4 Seasons Podcast

One Size Fits One: Why Your Social Security Strategy Should Be Uniquely Yours

• Jeff Bingham • Episode 11

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Can B&H Wealth Strategies Provide Guidance On Social Security Optimization?

Deciding when to claim Social Security might seem straightforward, but optimal timing depends on far more than just selecting an age between 62 and 70. This episode dives deep into the personalized nature of Social Security planning and why cookie-cutter approaches often lead to costly mistakes.

Jeff Bingham, President of B&H Wealth Strategies, emphasizes that Social Security decisions demand a "one size fits one" approach. Your neighbor's perfect claiming strategy could be entirely wrong for your situation. Rather than viewing Social Security in isolation, Jeff explains how their 4 Seasons GPS planning system incorporates Social Security as one piece of your complete retirement puzzle, allowing you to visualize how different claiming ages affect your overall financial success.

For anyone approaching retirement, this episode underscores why professional guidance matters when navigating Social Security's complexity. With proper planning, you can make confident decisions that maximize your benefits within the context of your broader financial goals. Ready to optimize your Social Security strategy? Schedule your free 20-minute consultation today by calling 423-247-1152 or visiting bhretire.com.

To learn more about B&H Wealth Strategies visit:
https://www.BHRetire.com
B&H Wealth Strategies
423- 247-1152

Speaker 1:

Welcome to the Four Seasons Podcast brought to you by B&H Wealth Strategies, serving Northeast Tennessee and Southwest Virginia since 1966. Here we guide you through the ever-changing seasons of your financial journey, offering insights to help you grow, protect and enjoy your wealth. Ready to turn your financial dreams into reality, dare to dream. And now here's your host. President of B&H Wealth Strategies, jeff Bingham.

Speaker 2:

There's more to Social Security than just picking an age. Learn how to unlock its full value with a personalized strategy. Welcome back everyone. Skip Monty, co-host, slash producer, back in the studio with president of B&H Wealth Strategies, mr Jeff Bingham. Good to see you, jeff. How's it going?

Speaker 3:

Skip, it's going great. How are you doing this week?

Speaker 2:

I'm doing fine, doing fine, loving almost summertime. That's my time. I love spring, but I love summer even more. Yeah.

Speaker 3:

Josh, it's hard to believe that as we sit here on this date of recording anyway, we've got Memorial Day coming on Monday, so that'll kind of give everybody an idea of when we drop this recording. I guess we're the 23rd here. It's just. It's hard to believe this year has flown by. As we say around here quite often is the days are long and the years are short.

Speaker 2:

Yep, and it just keeps getting. They keep getting shorter yeah.

Speaker 3:

That's an age thing?

Speaker 2:

Yep, it is. And speaking of age, big concern on a lot of folks' mind is social Security. So how can B&H Wealth Strategies provide guidance on Social Security optimization? It's more than just, I guess, picking a date right, there's a lot of information out there.

Speaker 3:

I guess that's the right way that I want to say that you know, and a lot of people will provide you know, water cooler counsel to folks as well, or maybe the breakfast table for those that are retired and those that are thinking about it.

Speaker 3:

They'll kind of toss those things out there. But I will tell you that it is very much an individual, you know, or a couple by couple, family by family kind of decision. What one person did that you know, may or may not be the same type of situation that you have or that you should incorporate in your plan. So, you know, I kind of want to go out there and say that it really just like anything that we talk about here when we're talking with our clients. It is a one size fits one kind of kind. So we look at it. Obviously you can start drawing at age 62. You do not want to go past age 70. So somewhere between 62 and 70 is where you're going to make those decisions. Right. It's going to be somewhere in between there For those.

Speaker 3:

For example, I was born in 1960. So my full retirement age, for the full benefit, is age 67. If you're born in 59, you know it's 66 in nine months or 10 months, whatever. So there's a scale and some of those things can be fairly complicated as well. And when you retire, during this there's a lot of. There's a lot of complication in there, which is what I don't really want to get into. So's when, when you make that decision between 62 and 70 to draw social security, um is really let's, let's focus on that. So how we go about doing that, and the longer you wait, the more you, the more your monthly income, the more your benefit is going to be. Uh, that's right. And then you can make. You'll hear cases made that if you wait, you know know to 70, as an example, you're and you live past, you know age 83, most of the time is somewhere in that time period. That's when you're going to. You're going to draw more social security benefit if you live to that age and beyond. That's when you kind of get you know, when you really have maximized that. But a lot of people aren't going to live to 83. So it's kind of the bird in hand. So there's a lot of stuff that goes around that.

Speaker 3:

As I wonder, through this question, the way that we do it. Again, it goes back and I think we've talked about this I'm sure we have in a previous episode, but we talked about our four seasons. You know GPS, you know what we call it, you know, kind of you know, you know the data that's in front of us and it's the whole picture. So you take the whole picture, not just singularly focusing on Social Security, right, so you see where the Social Security is going to be the most. It's easy to look at that and then people can give you all kinds of advice around that. I can run an optimization schedule and say, well, if you wait till this age right here and you live to this age right here, you're going to get more Social Security benefit. You and your spouse are going to get more Social Security benefit if these things happen, and that's all well and good.

Speaker 3:

But that is a myopic look at only your Social Security. Again, back up from that, look at your total financial plan, your total retirement plan, where your assets are, what your cash flow needs are, and then actually plug in. Let's say, if you are retired at 62, well, let's start drawing it in 62 with the other assets that you have, let's wait to full retirement and run it that way. So you can look, you can actually have an interactive experience when you sit down with us to look and see which way it not only optimizes social security, because that's a singular look. But what is it that optimizes your total picture, right?

Speaker 3:

Your total retirement plan, if you will, to make sure that your efficiency is there, your goals are being met, that you don't run out of money before you die, you have enough, et cetera, and if you have some legacy assets. So again, it is a one size fits one. It is not well 62, I get more to 67 than I get at 62. I get more at 70. So I'm going to wait or I'm going to start now, because I've got some mistrust, the social security system, which may not be around for me during my whole retirement, because we certainly hear a lot of talk about that. So let me pause for a minute. Hopefully that made there was some clarity in that right there, because it is an individual situation, it's not black and white, it's full color.

Speaker 2:

for you, let's say Gotcha, so I guess everybody's different. In other words, it's not the same solution for one size fits all?

Speaker 3:

Yeah, it's definitely not a one size fits all. It is a one size fits one, there's no question about it. Like I said, where we have just an incredibly powerful tool that we refer to as our Four Seasons GPS roadmap, which is where we build your financial freedom plan or your financial success plan or your retirement plan, however you want to phrase that. But it's you know, and social security is part of that right, but you've got a pen, maybe you have a pension. You've got IRA assets, you've got cash savings, you've got a number of things. How do you plug all of that in? And you need $5,000 a month, or you know, or whatever your number is on a monthly basis, that you need to have coming in, and so you need to obviously make sure that you protect that purchasing power. That number can go up as inflation continues to rise and it erodes your purchasing powers of the dollars. In other words, if you retire on $5,000 a month, if that's your number, that's just a number drawn out of the air, nothing magical about that as I sit here and talk, but if $5,000 is that number, you're going to need more than $5,000 next year and you're certainly going to need more than $5,000 five years from now, because even with fairly moderate inflation or low inflation, which is obviously what the goal is and we brought inflation back under control to a degree over the last several years where it did become, it kind of reared its head for the first time in 40 some odd years, you know, during the 22, you know in 2022, when we really, you know, we've seen over the last what three years and prices have increased by 26%, right, I mean that's? I heard that number this morning. So you know that's a that's a sharp increase. And if you've got $5,000 and the price has increased by 26% over the last three to four years, then you need considerably more than $5,000. You need to be in that $6,000 to $7,000 range, right? If you do the arithmetic on, how do you hedge for inflation? Does Social Security help you hedge for that inflation, et cetera? So, again, it is a one size fits one and what you want to make sure of is that you do not run out of money before you die. You want to optimize your retirement plan and so when you plug it in and we can look at it, I mean it is living color and we can bring it to life with that retirement GPS system that I'm describing. I can't emphasize how powerful a tool it is and if used correctly, in other words, if we have the right information to put into it, we've got a very, very beautiful look. I always say you can see it, you can feel it, you can experience retirement to a degree. If we could bring in beach smells and mountain smells and various things into the conference. We're showing that you can do that and you can build in retirement budgets I mean you can do all kinds I mean not retirement travel budgets into that plan.

Speaker 3:

But social security is in many, or maybe most at least in my client's experiences, social security is an intricate part of a financial plan, a financial retirement plan. It's intricate. I mean it's not insignificant, it's not trivial, as sometimes you'll hear it, I think, kind of cavalierly talked about on the various financial broadcasts because they were talking to a lot of high, really really high, net worth individuals where their incomes are, you know, very, very high, and so Social Security might be an insignificant amount of them. But I can tell you that the clients that I work with on a regular basis, social Security is a critically important part of most, if not all, of my retired clients financial plan.

Speaker 2:

Wow, wow. Well, what are some common mistakes that people do when they're claiming benefits? Are there any?

Speaker 3:

I think you know they go by rules of thumb or they go with what someone else that they know, you know, suggested. Well, this is what I did, and you know I'm the, I'm the, and they have some cachet with that person as far as their and their financial acumen. Let's say, right, you know what I mean, if that makes sense. So they talk to some you know, friend or relative, you know that kind of thing and so kind of you know, take that advice and kind of hold on to that and we create our biases based on those things. So you know, and that might mean never take it earlier, that might mean take it early. Some of the mistakes that you'll hear and maybe they don't need this is that I don't know, this don't need is that I don't know. This is a mistake, necessarily, but a lot of people that I sit in this room with, when they're thinking about starting to draw that social security is, there's the fear invalidly so, because it's talked about quite a bit of the social security system going broke, right. I mean, we hear that with some regularity nowadays the Social Security system is going to be broken. You know 2035, or now it's shortened to 2033, or wherever. That's kind of a moving bouncing target right there, and so when people hear that part of it they think, well, it's not going to be around for me and that doesn't really. Social Security system is not going to go broke because it doesn't have any money in it. Now, really, this is where, say Al Gore if you remember Al Gore's debates with George Bush back in the 2000 election, going all the way back 25 years ago, he talked about, the social security lockbox was full of IOUs, you know. And so what he meant by that was the social security system is a pay-as-you-go system. It hasn't always been that way, but it is a pay-as-you-go. So there's no money set aside in the social security system. Again, it's pay as you go. And as long as there's enough workers in the workplace paying into the social security system and that number, the income, or that those taxes, that social security taxes coming in is higher than those that are drawing out of the system, right, then it's not broke, it works, right. The difference, what the projections are, is that in 2035 or 2033, wherever we are now on the projection is that there'll be more people on the social security payroll than will be then. There will be people on the payroll, paying into the social security system. That's what that means, and so I don't think it's going to go broke. I mean, there's some ways.

Speaker 3:

You know it hadn't been talked a lot about in this past or previous election because there were so many other things to talk about, but that's, I think that's one of the mistakes. They want to draw it immediately, no matter what. I'm going to start drawing at 62 because I'm afraid it's going to run out of money. Therefore, is it going to be around to pay me? And I think anybody that's drawing today is not in jeopardy. I could be wrong, right? It's an opinion. This is totally an opinion. So let me caveat that that if you're I think you know my age and are already on the on on drawing Social Security, on the on the on the payroll, let's say of Social Security, I don't think that's in jeopardy.

Speaker 3:

I role. Let's say of Social Security. I don't think that's in jeopardy. I mean, could they decrease some of the benefits? I suppose they could. I don't, man, it's such a political football. You know it's a hot potato. Let's say it's the third rail of you know of politics. You don't touch Social Security system. You can hear the consternation that takes place. So anyway, I don't think I didn't mean to kind of wander off into that, but so I don't think that's the case.

Speaker 3:

I see that mistake, probably made as much as anything because of their plan, might suggest that they don't, they shouldn't start drawing that early, you know. Or people will draw and they're still working, maybe part time, and they don't realize that there's going. They could be penalized before they get to full retirement age. If they make too much money while working and drawing Social Security there's a penalty that comes along. You get Social Security kind of penalized, taken back, and that can be quite painful. And I won't go into the depth of that. So I'll kind of pause and let you ask.

Speaker 3:

But those are, I think, the mistakes that are made.

Speaker 3:

Is they don't they either have biases around it, they think the system is going to go broke and they want to start it now and that kind of thing.

Speaker 3:

And then there's a lot of little nuances to you know, if you've been married before, if you're a widowed, I mean there are a lot of things around Social Security that could be quite complex, honestly, and it's really a shame because it really seems like it should be a fairly simple system to kind of figure out, because it's, you know, it's for seniors and seniors get a little frustrated with, you know, complicated issues, and we're not, as not all of us, stay as sharp the older we get, you know, and a lot of times it is kind of created for widows and orphans, if you will, to a degree, and they're not necessarily, you know, versed in the financial, making those types of financial decisions.

Speaker 3:

So, again, I would suggest that anybody out there is thinking about these things sit down and talk to somebody that has some experience in it. Don't take your advice at the water cooler, so to speak, or at the retirement breakfast table at Hardee's or somewhere like that. Listen to it. I mean, I'm not saying don't listen to it, but take it in as part of its information. But it's not necessarily gospel, very good advice actually Love it, jeff.

Speaker 2:

I definitely learned something here today about social security, which is critical to all of us, and maybe we can talk more about that in a in a future episode too.

Speaker 3:

Yeah, and there's some social security talk in the great big, beautiful bill, right as President Trump calls it. That they got, I guess, worked through the House committee and it is on its way, I think, to the Senate. I could be wrong about that, but I think it's on the way to the Senate, meaning that they're trying to eliminate all income tax eliminated from Social Security, which again is a conversation to have of actually how it works now, versus just eliminating it on all Social Security benefits, which would be a boom.

Speaker 3:

I mean that would be something. It'd be quite something if that gets through.

Speaker 2:

Absolutely Well. We'll definitely talk more about that in future episodes and for now, thank you so much. Love it and appreciate your insight, joe.

Speaker 3:

Thank you very much, Skip. Always a pleasure to do this. I enjoy it very much.

Speaker 2:

Absolutely Same here. We'll see you soon, thanks.

Speaker 1:

Thanks for tuning into the Four Seasons Podcast brought to you by B&H Wealth Strategies, where your financial success is our priority. Schedule your free 20-minute consultation today by calling 423-247-1152 or by visiting bhretirecom. Take the first step toward making your financial dreams come true. Until next time, remember every season is the right season to plan for your future.