August 11, 2025 • 47 mins
Boomers, Benefits & the Budget: What’s Next for Social Security?
In this timely and informative episode of Something More with Chris Boyd, Social Security
expert Marcia Mantell (see link below) returns and joins Chris Boyd and Jeff Perry to unpack
recent legislative changes, dispel common myths, and offer practical guidance for retirees,
widows, and public employees navigating the evolving Social Security landscape. Highlights
from this episode include:
-The surprising passage of the Social Security Fairness Act and what it means for public
sector retirees and surviving spouses.
-Clarifying confusion around Social Security taxation and the impact of the One Big
Beautiful Bill.
- What do the latest actuarial projections mean for Social Security’s solvency and your
future benefits?
-Why claiming early may not be the best move, despite alarming headlines.
- Creative policy ideas and political realities that could shape Social Security reform.
-How immigration, demographics, and industry pressure may influence the future of
retirement benefits.
Whether you are planning your own retirement or advising others, this episode offers essential
insights to help you make informed decisions and prepare for what is ahead.
#OBBB #BBB #incometaxes #socialsecurity #socialsecurityreform #socialsecurityfairness
#immigrationreform
https://boomerretirementbriefs.com/meet-marcia/
Click the link below to register for our upcoming webinar, “Don’t leave a digital mess.”
https://register.gotowebinar.com/register/6040334700710880088
For more information or to reach TEAM AMR, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner practitioner
and senior vice president financial advisor at Wealth
Enhancement Group, one of the nation's largest registered
investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, everybody.
Thanks for being with us for another episode
of Something More with Chris Boyd.
And I'm here again with Jeff Perry, of
course.
Both of us are from the AMR team
(00:42):
at Wealth Enhancement.
Our guest is returning guest Marcia Mantel, our
one of our social security experts is a
fabulous guest.
You can find more about her at Mantelretirementconsulting
.com.
And you come back to us from time
(01:03):
to time to give us updates and always
a wealth of information.
So thank you for being here, Marcia.
We're glad to see you.
Thank you, Chris and Jeff.
Thanks for inviting me back.
You know, I love to talk to you
guys.
Writing any new books?
I know you're an author many times over.
Thank you.
Actually, I am updating, if you can believe
(01:25):
it, my social security book.
Perfect timing.
There have been a few changes over the
last year or so.
A couple.
Well, that's probably a great place to start.
But what is the social security book?
And people can be on the lookout for
it.
When do you think it'll be updated?
I think by the end of August, and
then it should be out by October.
(01:47):
Excellent.
I'm moving quickly on that book.
Yeah, I'm excited about that.
I have a new title.
I'm quite sure I'm going to be calling
it Social Security, Slightly Burned, Not Scorched.
That title coming.
All right, perfect.
Well, things have been changing.
(02:07):
And that's a good place for us to
start.
We saw before the change in administrations, the
Social Security Fairness Act passed with surprising bipartisan
support.
It was one of these things where it
seems like it kind of took us by
surprise that, hey, they actually got this done.
(02:27):
Oh, it's always had bipartisan support, but it's
always died.
It never made it across the finish line.
Yeah, yeah.
But I mean, it's one of these things
where like suddenly they actually did that.
You know, there's been a lot of rhetoric
for you.
Anyway, tell us a little about what that
did.
Sure.
And you're both right.
I mean, it was quite a surprise because
(02:48):
it hadn't been teed up like this was
a big hot thing.
And all of a sudden, Social Security Fairness
Act passes House, then the Senate in November,
December, and then President Biden signs it into
law in January.
Not only was that a surprise, but the
implementation of this Fairness Act, which I'll get
(03:08):
into in a second, it was retroactive all
the way back to January of twenty twenty
four.
So what was this thing, the surprise?
It was for those Social Security beneficiaries who
have a public pension.
So we're talking about, you know, the teachers
in Massachusetts and in other 15, 16 other
states who have a pension or firefighters, police,
(03:32):
your town workers, your state workers, they all
have a public pension.
And in nineteen eighty three and prior to
that, nineteen seventy seven, there were parts of
Social Security laws that said, you know what,
if you're getting a public pension, you're going
to get that first.
But if you're also entitled to some Social
Security, we're going to reduce that so that
(03:54):
you don't have either a windfall if you're
the worker, the windfall elimination provision, or if
you're a spouse that you have a government
pension offset.
So as soon as those laws passed back
in the day, the unions representing these workers
sort of took arms up against it and
said, hey, wait a minute, that's really not
(04:14):
fair because these are workers.
They're not just getting a pension and didn't
contribute to Social Security.
They have what I call that hybrid career.
They worked in the public sector maybe 30
or 35 years, and then they earned their
Social Security benefits as well.
But the Social Security benefits were really they
took a big hit, a big cut if
(04:36):
you had both provisions.
So raising his hand as yeah, that's me.
Oh, it is.
Yes.
So, you know, you were going to take
a big it's not even a haircut, you
know, a little trim.
It was a buzz cut.
Yeah.
So this was, you know, there are different
perspectives on it, right?
There's part of the industry says, well, now
it's not fair because people are now getting
(04:57):
two pensions.
Well, you get two pensions if you work
in the private sector also, but you're paying
into both.
Well, you're also paying into both in the
public sector.
And then, you know, the other side of
the coin is it is more fair and
people who have truly earned these benefits paid
into FICA should be entitled to those benefits.
(05:19):
So it was unexpected, kind of exciting.
And for me, what it was, was this
harbinger of good things to come to shore
up Social Security solvency.
It's like, oh, look, Congress is working on
it.
All right.
I wouldn't have picked that to start with,
but that's all right.
They've opened the patient.
(05:39):
What do you know?
We've got something.
Exactly.
Gee, and I looked at it like a
gift from President Biden to all his labor
buddies on the way out.
Well, see, different perspectives, right?
I mean, it's where I really appreciate it
in particular for surviving spouses, particularly their women.
(06:00):
Sure.
That's right.
And and their benefits, you know, many surviving
spouses get zero because they had a pension.
They were a teacher.
They worked in town hall and they are
just the way the math works, getting zero.
So when your husband dies, he had been
maybe bringing in two thousand dollars a month
or twenty five hundred.
That's gone from your household budget.
(06:21):
And now these women were left with a
whole lot less.
So there are parts of fairness.
I will applaud these unions, the police and
the fire, fire unions in particular.
They have lobbied for 40 years to get
this done.
And I think that's why none of us
thought it was going to happen, because it
had reached that point before over and over.
(06:41):
Right.
Sitting there past one house or the other
Senate and just laboring.
Right.
Pun, but sitting there and you're right.
None of the lobbyists were expecting this because
I get the newsletters and such.
And no one was saying, here we go.
It's right there.
Right.
Kind of given up again and said, we'll
refile next year.
(07:03):
Exactly.
And particularly at this point, right, we already
knew there was a new administration coming in.
There was already a lot going on.
This was not on anybody's radar.
So Jeff and I have talked about this
quite a bit and noticed that even though
word is getting out there, there still can
(07:24):
be people who have kind of tuned out
to this because they had the experience where
they were told at one time, oh, you're
not going to get any benefit or it's
not worth it to you to pursue this.
Let's try to dispel that myth now.
You know, if you are a public employee
(07:47):
or have been a public employee at one
time and are on a pension, thought you
were not eligible for Social Security or maybe
just it wasn't enough to be it was
going to get chewed up somehow with the
discounts of these different up and government offset.
You know, maybe it's time to revisit that
(08:09):
because you may be getting you likely will
be getting a bigger benefit because you'll get
your full Social Security benefits and it's it's
worth the time to go deal with.
Please check.
Please check.
Yes, I could not agree more.
And especially for the disposal side, you know,
(08:33):
when you did that, when one did the
calculation and saw they were going to get
zero, they never even filed.
So the spouses aren't attached now in the
Social Security records.
So Social Security administration would not know that.
Oh, you know, Marcia is entitled to this
spousal benefit because she's not even in the
system.
So it doesn't take long to file an
(08:55):
application.
I mean, what's the worst that could happen?
Right.
It's like, oh, even if you're seventy five
or something, you know, you haven't ever filed
in the past now file or widow, especially
for the widow.
Right.
Especially for the especially now if you're in
that situation.
(09:16):
What happens?
Let's say you're you know, you never filed
and does that person receive any of those
back benefits or not?
You know, I'm not 100 percent sure on
that.
I know that Social Security looks at each
of those cases separately, you know, to see
what you would have been entitled to.
But if you hadn't already claimed, are they
(09:37):
really paying you for?
I don't think so.
Yeah, I don't think so either.
I don't think so either.
But I'm not 100 percent sure.
Better to get started.
Then you don't get the back stuff.
Get started.
But the usual is if you haven't filed
a timely, there is a six month retroactive
period.
So maybe they'll get a six month bonus.
(09:58):
I'll call it a bigger check.
But it's the going forward.
I mean, it's just it's all good.
And because, you know, social Medicare Part B
premiums come directly out of your Social Security
check, even if it only covers your Part
B premiums.
Hey, that's money in your pocket, right?
(10:19):
Right.
And like you said, for a widow who,
you know, may have in many cases been
like excluded from their benefits.
Again, it's it's not just on your own
work experience, which may you may have your
own private sector work experience, Social Security contributions.
(10:41):
But if you've been married or are married,
you could be getting benefits through as a
spouse, whether it's to recover the as a
widow.
Right.
And that's one sense or even a spousal
benefit.
Even if you didn't work in the public,
sorry, private sector, you still might be eligible
(11:02):
for Social Security benefits.
These are all things that circumstances I'm just
trying to elaborate.
Go check it out.
You check it out.
Spouses as well.
You know, if you're a qualifying divorce person,
so largely you were married for 10 consecutive
years or longer, you may well now qualify
(11:23):
for a new benefit.
And, you know, like I said, even if
it's a small, small amount, one hundred, two
hundred, three hundred dollars a month, I'll say
yes to that.
Why not?
Yeah, right.
Like, don't miss an opportunity.
Yeah.
For an hour of your time.
Right.
To go online and file.
Right.
Yes.
OK, so we have this issue where we've
(11:46):
had additional benefits being paid out.
Surprisingly small relative to the whole of Social
Security, but some consequence.
We also had the one big, beautiful bill
act that has passed.
This also has some consequences as it relates
(12:08):
to Social Security and Medicare.
Can you elaborate a little bit on what's
changed as it relates to this legislation?
Not quite what the president was talking about
on the trail.
Right.
On the campaign trail.
And that's caused confusion, too.
You know, you make these promises on the
trail and then something passes and they associate
(12:30):
it to the promise.
Yeah, so it is.
I think your word, the key word here
is confusion.
There is a lot of confusion about this.
So let's set some of the records straight
here.
The first is the taxation.
So Social Security benefits are taxable income when
you have higher income in retirement.
(12:53):
And there's a calculation to determine.
Right.
Right.
You look at how much is taxable income.
There's a formula to create combined income.
And then some of your Social Security benefits
would be taxable if you're above the thresholds
and it's up to 85 percent.
So you always get 15 percent that's not
(13:14):
taxed anyway.
But the big claim or the hope or
the promise was that Social Security was no
longer going to be taxable income.
It was going to come off the front
of the 1040.
Well, it did not.
In fact, it stayed exactly the same.
The best we know today, the combined income
(13:35):
calculation still stands.
If you are married, filing jointly and you
have income, combined income above forty four thousand
dollars, up to 85 percent of your Social
Security comes on to the front of the
1040.
It's taxable income at whatever your tax rate
is.
Right.
Nothing's changed there.
Right.
(13:55):
So but there's a lot of confusion there
because people, oh, my Social Security is no
longer taxable.
So in lieu of that, the one big,
beautiful bill act, BBA or how many B's
got to get enough in there?
Three, three.
So anyway, there is some effort to offset
(14:19):
that income for people under a certain threshold
sort of with this in mind.
Is this essentially how they came to deal
with that?
Well, the administration is trying to tie two
disparate things together.
So what I will say in the big
bill, there's some really good.
(14:43):
Deductions now available to Americans who are 65
and older, we couldn't care less what you're
doing with Social Security, they are unrelated topics,
right?
But if you're 65 or older this year,
2025 and for the next three years, twenty
five, six, seven and eight.
So it's a temporary it's a temporary window.
(15:04):
It's a temporary fine.
But it's six thousand dollar personal deduction that
will be applied to your otherwise taxable income.
So if your taxable income is one hundred
thousand dollars and you meet the qualifications, you're
over 65, 65 or older and you have.
Well, one hundred thousand works if you're married,
filing jointly, there's some upper thresholds here.
(15:27):
Yeah.
And you get six thousand dollars off of
your taxable income obligation.
That's great news.
That is whether you're collecting Social Security or
not has nothing to do with nothing.
No, but I do think the motivation was,
hey, we can't really tie this to Social
Security.
So here's another way we'll go about it.
(15:47):
It is temporary, as you said.
The standard deduction did get raised from fifteen
thousand to fifteen thousand seven hundred and fifty.
Then you add to this for everyone, for
everyone.
Then you do this for retirees or people
age 65 and older for this window of
(16:10):
time.
As you said, there is an additional six
thousand per person unless you are married, filing
jointly and make in excess of one hundred
and fifty thousand.
It starts to phase out by two hundred
(16:32):
and fifty thousand.
Some sort of step down, I think.
So that's essentially how it works.
Yeah.
And then there's some other complications where there's
some additional like, I don't know, fifteen hundred
dollars or somewhere in there.
There's another.
There's another 65 and older and blind.
(16:56):
There's a different or larger deduction.
Yeah.
Or blind.
Overall, the deduction increased.
Yeah.
So that's what it is.
There's another sixteen hundred dollars.
This what I'm looking at says that you're
age 65 and older or blind is I
(17:17):
don't know if it's and blind.
Oh, I believe or or blind is correct.
So if you're 50 and blind, you get
an additional deduction on top of the standard
deduction.
Right.
OK, of this thirty two hundred, if you're
filing jointly, sixteen hundred if you're individual.
Yeah.
Anyway, guess what?
(17:38):
It's complicated.
But there's there's a lot more deduction, standard
deduction type opportunities with favorable for everyone.
Right.
Right.
I mean, if you're my kids, you're doing
itemized deductions.
Well, the the if you do itemized deductions,
that's one lane, except if you're now 65
(18:00):
and older, even if you itemize, I believe
you also still get that six thousand dollars
because it's called a personal deduction.
It doesn't work quite like the standard deduction.
So you either do standard or itemized and
then you get another below the line, you
know, deduction, write off offset, whatever you want
(18:21):
to call it.
Either way.
Either way.
Right.
Yeah.
So, yes, you're right.
You're complicated.
Right.
And and yet it is good news for
individual taxpayers.
Again, it's really nothing directly to do with
eliminating taxation of Social Security benefits.
So keep them separate.
But there is a big implication to the
(18:44):
Social Security funding and that the chief actuary
just published, just sent two letters to two
senators yesterday or two days ago.
They wanted to know what is the implication?
As we know, the big bill today, what
is the implication on Social Security?
So what she wrote, Karen Glenn is the
(19:05):
chief actuary of Social Security.
She's just this amazing woman, I'll tell you.
The result is the reserve account will be
depleted even sooner than the trustee's report forecasted
back a month or two ago.
And so we're moving due to the weapon
GPO situation.
(19:26):
We moved from the end of twenty thirty
three.
This is for OSI, just your old age
and survivors benefit, not the disability, just the
retirement.
So we go from Q4 of twenty thirty
three, then weapon GPO Fairness Act come in
and we move to Q1 of twenty thirty
three.
Now, with the both the tax rates being
(19:49):
lower, we've now made permanent the twenty seventeen
tax cut job act.
So our overall rates are lower and we
have these additional deductions which will lower the
tax lane, the revenue lane coming into Social
Security.
And now they're estimating that instead of Q1,
(20:12):
twenty thirty three for the reserve depletion, it
will be Q4, twenty thirty two.
So now we're moving into twenty thirty two.
And just one more quick thing, they haven't
yet even factored in the net negative immigration
and the loss of jobs and more early
retirements.
So payroll tax collection overall.
(20:36):
It looks to me like it's going to
be less than it has been.
So we have all these lots of small
things peppering the Social Security fundedness and it's
going to the reserve account will be depleted
sooner than projected.
We've talked about this before, but it's worth
reiterating.
(20:57):
Would you elaborate on what that means?
It does not mean that Social Security benefits
would not be paid.
What does it mean?
You're exactly right.
And thank you for bringing that up.
Not only does it not mean Social Security
benefits won't be paid, but it also doesn't
mean Social Security is going bankrupt.
So there's no bankruptcy related to Social Security.
(21:19):
All it means is we have a rainy
day fund within the Social Security trust fund.
It's a savings account.
It was the surpluses over the years that
built up over time.
And that surplus bucket of the rainy day
fund is now being used to pay out
100 percent of the earned benefits to all
(21:41):
of our beneficiaries, everyone who's collecting Social Security.
So you're getting a combined payment.
You just don't know it.
You're getting payroll taxes like paid out to
you and to true up to give you
100 percent of your benefit amount.
We're dipping into the savings account.
(22:02):
Well, by 2032, that savings account will run
dry, but payroll taxes continue.
If we have workers, we have payroll taxes.
I mean, it's kind of that simple.
So right now, the estimate is you would
be paid about 78 to 80 percent of
(22:22):
your benefit amount.
Right.
So you still get a check, a deposit
every month.
The checks are going away and you still
get benefits.
But if Congress fails to take action, you
will get less starting sometime in 2032.
And this date and amount is subject to
(22:42):
change based on a couple of things.
Right.
If we have a booming economy, we have
more payroll.
We have more payroll tax, essentially the FICA
tax that would help that percentage or timeline
when it comes to if we have a
recession and there's more people laid off and
(23:05):
less payroll being paid, these dates and amounts
could go sooner and lower.
Right.
So there's some variation in this that it's
not an exact date and time that we
can say, oh, that's the date.
However, we know that there's plenty of time
(23:26):
to do something about it and that it's
very likely that nothing will get done until
the last minute.
I completely concur.
So so should we run out and claim
our Social Security?
Oh, that is a common question.
Clients ask.
That's great to know.
Get that question.
(23:47):
But that's what the American consumer is doing.
They are very anxious, afraid that if you're
not in, you're not going to get your
fair share or, you know, what you're getting
is good.
Kind of exactly.
Lock it in.
And that just could not be further from
(24:08):
what's going on here.
Might not be the best path for your
personal financial circumstances, probably likely to work against
your personal financial projections.
Absolutely.
Assuming a certain life expectancy.
Right.
Right.
I mean, if you're chronically ill today and
you're 63, it might be time to claim.
(24:28):
But that's not a whole lot of us.
So what the emails I'm getting from consumers,
I mean, they are worried and from financial
advisors as well saying, you know, what should
we tell people?
Should you still wait until 70 if that's
in your best interest in your retirement income
plan?
Or should you still wait till full retirement
age?
Yes and yes are the answers to those
(24:50):
questions.
Don't claim today thinking that you won't have
a benefit.
And don't claim today thinking you're grandfathered in.
That's what they're thinking.
Yeah.
They really are.
And they think, well, if I'm getting a
thousand dollars a month now, if the reserve
account runs dry, I'm grandfathered and I'll still
(25:11):
get my thousand dollars a month.
Well, guess what?
I hate to be the bearer of bad
news here, but that is not how the
law works.
And you will not be grandfathered in unless
Congress does something to grandfather you in.
So if there's a cut, it's an across
the board cut.
So I would say it's in most people's
(25:32):
best interest to wait as long as you
can to full retirement age or somewhere between
67 and 70.
Before you claim so that if there is
a cut of any sort.
It will be less damaging to your cash
flow.
You'll have a bigger and bigger amount to
start with.
Yeah.
Good point.
(25:52):
So don't let all these crazy headlines and
all this confusion make it where you're making
poor financial decisions or non-ideal financial decisions
for your household.
Yeah, that statement applies to everything.
Everything.
Right.
Not just Social Security, but people get wrapped
(26:13):
up in making financial moves because of these
headlines or these proposals or these new provisions.
And it's usually a mistake when you're acting
emotionally.
It really is.
And then you figure it out like five
or six years later and then it's too
late to do anything.
Like you you've sown that field and you're
(26:34):
getting what you get then.
And it's never ideal to be old in
America with fewer dollars.
That's not a winning combination for us.
I would have thought in a different moment
in time that, you know, when we got
to this point, if Congress hadn't come up
with a real solution that, you know, that
(26:56):
they just write the check and put it
on the tab kind of mindset where, well,
we'll keep our benefits paid out, but we've
just we'll just owe more money with our
our debt.
But with our growing debt and deficits annually,
(27:17):
that may not be an option.
There may be a limit to at some
point how much we can we can take,
you know, and ultimately I know these are
sort of different animals.
It's not part of the general budget and
all that kind of thing.
But, Jeff, do you want to maybe just
(27:39):
I know you've got an article that you've
been you've developed that is sort of lays
out some of the range of possible ways
in which Congress could address this.
Would you want to just sort of touch
on what are some of the range of
possible possibilities as relates to this?
(28:01):
Sure, sure.
I was inspired to write the article after
the one big, beautiful bill actually dealt with
some Medicaid reform, you know, Medicaid, Social Security,
Medicare, whatever of these entitlement programs.
I didn't want to use that word.
I know, but they are ultimately.
Well, I don't know.
That's another reason for them as that is
(28:22):
what I'm saying.
Right.
I don't like the word because in Social
Security, for example, you have paid in the
promise, you know, so you're not entitled to
that.
I'm messing with you, I'm messing with you.
Yes, you are entitled to it.
You are entitled to it.
I'm just messing with you.
I was trying not to create this conversation
by not using the word.
(28:43):
I have failed.
I was anyhow, any of these programs are
thought to be the third rail of politics.
Right.
You know, if you if a political candidate
mentions Social Security, Medicare, Medicaid reform, they're targeted
with political ads saying a candidate.
Chris Boyd wants to take away your Social
(29:03):
Security.
It's a very powerful and divisive issue.
So you remember the pictures of wheeling granny
over the cliff?
Endless.
Right.
Yeah.
So the third rail.
So we'll use that.
I think people know you don't touch the
third rail on the subway because it zaps
you and you could die.
So I was I was inspired to write
this article that perhaps, you know, we're out
(29:24):
to twenty thirty two now.
Perhaps there is a political opportunity.
You know, President Trump is not running for
reelection, I think is another thing we won't
talk about.
And he was politically brave enough and Congress
(29:45):
was to deal with the Medicaid reform, whether
you like it or not.
They dealt with it.
And it's controversial.
So, you know, when you're not running for
reelection is a great time to deal with
things that are not subject to the next
election.
Yeah.
So that's the reason I decided to work
on this article is that there are solutions,
(30:07):
you know, the solutions that we've talked about,
the solutions that I've thought of, I've heard
of, and there's other solutions that are out
there.
So I thought I'd put it out there.
Is this an opportunity before before 1231, 2031
or whatever the date is to deal with
this now?
It's like any any financial issue you have,
(30:29):
any financial planning, any financial problem, the more
of a runway you have to deal with
it, the more your options are available to
you.
So, you know, I'll start with one that
Marcia touched on is that that's immigration reform.
You know, this is this is a big
issue that the president wants to deal with.
And I think there's an appetite wherever you
(30:50):
are along the spectrum of this debate.
But immigration reform, including a provision that allows
illegal immigrants, if you will, or to make
them legal workers and paying into the Social
Security system is a is a simple way.
To deal with two issues, Social Security revenue
(31:10):
and our immigration problem and our workers that
we need on the, you know, that's been
highlighted what's happening to the farms and hospitality,
that maybe there's an opportunity to get this
done and have a win, win, win overall.
So that's that's one of the things that
I think is worthy of consideration for Congress.
I don't know if Marcia has thought about
(31:31):
this.
You highlighted it in one of your comments.
So yes, what are we on the same
page with this?
We are we are on the same page.
There's tremendous amount of work that needs to
be done on immigration policy.
Right.
And it does have a an effect on
Social Security on payroll taxes.
(31:52):
I mean, it really is quite simple at
the core.
FICA taxes need to be paid when you
have workers, they pay into Social Security so
all of us old folks can get our
checks.
Right.
We need to fix that.
And frankly, we need a lot more workers.
And the Brookings Institution just released a new
report, I want to say on Monday, about
(32:15):
their forecast for this year's immigration net negative
and next year net negative.
Well, that does not help fuel the tank
here of FICA taxes, but it is comprehensive
reform.
And it sounded like at the end of
last year, maybe two years ago now, the
(32:35):
Senate at least had a bipartisan immigration reform
bill.
And then it was put on the back
burner.
Well, even in the context of one of
the president's campaign promises was deportation and such.
Even in the context of that effort, which
is very clearly one of his primary goals,
(32:57):
he has paused that effort in certain industries
because of the pushback from the business community
and recognition that, you know, we can't get
food to our table unless we have workers.
And we can't get the nursing homes to
have workers and the home health care, talking
about, you know, tying in with Medicaid.
That's right.
That's right.
(33:17):
Yeah.
So hopefully there's an appetite to solve the
worker problem, which is an economic issue to
keep our economy rolling and to take a
good step towards solving the number of people
paying into the Social Security system.
We didn't talk about why we have the
deficit, but, you know, obviously it's talked about
(33:38):
a lot.
One of the reasons that we have this
pending deficit and we're using the rainy day
fund is the demographic shift of the number
of people who are living longer and the
baby boomers who are entering Social Security.
And the fewer workers, you know, look around.
How many children do your friends have and
your family have?
We have a diminishing population, a shrinking population
(34:00):
growth, but we still have these baby boomers
entering and into Social Security.
So we need more people paying in.
And it seems like a simple solution to
me.
Yeah.
And the demographic element.
I mean, baby boomers won't be in the
system forever.
It's not.
Sorry.
(34:22):
But there is a temporary nature to that
bubble.
But your point, Jeff, is still a valid
one that we don't make as many babies
as we used to.
And therefore, there is a declining there's a
risk of a declining population.
One of the virtues of the United States
(34:42):
has historically been that immigration has helped us
manage that challenge where we've had population growth
through immigration.
So but and that can solve this reality
that we we derive payments from employees largely.
(35:03):
Absolutely.
And it's if you're on the this is
this cross.
I'm optimistic because this crosses the political spectrum.
You can be on the right, right.
You know, the right political side of this
and say, you know, you want immigration laws
enforced.
You want legal workers.
Well, this deals with this issue as well.
(35:23):
So I do think there's also the arithmetic
of this, that, you know, there's a reality
that you will likely have some combination of.
Either more taxation, right, or reduced benefits.
I mean, it's a simple arithmetic equation.
At some point, there's you've got to have
(35:44):
either or both, you know, either or or
both.
Right.
That.
So whether that's in the form of lifting
that cap on the FICA tax, whether it's
oh, you've got a window where it comes
back in later on.
On very high income earners, whether it's means
(36:07):
testing on benefits, whether it's raising the retirement
age for all of these might be on
the table.
And all of them seem like they'd be
viable elements of a resolution because we do
live longer than we did in 19.
(36:27):
What when did this all start?
Thirty five.
Thirty five.
That, you know, as a reality and even
1985 or whatever it was when they did
the last reform of this.
So as a reality, these are all variables
that, you know, how you come up with
what is fair and equitable becomes challenging to
(36:52):
consider.
But as a reality, it's a necessity.
If we want to continue this as a
program that we consider as a society important
to fund, whatever that means, we're going to
have to put more revenue toward it.
That's taxes in this case, revenue, euphemism.
(37:18):
Right.
And then or we're going to need to
decrease when you get to start or how
much you get, you know, in one form
or another.
That's right.
And I think we need to take that
idea and be more creative with it.
And what I mean by that is today,
(37:38):
Social Security has been a one size fits
all.
The rules are the rules.
The law is the law.
And it's all based on your wages that
you contributed or paid FICA tax on.
And then there's this PIA formula, right, that
has these different thresholds upon which your calculated
benefit is the same for everyone.
(38:01):
Well, except Weapon GPO.
But now that's been fixed, too.
So we don't have to have only one
PIA formula.
We can have, or frankly, one retirement date.
We have to really consider the American worker.
There's us.
We sit in a chair all day.
We can work until 70, might not want
(38:23):
to, but we could with no physical damage.
We're not lifting rocks or something.
We are not lifting rocks.
We are not.
I just drove from the Boston area to
Minnesota to visit my kids a couple of
weeks ago.
You drive through the heartland and every single
freaking mile of highway is under construction.
And it was 99 degrees and super humid
(38:45):
out in the Midwest.
And these guys are slinging hammers and running
this huge equipment and moving rocks.
You can't do that when you're 70.
First of all, it's not safe for all
the other workers or the drivers.
Your body can't do it.
So let's have different structures of retirement.
(39:05):
These are not new ideas.
The police for years had, and may even
now have, in public safety, you have to
retire by 55.
Or there were other physical jobs where you
had an earlier retirement date.
We don't need to penalize our service workers
and our construction workers.
(39:27):
Let them have one lane of calculated benefit
and retire at 62.
That's interesting.
And then those of us who are the
white collar sitting on our butts all day,
well, maybe we are the ones who got
age 70 is our full retirement age now.
We can be more creative with the math.
Labor unions do this.
(39:47):
States do it.
And pension systems, as you said.
So it's not out of the ordinary.
It's just not applied to social security.
Right.
Right.
And that's what I think we need to
do.
Because again, these headlines are relatively terrifying.
The most important people we can protect right
now are our 20 and 30 year olds.
(40:09):
But they have already written off by and
large that social security will even be there
for them.
That's true.
But we haven't then said, okay, children, because
these are my children's ages.
If you're not thinking you're going to have
a foundation, you need to be saving 25
% of your income from day one.
Are you doing that?
Well, of course they're not.
(40:31):
So they've given up on the one hand,
thinking that they will have a future benefit,
but they're not taking appropriate actions to fix
it either.
So it's bad policy.
It's bad thinking.
And we need to help them move forward.
Let alone all of us boomers who, by
the way, we're going to stick around for
a good long time, Chris.
(40:53):
I got at least 35 years on my
runway here.
Excellent.
I'm not complaining about it.
I'm just saying.
Yeah, you go.
Well, that's good.
So that's a creative suggestion as a way
to solve it.
But there is that political reality that it
is the hot potato that if anyone proposes
(41:16):
something, they're taking away your benefits kind of
mindset, you know, that there's this kind of
notion.
So I think we've got to get to
a point where people are scared enough to
recognize this is in need of immediate action.
Over the last couple of decades, we've had
sufficient runway where there's always been.
(41:37):
It's not a problem today, right?
That there's not been this sense of urgency
around this.
I'm not sure what drives that sense of
urgency.
I do think whether it's this issue, Social
Security, Medicare, Medicaid, the overall budget of the
(41:58):
United States government, we are going to be
facing more of these realities that we are
on a path that we need to address
something different.
And there's a limit to how much you
can do all at once when it comes
to a variety of these challenges we face.
(42:21):
But I mean, I'm convinced that over the
next decade, this is going to be an
increasingly prioritized topic.
That is to say, our fiscal planning as
a society, that this is going to be
a huge priority over the next decade because
(42:41):
we are running into these kinds of issues
that necessitate that it be dealt with.
But I worry it's not going to be
until 2032 or whatever it might be.
Yeah, 2032, if we're lucky.
It's also the impact on industry.
And I think this is where the industries
now need to get in the game in
a much more aggressive way.
(43:04):
So we'll take the nursing homes first.
They're in the game now because they're going
to lose revenue in a big way, not
be able to take care of the elderly
and those with disabilities.
So they're going to really be yelling and
screaming.
The hospital systems will do the same because
the emergency rooms are going to be blowing
(43:24):
out the doors with people waiting for care.
But our industry, financial services also needs to
get in the game because if there is
a reduction in benefits of any sort for
Social Security and couple it with an increase
in Medicare Part B premiums, which are forecast
(43:45):
to rise 11% between this year and
next year.
So from $185 per person per month standard
premium to $206 and change.
You know, that's a stunning number, right?
Yeah.
We're getting squeezed and the inflation, the COLA
(44:05):
won't be all that big.
No way.
We're squeezing the consumer.
But the result for our industry is going
to be, well, if I can't afford to
pay for my basics from my anticipated pool
of resources, Social Security, maybe pension and say
4% of my portfolio, well, now I'm
drawing down five or I'm drawing down six
(44:27):
or I'm drawing down seven.
And that, as you know, is a recipe
for failure, both for our industry, because we're
going to burn through assets too quickly on
the book and for real people.
So it's everything is getting squeezed.
Like there's just brick walls on all sides
right now.
So I completely agree with you that this
(44:48):
is going to be one of the top,
if not the top topic for the next
several years.
Well, let's hope they have some political courage
to deal with it sooner than later.
Yeah.
Yeah.
Those numbers are scary, Marsha.
(45:08):
The way you painted that picture.
So I agree.
Let's hope it is compelling and prioritized and
we can see some political courage from.
And some industry push where we haven't always
pushed.
Fair enough.
Good point.
(45:29):
Yeah.
Takes all parties.
Want to wrap things up and mention that
if you're enjoying learning some of these things
that Marsha is pointing out, you have a
newsletter and our listeners may benefit from signing
up, subscribing.
Do you want to share how to do
that?
Sure.
(45:49):
Thank you.
Yes.
It's boomerretirementbriefs.com.
It's a blog format, longer form stories, examples
and such.
So you can just hop online to boomerretirementbriefs
.com and you can sign up or just
poke around all the articles that are in
there.
Hey, for the listeners who didn't catch it,
I'll put it in the show notes, the
(46:10):
link, so you can just go right to
the show notes and click.
Thanks, Jeff.
Sure.
Marsha, always a wealth of information.
So valuable.
Thank you for making the time.
Come back and see us again.
We're definitely going to need to talk about
more.
When the new book's out, make sure you
reach out and come back.
Thank you.
I will.
Thank you so much.
(46:31):
I hope you found this as valuable as
we have.
Until next time, everybody keeps striving for something
more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
(46:54):
.com or call us toll-free at 866
-771-8901.
Or send us your questions to amr-info
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You're listening to Something More with Chris Boyd
Financial Talk Show.
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provide investment advice on an individual basis to
(47:15):
clients only.
Proper advice depends on a complete analysis of
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Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner practitioner
and senior vice president financial advisor at Wealth
Enhancement Group, one of the nation's largest registered
investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, everybody.
Thanks for being with us for another episode
of Something More with Chris Boyd.
And I'm here again with Jeff Perry, of
course.
Both of us are from the AMR team
(00:42):
at Wealth Enhancement.
Our guest is returning guest Marcia Mantel, our
one of our social security experts is a
fabulous guest.
You can find more about her at Mantelretirementconsulting
.com.
And you come back to us from time
(01:03):
to time to give us updates and always
a wealth of information.
So thank you for being here, Marcia.
We're glad to see you.
Thank you, Chris and Jeff.
Thanks for inviting me back.
You know, I love to talk to you
guys.
Writing any new books?
I know you're an author many times over.
Thank you.
Actually, I am updating, if you can believe
(01:25):
it, my social security book.
Perfect timing.
There have been a few changes over the
last year or so.
A couple.
Well, that's probably a great place to start.
But what is the social security book?
And people can be on the lookout for
it.
When do you think it'll be updated?
I think by the end of August, and
then it should be out by October.
(01:47):
Excellent.
I'm moving quickly on that book.
Yeah, I'm excited about that.
I have a new title.
I'm quite sure I'm going to be calling
it Social Security, Slightly Burned, Not Scorched.
That title coming.
All right, perfect.
Well, things have been changing.
(02:07):
And that's a good place for us to
start.
We saw before the change in administrations, the
Social Security Fairness Act passed with surprising bipartisan
support.
It was one of these things where it
seems like it kind of took us by
surprise that, hey, they actually got this done.
(02:27):
Oh, it's always had bipartisan support, but it's
always died.
It never made it across the finish line.
Yeah, yeah.
But I mean, it's one of these things
where like suddenly they actually did that.
You know, there's been a lot of rhetoric
for you.
Anyway, tell us a little about what that
did.
Sure.
And you're both right.
I mean, it was quite a surprise because
(02:48):
it hadn't been teed up like this was
a big hot thing.
And all of a sudden, Social Security Fairness
Act passes House, then the Senate in November,
December, and then President Biden signs it into
law in January.
Not only was that a surprise, but the
implementation of this Fairness Act, which I'll get
(03:08):
into in a second, it was retroactive all
the way back to January of twenty twenty
four.
So what was this thing, the surprise?
It was for those Social Security beneficiaries who
have a public pension.
So we're talking about, you know, the teachers
in Massachusetts and in other 15, 16 other
states who have a pension or firefighters, police,
(03:32):
your town workers, your state workers, they all
have a public pension.
And in nineteen eighty three and prior to
that, nineteen seventy seven, there were parts of
Social Security laws that said, you know what,
if you're getting a public pension, you're going
to get that first.
But if you're also entitled to some Social
Security, we're going to reduce that so that
(03:54):
you don't have either a windfall if you're
the worker, the windfall elimination provision, or if
you're a spouse that you have a government
pension offset.
So as soon as those laws passed back
in the day, the unions representing these workers
sort of took arms up against it and
said, hey, wait a minute, that's really not
(04:14):
fair because these are workers.
They're not just getting a pension and didn't
contribute to Social Security.
They have what I call that hybrid career.
They worked in the public sector maybe 30
or 35 years, and then they earned their
Social Security benefits as well.
But the Social Security benefits were really they
took a big hit, a big cut if
(04:36):
you had both provisions.
So raising his hand as yeah, that's me.
Oh, it is.
Yes.
So, you know, you were going to take
a big it's not even a haircut, you
know, a little trim.
It was a buzz cut.
Yeah.
So this was, you know, there are different
perspectives on it, right?
There's part of the industry says, well, now
it's not fair because people are now getting
(04:57):
two pensions.
Well, you get two pensions if you work
in the private sector also, but you're paying
into both.
Well, you're also paying into both in the
public sector.
And then, you know, the other side of
the coin is it is more fair and
people who have truly earned these benefits paid
into FICA should be entitled to those benefits.
(05:19):
So it was unexpected, kind of exciting.
And for me, what it was, was this
harbinger of good things to come to shore
up Social Security solvency.
It's like, oh, look, Congress is working on
it.
All right.
I wouldn't have picked that to start with,
but that's all right.
They've opened the patient.
(05:39):
What do you know?
We've got something.
Exactly.
Gee, and I looked at it like a
gift from President Biden to all his labor
buddies on the way out.
Well, see, different perspectives, right?
I mean, it's where I really appreciate it
in particular for surviving spouses, particularly their women.
(06:00):
Sure.
That's right.
And and their benefits, you know, many surviving
spouses get zero because they had a pension.
They were a teacher.
They worked in town hall and they are
just the way the math works, getting zero.
So when your husband dies, he had been
maybe bringing in two thousand dollars a month
or twenty five hundred.
That's gone from your household budget.
(06:21):
And now these women were left with a
whole lot less.
So there are parts of fairness.
I will applaud these unions, the police and
the fire, fire unions in particular.
They have lobbied for 40 years to get
this done.
And I think that's why none of us
thought it was going to happen, because it
had reached that point before over and over.
(06:41):
Right.
Sitting there past one house or the other
Senate and just laboring.
Right.
Pun, but sitting there and you're right.
None of the lobbyists were expecting this because
I get the newsletters and such.
And no one was saying, here we go.
It's right there.
Right.
Kind of given up again and said, we'll
refile next year.
(07:03):
Exactly.
And particularly at this point, right, we already
knew there was a new administration coming in.
There was already a lot going on.
This was not on anybody's radar.
So Jeff and I have talked about this
quite a bit and noticed that even though
word is getting out there, there still can
(07:24):
be people who have kind of tuned out
to this because they had the experience where
they were told at one time, oh, you're
not going to get any benefit or it's
not worth it to you to pursue this.
Let's try to dispel that myth now.
You know, if you are a public employee
(07:47):
or have been a public employee at one
time and are on a pension, thought you
were not eligible for Social Security or maybe
just it wasn't enough to be it was
going to get chewed up somehow with the
discounts of these different up and government offset.
You know, maybe it's time to revisit that
(08:09):
because you may be getting you likely will
be getting a bigger benefit because you'll get
your full Social Security benefits and it's it's
worth the time to go deal with.
Please check.
Please check.
Yes, I could not agree more.
And especially for the disposal side, you know,
(08:33):
when you did that, when one did the
calculation and saw they were going to get
zero, they never even filed.
So the spouses aren't attached now in the
Social Security records.
So Social Security administration would not know that.
Oh, you know, Marcia is entitled to this
spousal benefit because she's not even in the
system.
So it doesn't take long to file an
(08:55):
application.
I mean, what's the worst that could happen?
Right.
It's like, oh, even if you're seventy five
or something, you know, you haven't ever filed
in the past now file or widow, especially
for the widow.
Right.
Especially for the especially now if you're in
that situation.
(09:16):
What happens?
Let's say you're you know, you never filed
and does that person receive any of those
back benefits or not?
You know, I'm not 100 percent sure on
that.
I know that Social Security looks at each
of those cases separately, you know, to see
what you would have been entitled to.
But if you hadn't already claimed, are they
(09:37):
really paying you for?
I don't think so.
Yeah, I don't think so either.
I don't think so either.
But I'm not 100 percent sure.
Better to get started.
Then you don't get the back stuff.
Get started.
But the usual is if you haven't filed
a timely, there is a six month retroactive
period.
So maybe they'll get a six month bonus.
(09:58):
I'll call it a bigger check.
But it's the going forward.
I mean, it's just it's all good.
And because, you know, social Medicare Part B
premiums come directly out of your Social Security
check, even if it only covers your Part
B premiums.
Hey, that's money in your pocket, right?
(10:19):
Right.
And like you said, for a widow who,
you know, may have in many cases been
like excluded from their benefits.
Again, it's it's not just on your own
work experience, which may you may have your
own private sector work experience, Social Security contributions.
(10:41):
But if you've been married or are married,
you could be getting benefits through as a
spouse, whether it's to recover the as a
widow.
Right.
And that's one sense or even a spousal
benefit.
Even if you didn't work in the public,
sorry, private sector, you still might be eligible
(11:02):
for Social Security benefits.
These are all things that circumstances I'm just
trying to elaborate.
Go check it out.
You check it out.
Spouses as well.
You know, if you're a qualifying divorce person,
so largely you were married for 10 consecutive
years or longer, you may well now qualify
(11:23):
for a new benefit.
And, you know, like I said, even if
it's a small, small amount, one hundred, two
hundred, three hundred dollars a month, I'll say
yes to that.
Why not?
Yeah, right.
Like, don't miss an opportunity.
Yeah.
For an hour of your time.
Right.
To go online and file.
Right.
Yes.
OK, so we have this issue where we've
(11:46):
had additional benefits being paid out.
Surprisingly small relative to the whole of Social
Security, but some consequence.
We also had the one big, beautiful bill
act that has passed.
This also has some consequences as it relates
(12:08):
to Social Security and Medicare.
Can you elaborate a little bit on what's
changed as it relates to this legislation?
Not quite what the president was talking about
on the trail.
Right.
On the campaign trail.
And that's caused confusion, too.
You know, you make these promises on the
trail and then something passes and they associate
(12:30):
it to the promise.
Yeah, so it is.
I think your word, the key word here
is confusion.
There is a lot of confusion about this.
So let's set some of the records straight
here.
The first is the taxation.
So Social Security benefits are taxable income when
you have higher income in retirement.
(12:53):
And there's a calculation to determine.
Right.
Right.
You look at how much is taxable income.
There's a formula to create combined income.
And then some of your Social Security benefits
would be taxable if you're above the thresholds
and it's up to 85 percent.
So you always get 15 percent that's not
(13:14):
taxed anyway.
But the big claim or the hope or
the promise was that Social Security was no
longer going to be taxable income.
It was going to come off the front
of the 1040.
Well, it did not.
In fact, it stayed exactly the same.
The best we know today, the combined income
(13:35):
calculation still stands.
If you are married, filing jointly and you
have income, combined income above forty four thousand
dollars, up to 85 percent of your Social
Security comes on to the front of the
1040.
It's taxable income at whatever your tax rate
is.
Right.
Nothing's changed there.
Right.
(13:55):
So but there's a lot of confusion there
because people, oh, my Social Security is no
longer taxable.
So in lieu of that, the one big,
beautiful bill act, BBA or how many B's
got to get enough in there?
Three, three.
So anyway, there is some effort to offset
(14:19):
that income for people under a certain threshold
sort of with this in mind.
Is this essentially how they came to deal
with that?
Well, the administration is trying to tie two
disparate things together.
So what I will say in the big
bill, there's some really good.
(14:43):
Deductions now available to Americans who are 65
and older, we couldn't care less what you're
doing with Social Security, they are unrelated topics,
right?
But if you're 65 or older this year,
2025 and for the next three years, twenty
five, six, seven and eight.
So it's a temporary it's a temporary window.
(15:04):
It's a temporary fine.
But it's six thousand dollar personal deduction that
will be applied to your otherwise taxable income.
So if your taxable income is one hundred
thousand dollars and you meet the qualifications, you're
over 65, 65 or older and you have.
Well, one hundred thousand works if you're married,
filing jointly, there's some upper thresholds here.
(15:27):
Yeah.
And you get six thousand dollars off of
your taxable income obligation.
That's great news.
That is whether you're collecting Social Security or
not has nothing to do with nothing.
No, but I do think the motivation was,
hey, we can't really tie this to Social
Security.
So here's another way we'll go about it.
(15:47):
It is temporary, as you said.
The standard deduction did get raised from fifteen
thousand to fifteen thousand seven hundred and fifty.
Then you add to this for everyone, for
everyone.
Then you do this for retirees or people
age 65 and older for this window of
(16:10):
time.
As you said, there is an additional six
thousand per person unless you are married, filing
jointly and make in excess of one hundred
and fifty thousand.
It starts to phase out by two hundred
(16:32):
and fifty thousand.
Some sort of step down, I think.
So that's essentially how it works.
Yeah.
And then there's some other complications where there's
some additional like, I don't know, fifteen hundred
dollars or somewhere in there.
There's another.
There's another 65 and older and blind.
(16:56):
There's a different or larger deduction.
Yeah.
Or blind.
Overall, the deduction increased.
Yeah.
So that's what it is.
There's another sixteen hundred dollars.
This what I'm looking at says that you're
age 65 and older or blind is I
(17:17):
don't know if it's and blind.
Oh, I believe or or blind is correct.
So if you're 50 and blind, you get
an additional deduction on top of the standard
deduction.
Right.
OK, of this thirty two hundred, if you're
filing jointly, sixteen hundred if you're individual.
Yeah.
Anyway, guess what?
(17:38):
It's complicated.
But there's there's a lot more deduction, standard
deduction type opportunities with favorable for everyone.
Right.
Right.
I mean, if you're my kids, you're doing
itemized deductions.
Well, the the if you do itemized deductions,
that's one lane, except if you're now 65
(18:00):
and older, even if you itemize, I believe
you also still get that six thousand dollars
because it's called a personal deduction.
It doesn't work quite like the standard deduction.
So you either do standard or itemized and
then you get another below the line, you
know, deduction, write off offset, whatever you want
(18:21):
to call it.
Either way.
Either way.
Right.
Yeah.
So, yes, you're right.
You're complicated.
Right.
And and yet it is good news for
individual taxpayers.
Again, it's really nothing directly to do with
eliminating taxation of Social Security benefits.
So keep them separate.
But there is a big implication to the
(18:44):
Social Security funding and that the chief actuary
just published, just sent two letters to two
senators yesterday or two days ago.
They wanted to know what is the implication?
As we know, the big bill today, what
is the implication on Social Security?
So what she wrote, Karen Glenn is the
(19:05):
chief actuary of Social Security.
She's just this amazing woman, I'll tell you.
The result is the reserve account will be
depleted even sooner than the trustee's report forecasted
back a month or two ago.
And so we're moving due to the weapon
GPO situation.
(19:26):
We moved from the end of twenty thirty
three.
This is for OSI, just your old age
and survivors benefit, not the disability, just the
retirement.
So we go from Q4 of twenty thirty
three, then weapon GPO Fairness Act come in
and we move to Q1 of twenty thirty
three.
Now, with the both the tax rates being
(19:49):
lower, we've now made permanent the twenty seventeen
tax cut job act.
So our overall rates are lower and we
have these additional deductions which will lower the
tax lane, the revenue lane coming into Social
Security.
And now they're estimating that instead of Q1,
(20:12):
twenty thirty three for the reserve depletion, it
will be Q4, twenty thirty two.
So now we're moving into twenty thirty two.
And just one more quick thing, they haven't
yet even factored in the net negative immigration
and the loss of jobs and more early
retirements.
So payroll tax collection overall.
(20:36):
It looks to me like it's going to
be less than it has been.
So we have all these lots of small
things peppering the Social Security fundedness and it's
going to the reserve account will be depleted
sooner than projected.
We've talked about this before, but it's worth
reiterating.
(20:57):
Would you elaborate on what that means?
It does not mean that Social Security benefits
would not be paid.
What does it mean?
You're exactly right.
And thank you for bringing that up.
Not only does it not mean Social Security
benefits won't be paid, but it also doesn't
mean Social Security is going bankrupt.
So there's no bankruptcy related to Social Security.
(21:19):
All it means is we have a rainy
day fund within the Social Security trust fund.
It's a savings account.
It was the surpluses over the years that
built up over time.
And that surplus bucket of the rainy day
fund is now being used to pay out
100 percent of the earned benefits to all
(21:41):
of our beneficiaries, everyone who's collecting Social Security.
So you're getting a combined payment.
You just don't know it.
You're getting payroll taxes like paid out to
you and to true up to give you
100 percent of your benefit amount.
We're dipping into the savings account.
(22:02):
Well, by 2032, that savings account will run
dry, but payroll taxes continue.
If we have workers, we have payroll taxes.
I mean, it's kind of that simple.
So right now, the estimate is you would
be paid about 78 to 80 percent of
(22:22):
your benefit amount.
Right.
So you still get a check, a deposit
every month.
The checks are going away and you still
get benefits.
But if Congress fails to take action, you
will get less starting sometime in 2032.
And this date and amount is subject to
(22:42):
change based on a couple of things.
Right.
If we have a booming economy, we have
more payroll.
We have more payroll tax, essentially the FICA
tax that would help that percentage or timeline
when it comes to if we have a
recession and there's more people laid off and
(23:05):
less payroll being paid, these dates and amounts
could go sooner and lower.
Right.
So there's some variation in this that it's
not an exact date and time that we
can say, oh, that's the date.
However, we know that there's plenty of time
(23:26):
to do something about it and that it's
very likely that nothing will get done until
the last minute.
I completely concur.
So so should we run out and claim
our Social Security?
Oh, that is a common question.
Clients ask.
That's great to know.
Get that question.
(23:47):
But that's what the American consumer is doing.
They are very anxious, afraid that if you're
not in, you're not going to get your
fair share or, you know, what you're getting
is good.
Kind of exactly.
Lock it in.
And that just could not be further from
(24:08):
what's going on here.
Might not be the best path for your
personal financial circumstances, probably likely to work against
your personal financial projections.
Absolutely.
Assuming a certain life expectancy.
Right.
Right.
I mean, if you're chronically ill today and
you're 63, it might be time to claim.
(24:28):
But that's not a whole lot of us.
So what the emails I'm getting from consumers,
I mean, they are worried and from financial
advisors as well saying, you know, what should
we tell people?
Should you still wait until 70 if that's
in your best interest in your retirement income
plan?
Or should you still wait till full retirement
age?
Yes and yes are the answers to those
(24:50):
questions.
Don't claim today thinking that you won't have
a benefit.
And don't claim today thinking you're grandfathered in.
That's what they're thinking.
Yeah.
They really are.
And they think, well, if I'm getting a
thousand dollars a month now, if the reserve
account runs dry, I'm grandfathered and I'll still
(25:11):
get my thousand dollars a month.
Well, guess what?
I hate to be the bearer of bad
news here, but that is not how the
law works.
And you will not be grandfathered in unless
Congress does something to grandfather you in.
So if there's a cut, it's an across
the board cut.
So I would say it's in most people's
(25:32):
best interest to wait as long as you
can to full retirement age or somewhere between
67 and 70.
Before you claim so that if there is
a cut of any sort.
It will be less damaging to your cash
flow.
You'll have a bigger and bigger amount to
start with.
Yeah.
Good point.
(25:52):
So don't let all these crazy headlines and
all this confusion make it where you're making
poor financial decisions or non-ideal financial decisions
for your household.
Yeah, that statement applies to everything.
Everything.
Right.
Not just Social Security, but people get wrapped
(26:13):
up in making financial moves because of these
headlines or these proposals or these new provisions.
And it's usually a mistake when you're acting
emotionally.
It really is.
And then you figure it out like five
or six years later and then it's too
late to do anything.
Like you you've sown that field and you're
(26:34):
getting what you get then.
And it's never ideal to be old in
America with fewer dollars.
That's not a winning combination for us.
I would have thought in a different moment
in time that, you know, when we got
to this point, if Congress hadn't come up
with a real solution that, you know, that
(26:56):
they just write the check and put it
on the tab kind of mindset where, well,
we'll keep our benefits paid out, but we've
just we'll just owe more money with our
our debt.
But with our growing debt and deficits annually,
(27:17):
that may not be an option.
There may be a limit to at some
point how much we can we can take,
you know, and ultimately I know these are
sort of different animals.
It's not part of the general budget and
all that kind of thing.
But, Jeff, do you want to maybe just
(27:39):
I know you've got an article that you've
been you've developed that is sort of lays
out some of the range of possible ways
in which Congress could address this.
Would you want to just sort of touch
on what are some of the range of
possible possibilities as relates to this?
(28:01):
Sure, sure.
I was inspired to write the article after
the one big, beautiful bill actually dealt with
some Medicaid reform, you know, Medicaid, Social Security,
Medicare, whatever of these entitlement programs.
I didn't want to use that word.
I know, but they are ultimately.
Well, I don't know.
That's another reason for them as that is
(28:22):
what I'm saying.
Right.
I don't like the word because in Social
Security, for example, you have paid in the
promise, you know, so you're not entitled to
that.
I'm messing with you, I'm messing with you.
Yes, you are entitled to it.
You are entitled to it.
I'm just messing with you.
I was trying not to create this conversation
by not using the word.
(28:43):
I have failed.
I was anyhow, any of these programs are
thought to be the third rail of politics.
Right.
You know, if you if a political candidate
mentions Social Security, Medicare, Medicaid reform, they're targeted
with political ads saying a candidate.
Chris Boyd wants to take away your Social
(29:03):
Security.
It's a very powerful and divisive issue.
So you remember the pictures of wheeling granny
over the cliff?
Endless.
Right.
Yeah.
So the third rail.
So we'll use that.
I think people know you don't touch the
third rail on the subway because it zaps
you and you could die.
So I was I was inspired to write
this article that perhaps, you know, we're out
(29:24):
to twenty thirty two now.
Perhaps there is a political opportunity.
You know, President Trump is not running for
reelection, I think is another thing we won't
talk about.
And he was politically brave enough and Congress
(29:45):
was to deal with the Medicaid reform, whether
you like it or not.
They dealt with it.
And it's controversial.
So, you know, when you're not running for
reelection is a great time to deal with
things that are not subject to the next
election.
Yeah.
So that's the reason I decided to work
on this article is that there are solutions,
(30:07):
you know, the solutions that we've talked about,
the solutions that I've thought of, I've heard
of, and there's other solutions that are out
there.
So I thought I'd put it out there.
Is this an opportunity before before 1231, 2031
or whatever the date is to deal with
this now?
It's like any any financial issue you have,
(30:29):
any financial planning, any financial problem, the more
of a runway you have to deal with
it, the more your options are available to
you.
So, you know, I'll start with one that
Marcia touched on is that that's immigration reform.
You know, this is this is a big
issue that the president wants to deal with.
And I think there's an appetite wherever you
(30:50):
are along the spectrum of this debate.
But immigration reform, including a provision that allows
illegal immigrants, if you will, or to make
them legal workers and paying into the Social
Security system is a is a simple way.
To deal with two issues, Social Security revenue
(31:10):
and our immigration problem and our workers that
we need on the, you know, that's been
highlighted what's happening to the farms and hospitality,
that maybe there's an opportunity to get this
done and have a win, win, win overall.
So that's that's one of the things that
I think is worthy of consideration for Congress.
I don't know if Marcia has thought about
(31:31):
this.
You highlighted it in one of your comments.
So yes, what are we on the same
page with this?
We are we are on the same page.
There's tremendous amount of work that needs to
be done on immigration policy.
Right.
And it does have a an effect on
Social Security on payroll taxes.
(31:52):
I mean, it really is quite simple at
the core.
FICA taxes need to be paid when you
have workers, they pay into Social Security so
all of us old folks can get our
checks.
Right.
We need to fix that.
And frankly, we need a lot more workers.
And the Brookings Institution just released a new
report, I want to say on Monday, about
(32:15):
their forecast for this year's immigration net negative
and next year net negative.
Well, that does not help fuel the tank
here of FICA taxes, but it is comprehensive
reform.
And it sounded like at the end of
last year, maybe two years ago now, the
(32:35):
Senate at least had a bipartisan immigration reform
bill.
And then it was put on the back
burner.
Well, even in the context of one of
the president's campaign promises was deportation and such.
Even in the context of that effort, which
is very clearly one of his primary goals,
(32:57):
he has paused that effort in certain industries
because of the pushback from the business community
and recognition that, you know, we can't get
food to our table unless we have workers.
And we can't get the nursing homes to
have workers and the home health care, talking
about, you know, tying in with Medicaid.
That's right.
That's right.
(33:17):
Yeah.
So hopefully there's an appetite to solve the
worker problem, which is an economic issue to
keep our economy rolling and to take a
good step towards solving the number of people
paying into the Social Security system.
We didn't talk about why we have the
deficit, but, you know, obviously it's talked about
(33:38):
a lot.
One of the reasons that we have this
pending deficit and we're using the rainy day
fund is the demographic shift of the number
of people who are living longer and the
baby boomers who are entering Social Security.
And the fewer workers, you know, look around.
How many children do your friends have and
your family have?
We have a diminishing population, a shrinking population
(34:00):
growth, but we still have these baby boomers
entering and into Social Security.
So we need more people paying in.
And it seems like a simple solution to
me.
Yeah.
And the demographic element.
I mean, baby boomers won't be in the
system forever.
It's not.
Sorry.
(34:22):
But there is a temporary nature to that
bubble.
But your point, Jeff, is still a valid
one that we don't make as many babies
as we used to.
And therefore, there is a declining there's a
risk of a declining population.
One of the virtues of the United States
(34:42):
has historically been that immigration has helped us
manage that challenge where we've had population growth
through immigration.
So but and that can solve this reality
that we we derive payments from employees largely.
(35:03):
Absolutely.
And it's if you're on the this is
this cross.
I'm optimistic because this crosses the political spectrum.
You can be on the right, right.
You know, the right political side of this
and say, you know, you want immigration laws
enforced.
You want legal workers.
Well, this deals with this issue as well.
(35:23):
So I do think there's also the arithmetic
of this, that, you know, there's a reality
that you will likely have some combination of.
Either more taxation, right, or reduced benefits.
I mean, it's a simple arithmetic equation.
At some point, there's you've got to have
(35:44):
either or both, you know, either or or
both.
Right.
That.
So whether that's in the form of lifting
that cap on the FICA tax, whether it's
oh, you've got a window where it comes
back in later on.
On very high income earners, whether it's means
(36:07):
testing on benefits, whether it's raising the retirement
age for all of these might be on
the table.
And all of them seem like they'd be
viable elements of a resolution because we do
live longer than we did in 19.
(36:27):
What when did this all start?
Thirty five.
Thirty five.
That, you know, as a reality and even
1985 or whatever it was when they did
the last reform of this.
So as a reality, these are all variables
that, you know, how you come up with
what is fair and equitable becomes challenging to
(36:52):
consider.
But as a reality, it's a necessity.
If we want to continue this as a
program that we consider as a society important
to fund, whatever that means, we're going to
have to put more revenue toward it.
That's taxes in this case, revenue, euphemism.
(37:18):
Right.
And then or we're going to need to
decrease when you get to start or how
much you get, you know, in one form
or another.
That's right.
And I think we need to take that
idea and be more creative with it.
And what I mean by that is today,
(37:38):
Social Security has been a one size fits
all.
The rules are the rules.
The law is the law.
And it's all based on your wages that
you contributed or paid FICA tax on.
And then there's this PIA formula, right, that
has these different thresholds upon which your calculated
benefit is the same for everyone.
(38:01):
Well, except Weapon GPO.
But now that's been fixed, too.
So we don't have to have only one
PIA formula.
We can have, or frankly, one retirement date.
We have to really consider the American worker.
There's us.
We sit in a chair all day.
We can work until 70, might not want
(38:23):
to, but we could with no physical damage.
We're not lifting rocks or something.
We are not lifting rocks.
We are not.
I just drove from the Boston area to
Minnesota to visit my kids a couple of
weeks ago.
You drive through the heartland and every single
freaking mile of highway is under construction.
And it was 99 degrees and super humid
(38:45):
out in the Midwest.
And these guys are slinging hammers and running
this huge equipment and moving rocks.
You can't do that when you're 70.
First of all, it's not safe for all
the other workers or the drivers.
Your body can't do it.
So let's have different structures of retirement.
(39:05):
These are not new ideas.
The police for years had, and may even
now have, in public safety, you have to
retire by 55.
Or there were other physical jobs where you
had an earlier retirement date.
We don't need to penalize our service workers
and our construction workers.
(39:27):
Let them have one lane of calculated benefit
and retire at 62.
That's interesting.
And then those of us who are the
white collar sitting on our butts all day,
well, maybe we are the ones who got
age 70 is our full retirement age now.
We can be more creative with the math.
Labor unions do this.
(39:47):
States do it.
And pension systems, as you said.
So it's not out of the ordinary.
It's just not applied to social security.
Right.
Right.
And that's what I think we need to
do.
Because again, these headlines are relatively terrifying.
The most important people we can protect right
now are our 20 and 30 year olds.
(40:09):
But they have already written off by and
large that social security will even be there
for them.
That's true.
But we haven't then said, okay, children, because
these are my children's ages.
If you're not thinking you're going to have
a foundation, you need to be saving 25
% of your income from day one.
Are you doing that?
Well, of course they're not.
(40:31):
So they've given up on the one hand,
thinking that they will have a future benefit,
but they're not taking appropriate actions to fix
it either.
So it's bad policy.
It's bad thinking.
And we need to help them move forward.
Let alone all of us boomers who, by
the way, we're going to stick around for
a good long time, Chris.
(40:53):
I got at least 35 years on my
runway here.
Excellent.
I'm not complaining about it.
I'm just saying.
Yeah, you go.
Well, that's good.
So that's a creative suggestion as a way
to solve it.
But there is that political reality that it
is the hot potato that if anyone proposes
(41:16):
something, they're taking away your benefits kind of
mindset, you know, that there's this kind of
notion.
So I think we've got to get to
a point where people are scared enough to
recognize this is in need of immediate action.
Over the last couple of decades, we've had
sufficient runway where there's always been.
(41:37):
It's not a problem today, right?
That there's not been this sense of urgency
around this.
I'm not sure what drives that sense of
urgency.
I do think whether it's this issue, Social
Security, Medicare, Medicaid, the overall budget of the
(41:58):
United States government, we are going to be
facing more of these realities that we are
on a path that we need to address
something different.
And there's a limit to how much you
can do all at once when it comes
to a variety of these challenges we face.
(42:21):
But I mean, I'm convinced that over the
next decade, this is going to be an
increasingly prioritized topic.
That is to say, our fiscal planning as
a society, that this is going to be
a huge priority over the next decade because
(42:41):
we are running into these kinds of issues
that necessitate that it be dealt with.
But I worry it's not going to be
until 2032 or whatever it might be.
Yeah, 2032, if we're lucky.
It's also the impact on industry.
And I think this is where the industries
now need to get in the game in
a much more aggressive way.
(43:04):
So we'll take the nursing homes first.
They're in the game now because they're going
to lose revenue in a big way, not
be able to take care of the elderly
and those with disabilities.
So they're going to really be yelling and
screaming.
The hospital systems will do the same because
the emergency rooms are going to be blowing
(43:24):
out the doors with people waiting for care.
But our industry, financial services also needs to
get in the game because if there is
a reduction in benefits of any sort for
Social Security and couple it with an increase
in Medicare Part B premiums, which are forecast
(43:45):
to rise 11% between this year and
next year.
So from $185 per person per month standard
premium to $206 and change.
You know, that's a stunning number, right?
Yeah.
We're getting squeezed and the inflation, the COLA
(44:05):
won't be all that big.
No way.
We're squeezing the consumer.
But the result for our industry is going
to be, well, if I can't afford to
pay for my basics from my anticipated pool
of resources, Social Security, maybe pension and say
4% of my portfolio, well, now I'm
drawing down five or I'm drawing down six
(44:27):
or I'm drawing down seven.
And that, as you know, is a recipe
for failure, both for our industry, because we're
going to burn through assets too quickly on
the book and for real people.
So it's everything is getting squeezed.
Like there's just brick walls on all sides
right now.
So I completely agree with you that this
(44:48):
is going to be one of the top,
if not the top topic for the next
several years.
Well, let's hope they have some political courage
to deal with it sooner than later.
Yeah.
Yeah.
Those numbers are scary, Marsha.
(45:08):
The way you painted that picture.
So I agree.
Let's hope it is compelling and prioritized and
we can see some political courage from.
And some industry push where we haven't always
pushed.
Fair enough.
Good point.
(45:29):
Yeah.
Takes all parties.
Want to wrap things up and mention that
if you're enjoying learning some of these things
that Marsha is pointing out, you have a
newsletter and our listeners may benefit from signing
up, subscribing.
Do you want to share how to do
that?
Sure.
(45:49):
Thank you.
Yes.
It's boomerretirementbriefs.com.
It's a blog format, longer form stories, examples
and such.
So you can just hop online to boomerretirementbriefs
.com and you can sign up or just
poke around all the articles that are in
there.
Hey, for the listeners who didn't catch it,
I'll put it in the show notes, the
(46:10):
link, so you can just go right to
the show notes and click.
Thanks, Jeff.
Sure.
Marsha, always a wealth of information.
So valuable.
Thank you for making the time.
Come back and see us again.
We're definitely going to need to talk about
more.
When the new book's out, make sure you
reach out and come back.
Thank you.
I will.
Thank you so much.
(46:31):
I hope you found this as valuable as
we have.
Until next time, everybody keeps striving for something
more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
(46:54):
.com or call us toll-free at 866
-771-8901.
Or send us your questions to amr-info
at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
(47:15):
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
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