it does. And$66,000 exemption for those over 65 but it's phased out. If you make too much money in retirement, then it's phased out if you're doing well, we'll talk about when our planning session, but Roth conversions and things like that can adversely affect that deduction. It's just a deduction. It's not no tax on Social Security. It's going to benefit the majority of Americans on Social Security, absolutely.

BRIAN AKERS:

But I think the stats were, it's going to be up to 89% will not pay tax on their Social Security after this. But there's still going to be the top 10, 11% of earnings paying tax on their social security. Exactly, yes, and then yes. Just have to watch the income, the taxes, the tax flow, make sure you've got enough paid in Social Security. Can take federal taxes out. You just have to fill a form out and send it to them, and then they'll take it out the next month. All important things to do. There's a lot going on. What have you heard what the cost of living might be for 2026

Sam Payne:

yet, there's rumors, but we don't have it definitive from the government yet, and with the government shutdown, who knows when that will be, but it should be around 2.7%

BRIAN AKERS:

All right, so 2.7% one of the things about cost of living adjustments that that does not mean you get the 2.7% because of Medicare. Right? Exactly, exactly. How does that work?

Sam Payne:

If. You have an increase in in your cola then and an increase in Medicare premium, the cola goes towards the Medicare premium, so it doesn't actually, you don't see the benefit in your

BRIAN AKERS:

check, yeah, it might be like a little bit, right? Yeah. Now, is there a law that says that your Medicare premium, if it goes up more than cola, can they negatively affect your Social Security? No, all right, so your Social Security won't go reduce, be lower, right? And there's the other concept, if you're not drawing Social Security, your Medicare premium keeps increasing over time. Yes, and it's better to draw Social Security me a little earlier to get your Medicare locked in, right? Yes, man. So we've been hitting you up with a lot of questions, a lot of topics. So our goal today is talking about Social Security. Will it be there for you? We're talking about some of the Social Security ideas and big, important things for this year and for into the next year. When we talk about Social Security, it is part of our retirement planning, but we don't ever want it to be the only piece. So as we're talking about the fairness act, we're talking about cost of living adjustments, the Medicare effect of that, we got to basically be planning for your retirement in the best way possible. Now, Sam, one final question I have for you, as we're talking about this, this whole topic, Social Security, the word security, you still feel pretty good with that last word security.

Sam Payne:

There, I do. I do. It's baked back by the faithful, the faith and credit of the federal government and us as taxpayers, then I don't believe we as taxpayers are going to let it go away. So yes,

BRIAN AKERS:

absolutely right. And the reason I wanted to bring that up as we close out the first quarter is this the fears or the fear factors that tie into this is something that we really want to address, and we want you to understand that planning is what helps us handle whatever we face in the future, and that's what we do at AKERS Financial Group, we sit down with you. We become your advisor. At AKERS Financial Group, our team of advisors are there for you to talk about your situation and how to make the right choices. We are local. We're independent. We don't report to a big company on Wall Street. We report to you. We have offices in Forest Hill and Lutherville, clients all around the mid Atlantic region, all around the country, and even a few around the world. It's so easy to begin winning in retirement, you just give us a call and schedule your free meeting with one of our team of advisors. What you do is you call 833 win, retire. That's 830 3w. I n, r, e, t, I, R, E, we'll give you a call on Monday to schedule a free in person meeting. Go to AKERS financial group.com or call us at 833-946-7384, to start planning for your retirement now Social Security. Will it be there for you? We'll explain when we return.

Unknown:

You're listening to a pre recorded show, welcome back to winning in retirement. Call 833 win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS, welcome

BRIAN AKERS:

back to winning in retirement. I'm Brian AKERS from AKERS Financial Group, Certified Financial Planner, practitioner, president and founder of AKERS Financial Group. Here with me today is Sam Payne. Sam Payne, good morning again. Good

Sam Payne:

morning. It's again good to be here in Maryland. Love, love being out here this time of year. Absolutely.

BRIAN AKERS:

Hey and thank you for coming into our studio. Here at our office. We're really grateful to be able to have a talk with you about Social Security, because it really does matter. Now you have taken classes and have a certificate from a National Social Security Association,

Sam Payne:

yes, National Social Security Association who educates financial advisors who help clients understand how to use social security to their benefit.

BRIAN AKERS:

Yeah. So the idea here today is that Sam studied a lot, and the idea is, how do we apply this to our own financial life, our financial life now, and our financial life in the future? Now, the show is called winning in retirement. Winning in retirement is fun when everything's all positive. Yes. Now the thing is, is that we're going to talk a little negative. So this show is called Social Security. Will it be there for you? And the answer is, what? Sam Absolutely,

Sam Payne:

it's going to be there for you. The question is, how are you going to optimize it for your your specific need? I don't think that social security is going anywhere, right? And we can talk about the the options of what should be going on there, but there's a concern that Social Security and the Social Security Administration, like we said earlier, is telling us that they're going to not have enough money to pay the full benefits starting in 2033 and that time, the current projections are, they're going to be about to reduce benefit payments by about 23% I don't think that's ever going to happen, but that's what's on the it's on the docket, right?

BRIAN AKERS:

So what they're saying is, eight years from now, if nothing changes, if they don't make any changes, any effects of anything, what's going to happen is benefits that are drawing would drop down. Yep. Now obviously no one wants that to happen, because that's not going to be good for whoever is in power at that time, right? No,

Sam Payne:

it's not, nor would it be for the general populace, because they've all paid into it.

BRIAN AKERS:

Yeah. And. In the money, it'd be like, well, where'd our money go to Yeah, so they came out with documents saying, will it be there for you? That's the way they what they call it on Social Security, they go through the numbers, they tell us that they're in a negative cash flow situation already. That means the amount of money coming in off a tax is it enough to pay what's going out? And that started in 2021 Yep, right after covid started and people were not getting paychecks, they were getting other things, and that was not Social Security taxable. And that's a kicker when it comes to the beginning of this negative cash flow. Negative cash flow means money has to come out of the Social Security fund. The allocation that they have the Social Security Trust Fund is a major debt holder of our federal government, yes, but generally, the Social Security is funded from the flow of that flow from it all. So really, what's important for us to talk about is this, will it be there for you? When someone tells us that they're wanting to look they're going to lower it, I think we got to take that serious and understand that they will be some changes, and we can't tell you how those changes will affect you individually.

Sam Payne:

True about think, I think Brian reality is, is that there are three separate groups that should be looking at this specific situation with three different set of optics and three different perspectives. The first group is that group that is already claiming and receiving their Social Security benefit. Historically, if you've been claiming your benefit, any changes to Social Security were not applied to you, were grandfathered into the old program. We expect that's going to happen with this. Any changes, no guarantees, but that's pretty much the expectation. So that group leads at least needs to know that there's something on the horizon, and keep their, you know, their antenna up watching for that. So anybody got

BRIAN AKERS:

that first group, I call them the baby boomers. The baby boomers are, once they're drawing, they could, they could come in clean and everything be fine, yeah. And

Sam Payne:

it's important, it's the ones who are currently drawing, right there are baby boomers who have not yet started to draw they are going to that second group. Sure? What's that group? The second group is anybody who's 10 years or more away from retirement, or that 10 years to 12 to 15 year span. If you're that distance away from retirement, you need to sit up, you need to take notice, and you need to make plans for if indeed there is any type of impact

BRIAN AKERS:

that's not baby boomers anymore. Sam, well, there's some, come on. Not 10 years. Not 10 years. My generation. My generation is next. We're coming. We're coming in looking at baby boomers. Get everything. We get nothing. Okay, everyone, that's the second group. At that second group, let's go. You gonna call

Unknown:

them baby while I don't know? You tell me.

BRIAN AKERS:

So the second group is near termers are almost ready to draw, and they see horizon. It's like I had a birthday and I'm blank years till 62 that's the earliest I could draw. Yes, so that's in my mind. So people that are thinking about that, they have this timetable, and actually the clock starts ticking, yeah, and then what's

Sam Payne:

the third group? Third group is anybody is 15 years or more away from retirement, so basically, 50

BRIAN AKERS:

years old or younger, we're not going to say, good luck, but it's going to change. It's going

Sam Payne:

to change. And I would say, keep your head down. Keep working hard and start contributing, and start planning on contributing to things that will supplement whatever social security is, but not rely 100% on Social Security.

BRIAN AKERS:

So one of the biggest mistakes in retirement are people who, throughout their life. They never saved they never paid off their debts. They live. They would get to 62 they draw Social Security immediately, and that's all they have coming in for the rest of their life. Yes, now that's not quite poverty level, but it is a very low level for the rest of your life. Social Security only is a tight fixed income retirement, and not what we want you guys to have. When we're talking about winning in retirement, we talk about having multiple investments, multiple things to draw on. We call them our cash cow herd. Building out portfolios, saving some extra money to your future self is important. So when you hear this comment, will it be there for me? First thing you got to think of is this, I'm not letting them control my future. I need to do something about my future now. I need to do my planning, my investing. I need to do what's best for me and my family no matter what comes at me down the road. Social Security is piece of my retirement, not the only thing.

Sam Payne:

Yes, absolutely, a piece of your retirement for most, most Americans, and it should be viewed from that perspective, you should have multiple sources of income, right? Social Security being one of those sources. Absolutely I agree.

BRIAN AKERS:

By listening to this show, you're already taking the first step towards helping your own finances. The second step is to implement it, to actually do something about it. That means saving money. Don't say I'm gonna save next week or I'm going to start in January. Start today. Save something. Save, save the minimum. Get going. You need extra money save so that you have other buckets to draw on when the cost of living is not enough, or when Social Security is not enough, or if they do draw down, yes. Now So Social Security has issues, yes. How are they going to fix it? What? Are there, what are some ways that they can try to fix the Social Security system? That's

Sam Payne:

a great question. There's a lot of conversation, not as much as we would like, but some conversation behind the scenes that, like you can imagine, it is a hot potato, politically. So,

BRIAN AKERS:

potato, hot potato, there's no R in there. Potato, yeah. Potato, depends where

Sam Payne:

you're from. Yeah. Okay. Potato, so nobody really wants to get out in front of the public and say they're going to do this. This do this, this or this, but there are a lot of things they can do. They can extend the early retirement age. They can extend full retirement age. They can do away with delayed retirement age and the growth that's attributed to that. They can do means testing. They can increase taxes,

BRIAN AKERS:

right? So let's, let's talk a little bit about it. So 62 is early, yes. 60 is early for widows, yes. And you can also have social security disability at any age, but 62 is the normal as an early age. Now, 70 some percent of Americans draw at 62

Sam Payne:

and that seems like an incredibly high number, and I know that's what they they tell us, but as an advisor, that just doesn't make sense unless you know that social security and whatever sources of income you've got meet all of your expense needs in retirement. Because, as you and I both know, if you claim at 62 and you're still working, there's pretty good chance you're going to have your Social Security removed, because they're the annual earnings

BRIAN AKERS:

test. Yeah, very true. So what I really want to explain here is that Social Security is a a piece of your retirement planning, 62 we're gonna talk about this later. Show is not my goal for our clients to throw at 62 and I will try to explain that now the so they could change and bring 62 higher. Yes, I believe that social security likes it when we draw early, by drawing early, we get less because there's a penalty for every year early. They use something called a full retirement age of 67 that's the current age for everybody born 1960 or later. And if they move that full retirement age to 70, and then keep the early 62 you can penalize even more the early drawers. So the math of it, I believe they're going to work the math, yeah.

Sam Payne:

And one thing I would say, if they change any of the ages, the last time they do that, it was phased in over a 20 year period. It's not like they're going to set a date from

BRIAN AKERS:

65 to 67 the problem with an eight year time span, eight year problem, I believe whenever they do address it, it's gonna something's gonna have to happen quickly. Yeah, one of the flags they've been waving is something called means testing on Medicare. Yes, means testing on Medicare is called Irma. It's income related monthly adjustment amount to your Medicare premium. If you make a certain level of money, they charge you extra Medicare premium, right? I am using those numbers for my higher earners, my higher net worth people, to understand that there might be a reason to Roth convert and do all other kinds of planning to get your income below Irma limits to the future, so that you're not facing taxation, plus Medicare premium going up by doubling, tripling or quadrupling, but means testing could be the Social Security

Sam Payne:

someday. I'm sure that will be some part of it. The question is, how much of an impact that's going to make? But yes, means testing is one of the answers they're

BRIAN AKERS:

looking at. And then the other thing would be taxes. On the tax side, they could raise the limit that they tax. They only tax so much of the income now, they could unleash that and tax all the way up to no matter what you show on your w2 right? It's true. That's

Sam Payne:

the other one. Then, of course, the last one is they could just reduce the benefit, which is what they're warning about. That's something they could do. I don't think that's going to happen, but that is an answer.

BRIAN AKERS:

Yeah. So generally, Social Security, will it be there for you? Our answer would be, it's going to be there for you. The version that would be there for you could change. And my thing is, are you ready? We generally in planning, do not want to rely on our government, our companies, things to be our only source of our retirement income. We need to have control over our own financial

Sam Payne:

life. Yes. And the key is, and we'll talk about this later, is knowing what income you need to generate. Yep, that is the number one key from a financial planning perspective,

BRIAN AKERS:

absolutely. So this quarter, we've been talking about, will it be there for you? And then we talked about the benefits of what's going on and with some of the things that they could change based on cutting benefits or cutting taxes or raising taxes. There's a lot going on here, but the idea is that Social Security is a piece of retirement. Don't make it your only piece. That's the bottom line. So by talking about this, what we're doing is talking about your retirement income. Winning in retirement is about balancing your money coming in and your money going out, your cash flow. How we make decisions when we draw Social Security, when we take money out of investments all comes together to formulate your retirement income. Getting that retirement income is one of those first steps of retirement planning. We love doing for retirement planning at AKERS Financial Group. We love to help you. We love to assist you and guide you in the end through it. So instead of you worrying about where, what to do at retirement planning and where. To get your income from sit down with one of our team of advisors. We start out with a free meeting where we sit down, talk about you, and then we can begin planning for your retirement income plan. So go ahead and give us a call at 833 win retire, and schedule an in person meeting to just to begin doing that right now, that's 833 win, retire. 833-946-7384 or you can go to our web page at AKERS financial group.com is the best age to draw Social Security, 67, or 70 or something else. We'll talk about this when we return.

Unknown:

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS,

BRIAN AKERS:

welcome back to winning in retirement. I'm Brian AKERS from AKERS Financial Group. Here with me today is Sam Payne. Together, we put together a show called Social Security. Will it be there for you? We've been hitting that topic and talking about it. If you ever missed anything, as we're talking you'd always go to our website at AKERS financial.com AKERS financial group.com that's a k, e, r, s, financial group.com on that website, there's a radio podcast. Hit that button and right there is all of our shows. This show will be there so you can listen to it, and you can run it at one time speed, or one half time speed, whatever how fast you want to hear our voices. It's a lot of fun, but on that you can really, truly learn and understand where our topics are. And then we invite you to then look at the schedule meeting with us tab go right there and schedule me with one of our team of advisors who can talk about how this applies to you. And the reason I'm bringing this up is because this topic, in the third quarter here is the topic we've been talking about. Will it be there for you? And then the question comes down to this, what do you do about it? So Sam, the best age to draw Social Security? Is it 67, or 70? Or is it something else?

Sam Payne:

And as most answers you don't like to have is, the answer is that depends. Oh

BRIAN AKERS:

no, you're giving me. And it depends. That depends, Come on, pick pick a side. Pick a

Sam Payne:

side. Well, you said something interesting at the end of the last segment. You said that financial planning is about income and outgo, making sure your income does not or it exceeds your outgoing you're not spending more than you need to. The reason we're in this situation with Social Security is our federal government didn't live by those rules. Yes, they had a savings account that they were spending more than they were taking in. That savings account is being depleted, so that they're not going to have the extra money to pay more than they've been bringing in. You don't want to get to that scenario in retirement. So you really need to look at which for your specific situation, is the best age to claim.

BRIAN AKERS:

Now I enjoy the fact that you said, I said something interesting. So that's a major compliment. Compliment from you. I appreciate that. The second part I would say is I totally agree. So let's go over some basics. So full retirement is 67 and so that is a an amount. If you look on Social Security, they're going to basically project your full retirement age if you're born after 1960 and then the calculations go from there,

Sam Payne:

yes, there's a full, full retirement age for anybody born after 1960 it is 67 years old, sure. And at full retirement age, you have what's called a primary insurance amount. If you claim early, which you can you can claim as early as 62 that primary insurance amount is reduced. Claiming early reduced by 6% a year, something like that,

BRIAN AKERS:

and half a percent a month, which is about and a five year difference between 67 and 62 is a 30% reduction, yes. So if you have 2000 bucks, it reduced to 1400 1400 because you start early. So 74% of Americans start Social Security at 62 taking the reduced amount because they believe they get that money. Yes. And then it goes from there. Now, part of that decision is the concept of life expectancy and longevity, right? Health, health of both partners, yep.

Sam Payne:

Secondarily, is Social Security enough to fill your expense needs? Because if it's not, you probably have a job. And if you have a job and you earn too much, your social security is going to be taken away anyway. So it's It depends. It goes back to the it depends on you, your situation, what you're going through,

BRIAN AKERS:

generally, if you're still working, generally, if you don't need the money. We want you to wait on Social Security till 6567 or 70, pushing it down the road. Now I like to have a talk about 67 versus 70, and I need you, Sam, to decide which side of the fence you want to be on on this 67 versus 70 debate. I'll be on the right side of the fence, and the right side is what 70? I think 70, if you can afford it, 70 is the best strategy, and that's what for people that's gonna live the 90 to 100 Why are you waiting so long? I think

Sam Payne:

it's for anybody, because anybody who's married, yeah, because for me, you don't know what spouses, what kind of earnings record the spouses have. You might have a spouse who's had a lower earning, earnings record. Sure. Sure if you claim early, then you don't get the increase in benefits, which then locks them in to a lower benefit and lower Colas for the rest of their life. And if you haven't, you haven't accounted for that, or have some other way to fill that gap, because the gap is not only going to be a reduced benefit, but also higher taxes at a single rate, and Social Security can fill part of that role.

BRIAN AKERS:

All right, so since you chose 70, I'm gonna choose 67 now I understand the difference. As you wait from 67 to 70, it'll go up 8% a year. So that means you'll get a lot more money, yes, but you have less time to do it, because I believe that there's a defined date we're gonna die. If we do the math from that date, we can figure out the math of it. So security believe men should live to like 8182 I think, and females between 8384 in their charts. So if people believe they're gonna live beyond those times, waiting does matter. You get more money and more money over time, assuming all is okay with the will be there for me? Yeah, all right. So my understanding is that at 67 a spousal benefit. So if I'm the highest earner and my spouse is not, what would happen is that at 67 they get 50% of my benefit. Yes, if I wait to 70 that won't change. It's only a spousal benefits based on a 67 only. That's true, all right. Now, 60s, now 70, if you wait to 70, if you pass away, that becomes the benefit of the other the family, right?

Sam Payne:

That Exactly, and that's one of the reasons for considering delaying to need 70, because your benefit more than likely would be higher.

BRIAN AKERS:

Yeah, so I like 67 and part of that has to do with cash flow. Yes, it comes down to do I want to draw from my investments. I want to take it from the federal government. It's a play on. I got Medicare premiums coming in every quarter rather than writing the check. I have it come out my investment, out of the Social Security instead of my investment. Now, my general rule when I'm speaking, I would say, if we have a husband and wife espouses, we take the lowest earner, draw that early. Early could be 65 or 767, and then the higher earner, we wait until we need it. Now, counter to that is, if I have a massive for 1k pre tax, and I want to do a lot of Roth conversions, I have postponed into the future and waited to 70 because I want to Roth convert and have all the room possible underneath Irma to convert money from Ira to Roth IRA. So depending on this, depending on situation, I will wait to 70 in that kind of

Sam Payne:

situation. Yep. And you have made a great case that proves my original answer.

BRIAN AKERS:

Oh, no, you said that pins. It depends. I don't like that answer. So what happens is, this is that you might, let's say you're in your 50s and you're planning ahead. I think it's a great time to talk about it. The hard part is when we have people come in and they're 62 and they come in, they say, I just drew it. So there is no planning allowed, because we've already done yeah, I believe you need to talk to an advisor, and we need to work out your estate or your income plan. Everything comes in financial planning to make sure we know where cash flow is coming from, to make sure this money lasts a lifetime and that it's enough, the earlier you draw. I'm concerned, 10 to 12 years later, will your cash flow be okay?

Sam Payne:

Yes, you get inflation and Social Security. Unfortunately, I don't believe will keep up with true, actual inflation. One of the things, one of the ways to extend Social Security, is to not have Colas that are huge, and that's been accomplished. And so inflation is going to continue to arise. The biggest question, like we talked about earlier, is, how much income do you need to live the lifestyle you want in retirement, plain and simple.

BRIAN AKERS:

All right, Sam, so when they're 65 years old, they sign up for Medicare, and then if they sign up for Social Security, the Medicare will come out of their Social Security. Yep, if you don't sign up for Social Security at 65 they're going to bill you quarterly for your Medicare premium. Yep, I don't mind 65 now it's a 12% reduction in your in what you get, but you get money for 24 extra months you basically on. The math says you got to live to 78 years old before the break even occurs. And so I would say that that's not a bad thing, that when people come in and say, I am living the 90 to 100 now that always would tell us to wait as long as possible, right?

Sam Payne:

Yes. And I think the the 65 that person is all fine and dandy, as long as they're not currently working, as long as they don't have other income that they need to supplement their retirement, their social security to be able to meet their lifestyle needs, then it's a mute point. Why would you do it? One

BRIAN AKERS:

of the things I try to explain to some people is sometimes when you're getting ready to retire, you think, I'll draw. Social Security and work part time, and that life will be so much easier. And I come out with the idea of, you know, your current job has great benefits, has great health care, all the way to 65 Yeah, you get the most money. It's not a part time job paying you minimum wage. You're getting what you get paid now. And why not a couple more years and then never work again, versus retiring where you have to work. It's, it's a lifestyle choice. But sometimes we put these numbers in our head. I'm 62 I got to retire. It's rather. I rather have the opposite of, what do I want to do with my life? What I want to how do I want to spend? What kind of stress do I want to have with finances? Can I get to a point where I'm winning in retirement because everything's handled, everything's great, and I know my numbers are good. I'm out of debt. Cash flow is perfect. I have a balanced portfolio. Things are in great shape versus I want retire now no matter what.

Sam Payne:

Yeah, and I think you hit the nail on the head. What does your retirement look like? Yeah, what do you see yourself doing? Where are you doing it? Who you're doing it with? What does that life look like? And then secondarily, how much is that going to cost expenses? That's where planning truly starts, a picture, a vision, a true vision, of what your own retirement looks like.

BRIAN AKERS:

So we do use Social Security and planning for those that are in their 50s and 60s, people younger than 50s, social security, we use it in a way where we count a zero cost of living and air planning. We can also do planning where we cut it out and not even use it in your retirement plan. It just emphasizes the idea of saving and maximize your retirement savings through your work, using Roth, making sure you put money aside, throwing money to your future self. The earlier you start investing, the more that money is time to compound and grow, and then Social Security would be a minor piece of retirement.

Sam Payne:

Yeah, it begins with planning. Just like you said, planning period, if you're anything you want to do, requires some type of a plan, absolutely.

BRIAN AKERS:

So this show winning retirement, the answer is, gotta have a plan, and then we try not to go with it depends, but it does depend on you to start that plan. So this topic was, what's the best stage draw, social security versus 67 or 70? I think everybody agrees with me. At 67 was a good try on 70 Sam, I appreciate it. Mom's the word. All right, so we all know the best part of retirement is getting your time, your time back where you decide how to use it. Before retirement, your time is tied up with other commitments, mainly your job. A lot of that goes away. In retirement, your time is now consumed by things that you want to do. It's so easy to begin winning in retirement. Go to our website at AKERS financial group.com scroll to the schedule meeting section and let us know you'd like to schedule your free consultation with one of our team of advisors. Right there. That's AKERS financial group.com that's a k, e, r s, financial group.com or you can call us at 833 win, retire. That's 830 3w. I n, r, e, t, I R, E, and we'll give you a call on Monday to schedule that free in person meeting. Go to AKERS Financial Group, AKERS finish group.com or call us at 833-946-7384, to start planning for your retirement now. Is Social Security your only retirement plan. We'll talk about this when we return.

Unknown:

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS, indeed.

BRIAN AKERS:

Welcome back to winning in retirement. I'm Brian AKERS. I'm president, founder of AKERS Financial Group. Our show is winning in retirement. We would we want you to be winning in your retirement years. And by listening to this show, we think you're going to help get you there. Also by calling us and sitting down with one of our team of advisors, we'll help you. Today, we brought in SAM Payne. Sam Payne is here to talk about Social Security. Our topic is called, will it be there for you? And we've been talking about that. We talked about win the draw, and now we're sitting here in the fourth quarter. It's called the winning time of the show, the fourth quarter, where you got to bring it home. The topic this quarter is, is Social Security. If Social Security is your only retirement plan, what do you do? We got to talk this topic. It's not a fun one, because when we see people only rely on Social Security, it's a very tough answer.

Sam Payne:

It is a tough answer, and it's unfortunate that some people think that that is going to be their best strategy, to only work with Social Security. We don't believe that is the best strategy like you. We believe that we need more than one source of income. Social Security is just one source,

BRIAN AKERS:

right? So when you think about people in your life that are living on Social Security, only you know that they're constrained in their retirement years, and depending on how things go for them, they might need some help financially. Yes. Now, is it fair to say Social Security gets us to a poverty level in retirement, or is that not the right thing to say

Sam Payne:

it was originally designed to lift seniors out of poverty level? Sure, I don't know that it truly does. At today with the inflation we've seen, with the expenses that your average American has. So I think it tends to keep people pushed down, unfortunately,

BRIAN AKERS:

right? So, so security is going to be a monthly check. The monthly check comes on Wednesdays, yep. Generally around your birthday, right around your birthday, yeah. So security, once it starts, it's pretty regular. If government's open, government is closed, they're still going to send the checks, which checks. Which is good? Yes. So the security part of that consistency is very nice. The sad part would be, is that what's not predictable is what we need to live on, like, wherever we're living, the cost of living, making it all work. It's tough.

Sam Payne:

Yes, it is. It's, it's, it's not unless you were a top wage earner for the full 35 years, your benefit isn't going to be at a level that can truly fund most people in retirement. Unfortunately, you

BRIAN AKERS:

know, Social Security is designed where, if you make in that 36 to 40,000 to$50,000 range, you're gonna get a lot of your income from social security in retirement as you make more than that. So security is actually designed to pay you less, yes. So there it is prorated based on your your income and what they actually pay out. So it is calculated to benefit lower and lower income career people to get more of an income replacement. Yes, but it's not designed to replace everything. It's not designed replace everything Absolutely. All right, so the idea is this, Social Security can your only retirement plan. Well, if you're not planning, what happens is, social security becomes your only retirement plan. It's a vicious little thing of if you don't plan, this is what you

Sam Payne:

get, absolutely. And then you have choices to make, unfortunately, and they're never easy choices, and the results of those choices often aren't pleasurable at

BRIAN AKERS:

all. Oh, is there a choice if you don't plan like if you don't have any if you have no savings and you only have Social Security, there really is no other choice except going back to work or changing where you live, right?

Sam Payne:

Changing where you live, not spending money on things. I mean, it's just, it's you reduce your, you reduce your I'll

BRIAN AKERS:

go right. So our show winning in retirement is about taking our goals and dreams and putting this, this thing out there that we can obtain, and then bring it back through numbers and calculations and implementation of what you're what's going on to mathematically help you get there, but that's going to imply that you save money. It's going to imply that you live on less than you make. It's going to imply that you're doing planning. You're listening to planning. You're listening to the advice. The motivation is this, don't be like average Americans that don't save be unusual, be special, be the unbelievable person that you can be by saving money. Save money first, make it a habit. Make it come out of your pay. Make it go to your future without you having to decide. Every month you have to do that for yourself and for your future self, because then, if you don't have a plan, then you only have Social

Sam Payne:

Security, yes, and if you've been successful in saving and planning. Now, once you get to retirement, it becomes time to optimize what you've done, to get the best out of what you've done, to have it really achieve what you want it to achieve, live the lifestyle the retirement you want

BRIAN AKERS:

it to All right, I love my conversation with my clients about, well, we're making too much money in retirement. Brian, what do we do? Yeah, and you have every choice. Well, do you want to spend it? Do you want to give it to your kids? Give it to charity? It to charities? What do you want to do with this money? And the idea is this, choices are yours when you've done the work, done the planning, set money aside. Stock markets and investments have been very, very good for a decade, and a lot of people that have been doing saving, investing are in great shape. What we try to do is balance that out and be prepared for the worst case scenarios. Get the income flow going. Make sure we make decisions on each piece, pension, Social Security, when to draw. The lower income person draws first, the higher income draws later. Planning this all out, we do income spreadsheets. We build out the projections out to make sure it works out. Now in retirement planning, I've learned that during our early retirement years we're really going and running around, is when we spend the most money. And then there comes those later years where you just can't get up and go as fast and you spend less. Then there's the time where you usually go to doctors every week or every day, and that's when you spend even less if you have good health insurance. But the idea is that retirement planning needs to be flexible liquid, allowing money that you can use and spend to provide for all this retirement and that will supplement all the other choices that you have. So Social Security, will it be there for you? Well, that is our topic on our show today. The thing is, is that, do you want social security to be your only source. And my answer is, please, no,

Sam Payne:

yes, I would agree with you. You talked about the GO GO, the slow go and the no go years. Those are, those are what we phrase them. And really, I'm sure you're like me all of your clients. We want them to have the best years being their Go, go years, the years where they can go and see the grandkids, travel, do the things they want to do. So. When they get into slow go years, they don't, they don't feel like they've missed out on something, and then the no go years, we're all going to face those hopefully, that is the shortest part of our lives,

BRIAN AKERS:

right? Yeah, we just, we got to maintain ourselves, right? Yeah. So winning in retirement is more than just finance. It's everything, right? It

Sam Payne:

is. It's everything. And I read a book recently that had an interesting quote, and it said that people often think that they're bad problem solvers. And the book says, No, they're not problem solvers. They're bad problem anticipators. What we do, from a planning perspective is we anticipate the things that get blindsided with things that could derail their plans, and we account for those. That's what part of planning is but you got to start the planning process

BRIAN AKERS:

absolutely so at AKERS Financial Group, we have teams of advisors that sit down and go through where you are now and helping guide you to where you want to be now. Successful clients of ours are ones that might come in already successful or and want to be more successful. We got to know where you start, and we call that our financial fingerprint, and then we get get you through our AKERS way of designing your financial planning and then implementing that over the years. So today's topic, Social Security. Will it be there for you? Let's summarize a little bit. Sam about Will it be there for you? Your answer is yes. You believe Social Security

Sam Payne:

will be I believe the question is, to what extent, but absolutely, Social Security is going to be there, absolutely.

BRIAN AKERS:

And that's for all three groups you had. You had the group of already drawing people. Yes, you think that should be a pretty good group to have money and keep it flowing the way it is, possibly not many changes, unless you have high income. That could be means tested down the

Sam Payne:

road. Possibly means Texas higher taxes on it, something like that. But yes, absolutely.

BRIAN AKERS:

Then the near term people, people like, 10 years out or not, they they will have some changes. Possibly

Sam Payne:

they will have some changes. And what I would do, and I'm sure you would agree, is that you start planning for a worst case

BRIAN AKERS:

scenario, and then prior to 50 those are further out there, probably have the most

Sam Payne:

changes, the most changes, I would suggest. The thing for them to do is just keep working hard, keep saving on their own Roth Roths something where they're continuing to save, but save

BRIAN AKERS:

and save early, save often, and invest the money. Make sure it's invested, yes, not just parked on the sideline. Make sure you're in the market through the good and the bad. Yes, dollar cost averaging out of every paycheck is a great way to get that going. So the I so the idea is this Social Security B will be there for you. That's part of the Social Security website and their explanations of what they're trying to tell us about in 2033 where reduction of benefits could be as much as 23% and the reason the government tells us that is so that we prepare for countermeasures, right?

Sam Payne:

Yes, give it gives you an opportunity to start preparing. And I would, I would implore anyone who's listening to this to come in, sit down, have a conversation. How Does Social Security fit into your specific program, and is there a way to optimize it for your benefit, for what you're trying to

BRIAN AKERS:

accomplish? I mean, there's software that we run things through about break even on that break even analysis, and basically it's a math issue. It's based on what numbers you plug in if you know your life expectancy, like if I call it, if you're a milk bottle, you know your expiration dates, it's what's on your side. Then it's easy math, yes. But the reality is, we don't know. We just know longevity. People live longer, right?

Sam Payne:

People are living longer. And you got couples who have different, different health issues, sure. And so it's, again, it depends on your specific scenario. You use the fingerprint as a great analogy. Everybody has their own financial plan that is unique and distinct as their own fingerprint for the person next to them, right?

BRIAN AKERS:

And that fingerprint is where you are now and then we leads into your financial decisions now. Decisions are guided by an advisor, guided each and every year going through this and making sure it all comes together, so that you win in retirement and you just keep on winning. That's how we try to bring it all together. All right, Sam, so we're talking about Social Security. I'm talking about all these ages, 6265 6770 really, anytime, yes, do you ever say they should draw in January or a certain month of the year is best? Any any thoughts on that?

Sam Payne:

I don't know that a certain month of the year. I guess it depends on their own taxable situation. Does it make sense from a tax perspective to have it one year, not the other?

BRIAN AKERS:

Yeah, I like the idea of January. So we go online and apply October and January, trying to get it going, because that gives us that full tax year. And unless we unless we want to draw right away at 65 or 67 I'm okay with that

Sam Payne:

too. And unfortunately, most people want to jump in right on their birthday. So having that conversation sometimes a little bit harder

BRIAN AKERS:

than it should be. If they go online, they need to set up their account online early. And by setting it up online, you can apply directly online. And then it's three to four months, is my answer for what, how early you need to go to make sure you get it and get it rolling? Yes,

Sam Payne:

that's exactly what this administration suggests that you come in three months early, right? So

BRIAN AKERS:

Social Security Administration gave a lot of information this year. There's a lot of reports online, if you ever want to read all the numbers and where we get their numbers from, ssa.gov ssa.gov and they have some press releases which are interested. Thing. Well, Sam, I thank you very much for your effort today. It was a really good show for me to hear the knowledge and the wisdom so we can make decisions for this Always a pleasure. Thank you very much. So today we covered Social Security. Will be there for you. We do look forward to meeting with you. We want you to win in your retirement by taking advantage of the opportunity to begin planning with us at AKERS Financial Group to schedule a free meeting with one of our team of advisors. Go to our website at AKERS financial group.com scroll to the schedule a meeting section and let us know you'd like to schedule your free meeting right there. That's AKERS financial group.com or you can call us at 833 win, retire. That's 830 3w. I n, r, e, t, I R, E, we'll give you a call on Monday to schedule your free in person meeting with one of our team of advisors. Start planning for your retirement now. Go to AKERS financial group.com or call us at 830, 394-946-7384, thank you for listening. I'm Brian AKERS from AKERS Financial Group and we want you to be winning in retirement.

Unknown:

You've been listening to winning in retirement with your host, Brian AKERS of AKERS Financial Group. AKERS Financial Group offers securities through arcadios capital, an SIPC and FINRA member firm. Advisory services are provided through arcadios wealth. AKERS Financial Group and arcadios do not share any common ownership. Neither arcadios nor AKERS Financial Group provides tax or legal advice. Advice given on winning in retirement is general in nature, and one should seek further advice from their financial advisor, broker, attorney andor tax accountant before investing, be sure to read each prospectus carefully to understand all the risks associated with each investment. Examples and scenarios shared are meant to be for illustrative purposes only. Past performance is not indicative of future results.