There’s a retirement risk almost nobody models, and it has nothing to do with the stock market. It’s the quiet trade you make when you keep working past the point where your healthiest years are already slipping away.
We stitched together several of my most important retirement planning clips into one focused compilation. First, I explain why age 58 can be a real turning point: health, energy, and mobility start to change while the “compounding magic” of your savings matters less than you think. We unpack the difference between time on paper, usable time, and high quality time and why the decade from about 58 to 68 often holds the best shot at travel, freedom, and doing life on your terms. If market headlines keep you waiting for perfect conditions, I’ll show you why those conditions never arrive and why a stress tested plan is what actually creates confidence.
Next, we get practical on Social Security strategy. I walk through five reasons claiming Social Security at 62 can be smart, including cash flow needs, health, reducing pressure on your investment portfolio, reinvesting benefits, and the break even math. Then I lay out four straightforward ways to increase Social Security benefits, from the 35 year earnings rule to spousal and survivor benefits, plus why claiming decisions must coordinate with taxes, Medicare IRMAA, and required minimum distributions.
Finally, I cover why a ~$1.9 million portfolio changes the questions you should be asking. The focus shifts from “will I have enough” to tax planning, withdrawal strategy, risk alignment, simplicity, and legacy planning so the wealth you built actually supports the life you want.
🗓️ Meet with me: https://paradigmwealthpartners.com/begin-your-journey/#calendly
↔️ Connect with me on LinkedIn: https://www.linkedin.com/in/jbednarii/
🌐 Paradigm Wealth Partners (website) – Financial planning for career professionals who want to retire and stay retired: https://paradigmwealthpartners.com/
🌐 What the Wealth (website) – Adding clarity to difficult financial topics: https://whatthewealth.com/
▶️ YouTube: Paradigm Wealth Partners
If you or someone you care about could use the help of a financial advisor and sees the value in establishing a financial plan, please reach out to me.
Thanks for Listening!
Jonathan
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Episode Transcript
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SPEAKER_00 (00:04):
Hey podcast listeners, thank you as always
for joining and hopefullyfinding value in this financial
education awareness and topicalcontent.
This episode is a littledifferent.
It included a few individualclips that have been combined
for a compilation episode.
And I filmed these topicsoriginally for YouTube, and I
(00:25):
thought they'd be helpful toshare with you all on the
podcast as well.
The topics are all fairlyrelated, and I'll set each one
of them up for you, but wantedto make sure to give you a heads
up.
Thanks for following along, andas always, if you're a highly
motivated individual, family, orbusiness owner that could use
the help of a full servicefinancial planning partner to
(00:48):
guide you towards the future offinancial confidence, please do
not hesitate to reach out to mepersonally.
We'd be happy to schedule a timeto talk.
Thank you again, be confident inyour retirement.
We'll talk soon.
There's a financial risk mostpeople near age 58 never see
coming.
It has nothing to do with thestock market, nothing to do with
(01:10):
interest rates or inflation, andit has everything to do with
time.
Because there's a moment inlife, and most people never
realize they've crossed it,where continuing to work quietly
becomes one of the biggestdecisions you could ever make.
Not because you're riskingmoney, but because you're
risking one of the resources youcan never replace.
(01:32):
And for the majority of peopleI've worked with, that moment
happens right around 58.
If you don't understand howquickly your health, your
energy, your quality of lifechange, you could accidentally
sacrifice the best decade ofretirement you've planned for.
Before we get into this, my nameis Jonathan Bedner, certified
(01:52):
financial planner and owner ofParadigm Wealth Partners here in
Knoxville, Tennessee, where wehelp people in their 50s and 60s
retire with confidence, withoutguessing, gambling, without
giving up the best years intheir life.
I've seen this decision doneright, and I've seen this
decision what happens whenpeople wait too long.
This is why it matters.
(02:14):
Why age 58 is a turning point.
Around 58, several lifecurvatures happen.
Things start coming together,and this is what no one talks
about.
First, your health, mobilitystarts to decline, recovery
starts to slow, your strengthfades, and even mental sharpness
(02:37):
starts to lack.
Second, you start to loseenergy.
Most people still feel prettygood at 58, but by 62, 65, and
even 70, it's an entirelydifferent story.
Third, money.
By your late 50s, most of thecompounding magic is already
behind you.
The heavy lifting is done.
(02:58):
And finally, time, what Ibelieve is one of your biggest
assets.
And at 58, you have far fewerfully capable years left than
you think.
This is the convergence pointwhere money stabilizes, but time
begins to accelerate faster andfaster away from you.
The golden era of time, ofretirement, that you don't want
(03:24):
to miss is from 58 to 68.
And research consistently showsthat this age represents the
time, the decade where you havethe most freedom, you still have
great mobility, you still havegreat energy, and overall your
health is largely intact.
But after 70, you physicallydecline and that accelerates
(03:48):
sharply.
That means that most peoplenever really calculate, they
don't think about it.
Working through this windowmeans that you're working
through some of the best yearsin retirement you'll ever have.
The hidden trade-off happens at58.
Up to 58, your trading time formoney usually makes sense.
(04:10):
You're working, you're raisingfamilies, to do the things you
want to do.
You need money.
And so, in order to provide forthat money, provide for your
family, do the things you wantto do, you got to work, you
gotta earn a living.
After 58, I see where this trendusually flips.
You may already have a nice nestegg, but every year you work
(04:32):
from here, you might grow yourportfolio, I don't know, four,
five, eight percent maybe.
But the same year costs you six,twelve percent of your life,
your remaining high-energy,healthy years that you have, and
the cost of that compounding farfaster than your money ever
(04:54):
will.
And this trade-off is thetrade-off almost no one sees.
The fear that keeps peopleworking.
If I stop working, I'll beeating into my savings.
This is people's biggest fear,and it's an emotional fear, it's
one that doesn't always makesense.
Um, it may or may not make sensemathematically, but your savings
(05:16):
were built for this exact phaseof life.
Your kids are grown, you'remortgage-free, you know, life is
is, I don't want to say easy,but it's certainly less complex.
And these are the years thatyou've built and you save for to
enjoy this thing we callretirement.
So many people feel like they'recannibalized their portfolio,
(05:38):
they're spending their money,they're not sure, you know, if
their money is enough to last.
Uh, and what I like to say hereis you're not cannibalizing up
your portfolio, you're notspending down your portfolio,
you're deploying the tool youspent the last 30 and 40 years
building.
And people aren't thinking aboutit that way.
The danger isn't spending yourmoney, the danger is waiting too
(06:02):
long to spend your time.
There's another thing peopledon't often realize about time.
Again, one of your biggestassets.
These are important distinctionsto make, and another thing
people don't fully consider.
Time on paper is how long youmight live.
Usable time is how long yourbody cooperates.
(06:23):
High quality time is the timethat you have the most energy,
mobility, and freedom.
Those times, those uh aspects oftime are not the same thing.
They're vastly different.
And there are things that areeasy at 58 become dramatically
harder at 68.
Long hikes, internationaltravel, uh, sightseeing, playing
(06:48):
uh on the floor with grandkidsis harder and harder.
Uh, it's harder and harder towalk 18 holes of golf, it's
harder to drive long distances,learning new skills might be
more difficult.
You can delay your retirement.
Your body will not delay aging.
It's important to know that asyou're thinking about this and
(07:10):
as you're trying to decide whenyou should retire.
Retirement is a resourcebalance.
Uh, it isn't about hitting anumber, it's not about managing
uh four resources.
Uh, it is about managing fourresources.
Um, your time, it's aboutmanaging your health, it's about
(07:32):
managing your energy and yourmoney.
And money is the only one youcan replenish.
Earlier in life, you trade time,health, and energy to build the
money.
Later in life, you must use thatmoney to reclaim your time.
Once you have enough, the extrasavings provide diminish those
(07:52):
returns.
Why market conditions don'tmatter as much as you would
think.
People delay because they theyseem to think things like the
market feels too shaky, uh,rates are too high, there
inflation worries me, it's anelection year, uh, you know,
World War III might happen.
There's all these reasons not toretire because you're concerned
(08:16):
about market conditions, butthose conditions never
disappear.
We're constantly battling thewall of worry.
Uh just this year we've hadtariffs, we've had trade war, we
have World War III threat, youknow, every couple years there's
a presidential election.
These conditions uh often cycle,uh, some of the same ones cycle
(08:37):
through, and then we also havenew ones come through year to
year.
Markets adapt, companiescontinue to grow, their
earnings, their share price,they continue to do well, and
the these guardrails continue toexist.
You know, how can we make thebest decision for you in your
(08:58):
retirement objectives?
You don't retire because theseconditions are perfect, no
conditions are ever going to beperfect.
You retire because your plan uhworks under imperfect
conditions.
It says that, you know, since wehave done A, B, and C, you can
now do X, Y, and Z.
And it's important to know andunderstand that the work you've
(09:21):
put into building your plan, allthe knobs you've twisted and
levers you've pulled are uh youknow come together so that you
actually can have a plan thatlive confidently with clarity to
and through retirement withouthaving to work until your 90s.
Most people don't delay theretirement for financial
(09:44):
reasons.
They actually delay forpsychological ones.
A lot of our identity is tied upin our careers.
You know, we're police officers,we're teachers, we're attorneys,
we're we're salespeople, we'reIT people, we're doctors, we're
nurses.
So, you know, they wonder who amI without my job?
(10:05):
What will I do with my days?
Um, will I have any structure?
Will I feel irrelevant?
After decades of this routine,the routine becomes our
identity.
Um those fears aren't permanent,but they are solvable with
planning and they're very real.
I see this happen for you knowquite a bit with people.
They're not sure, you know, whattheir life looks like because
(10:29):
they're so tied into who their,you know, what their identity
is.
And and what we try to teachpeople is, you know, your
identity isn't necessarily yourcareer.
Your identity is being a fatherto your kids, being a
grandparent to your to yourgrandkids, you know, who you are
as your core values, that's howyou help identify and and solve
(10:51):
you know your identity crisis asyou move into retirement.
So the truth from real retirees,after working with hundreds of
retirees, one pattern is crystalclear.
People do not regret retiringtoo early.
Many regret retiring too late.
(11:12):
The most common phrase I hearis, I wish I had more healthy
years.
They regret only becomes visibleafter it's too late to fix.
So how do you know if 58 is yourmoment?
If you're ready to take thesteps, you understand your
spending, you have a withdrawalstrategy, your income sources
are mapped, your portfoliostress tested, you thought about
(11:34):
how you'll spend your time andwhat you'll do for fun, maybe
new hobbies, you've got a planfor healthcare, and you've
replaced routine with purpose,the things that you really
deeply seated uh value, thethings that are most important
to you.
If you have those pieces, therisk isn't retiring, the risk is
(11:56):
waiting.
Here's the truth (11:57):
most people will never hear.
Money can wait, your healthcan't, the window doesn't last
forever, and if you're near 58,the most dangerous financial
risk isn't in the market.
It's running out of time.
You're healthy enough to enjoy.
If you want clarity andconfidence around whether it's
(12:19):
your moment, click the link inthe description, schedule some
time with us.
Let's help you figure out if nowis the time you can reclaim what
matters most and retire with theconfidence and clarity you've
always wanted.
Should you retire at 62 andclaim Social Security?
A lot of people struggle withthese types of decisions,
(12:42):
understanding the advantages anddisadvantages of when you should
claim Social Security inretirement.
Today I'm gonna give you fivepowerful reasons that illustrate
why it might be an impactful andsmart decision for you to turn
Social Security on at age 62.
I'm Jonathan Bedner, certifiedfinancial planner, owner of
(13:03):
Paradigm Wealth Partners here inKnoxville, Tennessee.
And you know, this is how wehelp people make decisions
around Social Security, aroundretirement, so that they can
have a confident and clear uhretirement plan for themselves
as they live out uh thatretirement.
Let's dive right in.
(13:24):
Here we go.
First, you need to understandwhat Social Security is and how
it works.
So, Social Security is a systemthat we have paid into while
you're working, it is a form ofretirement benefit offered by
the US government.
And at a certain age, typicallybetween 66 and 67, you will
(13:46):
reach what's called fullretirement age.
And when you reach fullretirement age, you're able to
turn this benefit on.
And these benefits are monthlypayments to you.
Uh, one of the things that thatgoes into making this decision
of when do you turn this incomeon has a lot to do with what
we're going to discuss here in afew minutes.
But the government will alsoprovide you an incentive to
(14:10):
wait.
So every year you wait, theygive you about roughly an 8%
increase on your your annualamount.
Again, that pays out monthly,but it's an annual amount that
gets paid to you.
And so if you delay all the waytill 70, that's the maximum age
that you can delay your fullretirement benefits to, you'll
(14:31):
get about a 24% increase overwhat you would have gotten at
full retirement age of 66 or 67.
But you can also, if you choose,take these benefits turned on at
age 62 or 63, 64, any anytimebetween 62 and 70.
In this video, we're talkingabout, you know, 62 here.
So if you take those benefits at62, you actually get a reduced
(14:55):
amount.
You don't get as much as youwould get at age 66 or 67.
And so um, one of the questionsthat goes into how we work with
clients is you know, when is thebest time for you to take it?
So, with that said, let's talkabout the number one reason why
you might take Social Securityat age 62.
(15:17):
The number one reason might bean immediate financial need or
early retirement.
So maybe there's a disabilitythat puts you out of work, or
maybe you were laid off and youknow can't find another job, and
you need that income to come inand help support your lifestyle.
Maybe to help you pay yourcurrent expenses, maybe it'll
(15:38):
help you pay down some debt.
You know, one of the reasons youmight draw at 62 is to help fund
uh this immediate need that youmay have in your family.
Reason number two is shorterlife expectancy or health
issues.
So one of the things aboutSocial Security is when you pass
(15:59):
away, it it goes away.
It's over.
Now, your spouse could continueto claim either yours or hers,
or theirs is what I should say,whichever is higher, but one of
them will essentially go away.
And so if you have a serioushealth issue or you don't have
that long life expectancy, thenit might make sense to go ahead
(16:22):
and draw all your SocialSecurity, start getting those
payments so that you can usethem, uh, have them in your
account, use them for livingexpenses, those sort of things.
Uh, because once you pass away,then that benefit goes away.
The IRS no longer has to pay uhthat out.
Again, with the exception ofyour spouse, if you have a
(16:45):
spouse, they can continue thehigher Social Security payment
of yours or theirs.
And so uh if yours happens to behigher, theirs would fall off,
they would still get uh yours.
There's some funny math the waythat the IRS does this that I'm
not going to talk about in thistopic because it really uh kind
(17:07):
of defeats the purpose of whatwe're talking about today.
But that would be the secondreason in this situation.
The third reason is you know,reducing the pressure on your
investment portfolio.
So if you're delaying SocialSecurity for longer, you might
have to take more withdrawalsout of your investment account
(17:28):
to sustain your life, to payyour bills, to pay your
expenses, to pay your debt.
Um, and so it might cost moremoney out of your investment
portfolios that you've savedover your working careers to
fund your lifestyle.
And so if you turn SocialSecurity on earlier, you're able
to reduce the amount of pressureon your investment portfolio,
(17:51):
which helps your investmentportfolio sustain itself longer
and be there should you need itfor some unexpected event in the
future.
So these guaranteed incomesources like a pension or in
this case like a Social Securityhelps reduce the pressure on
your investment accounts.
Number four, you can invest themoney instead of waiting to
(18:15):
receive it later.
Uh one of the kind of foundingprinciples of investments and
compounding is you know, adollar today is worth more than
a dollar tomorrow.
And that's because inflationeats away your your dollar every
year that goes by.
And so, you know, as an example,as you as as years go by, things
(18:38):
cost more.
You know, you can remember fromyou know the you know 90s or
early 2000s where you know gaswas a dollar a gallon, milk was
a dollar a gallon.
You'll have clients still today.
I remember buying Coke orSnickers for you know five
cents.
And so as those years go by,your value of your dollar goes,
(18:59):
you know, gets less and less andless.
Now, if you delay SocialSecurity, the money will still
give you a little bit of benefitfor a couple of years uh because
they're gonna give you aguaranteed raise of eight
percent.
But if you draw early and investthe money, assuming you don't
need it, you could invest themoney.
Maybe you invest in somethingthat really takes off, or or uh,
(19:19):
you know, you're in control ofhow you sp how you utilize that
money.
So what I see a lot of people dois they don't necessarily need
the money, but they would ratherstart having it collected and
turned on so that that isflowing to them and that they
are uh not just leaving themoney out there at some point.
(19:40):
Um that way, if they tragicallypass away, it doesn't just
vanish into thin air.
Uh they've they've collectedsome of this income over time.
They can allocate it into theirinvestment accounts and utilize
um into growth investments orincome-producing investments,
depending on what theirsituation is.
(20:01):
But that reinvestment would thenallow the accounts to continue
to grow over time.
And then when they need theinvestment, they could tap into
it for themselves.
Finally, reason number five isthe big break-even question.
How long does it take for you tobreak even if you choose to wait
until 60, you know, 66, 67, oreven until 70?
(20:24):
So that's one of the things youhave to understand when you're
making this decision.
This chart by Capital Groupshows that if someone was
supposed to take Social Securityat age um 67, and let's just,
you know, I think the example is$2,500 a month, they would get
$2,500 a month at age 67.
(20:45):
Well, if they decided to take at62, they would have had to reach
age 77 for the decision to nottake Social Security at 62 to
make the decision of waiting payoff, they would have to reach
age 77.
That's a long, that's a 10-yeargap that you would have to wait
(21:08):
from 66, 67 to 77.
And life expectancy for peopletoday uh is somewhere around 75,
76, 77.
And so the IRS knows this.
They have, and you know, there'slots of people that live long,
healthy lives far beyond this.
But the IRS knows that theaverage life expectancy is
somewhere in the mid to late80s, excuse me, mid to late 70s.
(21:30):
And so if they can get people todelay, and then they end up not
living a long lifespan, they endup not having to pay out as much
as they were projecting or youwere projecting it to pay out.
You know, having this decisionearly on and understanding this
break even might help youunderstand well, if I'm giving
up$2,500 a month in this examplefor five years, you know, then
(21:56):
you know I'm I'm not taking in,you know,$100.
$120,000 in income for thatfirst five years and choosing to
delay at 62.
Again, have to wait till 77 forthat decision to delay to make
sense, for the break-even tomake sense.
So if you started at 62, you'llget less money.
(22:18):
You might get, say,$2,000 amonth, but you can use that
money today, like the thingswe've discussed for living
expenses, pay down debt, you'llreinvest it, and you be in
control of how it's invested.
So there's a lot of reasons tounderstand how and when you
should claim Social Security.
And they're individual reasons.
(22:39):
It's not a one size fits all,but these are serious things to
consider as you're moving intoretirement and trying to
understand the nuances of whento claim Social Security.
In today's video, I'm going toshare four simple ways to
increase your Social Securitybenefit in retirement.
Most people assume their SocialSecurity benefit is fixed, like
(23:03):
it's some number the governmentjust hands you and that's what
you get.
But that belief alone canquietly cost you tens and
sometimes hundreds of thousandsof dollars over your retirement
lifetime.
The truth is, Social Security isfull of rules, levers, and
timing decisions.
And if you don't understandthem, you will most certainly
(23:24):
leave money on the table.
This video isn't about loopholesor tricks.
It's about decisions most peoplenever even realize they have.
If you're within 10 years ofretirement or already retired
and haven't filed yet, this isone of the most important videos
you can watch.
Because once you lock in thesedecisions, there's no undo
button.
Hi, I'm Jonathan Bedner,certified financial planner,
(23:47):
owner of Paradigm WealthPartners here in Knoxville,
Tennessee, and we help retireesand pre-retirees build
retirement plans that provideconfidence and clarity.
Let's first talk about whySocial Security mistakes are so
expensive.
Social Security feels automatic.
You work, you pay in, you file,and you collect.
(24:08):
So most people never questionit.
But for most retirees, SocialSecurity becomes one of the
largest guaranteed incomestreams they'll ever receive,
often lasting 20 or 30 years.
That means a small percentage isdifferent, don't just add up,
they compound for life.
And understanding these rulescan mean more income for you
(24:31):
every single month.
And ignoring them means apermanent pay cut you can never
fix later.
Let's talk about how SocialSecurity is actually funded.
Social Security is fundedthrough payroll taxes, not
income taxes.
So every paycheck you pay apercentage and your employer
(24:51):
matches it.
And it only applies to yourannual earnings cap.
That matters because yourbenefit isn't based on your
savings or your investments orhow smart you were financially,
it's based on your earningshistory.
No earnings record equals nobenefit leverage.
Let's talk about the 35-yearrule.
(25:13):
Social Security looks at your 35highest earning years.
Those years are inflationadjusted, indexed, so earlier
wages aren't unfairly punished,but there's a catch most people
miss.
If you work fewer than 35 years,those years get replaced with
(25:34):
zeros, and zeros are brutal.
You don't need to earn a lot,you just need non-zero years.
Even modest income years late inyour career can meaningfully
boost your benefit.
Now let's talk about why higherearners don't get proportionally
higher benefits.
Social Security is intentionallynot linear.
(25:57):
Early dollars of income areweighted heavily.
Later dollars matter less andless.
That's why someone earning halfas much as another worker often
receives more than half of thebenefit.
This reverse progressivestructure is frustrating, but
once you understand it, itbecomes a planning advantage.
What full retirement ageactually means, full retirement
(26:22):
age, often called the FRA orfull retirement age, is not a
requirement.
It's just a reference point.
And depending on your birthyear, it's somewhere between 66
and 67.
If you claim it before, yourbenefit is permanently reduced.
If you delay beyond it and yourbenefit permanently increases,
(26:43):
capped at age 70.
And that brings us to the fourstrategies, the four ways you
can increase your SocialSecurity benefit.
Strategy number one, work a full35 years.
Even if it's part-time, thisdoesn't mean grinding longer in
a high stress job.
It means making sure that youreplace those zero years.
(27:05):
Even part-time income can knockout a zero and raise your
lifetime benefit more thananother high-earning year ever
could.
Small income, big impact.
Strategy number two, delayclaiming if you can.
Claim early and your benefit isreduced for life.
(27:25):
Delay pass full retirement ageand your benefit grows by
roughly 8% a year, guaranteeduntil age 70.
That's one of the few guaranteedincreases available anywhere in
retirement planning, and it'sespecially powerful for
longevity planning.
Protecting a surviving spouse inretirement, and that is one of
(27:48):
the key ways you can do it.
The third strategy is understandspousal benefits.
What you may be eligible for,your own benefit, or a spousal
benefit, which could be up to50% of your spouse's full
retirement benefit.
That's huge for lower earners,stay-at-home spouses, divorced
(28:12):
individuals who are married toan ex-spouse for at least 10
years.
Many people qualify for morethan they realize and never
claim it.
That takes us to the fourthstrategy.
Make sure you use your survivorbenefits strategically.
Spousal benefits apply when bothspouses are alive.
(28:33):
After one spouse passes, theycan be worth a hundred percent
of the higher amount.
This creates planningflexibility.
One benefit can be claimed whilethe other continues to grow.
Social Security isn't aboutincome, it's about security for
the spouse you left behind.
(28:54):
Social Security doesn't exist ina vacuum, and you shouldn't plan
for it in isolation.
It interacts with all parts ofyour retirement plan, including
taxes, investment withdrawals,pensions, your required minimum
distributions, long-term cashflow.
(29:14):
All of these are hugepossibilities and things to
consider as you're trying todetermine when you should claim
Social Security.
Claiming without coordinationoften locks people into
unnecessary taxes and lowerlifetime income.
When you claim matters just asmuch as what you claim.
In closing, Social Security ispredictable, but only if you
(29:37):
understand the rules.
Once you file, the decisionfollows you for life.
Before you lock anything in,learn your options, run the
numbers, and understand how itfits into your full retirement
plan.
Before we jump in, let mequickly frame who this video is
for.
If you've built seriousretirement savings, maybe you're
(30:00):
in your late 50s, 60s, or evenyour early 70s, and your
portfolio is approaching oralready around$1.9 million.
This is a stage where questionschange.
You're no longer asking, will Iever be able to retire?
Am I on track?
Instead, you're asking, are westructuring this correctly?
(30:22):
Are there things that we couldbe doing better?
Are we being tax efficient?
Are we taking the right level ofrisk?
Are we missing somethingimportant?
My name is Jonathan Bedner.
I'm a certified financialplanner and co-owner of Paradigm
Wealth Partners here inKnoxville, Tennessee.
I've been advising familiessince 2010, specializing in
retirement planning forprofessionals and business
(30:44):
owners who've spent decadesbuilding wealth and want clarity
about what comes next.
And what I've consistently seenis that there's a real
transition point that happensonce you reach this level of
wealth.
And not because$1.9 million is amagical number, but because
planning complexity increasessignificantly once you reach it.
(31:08):
And that's what we're going totalk about today.
Why is$1.9 million a turningpoint?
Crossing$1.9 million inretirement savings should feel
like freedom.
And in many ways it is.
You've built a large net worth.
You have freedom and flexibilityand wealth and you've
accomplished so much.
(31:29):
But what most people don'trealize is that once you reach
this level of wealth, retirementplanning changes.
Below roughly$1 million, thedominant concern is: will I have
enough?
Am I on track?
Can I make it?
Can I afford to retire?
Can I afford my living expensesif I choose to quit working?
(31:50):
Around$1.9 million and beyond,the questions become: how do I
protect what I've built?
And before this stage, growthlends to be what matters most.
After you reach this stage,preservation, tax strategy, how
we turn your nest egg into apaycheck, and risk alignment
(32:12):
begins to matter more thansimply maximizing returns.
Because when these numbers arelarger, even smaller
inefficiencies in taxes, fees,or allocation can have a
meaningful long-term impact.
And that's why this levelrepresents a shift in your
mindset.
(32:32):
So let's talk about a coupletraps.
The first trap is trap numberone, not knowing your real
retirement number.
Many people anchor to roundnumbers.
They think 1 million or 2million or even$5 million.
But retirement doesn't operateon round numbers.
It operates on your spending.
Your real retirement numberdepends on your actual monthly
(32:55):
expenses, healthcare cost,travel and lifestyle goals,
inflation, longevity, and taxes.
There could also be otherthings, but those are kind of
the key five or six things thatI think are important when
you're trying to think throughwhat is your retirement number?
How much do you need to live onin retirement?
(33:17):
So without clarity here, twocommon things happen.
One, you either oversave out offear, or two, you underspend out
of fear.
I've seen people work many extrayears simply because they never
defined what they actuallyneeded.
So once you build out a planwhen you have the strategy, it
(33:40):
provides that clarity, and thatclarity eliminates some of this
unnecessary anxiety.
Trap number two, the taxconcentration problem.
At$1.9 million, most householdshave 60 to 85% of their assets
in tax-deferred accounts, IRAsand 401ks.
(34:01):
Meaning that money has neverbeen taxed.
And when you take a withdrawal,it becomes taxable income that
hits your ordinary tax brackets,your ordinary income brackets.
So that means much of theportfolio, like I just said, has
never been taxed.
Eventually, you're gonna have touh start withdrawing what's
(34:21):
called required minimumdistributions, RMDs.
Currently, those phase in at 73,and they're gradually increasing
over time to age 75.
RMDs are a mandatory taxableincome.
Whether you need the money ornot, you must take the RMD
distribution once you hit acertain age.
(34:42):
These RMDs can trigger highermarginal tax brackets, uh,
increased taxable your SocialSecurity, uh Social Security
benefits being taxable, MedicareIrma premium surcharges, uh, net
investment income can also betriggered, and it can also
reduce deductions.
And none of this should be asurprise.
(35:03):
It's predictable, but itrequires action before you reach
RMD age, not after.
And this is where proactive taxplanning becomes essential in
your retirement plan.
Trap number three, thecomplexity creep.
As wealth grows, so doopportunities.
You get more and moresolicitations for private real
(35:25):
estate deals, alternativeinvestments, business
opportunities, insurance-basedsolutions.
And some of these may serve apurpose, but complexity for its
own sake often adds higherembedded cost, less liquidity,
longer lockup periods, andgreater difficulty understanding
(35:46):
the risk or how they work.
At this stage, simplicity isoften a competitive advantage,
and you don't need more movingparts.
You just need some coordinationand clarity with your financial
plan.
Trap number four, portfoliomisalignment.
So this is a big mindset here,but losses feel different at
(36:09):
different levels of wealth.
As an example, a 20% decline ona$200,000 investment portfolio
is$40,000.
A 20% decline on a$1.9 millionportfolio is$380,000.
That's a big difference, andthat changes the behavior
(36:29):
substantially.
The most common misalignments Isee is being too aggressive.
This is when retirees have toomuch money in equities, too much
of their portfolios in equities,and this is exposing themselves
to significant sequence ofreturn risk.
The other one that I see, andactually I see this far more
often, is when retirees are tooconservative, allowing inflation
(36:55):
to quietly erode purchasingpower.
A helpful structure in thinkingthrough these parts is what I
call the 654 method.
You can watch another video Ihave linked here where I explain
this in more detail.
Let's talk about the first partof the 654 method.
The first is the buffer.
This is your six-month emergencyfund.
(37:17):
You've heard about this manytimes.
This is the easy place to grabmoney for the unexpected
expense.
The next bucket is your warchest.
This is your five years inhigh-quality bond ladder that
you use to produce and generateincome over the next five years.
This helps you weather thestorms that we see, the
(37:39):
volatility we see in themarketplace as investors.
And then finally, the engine,the equities that we have
invested for long-term growth.
The purpose isn't to maximizeperformance with this, it's to
create stability duringvolatility.
When markets decline, you're notasking, should we sell?
(38:01):
You're reminding yourself wealready have funded the next few
years with our war chests.
We have a plan on paper onpurpose for this very event.
And that changes theconversations entirely in my
experience over years withretirees, business owners,
people that we've implementedwith, and it adds that
(38:24):
confidence they need to weatherthese unnecessary or these undue
storms that pop up out ofnowhere.
The next trap is the legacyblind spot.
So at$1.9 million, many familieswill not spend all of their
money.
In fact, it means that uh you'reyou're not just planning for
(38:46):
retirement, but you're planningfor a transfer.
There's gonna be a legacy, agift, whether to family or some
charitable organization.
But a lot of times we seeclients can't spend or don't
want to spend, uh, meaning thatthey're sufficient, they're
happy, they they enjoy the lifethey have.
They don't need the perpetualchase of more, they're content.
(39:10):
And so uh what this does iswithout having structure uh
around the legacy that you mayprovide, then beneficiary
mistakes happen, uh, taxinefficiencies compound, family
misunderstandings can develop.
This is one that I see all thetime, frequently.
Uh, and a little bit ofconversation, a little bit of
(39:31):
planning on the front end can goa long way to help uh these
family misunderstandings or evenprevent a lot of the family
misunderstandings.
So legacy planning isn't aboutcontrol, it's about clarity.
Reviewing your beneficiarydesignations, consider Roth
positioning, evaluate whethertrusts are appropriate for you
(39:52):
or your family.
That's one that you might wantto consult an attorney for.
Uh, be intentional about yourcharitable goals or charitable
giving and communicate yourvalues early to your spouse, to
your to your loved ones, to thepeople that are going to carry
out your final wishes and yourlegacy because your plan is not
(40:13):
just what you do with the moneytoday, but it's how this legacy
is left after you're gone.
And your tax plan and yourlegacy plan are definitely
connected.
People don't think about this,but these things are interwoven
uh substantially in your plan.
How to calculate your realnumber?
Here's a practical framework.
(40:35):
Step one, gather two to threemonths' worth of expenses.
Use your credit card statements,your bank statements.
And I also want you to includeeverything that would also be
things that are irregularexpenses like repairs or travel,
gifts, uh, insurance, thingsthat don't happen every single
month also need to be includedwhen you're trying to think
(40:58):
about your overall livingexpenses.
The next thing we want to do issubtract the guaranteed income
sources, such as SocialSecurity, pensions, or other
guaranteed uh income sourcesfrom your total expenses.
That's gonna give you the gap,how much we need to from our
(41:20):
investment portfolios everymonth to provide your retirement
income.
Step three, we want to identifyflexible spending.
So if markets declinesignificantly, what can we
temporarily pause or temporarytemporarily reduce in order to
kind of weather this storm?
Now, we have the 654 method inplace, we've got a buffer
(41:44):
already in place to help us, butstill, sometimes it's good when
the markets pull back, whenthings get uncertain, to pull
back, reevaluate, reset on am Ibeing thoughtful about where I
spend money or am I justwilly-nilly spending?
Step four, we're gonna divideour expenses into two
categories.
(42:04):
One is base spending.
This is gonna be our core livingexpenses, the things that you
have to have every month.
The next one is gonna be boostspending.
This is uh travel, experiences,the extra gifts, um, the extra
lattes we want to buy.
I'm not a fan of cutting outlattes, I think it's uh trivial,
but the extra things that we dofor us, ourselves, and our
(42:28):
families that are not necessaryto day-to-day life.
That is boost spending.
So this will help us analyze thegap between guaranteed income
and what our spending is.
That number becomes your targetretirement paycheck.
Now you're planning withclarity, with a strategy, and
(42:49):
you've worked your numbers,you're not just guessing at some
round number because it soundsgood.
If you want to take that allanother step forward, you can do
is you can multiply your basenumber by 25, and you can also
multiply your base plus yourboost number by 25.
(43:10):
Once we do that, that'll give ustwo figures, and that will give
us a range of what your assetsneed to be to provide
supplemental retirement incomefor you up above up and above
your guaranteed income streamslike Social Security, pensions,
those sort of things.
Let's talk about a tax smartwithdrawal framework.
(43:32):
A common structure looks likethis.
First, taxable accounts.
This is where you would mighttake money first when you're
taking income in retirement,supplemental income.
So one of the things to do isuse your taxable money first,
money that's already been taxed,harvesting gains and losses
(43:54):
strategically.
Second is potentially using yourpre tax accounts.
Uh filling lower tax bracketsintentionally, uh, not waiting
necessarily to RMD age.
And then third is using Rothaccounts, leaving these last so
that they can continue to growlong term for growth to help
(44:17):
support your retirement over a20 or 30 year period.
Uh the other things that youmight consider in this window is
Roth conversions.
Do they make sense?
Well, in low-income years, theyprobably do.
Before Social Security or beforeRMDs, they potentially do.
Before Medicare premiums rise,they you know, when you're when
(44:39):
you turn these on, you mighthave some Medicare Irma premium
surcharges.
So you want to factor that in.
Medicare uses two years lookback to determine what your
premium is going to be.
So it's important that if you'redoing Roth conversions, you're
also considering what theMedicare premium surcharge is so
(45:02):
that you're aware of that twoyears down the road when you're
paying these uh Medicarepremiums.
Finally, let's talk about a testfor the exclusive investments.
This comes up a lot.
And again, people, you know,they they have they build
significant wealth, they havesignificant wealth, and uh there
(45:23):
starts to be questions aroundyou know opportunities that get
presented, and and should I buy,should I invest, this deal came
to me, sounds good.
These are the some things that Iwant you to think about if those
get presented to you.
Number one, can I clearlyexplain how it makes or loses
(45:44):
money?
What does it do?
How does it earn money?
How does it lose money?
How does it work?
You you need to understand that.
Number two, what's the totalcost in dollars?
So, what does it cost to be aninvestor in this and how does it
impact you?
And not just uh uh a percent oranything like that, but what are
(46:07):
the dollars it cost you to beinvested in this opportunity?
And then after fees and taxes,can it realistically outperform
a diversified low-costportfolio?
I see a lot of times people arechasing the next greatest idea
or their friend brought them uha strategy or their neighbor,
(46:27):
their CPA, or someone, and youknow it sounds really good in
paper, and they want to be partof this thing, and and that's
all good and noble and fine, butit doesn't necessarily mean it
makes a lot of sense, and itdoesn't mean it can uh
outperform just a steady, eddy,diversified, you know, low-cost
portfolio.
(46:47):
So ask yourself those threequestions.
And if you can't confidentlyanswer those questions, you need
to pause and think throughdisciplined investing tends to
win quietly.
You don't have to have the bigloud, you know, look at what I'm
investing in strategy to win.
(47:08):
So being disciplined goes a longway in in continuing to build
success uh and wealth over time.
So, in conclusion,$1.9 millionis not just a milestone, it
represents a transition.
The transition from accumulationto stewardship.
Taxes matter more, structurematters more, behavior matters
(47:33):
more, and clarity becomes morevaluable than ever.
If you're approaching this stageor already there, and you want a
retirement plan aligned with thecomplexity of this level,
there's a link in thedescription where you can learn
more about how we work withpeople and see if it's a good
(47:53):
fit.
Thanks for watching, beconfident in your retirement,
have a long today.
Thanks for joining me on anotherepisode of What the World.
If you enjoyed the episodetoday, smash that subscribe
button.
It helps me more than you think.
Also, if you found this episodeinsightful and a light bulb went
off, share it.
Your friend, Aunt Judy, therandom guy in the office who's
(48:13):
always talked about investment.
Wealth isn't about just thechicken.
It's about our choices, chances,and changing our financial
future.
The information in this podcastis informational and general
nature, does not take intoconsideration the listener's
personal circumstances.
This podcast is not intended tobe a substitute for specific in
financial, legal, or tax advice.
(48:35):
You should consult the approvedqualified professional prior to
making a final decision.
Security is offered through LPLFinancial, member FINRA SIPC.
Paradigm Wealth Partners is theother business name for
Independent Advisor Alliance.
Investment advice offeredthrough Independent Advisor
Alliance, a registeredinvestment advisor, Independent
Advisor Alliance, and ParadigmLoft Partners are separate
(48:55):
entities for LPL Partners.
Hey podcast listeners, thank you as always
for joining and hopefullyfinding value in this financial
education awareness and topicalcontent.
This episode is a littledifferent.
It included a few individualclips that have been combined
for a compilation episode.
And I filmed these topicsoriginally for YouTube, and I
(00:25):
thought they'd be helpful toshare with you all on the
podcast as well.
The topics are all fairlyrelated, and I'll set each one
of them up for you, but wantedto make sure to give you a heads
up.
Thanks for following along, andas always, if you're a highly
motivated individual, family, orbusiness owner that could use
the help of a full servicefinancial planning partner to
(00:48):
guide you towards the future offinancial confidence, please do
not hesitate to reach out to mepersonally.
We'd be happy to schedule a timeto talk.
Thank you again, be confident inyour retirement.
We'll talk soon.
There's a financial risk mostpeople near age 58 never see
coming.
It has nothing to do with thestock market, nothing to do with
(01:10):
interest rates or inflation, andit has everything to do with
time.
Because there's a moment inlife, and most people never
realize they've crossed it,where continuing to work quietly
becomes one of the biggestdecisions you could ever make.
Not because you're riskingmoney, but because you're
risking one of the resources youcan never replace.
(01:32):
And for the majority of peopleI've worked with, that moment
happens right around 58.
If you don't understand howquickly your health, your
energy, your quality of lifechange, you could accidentally
sacrifice the best decade ofretirement you've planned for.
Before we get into this, my nameis Jonathan Bedner, certified
(01:52):
financial planner and owner ofParadigm Wealth Partners here in
Knoxville, Tennessee, where wehelp people in their 50s and 60s
retire with confidence, withoutguessing, gambling, without
giving up the best years intheir life.
I've seen this decision doneright, and I've seen this
decision what happens whenpeople wait too long.
This is why it matters.
(02:14):
Why age 58 is a turning point.
Around 58, several lifecurvatures happen.
Things start coming together,and this is what no one talks
about.
First, your health, mobilitystarts to decline, recovery
starts to slow, your strengthfades, and even mental sharpness
(02:37):
starts to lack.
Second, you start to loseenergy.
Most people still feel prettygood at 58, but by 62, 65, and
even 70, it's an entirelydifferent story.
Third, money.
By your late 50s, most of thecompounding magic is already
behind you.
The heavy lifting is done.
(02:58):
And finally, time, what Ibelieve is one of your biggest
assets.
And at 58, you have far fewerfully capable years left than
you think.
This is the convergence pointwhere money stabilizes, but time
begins to accelerate faster andfaster away from you.
The golden era of time, ofretirement, that you don't want
(03:24):
to miss is from 58 to 68.
And research consistently showsthat this age represents the
time, the decade where you havethe most freedom, you still have
great mobility, you still havegreat energy, and overall your
health is largely intact.
But after 70, you physicallydecline and that accelerates
(03:48):
sharply.
That means that most peoplenever really calculate, they
don't think about it.
Working through this windowmeans that you're working
through some of the best yearsin retirement you'll ever have.
The hidden trade-off happens at58.
Up to 58, your trading time formoney usually makes sense.
(04:10):
You're working, you're raisingfamilies, to do the things you
want to do.
You need money.
And so, in order to provide forthat money, provide for your
family, do the things you wantto do, you got to work, you
gotta earn a living.
After 58, I see where this trendusually flips.
You may already have a nice nestegg, but every year you work
(04:32):
from here, you might grow yourportfolio, I don't know, four,
five, eight percent maybe.
But the same year costs you six,twelve percent of your life,
your remaining high-energy,healthy years that you have, and
the cost of that compounding farfaster than your money ever
(04:54):
will.
And this trade-off is thetrade-off almost no one sees.
The fear that keeps peopleworking.
If I stop working, I'll beeating into my savings.
This is people's biggest fear,and it's an emotional fear, it's
one that doesn't always makesense.
Um, it may or may not make sensemathematically, but your savings
(05:16):
were built for this exact phaseof life.
Your kids are grown, you'remortgage-free, you know, life is
is, I don't want to say easy,but it's certainly less complex.
And these are the years thatyou've built and you save for to
enjoy this thing we callretirement.
So many people feel like they'recannibalized their portfolio,
(05:38):
they're spending their money,they're not sure, you know, if
their money is enough to last.
Uh, and what I like to say hereis you're not cannibalizing up
your portfolio, you're notspending down your portfolio,
you're deploying the tool youspent the last 30 and 40 years
building.
And people aren't thinking aboutit that way.
The danger isn't spending yourmoney, the danger is waiting too
(06:02):
long to spend your time.
There's another thing peopledon't often realize about time.
Again, one of your biggestassets.
These are important distinctionsto make, and another thing
people don't fully consider.
Time on paper is how long youmight live.
Usable time is how long yourbody cooperates.
(06:23):
High quality time is the timethat you have the most energy,
mobility, and freedom.
Those times, those uh aspects oftime are not the same thing.
They're vastly different.
And there are things that areeasy at 58 become dramatically
harder at 68.
Long hikes, internationaltravel, uh, sightseeing, playing
(06:48):
uh on the floor with grandkidsis harder and harder.
Uh, it's harder and harder towalk 18 holes of golf, it's
harder to drive long distances,learning new skills might be
more difficult.
You can delay your retirement.
Your body will not delay aging.
It's important to know that asyou're thinking about this and
(07:10):
as you're trying to decide whenyou should retire.
Retirement is a resourcebalance.
Uh, it isn't about hitting anumber, it's not about managing
uh four resources.
Uh, it is about managing fourresources.
Um, your time, it's aboutmanaging your health, it's about
(07:32):
managing your energy and yourmoney.
And money is the only one youcan replenish.
Earlier in life, you trade time,health, and energy to build the
money.
Later in life, you must use thatmoney to reclaim your time.
Once you have enough, the extrasavings provide diminish those
(07:52):
returns.
Why market conditions don'tmatter as much as you would
think.
People delay because they theyseem to think things like the
market feels too shaky, uh,rates are too high, there
inflation worries me, it's anelection year, uh, you know,
World War III might happen.
There's all these reasons not toretire because you're concerned
(08:16):
about market conditions, butthose conditions never
disappear.
We're constantly battling thewall of worry.
Uh just this year we've hadtariffs, we've had trade war, we
have World War III threat, youknow, every couple years there's
a presidential election.
These conditions uh often cycle,uh, some of the same ones cycle
(08:37):
through, and then we also havenew ones come through year to
year.
Markets adapt, companiescontinue to grow, their
earnings, their share price,they continue to do well, and
the these guardrails continue toexist.
You know, how can we make thebest decision for you in your
(08:58):
retirement objectives?
You don't retire because theseconditions are perfect, no
conditions are ever going to beperfect.
You retire because your plan uhworks under imperfect
conditions.
It says that, you know, since wehave done A, B, and C, you can
now do X, Y, and Z.
And it's important to know andunderstand that the work you've
(09:21):
put into building your plan, allthe knobs you've twisted and
levers you've pulled are uh youknow come together so that you
actually can have a plan thatlive confidently with clarity to
and through retirement withouthaving to work until your 90s.
Most people don't delay theretirement for financial
(09:44):
reasons.
They actually delay forpsychological ones.
A lot of our identity is tied upin our careers.
You know, we're police officers,we're teachers, we're attorneys,
we're we're salespeople, we'reIT people, we're doctors, we're
nurses.
So, you know, they wonder who amI without my job?
(10:05):
What will I do with my days?
Um, will I have any structure?
Will I feel irrelevant?
After decades of this routine,the routine becomes our
identity.
Um those fears aren't permanent,but they are solvable with
planning and they're very real.
I see this happen for you knowquite a bit with people.
They're not sure, you know, whattheir life looks like because
(10:29):
they're so tied into who their,you know, what their identity
is.
And and what we try to teachpeople is, you know, your
identity isn't necessarily yourcareer.
Your identity is being a fatherto your kids, being a
grandparent to your to yourgrandkids, you know, who you are
as your core values, that's howyou help identify and and solve
(10:51):
you know your identity crisis asyou move into retirement.
So the truth from real retirees,after working with hundreds of
retirees, one pattern is crystalclear.
People do not regret retiringtoo early.
Many regret retiring too late.
(11:12):
The most common phrase I hearis, I wish I had more healthy
years.
They regret only becomes visibleafter it's too late to fix.
So how do you know if 58 is yourmoment?
If you're ready to take thesteps, you understand your
spending, you have a withdrawalstrategy, your income sources
are mapped, your portfoliostress tested, you thought about
(11:34):
how you'll spend your time andwhat you'll do for fun, maybe
new hobbies, you've got a planfor healthcare, and you've
replaced routine with purpose,the things that you really
deeply seated uh value, thethings that are most important
to you.
If you have those pieces, therisk isn't retiring, the risk is
(11:56):
waiting.
Here's the truth (11:57):
most people will never hear.
Money can wait, your healthcan't, the window doesn't last
forever, and if you're near 58,the most dangerous financial
risk isn't in the market.
It's running out of time.
You're healthy enough to enjoy.
If you want clarity andconfidence around whether it's
(12:19):
your moment, click the link inthe description, schedule some
time with us.
Let's help you figure out if nowis the time you can reclaim what
matters most and retire with theconfidence and clarity you've
always wanted.
Should you retire at 62 andclaim Social Security?
A lot of people struggle withthese types of decisions,
(12:42):
understanding the advantages anddisadvantages of when you should
claim Social Security inretirement.
Today I'm gonna give you fivepowerful reasons that illustrate
why it might be an impactful andsmart decision for you to turn
Social Security on at age 62.
I'm Jonathan Bedner, certifiedfinancial planner, owner of
(13:03):
Paradigm Wealth Partners here inKnoxville, Tennessee.
And you know, this is how wehelp people make decisions
around Social Security, aroundretirement, so that they can
have a confident and clear uhretirement plan for themselves
as they live out uh thatretirement.
Let's dive right in.
(13:24):
Here we go.
First, you need to understandwhat Social Security is and how
it works.
So, Social Security is a systemthat we have paid into while
you're working, it is a form ofretirement benefit offered by
the US government.
And at a certain age, typicallybetween 66 and 67, you will
(13:46):
reach what's called fullretirement age.
And when you reach fullretirement age, you're able to
turn this benefit on.
And these benefits are monthlypayments to you.
Uh, one of the things that thatgoes into making this decision
of when do you turn this incomeon has a lot to do with what
we're going to discuss here in afew minutes.
But the government will alsoprovide you an incentive to
(14:10):
wait.
So every year you wait, theygive you about roughly an 8%
increase on your your annualamount.
Again, that pays out monthly,but it's an annual amount that
gets paid to you.
And so if you delay all the waytill 70, that's the maximum age
that you can delay your fullretirement benefits to, you'll
(14:31):
get about a 24% increase overwhat you would have gotten at
full retirement age of 66 or 67.
But you can also, if you choose,take these benefits turned on at
age 62 or 63, 64, any anytimebetween 62 and 70.
In this video, we're talkingabout, you know, 62 here.
So if you take those benefits at62, you actually get a reduced
(14:55):
amount.
You don't get as much as youwould get at age 66 or 67.
And so um, one of the questionsthat goes into how we work with
clients is you know, when is thebest time for you to take it?
So, with that said, let's talkabout the number one reason why
you might take Social Securityat age 62.
(15:17):
The number one reason might bean immediate financial need or
early retirement.
So maybe there's a disabilitythat puts you out of work, or
maybe you were laid off and youknow can't find another job, and
you need that income to come inand help support your lifestyle.
Maybe to help you pay yourcurrent expenses, maybe it'll
(15:38):
help you pay down some debt.
You know, one of the reasons youmight draw at 62 is to help fund
uh this immediate need that youmay have in your family.
Reason number two is shorterlife expectancy or health
issues.
So one of the things aboutSocial Security is when you pass
(15:59):
away, it it goes away.
It's over.
Now, your spouse could continueto claim either yours or hers,
or theirs is what I should say,whichever is higher, but one of
them will essentially go away.
And so if you have a serioushealth issue or you don't have
that long life expectancy, thenit might make sense to go ahead
(16:22):
and draw all your SocialSecurity, start getting those
payments so that you can usethem, uh, have them in your
account, use them for livingexpenses, those sort of things.
Uh, because once you pass away,then that benefit goes away.
The IRS no longer has to pay uhthat out.
Again, with the exception ofyour spouse, if you have a
(16:45):
spouse, they can continue thehigher Social Security payment
of yours or theirs.
And so uh if yours happens to behigher, theirs would fall off,
they would still get uh yours.
There's some funny math the waythat the IRS does this that I'm
not going to talk about in thistopic because it really uh kind
(17:07):
of defeats the purpose of whatwe're talking about today.
But that would be the secondreason in this situation.
The third reason is you know,reducing the pressure on your
investment portfolio.
So if you're delaying SocialSecurity for longer, you might
have to take more withdrawalsout of your investment account
(17:28):
to sustain your life, to payyour bills, to pay your
expenses, to pay your debt.
Um, and so it might cost moremoney out of your investment
portfolios that you've savedover your working careers to
fund your lifestyle.
And so if you turn SocialSecurity on earlier, you're able
to reduce the amount of pressureon your investment portfolio,
(17:51):
which helps your investmentportfolio sustain itself longer
and be there should you need itfor some unexpected event in the
future.
So these guaranteed incomesources like a pension or in
this case like a Social Securityhelps reduce the pressure on
your investment accounts.
Number four, you can invest themoney instead of waiting to
(18:15):
receive it later.
Uh one of the kind of foundingprinciples of investments and
compounding is you know, adollar today is worth more than
a dollar tomorrow.
And that's because inflationeats away your your dollar every
year that goes by.
And so, you know, as an example,as you as as years go by, things
(18:38):
cost more.
You know, you can remember fromyou know the you know 90s or
early 2000s where you know gaswas a dollar a gallon, milk was
a dollar a gallon.
You'll have clients still today.
I remember buying Coke orSnickers for you know five
cents.
And so as those years go by,your value of your dollar goes,
(18:59):
you know, gets less and less andless.
Now, if you delay SocialSecurity, the money will still
give you a little bit of benefitfor a couple of years uh because
they're gonna give you aguaranteed raise of eight
percent.
But if you draw early and investthe money, assuming you don't
need it, you could invest themoney.
Maybe you invest in somethingthat really takes off, or or uh,
(19:19):
you know, you're in control ofhow you sp how you utilize that
money.
So what I see a lot of people dois they don't necessarily need
the money, but they would ratherstart having it collected and
turned on so that that isflowing to them and that they
are uh not just leaving themoney out there at some point.
(19:40):
Um that way, if they tragicallypass away, it doesn't just
vanish into thin air.
Uh they've they've collectedsome of this income over time.
They can allocate it into theirinvestment accounts and utilize
um into growth investments orincome-producing investments,
depending on what theirsituation is.
(20:01):
But that reinvestment would thenallow the accounts to continue
to grow over time.
And then when they need theinvestment, they could tap into
it for themselves.
Finally, reason number five isthe big break-even question.
How long does it take for you tobreak even if you choose to wait
until 60, you know, 66, 67, oreven until 70?
(20:24):
So that's one of the things youhave to understand when you're
making this decision.
This chart by Capital Groupshows that if someone was
supposed to take Social Securityat age um 67, and let's just,
you know, I think the example is$2,500 a month, they would get
$2,500 a month at age 67.
(20:45):
Well, if they decided to take at62, they would have had to reach
age 77 for the decision to nottake Social Security at 62 to
make the decision of waiting payoff, they would have to reach
age 77.
That's a long, that's a 10-yeargap that you would have to wait
(21:08):
from 66, 67 to 77.
And life expectancy for peopletoday uh is somewhere around 75,
76, 77.
And so the IRS knows this.
They have, and you know, there'slots of people that live long,
healthy lives far beyond this.
But the IRS knows that theaverage life expectancy is
somewhere in the mid to late80s, excuse me, mid to late 70s.
(21:30):
And so if they can get people todelay, and then they end up not
living a long lifespan, they endup not having to pay out as much
as they were projecting or youwere projecting it to pay out.
You know, having this decisionearly on and understanding this
break even might help youunderstand well, if I'm giving
up$2,500 a month in this examplefor five years, you know, then
(21:56):
you know I'm I'm not taking in,you know,$100.
$120,000 in income for thatfirst five years and choosing to
delay at 62.
Again, have to wait till 77 forthat decision to delay to make
sense, for the break-even tomake sense.
So if you started at 62, you'llget less money.
(22:18):
You might get, say,$2,000 amonth, but you can use that
money today, like the thingswe've discussed for living
expenses, pay down debt, you'llreinvest it, and you be in
control of how it's invested.
So there's a lot of reasons tounderstand how and when you
should claim Social Security.
And they're individual reasons.
(22:39):
It's not a one size fits all,but these are serious things to
consider as you're moving intoretirement and trying to
understand the nuances of whento claim Social Security.
In today's video, I'm going toshare four simple ways to
increase your Social Securitybenefit in retirement.
Most people assume their SocialSecurity benefit is fixed, like
(23:03):
it's some number the governmentjust hands you and that's what
you get.
But that belief alone canquietly cost you tens and
sometimes hundreds of thousandsof dollars over your retirement
lifetime.
The truth is, Social Security isfull of rules, levers, and
timing decisions.
And if you don't understandthem, you will most certainly
(23:24):
leave money on the table.
This video isn't about loopholesor tricks.
It's about decisions most peoplenever even realize they have.
If you're within 10 years ofretirement or already retired
and haven't filed yet, this isone of the most important videos
you can watch.
Because once you lock in thesedecisions, there's no undo
button.
Hi, I'm Jonathan Bedner,certified financial planner,
(23:47):
owner of Paradigm WealthPartners here in Knoxville,
Tennessee, and we help retireesand pre-retirees build
retirement plans that provideconfidence and clarity.
Let's first talk about whySocial Security mistakes are so
expensive.
Social Security feels automatic.
You work, you pay in, you file,and you collect.
(24:08):
So most people never questionit.
But for most retirees, SocialSecurity becomes one of the
largest guaranteed incomestreams they'll ever receive,
often lasting 20 or 30 years.
That means a small percentage isdifferent, don't just add up,
they compound for life.
And understanding these rulescan mean more income for you
(24:31):
every single month.
And ignoring them means apermanent pay cut you can never
fix later.
Let's talk about how SocialSecurity is actually funded.
Social Security is fundedthrough payroll taxes, not
income taxes.
So every paycheck you pay apercentage and your employer
(24:51):
matches it.
And it only applies to yourannual earnings cap.
That matters because yourbenefit isn't based on your
savings or your investments orhow smart you were financially,
it's based on your earningshistory.
No earnings record equals nobenefit leverage.
Let's talk about the 35-yearrule.
(25:13):
Social Security looks at your 35highest earning years.
Those years are inflationadjusted, indexed, so earlier
wages aren't unfairly punished,but there's a catch most people
miss.
If you work fewer than 35 years,those years get replaced with
(25:34):
zeros, and zeros are brutal.
You don't need to earn a lot,you just need non-zero years.
Even modest income years late inyour career can meaningfully
boost your benefit.
Now let's talk about why higherearners don't get proportionally
higher benefits.
Social Security is intentionallynot linear.
(25:57):
Early dollars of income areweighted heavily.
Later dollars matter less andless.
That's why someone earning halfas much as another worker often
receives more than half of thebenefit.
This reverse progressivestructure is frustrating, but
once you understand it, itbecomes a planning advantage.
What full retirement ageactually means, full retirement
(26:22):
age, often called the FRA orfull retirement age, is not a
requirement.
It's just a reference point.
And depending on your birthyear, it's somewhere between 66
and 67.
If you claim it before, yourbenefit is permanently reduced.
If you delay beyond it and yourbenefit permanently increases,
(26:43):
capped at age 70.
And that brings us to the fourstrategies, the four ways you
can increase your SocialSecurity benefit.
Strategy number one, work a full35 years.
Even if it's part-time, thisdoesn't mean grinding longer in
a high stress job.
It means making sure that youreplace those zero years.
(27:05):
Even part-time income can knockout a zero and raise your
lifetime benefit more thananother high-earning year ever
could.
Small income, big impact.
Strategy number two, delayclaiming if you can.
Claim early and your benefit isreduced for life.
(27:25):
Delay pass full retirement ageand your benefit grows by
roughly 8% a year, guaranteeduntil age 70.
That's one of the few guaranteedincreases available anywhere in
retirement planning, and it'sespecially powerful for
longevity planning.
Protecting a surviving spouse inretirement, and that is one of
(27:48):
the key ways you can do it.
The third strategy is understandspousal benefits.
What you may be eligible for,your own benefit, or a spousal
benefit, which could be up to50% of your spouse's full
retirement benefit.
That's huge for lower earners,stay-at-home spouses, divorced
(28:12):
individuals who are married toan ex-spouse for at least 10
years.
Many people qualify for morethan they realize and never
claim it.
That takes us to the fourthstrategy.
Make sure you use your survivorbenefits strategically.
Spousal benefits apply when bothspouses are alive.
(28:33):
After one spouse passes, theycan be worth a hundred percent
of the higher amount.
This creates planningflexibility.
One benefit can be claimed whilethe other continues to grow.
Social Security isn't aboutincome, it's about security for
the spouse you left behind.
(28:54):
Social Security doesn't exist ina vacuum, and you shouldn't plan
for it in isolation.
It interacts with all parts ofyour retirement plan, including
taxes, investment withdrawals,pensions, your required minimum
distributions, long-term cashflow.
(29:14):
All of these are hugepossibilities and things to
consider as you're trying todetermine when you should claim
Social Security.
Claiming without coordinationoften locks people into
unnecessary taxes and lowerlifetime income.
When you claim matters just asmuch as what you claim.
In closing, Social Security ispredictable, but only if you
(29:37):
understand the rules.
Once you file, the decisionfollows you for life.
Before you lock anything in,learn your options, run the
numbers, and understand how itfits into your full retirement
plan.
Before we jump in, let mequickly frame who this video is
for.
If you've built seriousretirement savings, maybe you're
(30:00):
in your late 50s, 60s, or evenyour early 70s, and your
portfolio is approaching oralready around$1.9 million.
This is a stage where questionschange.
You're no longer asking, will Iever be able to retire?
Am I on track?
Instead, you're asking, are westructuring this correctly?
(30:22):
Are there things that we couldbe doing better?
Are we being tax efficient?
Are we taking the right level ofrisk?
Are we missing somethingimportant?
My name is Jonathan Bedner.
I'm a certified financialplanner and co-owner of Paradigm
Wealth Partners here inKnoxville, Tennessee.
I've been advising familiessince 2010, specializing in
retirement planning forprofessionals and business
(30:44):
owners who've spent decadesbuilding wealth and want clarity
about what comes next.
And what I've consistently seenis that there's a real
transition point that happensonce you reach this level of
wealth.
And not because$1.9 million is amagical number, but because
planning complexity increasessignificantly once you reach it.
(31:08):
And that's what we're going totalk about today.
Why is$1.9 million a turningpoint?
Crossing$1.9 million inretirement savings should feel
like freedom.
And in many ways it is.
You've built a large net worth.
You have freedom and flexibilityand wealth and you've
accomplished so much.
(31:29):
But what most people don'trealize is that once you reach
this level of wealth, retirementplanning changes.
Below roughly$1 million, thedominant concern is: will I have
enough?
Am I on track?
Can I make it?
Can I afford to retire?
Can I afford my living expensesif I choose to quit working?
(31:50):
Around$1.9 million and beyond,the questions become: how do I
protect what I've built?
And before this stage, growthlends to be what matters most.
After you reach this stage,preservation, tax strategy, how
we turn your nest egg into apaycheck, and risk alignment
(32:12):
begins to matter more thansimply maximizing returns.
Because when these numbers arelarger, even smaller
inefficiencies in taxes, fees,or allocation can have a
meaningful long-term impact.
And that's why this levelrepresents a shift in your
mindset.
(32:32):
So let's talk about a coupletraps.
The first trap is trap numberone, not knowing your real
retirement number.
Many people anchor to roundnumbers.
They think 1 million or 2million or even$5 million.
But retirement doesn't operateon round numbers.
It operates on your spending.
Your real retirement numberdepends on your actual monthly
(32:55):
expenses, healthcare cost,travel and lifestyle goals,
inflation, longevity, and taxes.
There could also be otherthings, but those are kind of
the key five or six things thatI think are important when
you're trying to think throughwhat is your retirement number?
How much do you need to live onin retirement?
(33:17):
So without clarity here, twocommon things happen.
One, you either oversave out offear, or two, you underspend out
of fear.
I've seen people work many extrayears simply because they never
defined what they actuallyneeded.
So once you build out a planwhen you have the strategy, it
(33:40):
provides that clarity, and thatclarity eliminates some of this
unnecessary anxiety.
Trap number two, the taxconcentration problem.
At$1.9 million, most householdshave 60 to 85% of their assets
in tax-deferred accounts, IRAsand 401ks.
(34:01):
Meaning that money has neverbeen taxed.
And when you take a withdrawal,it becomes taxable income that
hits your ordinary tax brackets,your ordinary income brackets.
So that means much of theportfolio, like I just said, has
never been taxed.
Eventually, you're gonna have touh start withdrawing what's
(34:21):
called required minimumdistributions, RMDs.
Currently, those phase in at 73,and they're gradually increasing
over time to age 75.
RMDs are a mandatory taxableincome.
Whether you need the money ornot, you must take the RMD
distribution once you hit acertain age.
(34:42):
These RMDs can trigger highermarginal tax brackets, uh,
increased taxable your SocialSecurity, uh Social Security
benefits being taxable, MedicareIrma premium surcharges, uh, net
investment income can also betriggered, and it can also
reduce deductions.
And none of this should be asurprise.
(35:03):
It's predictable, but itrequires action before you reach
RMD age, not after.
And this is where proactive taxplanning becomes essential in
your retirement plan.
Trap number three, thecomplexity creep.
As wealth grows, so doopportunities.
You get more and moresolicitations for private real
(35:25):
estate deals, alternativeinvestments, business
opportunities, insurance-basedsolutions.
And some of these may serve apurpose, but complexity for its
own sake often adds higherembedded cost, less liquidity,
longer lockup periods, andgreater difficulty understanding
(35:46):
the risk or how they work.
At this stage, simplicity isoften a competitive advantage,
and you don't need more movingparts.
You just need some coordinationand clarity with your financial
plan.
Trap number four, portfoliomisalignment.
So this is a big mindset here,but losses feel different at
(36:09):
different levels of wealth.
As an example, a 20% decline ona$200,000 investment portfolio
is$40,000.
A 20% decline on a$1.9 millionportfolio is$380,000.
That's a big difference, andthat changes the behavior
(36:29):
substantially.
The most common misalignments Isee is being too aggressive.
This is when retirees have toomuch money in equities, too much
of their portfolios in equities,and this is exposing themselves
to significant sequence ofreturn risk.
The other one that I see, andactually I see this far more
often, is when retirees are tooconservative, allowing inflation
(36:55):
to quietly erode purchasingpower.
A helpful structure in thinkingthrough these parts is what I
call the 654 method.
You can watch another video Ihave linked here where I explain
this in more detail.
Let's talk about the first partof the 654 method.
The first is the buffer.
This is your six-month emergencyfund.
(37:17):
You've heard about this manytimes.
This is the easy place to grabmoney for the unexpected
expense.
The next bucket is your warchest.
This is your five years inhigh-quality bond ladder that
you use to produce and generateincome over the next five years.
This helps you weather thestorms that we see, the
(37:39):
volatility we see in themarketplace as investors.
And then finally, the engine,the equities that we have
invested for long-term growth.
The purpose isn't to maximizeperformance with this, it's to
create stability duringvolatility.
When markets decline, you're notasking, should we sell?
(38:01):
You're reminding yourself wealready have funded the next few
years with our war chests.
We have a plan on paper onpurpose for this very event.
And that changes theconversations entirely in my
experience over years withretirees, business owners,
people that we've implementedwith, and it adds that
(38:24):
confidence they need to weatherthese unnecessary or these undue
storms that pop up out ofnowhere.
The next trap is the legacyblind spot.
So at$1.9 million, many familieswill not spend all of their
money.
In fact, it means that uh you'reyou're not just planning for
(38:46):
retirement, but you're planningfor a transfer.
There's gonna be a legacy, agift, whether to family or some
charitable organization.
But a lot of times we seeclients can't spend or don't
want to spend, uh, meaning thatthey're sufficient, they're
happy, they they enjoy the lifethey have.
They don't need the perpetualchase of more, they're content.
(39:10):
And so uh what this does iswithout having structure uh
around the legacy that you mayprovide, then beneficiary
mistakes happen, uh, taxinefficiencies compound, family
misunderstandings can develop.
This is one that I see all thetime, frequently.
Uh, and a little bit ofconversation, a little bit of
(39:31):
planning on the front end can goa long way to help uh these
family misunderstandings or evenprevent a lot of the family
misunderstandings.
So legacy planning isn't aboutcontrol, it's about clarity.
Reviewing your beneficiarydesignations, consider Roth
positioning, evaluate whethertrusts are appropriate for you
(39:52):
or your family.
That's one that you might wantto consult an attorney for.
Uh, be intentional about yourcharitable goals or charitable
giving and communicate yourvalues early to your spouse, to
your to your loved ones, to thepeople that are going to carry
out your final wishes and yourlegacy because your plan is not
(40:13):
just what you do with the moneytoday, but it's how this legacy
is left after you're gone.
And your tax plan and yourlegacy plan are definitely
connected.
People don't think about this,but these things are interwoven
uh substantially in your plan.
How to calculate your realnumber?
Here's a practical framework.
(40:35):
Step one, gather two to threemonths' worth of expenses.
Use your credit card statements,your bank statements.
And I also want you to includeeverything that would also be
things that are irregularexpenses like repairs or travel,
gifts, uh, insurance, thingsthat don't happen every single
month also need to be includedwhen you're trying to think
(40:58):
about your overall livingexpenses.
The next thing we want to do issubtract the guaranteed income
sources, such as SocialSecurity, pensions, or other
guaranteed uh income sourcesfrom your total expenses.
That's gonna give you the gap,how much we need to from our
(41:20):
investment portfolios everymonth to provide your retirement
income.
Step three, we want to identifyflexible spending.
So if markets declinesignificantly, what can we
temporarily pause or temporarytemporarily reduce in order to
kind of weather this storm?
Now, we have the 654 method inplace, we've got a buffer
(41:44):
already in place to help us, butstill, sometimes it's good when
the markets pull back, whenthings get uncertain, to pull
back, reevaluate, reset on am Ibeing thoughtful about where I
spend money or am I justwilly-nilly spending?
Step four, we're gonna divideour expenses into two
categories.
(42:04):
One is base spending.
This is gonna be our core livingexpenses, the things that you
have to have every month.
The next one is gonna be boostspending.
This is uh travel, experiences,the extra gifts, um, the extra
lattes we want to buy.
I'm not a fan of cutting outlattes, I think it's uh trivial,
but the extra things that we dofor us, ourselves, and our
(42:28):
families that are not necessaryto day-to-day life.
That is boost spending.
So this will help us analyze thegap between guaranteed income
and what our spending is.
That number becomes your targetretirement paycheck.
Now you're planning withclarity, with a strategy, and
(42:49):
you've worked your numbers,you're not just guessing at some
round number because it soundsgood.
If you want to take that allanother step forward, you can do
is you can multiply your basenumber by 25, and you can also
multiply your base plus yourboost number by 25.
(43:10):
Once we do that, that'll give ustwo figures, and that will give
us a range of what your assetsneed to be to provide
supplemental retirement incomefor you up above up and above
your guaranteed income streamslike Social Security, pensions,
those sort of things.
Let's talk about a tax smartwithdrawal framework.
(43:32):
A common structure looks likethis.
First, taxable accounts.
This is where you would mighttake money first when you're
taking income in retirement,supplemental income.
So one of the things to do isuse your taxable money first,
money that's already been taxed,harvesting gains and losses
(43:54):
strategically.
Second is potentially using yourpre tax accounts.
Uh filling lower tax bracketsintentionally, uh, not waiting
necessarily to RMD age.
And then third is using Rothaccounts, leaving these last so
that they can continue to growlong term for growth to help
(44:17):
support your retirement over a20 or 30 year period.
Uh the other things that youmight consider in this window is
Roth conversions.
Do they make sense?
Well, in low-income years, theyprobably do.
Before Social Security or beforeRMDs, they potentially do.
Before Medicare premiums rise,they you know, when you're when
(44:39):
you turn these on, you mighthave some Medicare Irma premium
surcharges.
So you want to factor that in.
Medicare uses two years lookback to determine what your
premium is going to be.
So it's important that if you'redoing Roth conversions, you're
also considering what theMedicare premium surcharge is so
(45:02):
that you're aware of that twoyears down the road when you're
paying these uh Medicarepremiums.
Finally, let's talk about a testfor the exclusive investments.
This comes up a lot.
And again, people, you know,they they have they build
significant wealth, they havesignificant wealth, and uh there
(45:23):
starts to be questions aroundyou know opportunities that get
presented, and and should I buy,should I invest, this deal came
to me, sounds good.
These are the some things that Iwant you to think about if those
get presented to you.
Number one, can I clearlyexplain how it makes or loses
(45:44):
money?
What does it do?
How does it earn money?
How does it lose money?
How does it work?
You you need to understand that.
Number two, what's the totalcost in dollars?
So, what does it cost to be aninvestor in this and how does it
impact you?
And not just uh uh a percent oranything like that, but what are
(46:07):
the dollars it cost you to beinvested in this opportunity?
And then after fees and taxes,can it realistically outperform
a diversified low-costportfolio?
I see a lot of times people arechasing the next greatest idea
or their friend brought them uha strategy or their neighbor,
(46:27):
their CPA, or someone, and youknow it sounds really good in
paper, and they want to be partof this thing, and and that's
all good and noble and fine, butit doesn't necessarily mean it
makes a lot of sense, and itdoesn't mean it can uh
outperform just a steady, eddy,diversified, you know, low-cost
portfolio.
(46:47):
So ask yourself those threequestions.
And if you can't confidentlyanswer those questions, you need
to pause and think throughdisciplined investing tends to
win quietly.
You don't have to have the bigloud, you know, look at what I'm
investing in strategy to win.
(47:08):
So being disciplined goes a longway in in continuing to build
success uh and wealth over time.
So, in conclusion,$1.9 millionis not just a milestone, it
represents a transition.
The transition from accumulationto stewardship.
Taxes matter more, structurematters more, behavior matters
(47:33):
more, and clarity becomes morevaluable than ever.
If you're approaching this stageor already there, and you want a
retirement plan aligned with thecomplexity of this level,
there's a link in thedescription where you can learn
more about how we work withpeople and see if it's a good
(47:53):
fit.
Thanks for watching, beconfident in your retirement,
have a long today.
Thanks for joining me on anotherepisode of What the World.
If you enjoyed the episodetoday, smash that subscribe
button.
It helps me more than you think.
Also, if you found this episodeinsightful and a light bulb went
off, share it.
Your friend, Aunt Judy, therandom guy in the office who's
(48:13):
always talked about investment.
Wealth isn't about just thechicken.
It's about our choices, chances,and changing our financial
future.
The information in this podcastis informational and general
nature, does not take intoconsideration the listener's
personal circumstances.
This podcast is not intended tobe a substitute for specific in
financial, legal, or tax advice.
(48:35):
You should consult the approvedqualified professional prior to
making a final decision.
Security is offered through LPLFinancial, member FINRA SIPC.
Paradigm Wealth Partners is theother business name for
Independent Advisor Alliance.
Investment advice offeredthrough Independent Advisor
Alliance, a registeredinvestment advisor, Independent
Advisor Alliance, and ParadigmLoft Partners are separate
(48:55):
entities for LPL Partners.
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The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!