Expert Commentary

Best way to coordinate Social Security with your savings – Morningstar interviews Founders

See recent interview of Meyer and Reichenstein by Morningstar. Learn how maximizing Social Security can make your money last longer. A case study and free report allow you to see how their research published in the Journal of Financial Planning could help you coordinate your claiming strategy with your retirement savings.

Link to article:

http://ibd.morningstar.com/article/article.asp?id=610000&CN=brf295,http://ibd.morningstar.com/archive/archive.asp?inputs=days=14;frmtId=12,%20brf295

Yes, there are strategies if you are single

Full-Retirement Age May Be Worst Time For Singles To Start Social Security -

See more at: http://www.fa-mag.com/news/individuals-can-maximize-social-security-benefits-13089.html#sthash.ogSV4rOl.dpuf

WARNING – 6 strategies are not enough

In my last post, I spoke about the importance of QUALITY.  All Social Security tools are not the same.  You need to understand the recommendations you are given on how to claim, but you need to make sure the advice is actually good.   How do you know if the advice is good?

We have studied this area extensively.  We know the details matter.

Previously, I have written and been quoted about deficiencies in the AARP Social Security calculator.  Be careful, you can receive bad results since it does not solve for or give you a strategy for the most benefits you receive over your lifetime.

My point in this post is different.  Be careful, also, about the depth of the logic in tools you use.  There are 2 new tools that say they “optimize” when they only use 7 default strategies.  People, there are way more than 7 strategies to consider.  If you do not comprehensively evaluate your situation, you may leave a lot of money on the table.

Here is an example, of the leading financial planning software financial advisors use.  They just released functionality to “optimize” social security looking at only 6 strategies.  Enclosed is a comparison where the software uses their optimized recommendation compared to our recommendation.  This leading tool, tells you that you are going to have a “rainy day” (i.e., in the red zone) and can’t afford your retirement goals.  Using the same couple and uploading the results from our software with more detailed logic, we got them more money and showed them that they could afford their retirement goals (i.e., our results got them into the green zone).

The take-away is that quality matters.  Make sure you run your numbers and create a strategy on how to claim benefits. But, make sure the answer is accurate and truly maximizes your benefits.

 

 

 

Why women are special

The last couple weeks, I have seen a lot more written about women. There was a big report presented to the Senate’s Special Committee on Aging the end of July. Here is the biggest take away:

“Specifically, the participation rate for women in any type of plan, defined benefit or defined contribution, declined slightly from 87% in 1998 to 86% in 2009, while the participation rate for men declined from 91% to 87%,”

The report was entitled “Retirement Security – Women still face challenges.” I attach it here.As you know, I post a lot about women. The biggest opportunity for women is around their Social Security strategy. For married women optimizing the survivor benefit can be significant. Remember that Social Security is based on joint mortality. See my previous posts with graphs on joint mortality — remember that a couple that makes it to 62 will have a 85% probability of having one spouse live past 80. This is a magic age where a delay strategy almost always is better for a person.

Anyway, the “rule of thumb” for a couple is the time the spouse with the higher benefits should claim should be based on the life span of the second to die since the higher benefits carry over into survivor benefits.

So, are women special? Of couse, yes. But, the real need is around planning for a longer mortality (planning horizon) that women have.

We have been helping many experts with strategies for women. Call us if you need help.

http://www.gao.gov/assets/600/592726.pdf

New research shows SS is the cheapest annuity you can buy, and we agree!

Quoted in the news today – new research is out on Social Security. The take away is that it “pays” to create a smart strategy…sound familiar.

The twist is that the authors use different terminology and relate Social Security to an “annuity.” Yes, it is like an annuity…but, a cheap one. The point of the article is that with low interest rates it is the cheapest annuity you can buy.

The implication is 1) you should maximize your benefits and 2) figure out how to withdrawal your other savings to maximize benefits which will result in your money lasting longer.

Overall, this is consistent with my research published in the Journal of Financial Planning 2 months ago. We showed we could make someone’s money last 2 to 10 years longer by optimizing Social Security.

People, this is a “no brainer” decision. However, the implementation is hard. Make sure you don’t cut a corner to figure out your strategy since you will likely have a lot more money.

http://www.marketwatch.com/story/with-rates-low-it-pays-to-delay-social-security-2012-07-12?link=MW_Nav_PF

If You are Under 40, Do Not Bank on Social Security

Quoted in the Wall Street Journal – over the weekend I was quoted in the WSJ…I think the title of the article is funny. “If You’re Under 40, Don’t Bank on Social Security.” http://online.wsj.com/article/SB10001424052702303592404577362204167117454.html#articleTabs%3Darticle

The key is that there is a lot of misinformation about impact if you are over 50…the bottom line is that if you are close to retirement, use the existing rules and evaluate how you get all the money you are entitled to. You might be surprised that a few small maneuvers could result in a lot more money to live on in retirement.

We have smart tools on www.socialsecuritysolutions.comthat allows you to see how to maximize your benefits and “compare” other claiming dates you think fit your plans.

The sky is NOT falling

Every day we see the media talking about Social Security. Unfortunately, a lot of misinformation is being spread about the viability of Social Security. The bottom line is that Social Security is NOT going “belly up” any time soon. Yes, it needs to change, but it is a remarkable program that American’s can continue to rely on.

I recently received a great Fact Sheet from the AARP Policy Institute that talks about the Social Security Trust Fund (http://www.aarp.org/content/dam/aarp/research/public_policy_institute/econ_sec/2012/Social-Security-Whos-Counting-on-It-fs-252-AARP-ppi-econ-sec.pdf).

As reported by AARP and the Social Security Administration, the Social Security Trust fund can pay out 100% of benefits through 2036. Let’s do the math…2036 minus 2012 equals 24 years. If the earliest you can file is 62, let’s subtract 24 from 62 which equals 38. So, according to real data and actuarial projections, there is enough money to pay 100% of benefits for someone that is 38 years old or older.

Note, it is clear that change will be need to Social Security. However, the “sky is not falling.” In our book, we say that individuals over the age of 55 are likely to not be impacted by impending changes. This is consistent with other experts and academics that study Social Security.

The bottom line is that regardless of your beliefs of the future of Social Security, do some calculations to see the difference between claiming strategies. You will shocked at the differences. Make an informed decision and you may be able to find thousands of more dollars to support you in retirement.

Overall, I’ll leave you with one more thought. Remember the last 2 major Social Security overhauls were in 1977 and 1983. In both cases, it took 7 and 17 years, respectively, from the time the changes were announced to the time they were implemented.

My personal belief is that if you are over 55, you won’t be impacted. Even if a change is announced, it is going to take some time before it is rolled out to all Americans. Sign up for our service to run your numbers. Also, sign up for our newsletter so we can keep you informed of the status of Social Security funding levels.

Welcome

On behalf of our team, welcome to our site. We are proud to bring you services that will help you “Get More” Social Security.

Dr. Bill Reichenstein, from Baylor University, and I have worked for many years to develop the research, published in the Journal of Financial Planning, that underlies our technology.

Our mission is to help you maximize your retirement benefits! This is a very important decision and you won’t be able to change your strategy in the future.  Within seconds you will receive a “recommendation” from us that will show you how to get the most amount of benefits.  However, this is just a place to start. Our interactive tools will allow you to create and personalize other strategies that you believe are good for you.

My advice to you is “compare.”  Come in and look at our recommendation and also compare it to other strategies.  You will have the diagnostics and tools to see the difference in benefits and income one strategy will give you over another strategy.

There are a lot of rules and complexity. Register for our service so we can help you and make it easy to see the difference between claiming strategies. Again, our goal is simple…”get more” benefits.  So, don’t leave money on the table.  Come and receive your Recommended Solution and read our educational content to make the best decision possible for your situation.

Best of Luck, Bill