In this episode of Pink Money, Jerry Williams breaks down the confusing—and often overwhelming—decision of when to start taking Social Security. From age 62 to 70, Jerry explains how timing impacts your monthly benefit, why “take it early and invest” isn’t always the best advice, and what realistic returns look like compared to the hype.
He also dives into full retirement age rules, earnings limits, taxation of benefits, and life expectancy considerations. Whether you’re planning for yourself or helping someone else, this episode delivers a clear-eyed look at how to make Social Security work as part of your retirement strategy.
💬 Have a question or comment? Contact Jerry here
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UNKNOWN (00:01):
Thank you.
SPEAKER_00 (00:53):
Welcome to the Pink Money Podcast.
We talk about all about thingsrelated to money from a gay
perspective.
And I'm your host, JerryWilliams.
And, you know, lately, I thinkthat I have heard ads about
taking your Social Securityabout three times a day at
least.
It is just so crazy, probablybecause of the age that I'm
(01:17):
getting to.
I'm over 60 now, so I thinkthat's probably why.
But it just seems like those andMedicare seem to be the most
popular ads that I consistentlysee across a wide variety of
different places.
But anyway, it started making methink about...
(01:38):
How much people know, don'tknow, et cetera, about Social
Security.
Because it's kind of a mystery.
And you don't really think aboutit too much until you really
start to get to the point thatyou really need it.
Or can take it, either way.
And so I was also listening tosomebody who was mentioning that
a lot of different people aresaying you should take it as
(01:59):
soon as possible instead ofwaiting.
Sometimes they say you shouldtake it as soon as possible
because it's going to run out ofmoney.
I don't think that's really thecase.
I think that depending on theright administration that gets
in, I think they're alwaysgonna.
have social security becauseit's a safety net.
Now, whether it is completelysocial security or something
(02:20):
like the universal basic income,you know, I'm not sure about
that.
But as we sit here today, it's,you know, the same old thing
that it's the same old bent hasalways been.
So that's where I'm going tojump off at.
And, you know, one guy was alsomentioning, I don't really
listen to other nationalfinancial advisors like, um,
(02:41):
Dave Ramsey or Susie Orman.
I mean, I've heard them before.
Don't get me wrong, but I don'tlisten to them with any
regularity.
So I'm not 100% familiar withall that they expose on a
regular basis.
But anyway, he had mentionedDave Ramsey saying, again, you
should take it as early aspossible and you should take it.
(03:03):
And even if you don't need it,the best thing you can do is
save it and invest it.
And he was saying that you wouldcome out ahead in the long run.
If you put it in the market, youshould be able to get a 12%
return.
Now that's the part that reallycaught my attention because I
was thinking, now that's prettyballsy to say you're going to
(03:25):
get an annual 12% return.
And I think that's far from thetruth.
And, I mean, when you reallylook at the market overall, I
mean, in the last 30 years,let's just say from, you know,
94 to 23, the average return hasbeen somewhere in the vicinity
of 9% to 10%.
And if you're looking at maybejust the last 10 years, he is
(03:47):
right.
You can get somewhere between12% and 14%.
Now, I mean, these most latestreturns are because, you know,
the market has been really,really strong since– You know,
the 2008 financial crisis wheneverything went, you know, all
went to hell.
And then, you know, we've had apretty strong recovery since.
(04:11):
And the point that I'm thinkingabout is you can never really
trust the market.
I've seen so many times wherepeople really counted on the
market to support theirportfolio, and it just wasn't
there.
I mean, again, thinking about2008, I think I've shared this
story before.
You know, when so many bankswent bust, you know, people lost
(04:35):
everything.
And so many people wereconcentrated in one particular
stock.
And then when that stock wentbust, then their portfolio went
bust.
There's always a good case to bemade for having a diversified
portfolio.
But that aside, it's really kindof scary when you put all your
eggs in one basket and you'rereally counting on that income.
(04:57):
So I guess then you have toreally decide when are you going
to take your Social Security.
Should you take it at 62, whichis the earliest you can take it,
or should you wait?
And...
It really, really, you know, Iguess my basic answer is always
it just depends, right?
(05:18):
It really depends because if youdon't need the money, you can
certainly just let it sit inthere and grow until it's your
full retirement age.
So your full retirement age, I'mjust going to say FRA since
it's...
apparently gonna be easier forme.
If you were born between 1943and 1954, your FRA is gonna be
(05:39):
66.
If you were born in 1955, yourFRA is 66 and two months.
If you were born in 1956, yourFRA is 66 and four months.
If you were born in 1957, it's66 and six months.
Born 1958, 66 and three months.
(06:00):
In 1959, it's 66 and 10 months.
If you're born 1960 or later,then your FRA is 67.
So that's when you can claimyour full Social Security.
And that just means that you'regoing to get the most you can
from Social Security if you waituntil then.
And many people do, but Ibelieve that the average time
(06:24):
that most people take it isaround 65.
That's just when...
It used to be that was basicallyretirement age for almost
everybody, 65.
But that just really depended...
on you know how much you hadsaved maybe you were going to
get a pension and maybe you hadyou know other resources
(06:45):
available to you and that wasyou know doable nowadays a lot
of people just haven't saved asmuch as they have in the past a
lot of people don't havepensions like they used to have
and so because of those thingsretiring at 65 may or may not be
an option at least maybecompletely many people just
(07:05):
still work and work and work andwork until as long as they can.
And if you're married, thatcertainly might relieve some of
the burden as long as yourspouse has been working or can
work.
If you're on your own, thenobviously things are going to be
a lot more difficult.
But I'm going to go with justthe assumption that you're going
(07:27):
to be single and on your own.
But a lot of these situationsapply to being married as well.
But if you...
Just say, for example, just tokind of throw it out there,
let's just say that you weregoing to wait and take your
Social Security and delay it aslong as possible.
(07:49):
And if you did that, then thelongest you could delay it would
be at age 70.
And that's when you would getthe biggest bang for your buck,
if you will.
And you'll get the most moneyyou can from Social Security.
But if you decide that...
I'm not sure if I'm going tomake it to 70 because that's
(08:12):
really kind of the most criticalfactor here is how long do you
think you're going to live?
No one knows, right?
But if there's a history of poorhealth in your family or you
know through whatevercircumstances you're not going
to make it to 70, then there canbe obviously the best case is to
take it as soon as possible.
(08:33):
And again, if you need itbecause it's...
you know gonna help you becauseyou don't have any other
resources well then take it youknow it's there go ahead as long
as you've made your 40 quarterswhich is what the IRS considers
your ability to get SocialSecurity at you know no reduced
rate then take it then you canalso check for your particular
(08:58):
situation on social security'swebsite and you can go to i
believe it's my social securityand then you can look at your
account and you can see you knowwhat your earnings are and what
they project you're going to beable to take i think it's a good
idea always just to look at yoursocial security benefits and
just see you know what it is andjust to have some rough idea and
(09:21):
it always helps in yourfinancial planning as well
because when you're specificallyworking with your financial
advisor you're trying toconstruct a retirement plan, you
definitely want to take SocialSecurity into account.
Now whether you want to rely onit to a large degree or not rely
on it at all, that depends onyou and your advisor.
(09:43):
And you can run scenarios withor without having Social
Security.
And it also depends, again, onyour spouse, whether your spouse
works, doesn't work, may work,et cetera.
Your spouse is young or old.
You know, if you have a spouse,again, all those factors come
into play.
And with the help of yourfinancial advisor, or I guess
(10:04):
you can do it on your own ifyou're capable, then you should
be able to run these variousscenarios and have a real good
idea of whether you're going tobe on track or not and maybe
come to a more definitivedecision decision about when
you're going to take it now ofcourse if you're young then you
know you're just going to playout this scenario to the best
best of your ability but as timemarches on you know when you're
(10:27):
in your 40s and 50s and you knowmaybe 60s then you know you're
you're already there and youreally need to make wise
decisions because you're goingto take it sooner rather than
later and like i said you can'twait you can't wait you can
never take it i suppose if younever never want it but You
really want to decide when's thebest time for you to take it.
(10:48):
So when you take your SocialSecurity, sometimes it's taxed
and sometimes it's not taxed.
And that just depends on theincome that you're earning at
the time.
So because the Social SecurityAdministration takes into
account how much you are earningSo your earned income goes into
(11:13):
the calculation, and it willeither not impact your monthly
benefit or it will impact yourmonthly benefit because there's
only a certain amount of moneythat the IRS allows you to earn
during the time you take SocialSecurity.
So if you...
(11:36):
If you're under your fullretirement age, there's an
earning limit.
And for 2024, it's$22,320.
If you earn more than that, thenSocial Security deducts a dollar
for every$2 you earn above thelimit.
And in the year you reach yourFRA, the earnings limit is
(11:58):
higher.
In 2024, the limit is$59,520.
But that only applies toearnings before you reach your
FRA.
And then it's more steep,meaning it's$3 you earn per
year.
For every$3 you earn, a dollaris deducted from your benefits.
And then, again, when you reachyour FRA, you can earn as much
(12:21):
as you want without it affectingyour benefits at all.
So if you are capable of waitingand you still are able to work,
whether you get a W-2 or you'reself-employed and you don't
really need the money, butwaiting beyond your FRA isn't
really going to help you, theaverage amount that it increases
(12:44):
every year that you wait isabout 8%.
So looking back at the market,looking at that, you can kind of
see that maybe it is better,right?
But there's just no guarantee.
So the fallback always is thegovernment, meaning the U.S.
government has always beenstrong.
It has always been...
(13:05):
you know, the backstop forpretty much everything.
Will that always be the case?
I don't know.
I think we hope that that willalways be the case.
But again, it depends on yourbelief system and whether you
have strong beliefs that theU.S.
government is always going to bethere.
(13:26):
So we've seen some scary timeswhen, you know, it looks a
little shaky.
And I remember when the U.S.
credit rating got affected aswell.
And that had never been seenbefore.
And that was when Congress can'tmake up their damn mind and
played games with keeping thegovernment open and whether they
were going to pay their bills.
(13:47):
And that affected the U.S.
credit rating, which had neverbeen seen before.
And that, again, just kind ofleads to some panic in the
market because that means, hey,is the U.S.
going to default on any of theirobligations?
So again, just not a good thing.
But beyond that, so when goingback to income and taxation, it
(14:11):
depends really on your filingstatus.
So if you're just a single oryou're head of household or
you're a qualifying widow, yourcombined income If it's less
than$25,000, no Social Securitybenefits are going to be taxed.
If your income is between$25,000and$34,000, up to half or 50% of
your benefits might be taxed.
(14:33):
If your combined income is morethan$34,000, then up to 85% of
your benefits may be taxed.
So if you're married filingjointly, I'll just run through
that quickly.
Your combined income, if it'sless than$32,000, no benefits
are taxed.
If your income between 32 and44, and that's your combined
(14:54):
income, up to 50% may be taxed.
If your combined income isgreater than$44,000, up to 85%
of your benefits may be taxed.
If you're married filingseparately, in most cases, 85%
of your Social Security benefitsare taxable regardless of your
combined income.
(15:14):
It's difficult when you filemarried filing separately for
whatever reasons you're filingbecause you really get taxed and
penalized and don't get thebenefits of married filing
jointly.
So, again, another situation torun through with your financial
advisor, why you're filingseparately and whether that
(15:35):
continues to be in your bestinterest or not.
And if your financial advisor...
isn't well steeped in taxes, itmay be a good idea to go to a
tax expert and seek competenttax advice who can really drill
down and work with you and findthe best solution for you.
(15:57):
I'll just leave it at that.
So in all cases, you really wantto work with an expert so that
you benefit from the bestadvice.
And you can go into this blindlyor you can go into it as best
prepared you can be.
If you do take it early, youknow, one of their, you know,
several benefits of reallytaking it early, meaning if I
(16:20):
take my money early, I'm gettingit and I can do whatever I want
to with it.
So I can spend it, you know, asI feel, see fit, you know, I can
invest it.
I can save part and, and, um,Again, if you have a shorter
life expectancy, then you'regoing to get the most out of it.
But you just have moreflexibility if you take it
(16:42):
early.
But if you do wait, then youreceive a larger monthly
benefit.
So...
once you do take it that amountwill never change it is set it
is what it is there used to be atime years ago where if you took
it and you had the money youcould pay it back and that would
(17:03):
reset your social securitybenefits that's no longer the
case it is what it is when youtake it and it won't change so
you get a larger monthly benefitif you wait and the longest you
can wait is up to age 70 andthen it just stops so there's no
point in waiting after that Ifyou think that you're going to
live longer, then, again, itmight benefit you.
(17:27):
I think the average lifeexpectancy these days for a man,
I think, is age 70-something.
No, it really depends.
I think for women, it's a littlelonger.
And I think that...
Let me just look real quick.
(17:49):
I think it's...
For men, yeah, 74.5.
For women, it's 80.4.
Now, I know that Social Securitywill look at this a little bit
differently, and they will alsouse a different life expectancy
(18:09):
table.
Now, how everybody gets there, Idon't even know that.
It's always been a mystery tome.
But I think that you can look atyour own family and use that
sort of as your guide.
Again, it's hard to say.
I know that my mother, she had astroke when she was 59.
(18:30):
And...
I was always worried that shewasn't going to make it very
far.
Because my grandmother on mymother's side, she lived until
she was 96.
My dad, however, died when hewas 65.
But my mother is now 85.
So she just continues to keep onkicking.
(18:50):
Now she has dementia at thispoint.
Not full blown on where shecan't take care of herself.
But it is certainly a concern.
But anyway...
it's really difficult to sayobviously what your life
expectancy is going to be.
But that just, like I've alwaystalked about before too, you
know, I think that you shouldplan as best you can with your
(19:13):
financial planner to look at,you know, your financial
planning in the sense of whatdoes my estate plan look like.
I think that's probably thewisest thing you can do.
But, you know, they say that oneway of looking at Your life
expectancy is to not take intoaccount entire life expectancy,
(19:36):
meaning a lot of tables puttogether like this 74 and a
half, you know, that takes intoaccount age, you basically zero
all the way to age 100, maybebeyond that too.
I think most average is about120 now.
I know life insurance when itused to go up to age 100 in
(19:56):
terms of, you know, the lifeexpectancy tables.
But now I think they use 120 onaverage because people are
living longer.
But my point is that they say ifyou use those average tables,
they aren't 100% accurate foryou because that takes into
account people who die in there.
you know, infants and teens and20s, etc.
(20:18):
So, you know, how helpful isthat when you've already made it
through all that, right?
And then if you want to look atyour more relevant life
expectancy, look at your cohort.
So people who are at your age,you know, what is the average
life expectancy at 40, 50, 60?
(20:40):
you know, etc.
And that may be more helpful.
Because again, you have a muchbetter idea, because it's maybe
more accurate, if again, that'show you see things.
But nevertheless, it just is agood way to determine, you know,
in terms of your planning, whatyou think is relevant to you.
(21:01):
I know that on the SocialSecurity, their website, they
have a retirement uh lifeexpectancy calculator that you
can just plug in you know yourgender and your age and it will
kick out to you you know whatthey calculate based on whatever
(21:21):
again methods that they're usingum it will calculate your life
expectancy um and yeah againjust so that you know um i think
let's see i'll just plug this infor me it says if i'm 61 in nine
months, I'm expected to live21.8 years.
So I should kick off at 83.6 ifI'm 62.
(21:45):
83, still the same, 83.6.
67, I'll live to 85.1.
And age 70, I'm supposed to liveto like 86.
So, you know, who knows?
I don't know.
You don't know.
No one knows.
Only God knows.
So, again, you just plan basedon...
I think the most appropriateway.
(22:06):
I think that most financialplanners, I know that what we
did was ran most people's plansout to age 90.
And because I think that wethought at that time that that
is a good way to just make surethat you don't run out of money,
but you don't run it all the wayout to, let's say, 120, which
(22:30):
very few people are probablyliving to that.
But again...
That's entirely up to you.
So taking Social Security again,you just want to really
determine for yourself when isthe best time for you to take
it.
And it's really difficult.
But, you know, going back to,again, investing it, whether you
(22:52):
really believe you can achieve a12% return on average or not, I
don't know.
I would say you should probablynot plan for that.
That just seems a littleunrealistic for me.
But I think that if you werelooking at maybe a 7% return, I
think that's probably a lot moredoable and achievable.
(23:13):
If, again, going back to whetheryou are comfortable investing or
not on your own, okay.
Good luck to you and do what youthink is best.
It may be better, though, to,again, keep a diversified
portfolio and work with afinancial professional and let
them do their job to construct aportfolio for you or invest in
(23:36):
mutual funds.
Again, and you can do all stock.
You can do a 60-40.
You can have, you know, smallcaps, large caps, mid, global.
You know, it really justdepends.
So work with your financialprofessional.
That, again, is my best adviceso that you can.
(23:59):
have your ducks in a row so whenthe time comes that you do do do
do when you decide to takesocial security that you're
ready to take it you know what'sgoing to happen it's not a
surprise and you're fullycapable and ready of making the
best decision for you so I thinkthat I'm going to leave it right
(24:20):
there and other than that I willtalk at you next time music
UNKNOWN (24:30):
you
Thank you.
SPEAKER_00 (00:53):
Welcome to the Pink Money Podcast.
We talk about all about thingsrelated to money from a gay
perspective.
And I'm your host, JerryWilliams.
And, you know, lately, I thinkthat I have heard ads about
taking your Social Securityabout three times a day at
least.
It is just so crazy, probablybecause of the age that I'm
(01:17):
getting to.
I'm over 60 now, so I thinkthat's probably why.
But it just seems like those andMedicare seem to be the most
popular ads that I consistentlysee across a wide variety of
different places.
But anyway, it started making methink about...
(01:38):
How much people know, don'tknow, et cetera, about Social
Security.
Because it's kind of a mystery.
And you don't really think aboutit too much until you really
start to get to the point thatyou really need it.
Or can take it, either way.
And so I was also listening tosomebody who was mentioning that
a lot of different people aresaying you should take it as
(01:59):
soon as possible instead ofwaiting.
Sometimes they say you shouldtake it as soon as possible
because it's going to run out ofmoney.
I don't think that's really thecase.
I think that depending on theright administration that gets
in, I think they're alwaysgonna.
have social security becauseit's a safety net.
Now, whether it is completelysocial security or something
(02:20):
like the universal basic income,you know, I'm not sure about
that.
But as we sit here today, it's,you know, the same old thing
that it's the same old bent hasalways been.
So that's where I'm going tojump off at.
And, you know, one guy was alsomentioning, I don't really
listen to other nationalfinancial advisors like, um,
(02:41):
Dave Ramsey or Susie Orman.
I mean, I've heard them before.
Don't get me wrong, but I don'tlisten to them with any
regularity.
So I'm not 100% familiar withall that they expose on a
regular basis.
But anyway, he had mentionedDave Ramsey saying, again, you
should take it as early aspossible and you should take it.
(03:03):
And even if you don't need it,the best thing you can do is
save it and invest it.
And he was saying that you wouldcome out ahead in the long run.
If you put it in the market, youshould be able to get a 12%
return.
Now that's the part that reallycaught my attention because I
was thinking, now that's prettyballsy to say you're going to
(03:25):
get an annual 12% return.
And I think that's far from thetruth.
And, I mean, when you reallylook at the market overall, I
mean, in the last 30 years,let's just say from, you know,
94 to 23, the average return hasbeen somewhere in the vicinity
of 9% to 10%.
And if you're looking at maybejust the last 10 years, he is
(03:47):
right.
You can get somewhere between12% and 14%.
Now, I mean, these most latestreturns are because, you know,
the market has been really,really strong since– You know,
the 2008 financial crisis wheneverything went, you know, all
went to hell.
And then, you know, we've had apretty strong recovery since.
(04:11):
And the point that I'm thinkingabout is you can never really
trust the market.
I've seen so many times wherepeople really counted on the
market to support theirportfolio, and it just wasn't
there.
I mean, again, thinking about2008, I think I've shared this
story before.
You know, when so many bankswent bust, you know, people lost
(04:35):
everything.
And so many people wereconcentrated in one particular
stock.
And then when that stock wentbust, then their portfolio went
bust.
There's always a good case to bemade for having a diversified
portfolio.
But that aside, it's really kindof scary when you put all your
eggs in one basket and you'rereally counting on that income.
(04:57):
So I guess then you have toreally decide when are you going
to take your Social Security.
Should you take it at 62, whichis the earliest you can take it,
or should you wait?
And...
It really, really, you know, Iguess my basic answer is always
it just depends, right?
(05:18):
It really depends because if youdon't need the money, you can
certainly just let it sit inthere and grow until it's your
full retirement age.
So your full retirement age, I'mjust going to say FRA since
it's...
apparently gonna be easier forme.
If you were born between 1943and 1954, your FRA is gonna be
(05:39):
66.
If you were born in 1955, yourFRA is 66 and two months.
If you were born in 1956, yourFRA is 66 and four months.
If you were born in 1957, it's66 and six months.
Born 1958, 66 and three months.
(06:00):
In 1959, it's 66 and 10 months.
If you're born 1960 or later,then your FRA is 67.
So that's when you can claimyour full Social Security.
And that just means that you'regoing to get the most you can
from Social Security if you waituntil then.
And many people do, but Ibelieve that the average time
(06:24):
that most people take it isaround 65.
That's just when...
It used to be that was basicallyretirement age for almost
everybody, 65.
But that just really depended...
on you know how much you hadsaved maybe you were going to
get a pension and maybe you hadyou know other resources
(06:45):
available to you and that wasyou know doable nowadays a lot
of people just haven't saved asmuch as they have in the past a
lot of people don't havepensions like they used to have
and so because of those thingsretiring at 65 may or may not be
an option at least maybecompletely many people just
(07:05):
still work and work and work andwork until as long as they can.
And if you're married, thatcertainly might relieve some of
the burden as long as yourspouse has been working or can
work.
If you're on your own, thenobviously things are going to be
a lot more difficult.
But I'm going to go with justthe assumption that you're going
(07:27):
to be single and on your own.
But a lot of these situationsapply to being married as well.
But if you...
Just say, for example, just tokind of throw it out there,
let's just say that you weregoing to wait and take your
Social Security and delay it aslong as possible.
(07:49):
And if you did that, then thelongest you could delay it would
be at age 70.
And that's when you would getthe biggest bang for your buck,
if you will.
And you'll get the most moneyyou can from Social Security.
But if you decide that...
I'm not sure if I'm going tomake it to 70 because that's
(08:12):
really kind of the most criticalfactor here is how long do you
think you're going to live?
No one knows, right?
But if there's a history of poorhealth in your family or you
know through whatevercircumstances you're not going
to make it to 70, then there canbe obviously the best case is to
take it as soon as possible.
(08:33):
And again, if you need itbecause it's...
you know gonna help you becauseyou don't have any other
resources well then take it youknow it's there go ahead as long
as you've made your 40 quarterswhich is what the IRS considers
your ability to get SocialSecurity at you know no reduced
rate then take it then you canalso check for your particular
(08:58):
situation on social security'swebsite and you can go to i
believe it's my social securityand then you can look at your
account and you can see you knowwhat your earnings are and what
they project you're going to beable to take i think it's a good
idea always just to look at yoursocial security benefits and
just see you know what it is andjust to have some rough idea and
(09:21):
it always helps in yourfinancial planning as well
because when you're specificallyworking with your financial
advisor you're trying toconstruct a retirement plan, you
definitely want to take SocialSecurity into account.
Now whether you want to rely onit to a large degree or not rely
on it at all, that depends onyou and your advisor.
(09:43):
And you can run scenarios withor without having Social
Security.
And it also depends, again, onyour spouse, whether your spouse
works, doesn't work, may work,et cetera.
Your spouse is young or old.
You know, if you have a spouse,again, all those factors come
into play.
And with the help of yourfinancial advisor, or I guess
(10:04):
you can do it on your own ifyou're capable, then you should
be able to run these variousscenarios and have a real good
idea of whether you're going tobe on track or not and maybe
come to a more definitivedecision decision about when
you're going to take it now ofcourse if you're young then you
know you're just going to playout this scenario to the best
best of your ability but as timemarches on you know when you're
(10:27):
in your 40s and 50s and you knowmaybe 60s then you know you're
you're already there and youreally need to make wise
decisions because you're goingto take it sooner rather than
later and like i said you can'twait you can't wait you can
never take it i suppose if younever never want it but You
really want to decide when's thebest time for you to take it.
(10:48):
So when you take your SocialSecurity, sometimes it's taxed
and sometimes it's not taxed.
And that just depends on theincome that you're earning at
the time.
So because the Social SecurityAdministration takes into
account how much you are earningSo your earned income goes into
(11:13):
the calculation, and it willeither not impact your monthly
benefit or it will impact yourmonthly benefit because there's
only a certain amount of moneythat the IRS allows you to earn
during the time you take SocialSecurity.
So if you...
(11:36):
If you're under your fullretirement age, there's an
earning limit.
And for 2024, it's$22,320.
If you earn more than that, thenSocial Security deducts a dollar
for every$2 you earn above thelimit.
And in the year you reach yourFRA, the earnings limit is
(11:58):
higher.
In 2024, the limit is$59,520.
But that only applies toearnings before you reach your
FRA.
And then it's more steep,meaning it's$3 you earn per
year.
For every$3 you earn, a dollaris deducted from your benefits.
And then, again, when you reachyour FRA, you can earn as much
(12:21):
as you want without it affectingyour benefits at all.
So if you are capable of waitingand you still are able to work,
whether you get a W-2 or you'reself-employed and you don't
really need the money, butwaiting beyond your FRA isn't
really going to help you, theaverage amount that it increases
(12:44):
every year that you wait isabout 8%.
So looking back at the market,looking at that, you can kind of
see that maybe it is better,right?
But there's just no guarantee.
So the fallback always is thegovernment, meaning the U.S.
government has always beenstrong.
It has always been...
(13:05):
you know, the backstop forpretty much everything.
Will that always be the case?
I don't know.
I think we hope that that willalways be the case.
But again, it depends on yourbelief system and whether you
have strong beliefs that theU.S.
government is always going to bethere.
(13:26):
So we've seen some scary timeswhen, you know, it looks a
little shaky.
And I remember when the U.S.
credit rating got affected aswell.
And that had never been seenbefore.
And that was when Congress can'tmake up their damn mind and
played games with keeping thegovernment open and whether they
were going to pay their bills.
(13:47):
And that affected the U.S.
credit rating, which had neverbeen seen before.
And that, again, just kind ofleads to some panic in the
market because that means, hey,is the U.S.
going to default on any of theirobligations?
So again, just not a good thing.
But beyond that, so when goingback to income and taxation, it
(14:11):
depends really on your filingstatus.
So if you're just a single oryou're head of household or
you're a qualifying widow, yourcombined income If it's less
than$25,000, no Social Securitybenefits are going to be taxed.
If your income is between$25,000and$34,000, up to half or 50% of
your benefits might be taxed.
(14:33):
If your combined income is morethan$34,000, then up to 85% of
your benefits may be taxed.
So if you're married filingjointly, I'll just run through
that quickly.
Your combined income, if it'sless than$32,000, no benefits
are taxed.
If your income between 32 and44, and that's your combined
(14:54):
income, up to 50% may be taxed.
If your combined income isgreater than$44,000, up to 85%
of your benefits may be taxed.
If you're married filingseparately, in most cases, 85%
of your Social Security benefitsare taxable regardless of your
combined income.
(15:14):
It's difficult when you filemarried filing separately for
whatever reasons you're filingbecause you really get taxed and
penalized and don't get thebenefits of married filing
jointly.
So, again, another situation torun through with your financial
advisor, why you're filingseparately and whether that
(15:35):
continues to be in your bestinterest or not.
And if your financial advisor...
isn't well steeped in taxes, itmay be a good idea to go to a
tax expert and seek competenttax advice who can really drill
down and work with you and findthe best solution for you.
(15:57):
I'll just leave it at that.
So in all cases, you really wantto work with an expert so that
you benefit from the bestadvice.
And you can go into this blindlyor you can go into it as best
prepared you can be.
If you do take it early, youknow, one of their, you know,
several benefits of reallytaking it early, meaning if I
(16:20):
take my money early, I'm gettingit and I can do whatever I want
to with it.
So I can spend it, you know, asI feel, see fit, you know, I can
invest it.
I can save part and, and, um,Again, if you have a shorter
life expectancy, then you'regoing to get the most out of it.
But you just have moreflexibility if you take it
(16:42):
early.
But if you do wait, then youreceive a larger monthly
benefit.
So...
once you do take it that amountwill never change it is set it
is what it is there used to be atime years ago where if you took
it and you had the money youcould pay it back and that would
(17:03):
reset your social securitybenefits that's no longer the
case it is what it is when youtake it and it won't change so
you get a larger monthly benefitif you wait and the longest you
can wait is up to age 70 andthen it just stops so there's no
point in waiting after that Ifyou think that you're going to
live longer, then, again, itmight benefit you.
(17:27):
I think the average lifeexpectancy these days for a man,
I think, is age 70-something.
No, it really depends.
I think for women, it's a littlelonger.
And I think that...
Let me just look real quick.
(17:49):
I think it's...
For men, yeah, 74.5.
For women, it's 80.4.
Now, I know that Social Securitywill look at this a little bit
differently, and they will alsouse a different life expectancy
(18:09):
table.
Now, how everybody gets there, Idon't even know that.
It's always been a mystery tome.
But I think that you can look atyour own family and use that
sort of as your guide.
Again, it's hard to say.
I know that my mother, she had astroke when she was 59.
(18:30):
And...
I was always worried that shewasn't going to make it very
far.
Because my grandmother on mymother's side, she lived until
she was 96.
My dad, however, died when hewas 65.
But my mother is now 85.
So she just continues to keep onkicking.
(18:50):
Now she has dementia at thispoint.
Not full blown on where shecan't take care of herself.
But it is certainly a concern.
But anyway...
it's really difficult to sayobviously what your life
expectancy is going to be.
But that just, like I've alwaystalked about before too, you
know, I think that you shouldplan as best you can with your
(19:13):
financial planner to look at,you know, your financial
planning in the sense of whatdoes my estate plan look like.
I think that's probably thewisest thing you can do.
But, you know, they say that oneway of looking at Your life
expectancy is to not take intoaccount entire life expectancy,
(19:36):
meaning a lot of tables puttogether like this 74 and a
half, you know, that takes intoaccount age, you basically zero
all the way to age 100, maybebeyond that too.
I think most average is about120 now.
I know life insurance when itused to go up to age 100 in
(19:56):
terms of, you know, the lifeexpectancy tables.
But now I think they use 120 onaverage because people are
living longer.
But my point is that they say ifyou use those average tables,
they aren't 100% accurate foryou because that takes into
account people who die in there.
you know, infants and teens and20s, etc.
(20:18):
So, you know, how helpful isthat when you've already made it
through all that, right?
And then if you want to look atyour more relevant life
expectancy, look at your cohort.
So people who are at your age,you know, what is the average
life expectancy at 40, 50, 60?
(20:40):
you know, etc.
And that may be more helpful.
Because again, you have a muchbetter idea, because it's maybe
more accurate, if again, that'show you see things.
But nevertheless, it just is agood way to determine, you know,
in terms of your planning, whatyou think is relevant to you.
(21:01):
I know that on the SocialSecurity, their website, they
have a retirement uh lifeexpectancy calculator that you
can just plug in you know yourgender and your age and it will
kick out to you you know whatthey calculate based on whatever
(21:21):
again methods that they're usingum it will calculate your life
expectancy um and yeah againjust so that you know um i think
let's see i'll just plug this infor me it says if i'm 61 in nine
months, I'm expected to live21.8 years.
So I should kick off at 83.6 ifI'm 62.
(21:45):
83, still the same, 83.6.
67, I'll live to 85.1.
And age 70, I'm supposed to liveto like 86.
So, you know, who knows?
I don't know.
You don't know.
No one knows.
Only God knows.
So, again, you just plan basedon...
I think the most appropriateway.
(22:06):
I think that most financialplanners, I know that what we
did was ran most people's plansout to age 90.
And because I think that wethought at that time that that
is a good way to just make surethat you don't run out of money,
but you don't run it all the wayout to, let's say, 120, which
(22:30):
very few people are probablyliving to that.
But again...
That's entirely up to you.
So taking Social Security again,you just want to really
determine for yourself when isthe best time for you to take
it.
And it's really difficult.
But, you know, going back to,again, investing it, whether you
(22:52):
really believe you can achieve a12% return on average or not, I
don't know.
I would say you should probablynot plan for that.
That just seems a littleunrealistic for me.
But I think that if you werelooking at maybe a 7% return, I
think that's probably a lot moredoable and achievable.
(23:13):
If, again, going back to whetheryou are comfortable investing or
not on your own, okay.
Good luck to you and do what youthink is best.
It may be better, though, to,again, keep a diversified
portfolio and work with afinancial professional and let
them do their job to construct aportfolio for you or invest in
(23:36):
mutual funds.
Again, and you can do all stock.
You can do a 60-40.
You can have, you know, smallcaps, large caps, mid, global.
You know, it really justdepends.
So work with your financialprofessional.
That, again, is my best adviceso that you can.
(23:59):
have your ducks in a row so whenthe time comes that you do do do
do when you decide to takesocial security that you're
ready to take it you know what'sgoing to happen it's not a
surprise and you're fullycapable and ready of making the
best decision for you so I thinkthat I'm going to leave it right
(24:20):
there and other than that I willtalk at you next time music
UNKNOWN (24:30):
you
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