June 5, 2025 • 24 mins
Social Security has reached a milestone with the average check surpassing $2,000 monthly for the first time in June 2025, but this achievement highlights serious concerns about retirement security in America.
• Maximum benefit for those claiming at age 70 will be $5,108 per month
• Social Security was designed to replace only about 40% of pre-retirement income
• Cost of living adjustments are designed to lag behind actual inflation rates
• Nearly 90% of people over 65 receive benefits, with 40% relying on it for half their income
• One in seven seniors depend on Social Security for over 90% of their income
• The U.S. has the highest elder poverty rate among G7 countries
• Social Security Trust Fund projected to be depleted by 2032-2033
• Without congressional action, benefits could be cut by approximately 21%
• Women are especially vulnerable due to lower lifetime earnings and longer lifespans
• Healthcare costs continue to rise dramatically for retirees
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Evan (00:06):
Are you ready for Social Security history to be made?
Hey folks, thanks for joiningus.
Welcome back to RetirementRoadmap with Master Plan
Retirement Consultants.
My name is Evan and with me, asalways, retirement Planner Mark
Fricks.
The average Social Securitycheck for retired workers has
indeed surpassed $2,000 for thefirst time in June 2025.
(00:29):
The milestone is a significantevent in the history of the
program, as it marks the highestaverage monthly benefit ever.
The average check for June 2025is expected to be over $2,000,
based on the statisticalsnapshot issued by the Social
Security Administration.
That's a new milestone.
Mark (00:50):
It is, that's, I guess, a natural occurrence.
I mean between cost of livingadjustments, people paying more
in, because when you make moremoney you pay more in.
So it's going to push thatnumber up year after year,
that's right, that's right.
Evan (01:03):
So it's harder to judge what the lowest number is going
to be with all the deductionshow much people have paid in and
spousal benefits, everythingelse.
However, in June 2025, themaximum payment will be $5,108
per month for those claiming atage 70.
Mark (01:20):
I was going to ask what age?
So 70, just over five grand,that's not a bad paycheck 60
grand a year, you know.
But you don't have to wait forit.
You don't have to wait for itand that's the question we are
always asked.
That's the discussion we alwayshave with our clients and
prospects is when should I takesocial security, right?
So it's always the bigger checkif you wait longer but you have
fewer yea rs to get it.
(01:40):
But $5,000 a month.
If you have a couple and if thespouse is getting anywhere near
that, you may be looking at sixfigures for that.
Evan (01:48):
That's right.
So Social Security is thelargest federal government
program and one of the mostsuccessful.
Truly, it provides income frommillions of retirees, dependents
, survivors and disabled workers.
However, it's not withoutconcern.
Not only are we making historywith a bump in the average
monthly benefit, we've got a loton the table with Social
Security these days, the firstbeing the Social Security dollar
(02:10):
simply isn't what it once was.
It's losing the race toinflation.
Mark (02:14):
The formula for the cost of living adjustment which we
used to teach in class.
It was like an extra 15 minutesto the class and I was just
like people are glazing over.
It is a complicated formula.
It's designed to not keep upwith inflation.
You know and it's great, by theway you know, several years ago
there was no cost of livingadjustment.
(02:35):
So once you got what you got,you got what you got from now on
.
So at least we have someadjustment.
But pretty much like anypension, they almost always lag
behind.
So there ends up being what wecall an income gap somewhere
down the road.
If you don't have one now,you're probably going to have
one later because it is notkeeping up with inflation.
And this again it's the formula.
It's the consumer price indexthat they use.
(02:57):
It doesn't really counteverything in inflation, but
it's designed that way andthey're thinking about tweaking
it even further down so it won'tkeep up even as much.
Evan (03:05):
Yeah, so Social Security, first of all, was never meant to
replace an entire paycheck.
In fact, somewhere around 40%of a replacement on average is
what it was supposed to do.
In your retirement, once youwalk away from work, with the
(03:27):
extinction or process ofelimination of pensions, that
erases another guaranteedpaycheck that was meant to work
in accordance with SocialSecurity.
Now, the majority of ourworkers in America are reliant
on 401ks, which are not aguaranteed amount.
In fact, you don't know whatit's going to be when you retire
and you also don't own it alleither, because of taxes, right.
Mark (03:45):
Think of it as a three-legged stool.
Okay, you've got leg one isSocial Security, leg two were
pensions and leg three was yourown personal savings.
So back in 1979, when the ERISAlaws were passed, the 401k s
came out.
Companies began replacingpensions with 401k s, and so one
of those legs have become verywobbly or non-existent the
(04:07):
pension leg.
So now the leg that is left,but besides social security, is
that 401k or your savings orwhatever it may be.
And, yes, that can do well overmany years if you stick with it
, if you don't borrow too muchfrom it, if you don't spend it
when you change jobs, all thatkind of good stuff.
But it's still, like you said,it does not guarantee a paycheck
(04:27):
.
It doesn't guarantee a paycheckreplacement.
There are ways, throughplanning, to better ensure that
I mean that's a good way to sayit that payment coming in, but
it's, you know, theresponsibility is now on the
worker to make sure that happens.
Evan (04:42):
So I did mention Social Security was never meant to
replace an entire paycheck.
Again, we said around 40% or so.
Social Security is thefoundation of retirement income
for many of our older Americans.
Nearly 90% of people over 65receive benefits and for 40% of
them that accounts for more thanhalf of their income.
(05:02):
More than half.
For about one in seven.
It provides over 90 percent ofwhat they live on, according to
the social securityadministration.
Mark (05:11):
Yeah, and that's not going to get any better.
It's not again between the factthat it's not keeping up with
inflation um, inflation being alittle bit worse over the last
few years.
Um, again, so many folks youknow every study I've read
people are just not puttingmoney away and so they're
retiring with very little nestegg, especially if you're
self-employed.
It's even harder If you workfor a corporation and they have
(05:33):
this nice incentive to match.
It becomes much easier.
You don't see the money comingout of your paycheck, right, but
self-employed or smallcompanies tend to be a little
bit less aggressive on somethinglike that.
You really have to beintentional and that's why, when
we work with small businessowners, that's one of the first
things we bring up when are yousaving your money?
And I realize that many times.
(05:55):
Hey, the value of my businessis part of my retirement.
I get it, you know, and I thinkthat's great.
But again, it would be nice tohave another leg as well, and I
think that's great, but again,it'd be nice to have another leg
as well.
Evan (06:05):
Yeah, consider that last fact.
For about one in seven, socialSecurity provides about 90% of
what they live on.
So we already know manyretirees are living on the edge.
The median benefit, while it'sgreat news if we're hitting
average around $2,000 per month,it's simply not enough to cover
the basic expenses in manyparts of the country.
(06:25):
And also consider that one inseven is providing 90%.
What are the odds, actually, Ishould have looked into it, what
are the odds that they've evenachieved their full benefit at
full retirement age?
Mark (06:34):
Exactly, and there's so many different factors that come
into play and we're beginningto see more and more of parents
living in the basement of theirchildren, of you know, some
lower income apartments comingalong.
I mean, you start looking atthese senior living apartments.
They're expensive, you know,buying houses now are expensive,
and so we're seeing some verycreative ways.
(06:56):
Maybe we have three or fourseniors getting together and
renting a house together andbeing roommates, which actually
might be kind of good becauseyou share common interests, so
but also being able to splitthose bills a good bit.
So you had to become creative,and I don't, I don't know what
the answer is.
I mean, again, social securitywas never meant to provide
(07:17):
everything in retirement.
And if you're 60, 65, 70, I'mnot going to say it's too late,
but you certainly have lost alot of years in saving, and so
what's the solution?
And so that's when you startgetting creative.
I think we had a show, anepisode about a month ago,
talking about some ideas aboutretirement and how to make the
most of it and things like that.
So it is an issue, and nowwe've got social security
(07:38):
beginning.
The trust fund is beginning todisappear, which is going to put
it more in jeopardy, may cutbenefits a little bit.
They're not going away.
We've had a show all about howsocial security is not going
away, but it could be a littlebit smaller benefit for many
folks coming up.
So there's a lot of issuesgoing on there and I wish I had
a lot of good solutions.
I've got a lot of good ideas,but the problem is getting it
(07:59):
through these stubborn heads inCongress where they each want
something of their own and theyare not willing to give up
something.
Evan (08:07):
Yeah, absolutely, and I would like our listeners and our
viewers to consider this.
Consider your personal budgetnow, whether you're in
retirement or working towardsretirement, consider your
personal budget.
Could you survive on $2,000 amonth?
Could you survive on $4,000 ifthat was just supplemental, or
$5,000 a month?
Could you survive on fourthousand if that was just
supplemental, or five thousanddollars a month?
Could you survive on that witha lagging increase in cost of
(08:32):
living?
It was not keeping up withinflation over the over 10 years
or more.
That's the median average oftwo thousand.
We see immediately that thereis a need for planning beyond
Social Security.
Mark (08:43):
Absolutely.
And again, the sooner you start.
And again, if you're listening,I don't care if you're 60, 65,
70.
We have one couple that are inthere.
She's in her mid-60s, he'sapproaching 70.
We've just put a turbo plan inplace.
They're getting their debt paiddown, they're putting away
every penny they can.
They're saying, hey, we'regonna sacrifice for the next
(09:06):
five years so that when we're inour 70s and you know may not
can work anyway, right, whetherit be part-time or at all.
They didn't, they didn't keepputting it off and say, well,
it's too late for us, it's nottoo late.
I mean, there's all littlethings we can do to to just
optimize, to put a little bitmore power behind certain
accounts or certain methods andstrategies and things like that.
(09:28):
So you know, if, if there's onekey point to take away from
today, whether you're 45 or 65,start now.
Evan (09:38):
Yeah, with everything going on in social security and
us discussing how tight so manyAmerican pocketbooks are right
now, I want to bring somethingelse, and I don't mean this to
be gloom and doom, butconcerning the elderly, the
elder poverty in the U.
S.
So, here's kind of a soberingfact.
The U.
S.
is already the highest among G7countries, which is Canada,
France, Germany, Italy, Japanand the United Kingdom.
(09:59):
We're already the highest amongthose countries as far as our
elderly poverty.
We have the highest populationof elders in poverty.
Older women are especiallyvulnerable because they tend to
earn less.
They tend to live longer.
They tend to have fewerretirement savings.
Social Security is often theironly source of income.
(10:22):
Without it, elder poverty inthe US would be much worse.
So consider the potential cutson the line for Social Security
and those people who are alreadyare most vulnerable in our
society and what that could mean, and then add in Medicaid and
Medicare cuts to that as well,and then what kind of a bigger
issue do you have on your hands?
This information is alsoaccording to Kathleen Romig and
(10:45):
research at the Center forBudget Priorities.
Mark (10:48):
Well, and it's such a hot potato politically and we're not
taking any side of the fencehere.
I'm a big believer in nothaving huge government.
I think the power should be inthe people's hands.
But these are the countries youmentioned have more safety nets
too, and so where's the balance?
I mean, I've mentioned a coupleof times about healthcare.
I know as a small business whatwe pay, and it's just
(11:09):
astronomical.
It doubled in the last year.
And so whether you're gettingyour health insurance at work
and you're having to pay moneytoward it, whether you're having
to go on your own, whateveryour situation is, even under
Medicare, your Medicare Part Bis up at I think it's $185 per
person this year.
So a couple's paying $370 amonth just for Part B.
(11:31):
That doesn't include your PartD, which is drugs, your
supplement, or whether you go toan Advantage plan or whatever.
There's a lot of out-of-pocket.
So that's the other thing thatme; folks that are retired and
own nothing but social security.
Once they pay that and buy foodand a place to stay, it's
almost like there's nothing left.
And so what do you do if youhave health issues?
(11:53):
What do you do?
Do you just put off going tothe doctor.
I've had people tell me beforethat they get a prescription and
it's so expensive they skipevery other day because they
just can't afford a full month'ssupply, or split them in half,
exactly, exactly.
And so again, we're not here totalk politics.
For sure I don't profess to bea Republican or a Democrat, I'm
(12:15):
a capitalist.
Evan (12:15):
Well, I actually love that .
That's really important to say.
This is not so much a politicalconversation, because many of
our past administrations, guys,this solvency of social security
has been a conversation fordecades.
Mark (12:29):
They've been kicking it down the road forever.
Evan (12:31):
The potato's getting hotter at this point because we
are approaching 2033 or whateverthe current estimate is.
Mark (12:38):
When I first started teaching Social Security classes
, I was warning people.
Then that was 18 and 20 yearsago.
Evan (12:43):
It's foolish not to look the situation in the face at
this point, without some realconsideration of, okay, what
happens if?
Mark (12:51):
And I think we've lost the ability in our government to
negotiate.
I was a big fan of RonaldReagan.
He didn't get everything hewanted.
He gave up.
If you go back to history, he'dgive up this, which you know
was more of a democratic thingto give up to get something that
was more along his beliefs, andvice versa.
They were all statesmen andstateswomen that were willing to
(13:13):
do what was best for theircountry.
So this is not political.
This is where we as a countrywe've become so divisive and
probably we need to leave thissubject now.
But but you know, let's pullthat back around to retirement
and Social Security andsurviving, and so I don't have
(13:43):
the answer Again.
I've got some great ideas, butwe can't kick it down the road
anymore, right?
So, uh, by the way, um, alittle slight change of topic
here let's do mention thewebsite.
Okay, because there aresolutions on the website, there
are tools, there are resourcesto help give you guidance.
They're not all the answers.
I don't believe that you can goto any website and have it
answer everything, whether it bemedical or anything else.
You need professional helpeither.
You know whether it answereverything, whether it be
medical or anything else youneed professional help, whether
it's financial, medical, a CPA,for taxes or whatever it may be.
(14:06):
But our website,masterplanretirecom, has some
great tools.
We've got many, many episodeslike this on it that you can
access through podcasts, throughYouTube or just the recording
or whatever it may be.
We've got a checklist, whetherit be a survivor checklist,
whether it be a retirementchecklist, a federal checklist
(14:26):
If you're a federal worker.
A lot of turmoil there.
What are these people doing?
I'm having two or threemeetings a day just with federal
workers that are trying to makecritical decisions.
So masterplanretirecom, that'salso a place.
You can push this little button.
It says schedule a meeting.
So why would you want toschedule a meeting?
This is complimentary.
This allows you to chat with us, to share your concerns.
(14:49):
Maybe we've brought up someconcerns for you today.
Maybe we've said some thingsthat have triggered some worries
.
Don't just stifle those.
Approach them, meet them headon, meet with us, have a chat,
talk about the good, the bad andthe ugly, and then let us run
some reports for you to seereally where you are at.
Maybe that's not a worry thatyou thought was, but maybe
something else is a worry thatyou hadn't considered
(15:10):
MasterPlanRetirecom.
All you have to do is call770-980-9262.
Evan (15:16):
You know I'm going to have to remember that in my daily
conversations if theconversation is getting a little
bit too close to beingpolitical.
I'll just mention the website.
That's a pretty good move.
Mark (15:28):
Moving on and there's nothing political on the website
, by the way, and I don't thinkthere's anything political here
except we're saying we need asolution and we need some people
to come together and come upwith those solutions and
understand that it's going totake both sides coming together.
This is nobody's fault.
This is a whole lot of partiesand a whole lot of positions
(15:48):
over the last 20, 30 years thatshould have been solving this a
long time ago.
Evan (15:52):
Well, we do have a bipartisan page on our website,
and that's the federal employeepage.
Speaker 3 (15:56):
That's true, that's true, that's true.
Evan (16:00):
However political, that would be.
All right.
So the yet unknown.
Let's talk a little bit onsocial security solvency.
Mark (16:07):
So again we I think we've talked about this in a couple of
shows, or at least one episode,but people misunderstand what's
going on with social security.
Okay, Social security is fundedthree ways.
The first way is by folks thatwork that pay into the FICA tax.
If you're working for someone,you pay in is it six and a half,
I think six and three quarters,something like that.
(16:29):
The employer pays in the samepercentage for a total of 12
plus percent.
If you're self-employed, youpay in the whole 12 plus percent
.
Part of that goes to Medicare,Part A Part of that goes to a
few other areas.
Part of that goes to medicare.
Part a part of that goes to afew other areas.
Part of that goes to socialsecurity.
That's funding way one.
Funding way two are folks thatare on social security.
Uh, part of the tax they pay ontheir social security goes back
(16:52):
into social security, sothey're kind of paying their own
way as they go.
Is that that fair or not?
I'm not here to say that, butthat's leg two.
Leg three is what we call thetrust fund.
That's a fancy word, for it'snot really a fancy word, is it?
The trust fund is basically asavings account.
Yeah, I won't do that.
(17:15):
So it's a savings account thathas accumulated over the years.
When there were more peopleworking than there are now,
there were like 16 peopleworking for every retiree.
Now it's like two and a half tothree, and so there's not
enough funding going in from theother two sources, so they're
having to take money out ofsavings.
The trust fund, which is mean,means that the trust fund has
(17:36):
been dwindling for the last 30years plus.
Okay, so they're estimating thetrust fund will be empty by
2032, 2033, somewhere in thattime range.
Okay, so that doesn't meansocial security is going broke.
It still has the other two legs, two other funding sources, but
it means 21% of the fundingwill be gone.
So, theoretically, if nothingis done, your check in the
(18:00):
mid-2030s could drop by 21%.
So it's not going away, it'snot going under.
It could be a cut in benefits.
Now, again, we've talked aboutthis.
There are six, seven differentthings on the table being
discussed.
Some are raising taxes, Someare lowering benefits, some are
changing benefits, changinginflation, raising the
(18:23):
retirement age, all of this kindof stuff.
So it's on the table.
Okay, Now what's the difference?
What's going to end up?
Who knows right, but I hopesomething ends up Again.
I want to be able, when I'm 75,85, and 90, to still be getting
a check and know what's comingin.
Folks that are 35 and 40 wouldbe even more concerned.
We've actually had some folks.
(18:44):
When we do our planning theysay, just leave Social Security
out of my numbers, let's justpretend it's not there anymore.
But you know, they're blessedto be able to do that.
If it works, they are blessed.
And then it's just gravyAbsolutely.
And they've worked hard to makethat happen many times, so that
, and so it's kind of fun to dothat.
But I do tell them I don'tthink it's going.
It is the biggest program wehave, you know.
(19:07):
So I don't know how they couldever get rid of that.
And think of the people thatwould be on the street if they
did away with Social Securitythe disabled folks, the elderly,
the semi-elderly, I mean somany people.
Now you've got a much, muchlarger problem.
So again, I'm very confident.
But the sooner they do it, thesooner they're going to not have
(19:30):
to bite such a big bullet.
Evan (19:31):
And at the time of this recording there are no dramatic
cuts being proposed.
But as it currently stands,doing nothing is doing something
bad, because it's a problemthat's got to be solved.
There's discussion aboutpossibly raising the retirement
age.
For retirement age, people areliving longer.
I'm sure people don't want towait that much longer, that much
more time, to receive a check,but at the same time people are
(19:53):
living longer.
Our lifespans are increasing.
Possible cuts to SocialSecurity taxation but again
that's going to have to get paidfrom somewhere.
Possibly more taxation, raisingFICA incrementally over time.
There's a lot of options on thetable, but right now the
inaction is the most concerningpart, because if nothing happens
(20:15):
then it's just going to drop.
21%-ish now is the average.
Mark (20:19):
And I will say this if they do raise the retirement age
.
So when it first came out theretirement age, full retirement
age was 65.
The average life expectancy was62.
So it was kind of like, well,hopefully you die before we have
to give you any money, right?
But now that we're, our lifeexpectancies are in the upper
seventies to mid eighties,depending on lifestyle and male,
(20:42):
female, things like that then.
And we've only raised theretirement age to 67.
So I see that going to 70, but Idon't see it affecting people
like over the age of 45 or 50.
They will phase that in.
So if you're retirementplanning now and you're 52, I
really don't think it wouldaffect you.
But the problem is this that'snot going to really affect the
(21:04):
money of social security for 20years.
If you say everybody under 50,we're going to affect, but if
you're over 50, that's 25, 27,30 years away.
So what's it going to do fortoday's problem, today's
situation?
Nothing.
So that's a concern with that,not that they should or
shouldn't raise it, but it's nota solution that's going to help
us over the next 10, 12, 15years.
Evan (21:26):
Yeah, as retirement planners, income is often not
always, but often the firsthurdle we have to tackle when
creating a plan for a client.
So, with social security as acurrently guaranteed income
stream, with all the questionson the table, I ask our
listeners and our viewers whatwould happen if your retirement
plan, what would happen to yourretirement plan if social
(21:48):
security was suddenly removedfrom the equation, or even
significantly reduced?
Mark (21:53):
Again.
That's what we got to mention aminute ago.
Take the responsibility, and wehave clients that do that.
We have prospects, we have kidsof clients that come in and see
us and you know, step one isthem coming in to see us.
So many of our clients say Ireally want my son, my daughter,
they're in their 30s and intheir 40s.
I want them to come see.
You Just can't get them in hereand I know you're busy.
(22:14):
I mean, gosh, at that age, kidsrunning around, you know,
college approaching, I get it OK, working your tails off, but if
you can just take some time andjust go ahead and say where am
I at, what should I be doing toget where I want to be?
And, by the way, let's aim fornot even worrying about social
security, and that would be agreat way to start.
(22:34):
So the younger you are, thebetter, the quicker.
But yeah, it's a smallpercentage of people that have
the time to do that or take thatresponsibility to do that.
Evan (22:47):
And I know it's been a little bit of a heavier episode
topically.
But topically or per topic-topically is a cream, isn't it?
But here's the good news,Social Security is not a
retirement plan, A 401k, an IRA,a Roth.
Those are not retirement plans.
Social Security is but one of adozen or more areas of
(23:08):
retirement that must beaddressed, and not only
addressed, but they all mustwork in accordance with each
other.
Mark (23:14):
You know, I've got to mention these reports we run
because it's amazing.
Every time I look at them we'llshow a perfect world report and
they may not ever run out ofmoney, or maybe they run out of
money in their nineties orwhatever, which we can fix that.
But then you apply one stresstest.
Let's just say taxes go up by15%, which I think they will All
of a sudden they're running outof money in their 70s.
(23:35):
You add a little bit higherinflation, they're running out
of money.
So there's these dangers thatwe really have to pay attention
to and we got to work on all ofthem.
So that's why we stress all ofthem as well.
So I hope you take advantage ofthat complimentary consultation.
Push that button atmasterplanretirecom.
Uh, give us a call 770-980-9262.
(23:55):
Again, today's show might'vebeen a little bit heavier but
we'll lighten it up next week.
But in the meantime, until wesee each other again, plan well
and prosper.
Take care, this was RetirementRoadmap Radio with Mark Fricks
of Master Plan RetirementConsultants consultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
(24:19):
Thanks for listening andremember plan well and prosper.
Speaker 3 (24:23):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
A registered investment advisorin the state of Georgia, mark
Fricks, and Master PlanRetirement Consultants are not
(24:45):
affiliated with or endorsed bythe Social Security
Administration or any othergovernment agency.
Are you ready for Social Security history to be made?
Hey folks, thanks for joiningus.
Welcome back to RetirementRoadmap with Master Plan
Retirement Consultants.
My name is Evan and with me, asalways, retirement Planner Mark
Fricks.
The average Social Securitycheck for retired workers has
indeed surpassed $2,000 for thefirst time in June 2025.
(00:29):
The milestone is a significantevent in the history of the
program, as it marks the highestaverage monthly benefit ever.
The average check for June 2025is expected to be over $2,000,
based on the statisticalsnapshot issued by the Social
Security Administration.
That's a new milestone.
Mark (00:50):
It is, that's, I guess, a natural occurrence.
I mean between cost of livingadjustments, people paying more
in, because when you make moremoney you pay more in.
So it's going to push thatnumber up year after year,
that's right, that's right.
Evan (01:03):
So it's harder to judge what the lowest number is going
to be with all the deductionshow much people have paid in and
spousal benefits, everythingelse.
However, in June 2025, themaximum payment will be $5,108
per month for those claiming atage 70.
Mark (01:20):
I was going to ask what age?
So 70, just over five grand,that's not a bad paycheck 60
grand a year, you know.
But you don't have to wait forit.
You don't have to wait for itand that's the question we are
always asked.
That's the discussion we alwayshave with our clients and
prospects is when should I takesocial security, right?
So it's always the bigger checkif you wait longer but you have
fewer yea rs to get it.
(01:40):
But $5,000 a month.
If you have a couple and if thespouse is getting anywhere near
that, you may be looking at sixfigures for that.
Evan (01:48):
That's right.
So Social Security is thelargest federal government
program and one of the mostsuccessful.
Truly, it provides income frommillions of retirees, dependents
, survivors and disabled workers.
However, it's not withoutconcern.
Not only are we making historywith a bump in the average
monthly benefit, we've got a loton the table with Social
Security these days, the firstbeing the Social Security dollar
(02:10):
simply isn't what it once was.
It's losing the race toinflation.
Mark (02:14):
The formula for the cost of living adjustment which we
used to teach in class.
It was like an extra 15 minutesto the class and I was just
like people are glazing over.
It is a complicated formula.
It's designed to not keep upwith inflation.
You know and it's great, by theway you know, several years ago
there was no cost of livingadjustment.
(02:35):
So once you got what you got,you got what you got from now on
.
So at least we have someadjustment.
But pretty much like anypension, they almost always lag
behind.
So there ends up being what wecall an income gap somewhere
down the road.
If you don't have one now,you're probably going to have
one later because it is notkeeping up with inflation.
And this again it's the formula.
It's the consumer price indexthat they use.
(02:57):
It doesn't really counteverything in inflation, but
it's designed that way andthey're thinking about tweaking
it even further down so it won'tkeep up even as much.
Evan (03:05):
Yeah, so Social Security, first of all, was never meant to
replace an entire paycheck.
In fact, somewhere around 40%of a replacement on average is
what it was supposed to do.
In your retirement, once youwalk away from work, with the
(03:27):
extinction or process ofelimination of pensions, that
erases another guaranteedpaycheck that was meant to work
in accordance with SocialSecurity.
Now, the majority of ourworkers in America are reliant
on 401ks, which are not aguaranteed amount.
In fact, you don't know whatit's going to be when you retire
and you also don't own it alleither, because of taxes, right.
Mark (03:45):
Think of it as a three-legged stool.
Okay, you've got leg one isSocial Security, leg two were
pensions and leg three was yourown personal savings.
So back in 1979, when the ERISAlaws were passed, the 401k s
came out.
Companies began replacingpensions with 401k s, and so one
of those legs have become verywobbly or non-existent the
(04:07):
pension leg.
So now the leg that is left,but besides social security, is
that 401k or your savings orwhatever it may be.
And, yes, that can do well overmany years if you stick with it
, if you don't borrow too muchfrom it, if you don't spend it
when you change jobs, all thatkind of good stuff.
But it's still, like you said,it does not guarantee a paycheck
(04:27):
.
It doesn't guarantee a paycheckreplacement.
There are ways, throughplanning, to better ensure that
I mean that's a good way to sayit that payment coming in, but
it's, you know, theresponsibility is now on the
worker to make sure that happens.
Evan (04:42):
So I did mention Social Security was never meant to
replace an entire paycheck.
Again, we said around 40% or so.
Social Security is thefoundation of retirement income
for many of our older Americans.
Nearly 90% of people over 65receive benefits and for 40% of
them that accounts for more thanhalf of their income.
(05:02):
More than half.
For about one in seven.
It provides over 90 percent ofwhat they live on, according to
the social securityadministration.
Mark (05:11):
Yeah, and that's not going to get any better.
It's not again between the factthat it's not keeping up with
inflation um, inflation being alittle bit worse over the last
few years.
Um, again, so many folks youknow every study I've read
people are just not puttingmoney away and so they're
retiring with very little nestegg, especially if you're
self-employed.
It's even harder If you workfor a corporation and they have
(05:33):
this nice incentive to match.
It becomes much easier.
You don't see the money comingout of your paycheck, right, but
self-employed or smallcompanies tend to be a little
bit less aggressive on somethinglike that.
You really have to beintentional and that's why, when
we work with small businessowners, that's one of the first
things we bring up when are yousaving your money?
And I realize that many times.
(05:55):
Hey, the value of my businessis part of my retirement.
I get it, you know, and I thinkthat's great.
But again, it would be nice tohave another leg as well, and I
think that's great, but again,it'd be nice to have another leg
as well.
Evan (06:05):
Yeah, consider that last fact.
For about one in seven, socialSecurity provides about 90% of
what they live on.
So we already know manyretirees are living on the edge.
The median benefit, while it'sgreat news if we're hitting
average around $2,000 per month,it's simply not enough to cover
the basic expenses in manyparts of the country.
(06:25):
And also consider that one inseven is providing 90%.
What are the odds, actually, Ishould have looked into it, what
are the odds that they've evenachieved their full benefit at
full retirement age?
Mark (06:34):
Exactly, and there's so many different factors that come
into play and we're beginningto see more and more of parents
living in the basement of theirchildren, of you know, some
lower income apartments comingalong.
I mean, you start looking atthese senior living apartments.
They're expensive, you know,buying houses now are expensive,
and so we're seeing some verycreative ways.
(06:56):
Maybe we have three or fourseniors getting together and
renting a house together andbeing roommates, which actually
might be kind of good becauseyou share common interests, so
but also being able to splitthose bills a good bit.
So you had to become creative,and I don't, I don't know what
the answer is.
I mean, again, social securitywas never meant to provide
(07:17):
everything in retirement.
And if you're 60, 65, 70, I'mnot going to say it's too late,
but you certainly have lost alot of years in saving, and so
what's the solution?
And so that's when you startgetting creative.
I think we had a show, anepisode about a month ago,
talking about some ideas aboutretirement and how to make the
most of it and things like that.
So it is an issue, and nowwe've got social security
(07:38):
beginning.
The trust fund is beginning todisappear, which is going to put
it more in jeopardy, may cutbenefits a little bit.
They're not going away.
We've had a show all about howsocial security is not going
away, but it could be a littlebit smaller benefit for many
folks coming up.
So there's a lot of issuesgoing on there and I wish I had
a lot of good solutions.
I've got a lot of good ideas,but the problem is getting it
(07:59):
through these stubborn heads inCongress where they each want
something of their own and theyare not willing to give up
something.
Evan (08:07):
Yeah, absolutely, and I would like our listeners and our
viewers to consider this.
Consider your personal budgetnow, whether you're in
retirement or working towardsretirement, consider your
personal budget.
Could you survive on $2,000 amonth?
Could you survive on $4,000 ifthat was just supplemental, or
$5,000 a month?
Could you survive on fourthousand if that was just
supplemental, or five thousanddollars a month?
Could you survive on that witha lagging increase in cost of
(08:32):
living?
It was not keeping up withinflation over the over 10 years
or more.
That's the median average oftwo thousand.
We see immediately that thereis a need for planning beyond
Social Security.
Mark (08:43):
Absolutely.
And again, the sooner you start.
And again, if you're listening,I don't care if you're 60, 65,
70.
We have one couple that are inthere.
She's in her mid-60s, he'sapproaching 70.
We've just put a turbo plan inplace.
They're getting their debt paiddown, they're putting away
every penny they can.
They're saying, hey, we'regonna sacrifice for the next
(09:06):
five years so that when we're inour 70s and you know may not
can work anyway, right, whetherit be part-time or at all.
They didn't, they didn't keepputting it off and say, well,
it's too late for us, it's nottoo late.
I mean, there's all littlethings we can do to to just
optimize, to put a little bitmore power behind certain
accounts or certain methods andstrategies and things like that.
(09:28):
So you know, if, if there's onekey point to take away from
today, whether you're 45 or 65,start now.
Evan (09:38):
Yeah, with everything going on in social security and
us discussing how tight so manyAmerican pocketbooks are right
now, I want to bring somethingelse, and I don't mean this to
be gloom and doom, butconcerning the elderly, the
elder poverty in the U.
S.
So, here's kind of a soberingfact.
The U.
S.
is already the highest among G7countries, which is Canada,
France, Germany, Italy, Japanand the United Kingdom.
(09:59):
We're already the highest amongthose countries as far as our
elderly poverty.
We have the highest populationof elders in poverty.
Older women are especiallyvulnerable because they tend to
earn less.
They tend to live longer.
They tend to have fewerretirement savings.
Social Security is often theironly source of income.
(10:22):
Without it, elder poverty inthe US would be much worse.
So consider the potential cutson the line for Social Security
and those people who are alreadyare most vulnerable in our
society and what that could mean, and then add in Medicaid and
Medicare cuts to that as well,and then what kind of a bigger
issue do you have on your hands?
This information is alsoaccording to Kathleen Romig and
(10:45):
research at the Center forBudget Priorities.
Mark (10:48):
Well, and it's such a hot potato politically and we're not
taking any side of the fencehere.
I'm a big believer in nothaving huge government.
I think the power should be inthe people's hands.
But these are the countries youmentioned have more safety nets
too, and so where's the balance?
I mean, I've mentioned a coupleof times about healthcare.
I know as a small business whatwe pay, and it's just
(11:09):
astronomical.
It doubled in the last year.
And so whether you're gettingyour health insurance at work
and you're having to pay moneytoward it, whether you're having
to go on your own, whateveryour situation is, even under
Medicare, your Medicare Part Bis up at I think it's $185 per
person this year.
So a couple's paying $370 amonth just for Part B.
(11:31):
That doesn't include your PartD, which is drugs, your
supplement, or whether you go toan Advantage plan or whatever.
There's a lot of out-of-pocket.
So that's the other thing thatme; folks that are retired and
own nothing but social security.
Once they pay that and buy foodand a place to stay, it's
almost like there's nothing left.
And so what do you do if youhave health issues?
(11:53):
What do you do?
Do you just put off going tothe doctor.
I've had people tell me beforethat they get a prescription and
it's so expensive they skipevery other day because they
just can't afford a full month'ssupply, or split them in half,
exactly, exactly.
And so again, we're not here totalk politics.
For sure I don't profess to bea Republican or a Democrat, I'm
(12:15):
a capitalist.
Evan (12:15):
Well, I actually love that .
That's really important to say.
This is not so much a politicalconversation, because many of
our past administrations, guys,this solvency of social security
has been a conversation fordecades.
Mark (12:29):
They've been kicking it down the road forever.
Evan (12:31):
The potato's getting hotter at this point because we
are approaching 2033 or whateverthe current estimate is.
Mark (12:38):
When I first started teaching Social Security classes
, I was warning people.
Then that was 18 and 20 yearsago.
Evan (12:43):
It's foolish not to look the situation in the face at
this point, without some realconsideration of, okay, what
happens if?
Mark (12:51):
And I think we've lost the ability in our government to
negotiate.
I was a big fan of RonaldReagan.
He didn't get everything hewanted.
He gave up.
If you go back to history, he'dgive up this, which you know
was more of a democratic thingto give up to get something that
was more along his beliefs, andvice versa.
They were all statesmen andstateswomen that were willing to
(13:13):
do what was best for theircountry.
So this is not political.
This is where we as a countrywe've become so divisive and
probably we need to leave thissubject now.
But but you know, let's pullthat back around to retirement
and Social Security andsurviving, and so I don't have
(13:43):
the answer Again.
I've got some great ideas, butwe can't kick it down the road
anymore, right?
So, uh, by the way, um, alittle slight change of topic
here let's do mention thewebsite.
Okay, because there aresolutions on the website, there
are tools, there are resourcesto help give you guidance.
They're not all the answers.
I don't believe that you can goto any website and have it
answer everything, whether it bemedical or anything else.
You need professional helpeither.
You know whether it answereverything, whether it be
medical or anything else youneed professional help, whether
it's financial, medical, a CPA,for taxes or whatever it may be.
(14:06):
But our website,masterplanretirecom, has some
great tools.
We've got many, many episodeslike this on it that you can
access through podcasts, throughYouTube or just the recording
or whatever it may be.
We've got a checklist, whetherit be a survivor checklist,
whether it be a retirementchecklist, a federal checklist
(14:26):
If you're a federal worker.
A lot of turmoil there.
What are these people doing?
I'm having two or threemeetings a day just with federal
workers that are trying to makecritical decisions.
So masterplanretirecom, that'salso a place.
You can push this little button.
It says schedule a meeting.
So why would you want toschedule a meeting?
This is complimentary.
This allows you to chat with us, to share your concerns.
(14:49):
Maybe we've brought up someconcerns for you today.
Maybe we've said some thingsthat have triggered some worries
.
Don't just stifle those.
Approach them, meet them headon, meet with us, have a chat,
talk about the good, the bad andthe ugly, and then let us run
some reports for you to seereally where you are at.
Maybe that's not a worry thatyou thought was, but maybe
something else is a worry thatyou hadn't considered
(15:10):
MasterPlanRetirecom.
All you have to do is call770-980-9262.
Evan (15:16):
You know I'm going to have to remember that in my daily
conversations if theconversation is getting a little
bit too close to beingpolitical.
I'll just mention the website.
That's a pretty good move.
Mark (15:28):
Moving on and there's nothing political on the website
, by the way, and I don't thinkthere's anything political here
except we're saying we need asolution and we need some people
to come together and come upwith those solutions and
understand that it's going totake both sides coming together.
This is nobody's fault.
This is a whole lot of partiesand a whole lot of positions
(15:48):
over the last 20, 30 years thatshould have been solving this a
long time ago.
Evan (15:52):
Well, we do have a bipartisan page on our website,
and that's the federal employeepage.
Speaker 3 (15:56):
That's true, that's true, that's true.
Evan (16:00):
However political, that would be.
All right.
So the yet unknown.
Let's talk a little bit onsocial security solvency.
Mark (16:07):
So again we I think we've talked about this in a couple of
shows, or at least one episode,but people misunderstand what's
going on with social security.
Okay, Social security is fundedthree ways.
The first way is by folks thatwork that pay into the FICA tax.
If you're working for someone,you pay in is it six and a half,
I think six and three quarters,something like that.
(16:29):
The employer pays in the samepercentage for a total of 12
plus percent.
If you're self-employed, youpay in the whole 12 plus percent
.
Part of that goes to Medicare,Part A Part of that goes to a
few other areas.
Part of that goes to medicare.
Part a part of that goes to afew other areas.
Part of that goes to socialsecurity.
That's funding way one.
Funding way two are folks thatare on social security.
Uh, part of the tax they pay ontheir social security goes back
(16:52):
into social security, sothey're kind of paying their own
way as they go.
Is that that fair or not?
I'm not here to say that, butthat's leg two.
Leg three is what we call thetrust fund.
That's a fancy word, for it'snot really a fancy word, is it?
The trust fund is basically asavings account.
Yeah, I won't do that.
(17:15):
So it's a savings account thathas accumulated over the years.
When there were more peopleworking than there are now,
there were like 16 peopleworking for every retiree.
Now it's like two and a half tothree, and so there's not
enough funding going in from theother two sources, so they're
having to take money out ofsavings.
The trust fund, which is mean,means that the trust fund has
(17:36):
been dwindling for the last 30years plus.
Okay, so they're estimating thetrust fund will be empty by
2032, 2033, somewhere in thattime range.
Okay, so that doesn't meansocial security is going broke.
It still has the other two legs, two other funding sources, but
it means 21% of the fundingwill be gone.
So, theoretically, if nothingis done, your check in the
(18:00):
mid-2030s could drop by 21%.
So it's not going away, it'snot going under.
It could be a cut in benefits.
Now, again, we've talked aboutthis.
There are six, seven differentthings on the table being
discussed.
Some are raising taxes, Someare lowering benefits, some are
changing benefits, changinginflation, raising the
(18:23):
retirement age, all of this kindof stuff.
So it's on the table.
Okay, Now what's the difference?
What's going to end up?
Who knows right, but I hopesomething ends up Again.
I want to be able, when I'm 75,85, and 90, to still be getting
a check and know what's comingin.
Folks that are 35 and 40 wouldbe even more concerned.
We've actually had some folks.
(18:44):
When we do our planning theysay, just leave Social Security
out of my numbers, let's justpretend it's not there anymore.
But you know, they're blessedto be able to do that.
If it works, they are blessed.
And then it's just gravyAbsolutely.
And they've worked hard to makethat happen many times, so that
, and so it's kind of fun to dothat.
But I do tell them I don'tthink it's going.
It is the biggest program wehave, you know.
(19:07):
So I don't know how they couldever get rid of that.
And think of the people thatwould be on the street if they
did away with Social Securitythe disabled folks, the elderly,
the semi-elderly, I mean somany people.
Now you've got a much, muchlarger problem.
So again, I'm very confident.
But the sooner they do it, thesooner they're going to not have
(19:30):
to bite such a big bullet.
Evan (19:31):
And at the time of this recording there are no dramatic
cuts being proposed.
But as it currently stands,doing nothing is doing something
bad, because it's a problemthat's got to be solved.
There's discussion aboutpossibly raising the retirement
age.
For retirement age, people areliving longer.
I'm sure people don't want towait that much longer, that much
more time, to receive a check,but at the same time people are
(19:53):
living longer.
Our lifespans are increasing.
Possible cuts to SocialSecurity taxation but again
that's going to have to get paidfrom somewhere.
Possibly more taxation, raisingFICA incrementally over time.
There's a lot of options on thetable, but right now the
inaction is the most concerningpart, because if nothing happens
(20:15):
then it's just going to drop.
21%-ish now is the average.
Mark (20:19):
And I will say this if they do raise the retirement age
.
So when it first came out theretirement age, full retirement
age was 65.
The average life expectancy was62.
So it was kind of like, well,hopefully you die before we have
to give you any money, right?
But now that we're, our lifeexpectancies are in the upper
seventies to mid eighties,depending on lifestyle and male,
(20:42):
female, things like that then.
And we've only raised theretirement age to 67.
So I see that going to 70, but Idon't see it affecting people
like over the age of 45 or 50.
They will phase that in.
So if you're retirementplanning now and you're 52, I
really don't think it wouldaffect you.
But the problem is this that'snot going to really affect the
(21:04):
money of social security for 20years.
If you say everybody under 50,we're going to affect, but if
you're over 50, that's 25, 27,30 years away.
So what's it going to do fortoday's problem, today's
situation?
Nothing.
So that's a concern with that,not that they should or
shouldn't raise it, but it's nota solution that's going to help
us over the next 10, 12, 15years.
Evan (21:26):
Yeah, as retirement planners, income is often not
always, but often the firsthurdle we have to tackle when
creating a plan for a client.
So, with social security as acurrently guaranteed income
stream, with all the questionson the table, I ask our
listeners and our viewers whatwould happen if your retirement
plan, what would happen to yourretirement plan if social
(21:48):
security was suddenly removedfrom the equation, or even
significantly reduced?
Mark (21:53):
Again.
That's what we got to mention aminute ago.
Take the responsibility, and wehave clients that do that.
We have prospects, we have kidsof clients that come in and see
us and you know, step one isthem coming in to see us.
So many of our clients say Ireally want my son, my daughter,
they're in their 30s and intheir 40s.
I want them to come see.
You Just can't get them in hereand I know you're busy.
(22:14):
I mean, gosh, at that age, kidsrunning around, you know,
college approaching, I get it OK, working your tails off, but if
you can just take some time andjust go ahead and say where am
I at, what should I be doing toget where I want to be?
And, by the way, let's aim fornot even worrying about social
security, and that would be agreat way to start.
(22:34):
So the younger you are, thebetter, the quicker.
But yeah, it's a smallpercentage of people that have
the time to do that or take thatresponsibility to do that.
Evan (22:47):
And I know it's been a little bit of a heavier episode
topically.
But topically or per topic-topically is a cream, isn't it?
But here's the good news,Social Security is not a
retirement plan, A 401k, an IRA,a Roth.
Those are not retirement plans.
Social Security is but one of adozen or more areas of
(23:08):
retirement that must beaddressed, and not only
addressed, but they all mustwork in accordance with each
other.
Mark (23:14):
You know, I've got to mention these reports we run
because it's amazing.
Every time I look at them we'llshow a perfect world report and
they may not ever run out ofmoney, or maybe they run out of
money in their nineties orwhatever, which we can fix that.
But then you apply one stresstest.
Let's just say taxes go up by15%, which I think they will All
of a sudden they're running outof money in their 70s.
(23:35):
You add a little bit higherinflation, they're running out
of money.
So there's these dangers thatwe really have to pay attention
to and we got to work on all ofthem.
So that's why we stress all ofthem as well.
So I hope you take advantage ofthat complimentary consultation.
Push that button atmasterplanretirecom.
Uh, give us a call 770-980-9262.
(23:55):
Again, today's show might'vebeen a little bit heavier but
we'll lighten it up next week.
But in the meantime, until wesee each other again, plan well
and prosper.
Take care, this was RetirementRoadmap Radio with Mark Fricks
of Master Plan RetirementConsultants consultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
(24:19):
Thanks for listening andremember plan well and prosper.
Speaker 3 (24:23):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
A registered investment advisorin the state of Georgia, mark
Fricks, and Master PlanRetirement Consultants are not
(24:45):
affiliated with or endorsed bythe Social Security
Administration or any othergovernment agency.
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Law & Order: Criminal Justice System - Season 1 & Season 2
Season Two Out Now! Law & Order: Criminal Justice System tells the real stories behind the landmark cases that have shaped how the most dangerous and influential criminals in America are prosecuted. In its second season, the series tackles the threat of terrorism in the United States. From the rise of extremist political groups in the 60s to domestic lone wolves in the modern day, we explore how organizations like the FBI and Joint Terrorism Take Force have evolved to fight back against a multitude of terrorist threats.