Wealth from Wisdom

Another Black Eye for Social Security!

March 18, 2017
Wealth from Wisdom
Another Black Eye for Social Security!
Chapters
Wealth from Wisdom
Another Black Eye for Social Security!
Mar 18, 2017
Carson Wealth
Show Notes Transcript

Even if you’ve earned a modest income throughout your career, you’ve contributed 6-figures or more to social security. There’s a lot of your money at stake here! Join your host Ron Carson and Carson Wealth Managing Partner Paul West as they discuss strategies to maximize your social security.

Speaker 1:
0:00
Here's some legal Mumbo jumbo, the opinions voiced and wealth and wisdom with Ron Carson and for general information only and are not intended to provide specific advice or recommendations for any individual to determine what is appropriate for you. Consult a qualified professional. All indices are unmanaged. I may not be invested into directly. Investment involves risk including possible loss of principle. No strategy is your success or protects from loss. Past performance is no guarantee of future results. Securities offered through Satara advisor networks, LLC member fin Ra investment advisory services offered through Cwm LLC, a registered investment advisor. It's a terror advisor. Networks is under separate ownership from any other named entity.
Speaker 2:
0:29
This is Doug market. Hit another all time. Records as much as $10 billion in social security benefits go unclaimed every single year. Federal Reserve announced that they will raise interest rates by 203 the skyrocketing cost of healthcare and retirement could now run 350,000 planning for retirement today is now a whole new ballgame. It's loaded with challenges, obstacles, the trap doors that you can do this and we can be your guide. Welcome to wealth from wisdom with Barron's hall of Fame Advisor, Ron Carson, and straightforward and objective advice and how you could make your money go further in retirement. And now here's your host, Ron Carson. Hi, I'm Ron Carson and welcome to wealth from wisdom radio. I'm here with my cohost, Paul was Paul, welcome. Hey, I'm excited to be here, Ron. It's great to have you. Well today we're going to talk about social security. You probably don't realize this, but you contribute as much as 6.2% of every single paycheck, just social security and your employer matches that another 6.2% so between you and the employee have as much as 12.4% of your earnings going into social security and has been going in there since that very first paycheck as a kid.
Speaker 2:
1:35
Now add that up 40 or 50 years and it really makes your 401k look like chump change. The government forces you to contribute this money to social security, but unfortunately they make it really difficult for you to get your money back. In fact, claiming your benefits is riddled with potential pitfalls. According to a recent USA today article, the top brass at the social security administration doesn't always explain the rules clearly and consistently. I will be sharing some other stories where the government does that as well. Even the government accountability office, as most individuals do not understand important rules and details, it could impact their retirement benefits. And the Social Security Administration own website states that it cannot be assumed that potential claimants have obtained read or understood information when they claimed benefits, especially given documented gaps in knowledge about social security. So here's my point, Paul, I want to make today is you can't completely rely or even partially rely on information provided by the Social Security Administration.
Speaker 2:
2:42
And it's really up to you. It's no different than being an accountant VOB and an advocate for your health care. You got to be an advocate for your social security benefits. And if you make a little mistake here, it could cost you tens of thousands, if not hundreds of thousands of dollars. So coming up on today's show, I'm going to arm you with facts and strategies that help you wring every nickel out of your social security benefits and how you can pay fewer taxes on those benefits and share some of these little known benefits. It could potentially put thousands of dollars in your pocket. And Paul start right off with, this is an area that really doesn't matter with our clients whether they are of modest means and have a lot of money. By golly, they put all that money into social security, forced to be put in and they make it difficult to optimize your benefits out and that's where we can make a huge difference and helping our clients and prospects.
Speaker 3:
3:32
Yeah, it's gigantic, Ron. I mean everyone thinks that is either an honor, an off button, right? For your social security. The reality is there's over a hundred different decision points or ways that you can look at it and it's like you said, hundreds and hundreds of thousands of dollars or potentially a play. So how many people judge a wealth management firm on your investments? Did you get a 3% return or a 4% return or 6% return, but then they go look at something that had been plowing money in their entire life and they don't look at it. They just look at turning it on or off and that's where they need an expert to help them think through what's their best scenario. Waiting an extra year. It could be one of the best decisions they ever make if they actually don't need the money at that one
Speaker 2:
4:10
point in time or just waiting for a long time. Now here's something you may not know. It used to be the social security administration. If you made a bad decision, you could reverse it. You could go in and revoke the decision, payback everything you've received, and it's as though it's a, it's a do over. You get to start all over again. Well, they've changed it. They went to them three years and now it's one year, so you have one year if you started benefits. Let me give you a great example. Something that just happened with one of our clients a week ago. We could go, they come in, we're going through the planning process. Turns out that this gentleman had started as social security at 62 a few years ago. Everything seems okay, right? All they start doing plan it and they realize his wife is 50 years of age, 12 years younger and he, she is only going to get his benefits, which were not nearly as great.
Speaker 2:
5:04
If they would have shot him off a lot her to move into his position at his death. He didn't need the income. And guess what the responsibility is like governments or grow those benefits at 8% a year. Where else can you get a guaranteed 8% return by the government every year by optimizing that? So the recommendation of our wealth enhancement group was stop it, revoke it, pay back the benefits and allow those benefits or grow at 8% a year. Big, big difference. You do the present value of what those benefits are going to be for that family. And they're huge and it's because they were uninformed. They did not know what their options were. Yeah.
Speaker 3:
5:41
Ron, I think a lot of people I've heard from there like, I want my free money. Well I run a how's it free PR? I mean you just talked about you're contributing to it. You can only actually get social security if you've been working for certain periods of time to generate the units so that you can actually get paid. Just because it's available
Speaker 2:
5:58
doesn't mean you should take it. I think about making the right decisions. So what's one of the more painful pate places we've all gone in our life, the DMV, right? And I'm so happy, at least least for us. You can do it all online. Now. Light life is simpler. I would rather have a tooth pulled and then go back to the DMV and Senate line. Well that's why I hardly have any teeth left recently. So, uh, when you think about it, I wouldn't you feel the same way a little bit is go on the social security office and no offense to anybody there, but do they really have your best interest at heart? What do they want to do next? Get you through the line and make sure the answer your question move on. Are they going to actually say, Huh, what's most important for you?
Speaker 2:
6:36
Do you need this income at this moment? Are you going to be okay? They're never going to think through that. And that's why you got to work with a wealth manager to help you do that because they're just, you are a number of system. You are a ticket for them to get next. This is not an indictment on all the hard workers at the Social Security Administration or even the IRS. When you think about it's a complex system, they're not probably trained at the level they need to. They're asked to do a lot. So this is not an indictment on the people. It's an indictment on how complicated, you know, going back to, they force you to put money in and they make it very difficult to get. It's a lot of like insurance companies, right? They take your premium gladly and then soon as you want to benefit, um, it's like an act of God getting the, getting the benefits actually reversed out.
Speaker 2:
7:18
So that can be very, very frustrating. And we're here to say there's something you can do about it. Arm yourself with information. Well, I give huge credit, Ron. So you know, what I actually did earlier today was I went on to ssa.gov and got my own personal social security statement. It was so easy to set up and take care of. I found my benefits, I found my information. But guess what? All I saw was the number of what am I going to get at the earliest possible time? What am I going to get at retirement at age 67 so full retirement age and what do I do if I hold off and wait and guess what? There's a pretty big discrepancy on a monthly basis between those three numbers. But how do I know what's right for me? Yeah, I all I know is so if I'm going to say don't do that, yeah, I'll do it.
Speaker 2:
8:03
Yeah. So, yeah, this is an, I don't know, you know, who's more frustrated, you know, th the are, what I'm most frustrated about is all the bad advice social security administration gives or just clearly, you know, there are financial advisors out there that are not taking the time to optimize this for their clients. And this is such a big, big piece when you think about it, the present value of the income streams could be a million or more dollars, you know, so think of that as a fixed income part of your portfolio and how's that fit into it? Here's something enter is, it's interesting. More than a year ago, Congress approved changes in social security claiming rules as part of the bipartisan budget act of 2015 an agency representatives continue, continue to deny legitimate claims for spousal benefits by applicants who are clearly grandfathered under the prior rules and tell other applicants they can take advantage of claiming rules that no longer exists. On one. On one hand, they're misinforming people that are grandfathered under the old rules and then they're telling people that aren't grandfathered, that they can use some of these claiming benefits. So this is why it's really important to work with someone that specializes in this area with wealth enhancement group, we have the CPAS, the attorneys, the cfas, CFPs coordinated team that all work together to make sure that we're maximizing your benefit.
Speaker 3:
9:26
Yeah. So Ron, I think about, uh, the numbers right now, say that about two out of three people. So security income is more than 50% of their income. So a mistake made is past significant. I'm not gonna say to catastrophic, and that's probably too strong, but it's so severe for many people, they work their lives, they worked so hard, they've been plowing money in this. Maybe they don't see it cause they don't see they get the net in their bank account. But that's why it's important for them to look at this because it is such a monumental part. But even if it's not over 50% of your income, and as you're listening today, you still want your money and you still want to maximize it, you press your wealth manager to maximize their return. We need to press social security for you to make sure it maximizes your return and your
Speaker 2:
10:09
well and it just comes with a wealth and wealth planning process as are so many pockets of things that you, that that are not obvious that can have a meaningful impact on how you live your life and the goals and the objectives that you hit. Here's another example. Paul lady goes into social security claims are social security. It was $1,100 a month when she reached forward tire and age in 2015 when the husband retired last year, he, he then he waited and turn his on at 66 to file a restricted claim for spousal benefits that would entitle the husband to 550 a month. Half of his wife's benefit while his own retirement benefit continue to grow at 8% a year until the age of 70 so here's a great example of somebody that's some good advice from good strategy on how to maximize the benefits between the two. It makes a big difference. The age difference makes a big difference on how long you think you're going to live because you've got all kinds of things to solve for and it's not just as easy as, you know, doing this or that. Make sure someone's putting some real thought and effort into figuring this out for you.
Speaker 3:
11:11
Yeah, it's a runway I like to ask is, so, uh, when do you think you're going to no longer be on this great earth? Do you know what age? I don't. I thankfully do not know. I do think about it occasionally. My, yeah, I think most of us do and most of us have this fear on when's that going to happen. But the reality is we don't know. But what's Nice is when you actually look at your situation, and this is where our wealth enhancement group really helps us think through it, is there's actually a break even point with social security that from an age group that can really help you.
Speaker 2:
11:42
That is so if you're concerned about this, we, this is the kind of people we help with the Carson group across the country. Some are modest means, some are very, very wealthy. It doesn't matter. These are your dollars. You want to get the most out of them. The common theme is you want to know how to maximize it, so think about it over the past decade, you've contributed so much money to this plan and you want your money back, you deserve your money back. Doesn't matter what the level of income that you've had, but claiming these benefits is complicated and it's riddled with all kinds of potential trap doors and pitfalls. Do not make the big mistake. Learn how you can wring every nickel out of your benefits and our customized social security analysis. It'll show you precisely how and when to claim your benefits when you're eligible for those benefits, how you can get additional benefit, how you could pay fewer taxes on those benefits, and we'll do this. It doesn't cost you anything. If you've saved at least a hundred thousand for retirement, be one of the first callers. Do you get this beautiful customize analysis? 1884198513 you can't get this report from the Social Security Administration. Call 1884198513 that's (888) 419-8513
Speaker 4:
12:52
trust, transparency, accountability. These are the values that drive line Carson and Carson. Well, you're listening to wealth from wisdom with Barron's hall of Fame Advisor Ron Carson. Welcome back. I'm Ron Carson and thanks for joining us today
Speaker 2:
13:08
for wealth from wisdom with my cohost Paul West, another black guy for the social security administration. According to several recent articles in USA Today, investment news and Motley fool, the Social Security Administration has reported mistakes and their own Faq reduced their staffing budget and had major concerns raised by the government accountability office. All in this last year, all while the number of people receiving social security is skyrocketing. So typical government reducing resources while at the same time the need is growing. So when it comes to claiming those benefits, you cannot rely on the social security administration. You're totally on your own here. You've got to be an advocate for yourself. If you simply take social security benefits at face value, you could easily leave tens of thousands if not 100,000 or more on the table. So coming up in this segment, Paul are going to talk about how to arm yourself with more strategies that can help you wring every nickel out of social security.
Speaker 2:
14:04
Offer ways to pay fewer taxes. And we'll tell you about some other benefits that could potentially put thousands of dollars in your pocket. And we, one of these Paul or wealth enhancement group uses all the time is, is the suspend. You'll take social security events to spend it. Um, very effective way. And there's, and I didn't realize this until a few years ago, there are little, literally a thousand different combinations so that a couple can take depending upon what their unique needs are. Yeah. Off People think of the word suspend is I'm losing it, but you're just, you're postponing your sister, you're going to get it later and you have to figure it out. And I love, you know, people think about when, when are things going to happen in life and what's going on. So you're 65 years old. So this tends to be the age where people, that they're really getting serious now and they need to be, this is where they need an analyzer report. So as
Speaker 3:
14:52
of right now, if you're a 65 year old man, your life expectancy is 84.3 years old. If you're a 65 year old woman, your life expectancy is 86.6 years old. So I'd like to know as part of this, when is the best time, because as we all know, if you wait and you suspend, you're going to get more per month. So if you know the numbers and the odds, I think that's something that you got to look at and you've got your own life's different. You may have your own opinion, but suspending maybe one of the best things you can do.
Speaker 2:
15:22
It could be. And do you know, and it's hard to imagine it is for me, not anymore, but it used to be hard to imagine that you could go in and get the IRA. This is driving me crazy. If IRS, it's like we give you an opinion, but we're not bound by it. If we give you bad advice, it's your responsibility, not our responsibility. And it blows me away that social security operates the same way. But I had a recent example two years ago I asked some farm ground and grew up on a farm, so actively involved in the farm and I go to put our item, some ground coming out of the CRP program. So I go in and meet with the FSA office, government agency, and they tell me, Oh, you got to wait until next year to put this in. I was there in December and then I wait until the next year and someone else said, oh no, you should have done it last year.
Speaker 2:
16:07
Now the ground doesn't qualify anymore. It was expensive. Bad advice that they had given me. But there's no responsibility, there's nothing that you know, I can hold them accountable for what they did. So you have to be an advocate. As another example, coppo couple goes into social security office. They go in to apply for a spousal benefit. They were told that they did not have that option. The Social Security representative said the husband must file first for his benefits and then immediately suspend them. And the why. So security would benefit, would be increased to be worth half our husbands for retirement at a, at that retirement age. This advice was completely wrong on so many levels. Um, again, bad advice. Have to be an advocate, work with a team to maximize your benefits.
Speaker 3:
16:53
Yeah. So Ron, I mean those are high scary stories for us to hear and obviously people want to prevent what happens. But let me share from a show a couple of weeks ago, we got our recent color and he was asking his mid sixties and he said, hey, I've got an IRA and a four o one k and I haven't turned on my social security yet. What should I do? And I love hearing that because there was someone who was making a proactive reach, had a problem and had an issue, but wanted advice because he said, I actually went to social security website, went into the office and I have no idea what I should do. So we called out to professional. But then when speaking with him, what I found even more interesting, Ron was, is to somebody that had an IRA, said, well what do you with your eye? He goes, I don't really know. I just know something that as soon as I lock it in, it pays me income for life. I so I know exactly what he was in at that point, but he knew nothing about it. He couldn't explain it to me, had no idea of the fees and costs that went along with that annuity product that he had purchased, but I was, he, you could tell in his mind that he had made a mistake
Speaker 2:
17:50
on this annuity purchase in the past, so he was not going to make a mistake on another large income source forum, which was a social security. Yeah, that's a whole other topic which we're going to spend a lot of time in a future wealth and wisdom shows, talking about conflicts, costs and all of that stuff. I'm a yesterday at a board, I'm on the fiduciary institute with Jack Bogle, among others, but he's a founder of vanguard and we're just talking about this very issue, these fixed index annuities and all the expenses that they have and they promise to deliver something, but the costs are so enormously high. You really have to be careful with it because it impacts, there's lots of little decisions when made right. Can have an astonishing an impact on what it means for you ultimately with your wealth. So not to not to spending some time doing this and that's what we do at the Carson Group.
Speaker 2:
18:40
We make the complex simple. We really do. We we get, we hear it all the time. We take a complex topic, wealth management, protect my downside. The upside will take care of itself when we do that through really total transparency on fees and costs be pounder saying sandwich they're paying and what they're getting an effective game plan. Outcomes based planning, right? Paul is social security is a big piece of that. It's what uh, how am I going to know, you know, if I'm hitting the goals that we set and that advice and a common language where people understand what the heck heck it is we're talking about. Yeah. I mean as you think about the social security piece of that, Ron is again, it doesn't matter what level of wealth you have or what your monthly payment is. Everybody wants it and everybody needs it, but it is personal.
Speaker 2:
19:25
It's based on your personal income and what you've put in, how long you've worked in, what you've done, why not get a personalized advice on how to actually use that there. And that's what I love about when people call in to talk about it because it is important for you. You can't make a judgment call and say, well the majority of people need x. Why don't want to know what the majority of people need. I want to know what I need, what's important for both me and my wife, my kids. And how does that apply in Carson Group and all of our partner offices around the country, we have 51 partner offices. That's what we stand for is we're consumer advocates. You need to have someone that is therefore you advising you how you can make the best decision, whether it's social security, whether it's risk management on insurance as you're trying to decide allocating your wealth properly, really understanding the cost, who's getting paid, what the, what the potential conflicts could be.
Speaker 2:
20:18
Um, matter of fact, I have a book that talks to, it's called the sustainable edge. It just came out about a year ago. Uh, if you'd like a copy, give us a call at eight, eight, (841) 900-8513. I want to talk about in the book I've, I've advised thousands of businesses over the years is what is it that you should look for a and doing business with a business? Now, this is especially true of financial services firm or somebody giving wealth advice and in the sustainable edge, I'll tell you exactly, and this is stuff that is not theory. It's in the trenches. Great examples of things we can get. Also, we have a great concert coming up, Paul, October 11th, if you're into country music, Coleslaw and Dell, even if you're not, it's going to be a phenomenal event out of the council bluffs airport. We're going to have it at our hangar. Um, or if you love aviation, we've got Textron aviation will be involved. They'll have some planes there. We're going to have wheels up. Um, I'm hoping they're some really cool, maybe cars and wine. Be a great night. So if you're in the Omaha area, want to travel to the Omaha area, you want to be part of this incredible event, give us.