…and I’m not talking about whether or not you will receive a benefit, nor if the Government will go bankrupt and not pay your benefit. Keep reading as I do have some pretty strong points to make on your personal Social Security planning.
In case you either misread or did not read my December blog, life has changed for me. I retired from Peachtree Planning, and with no forethought whatsoever, found myself involved with a new business venture, and a new vision with regard to my financial advisory business. Surely didn’t see it coming, but every day I’m amazed at the new knowledge I’m gaining by just opening my eyes & widening my scope. (A lot of greater topics to blog about this year too!)
The new firm is STEWARDSHIP PRIVATE WEALTH MANAGEMENT and Kelli Gabriel & I literally met on a group tour to Greece last summer. Both of us were at a transitional period in our respective practices. One of my favorite sayings is “Coincidence is God’s way of staying anonymous”, and our beginnings were purely coincidental. I went to Greece to get away from work…not reengage it.
So many clients & friends didn’t read down the page far enough when I talked about my general insurance practice (home/auto/landlord) with ELITE Insurance Solutions. It’s simple…nothing changes…ELITE is better than ever…always growing, and I’m still your insurance advisor…and if I’m not, maybe I should be!
I’m always learning…no matter what it is…in as much as I claim to be a “right brained, creative & thoughtful person,” my left brain…the analytical side…is always craving to be fed…albeit documentaries, blogs, biographies of famous people, whatever…it’s never ending…nor should it be for all of us! With my new affiliation comes an amazing back office of highly knowledgeable & technical people with a variety of skillsets. I’ve got to admit…it’s really cool!
Right when I joined STEWARDSHIP, Kelli was teaching a number of workshops specifically designed with Social Security planning in mind. I was just the co-host. In thinking of the number of workshops I’ve either attended or led personally, here I had the luxury of watching the audiences while she was talking. It was fun watching the lights go on many of the attendees as the financial plan in their minds went up in smoke.
Yes, Social Security has become a cornerstone of retirement planning, but it’s a lot more complex than people think. The benefit statement you have available to you (www.ssa.gov) only tells you how much you are eligible for at ages 62, 66 (full retirement age or FRA) or age 70. What it doesn’t tell you is how it’s taxed (keep reading) or how Medicare premiums factor in. What it doesn’t tell you is that if you start taking benefits at age 62, which most men & women do by the way, for every two dollars you EARN above $17,640.00 (for 2019), your Social Security monthly benefit is reduced by one dollar. (Read that again…)
EXAMPLE: So, I’m 62, and because I’m in a hurry, and it’s what everyone else is doing, I go ahead and elect to start benefits and I qualify for $1800/mo. So, assuming I’m still working, and I make around $53,000, I have made two significant errors. First, I’ve locked in my monthly benefit, which is 66 2/3 of my FRA for the remainder of my life. But because there’s a phase out of my benefit (remember, I’m still working) I’ve double-crossed myself because I have elected a benefit that I will not receive because of my EARNED INCOME (not including income from retirement plans, real estate, or investments.)
To make it even more fun…if I do wait until my Full Retirement Age, (which for me, is actually age 66 & 8 months) and I have PROVISIONAL INCOME over $34,000 (single) or $44,000 (jointly) 85% of my Social Security benefit is taxed at my current tax bracket. This includes ANY income plus 50% of your Social Security benefit. Oh, and Medicare premiums are deducted from that amount as well. This is for part B (Doctors) as part A (hospitals) has no cost…but it doesn’t include the cost for supplemental plans that cover prescriptions & other benefits. Needless to say, if you’ve read this far you realize there’s a lot more than just collecting a monthly check. I’ve either confused you or scared you if you’re still reading.
You’re thinking…what’s the point here? Well, hopefully you know me well enough that when I put something out there like this that I’ve already been researching strategies and solutions…and we’ve either found or created lots of them…we’ve got over 60 years of combined experience and if I don’t know the answer, well Kelli probably does. So, as I always do, the offer for a latte is on the table…and a conversation to see if I can help guide you to that lifestyle that the TV ads keep showing you.
As always, I’m grateful for your readership, your friendship, and your kind words when we do see other. Oh, and GO VOLS! Number One college basketball team in the nation as of this writing!