Social Security TRAP. Waiting until 70? Huge retirement mistake!
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- Опубліковано 29 чер 2024
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Join Alex as he breaks down social security benefits in a case study.
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0:00 - Introduction
0:35 - Financial Snapshot
5:28 - Initial Withdrawal Needs
9:46 - Tax Considerations
12:28 - The Optimal Strategy
17:59 - Conclusion
New subscribe. Their monthly expenses are way too high. What are they spending their money on? 🤔 Take a vacation every other year if they refuse to cut expenses. Why haven’t they paid off that small mortgage already?
The sad part is FDR never meant for SS to be taxed but a certain Pres and party did that but that’s another story.
Great breakdown on their taxes. I retired this past Oct at 55 and blessed to have a military pension and VA disability. I’m looking to take SS at 62 and investing it. The Rule of 55 also applies to me but I don’t plan to use it and will let my retirement accounts continue to grow.
Great video and info!
Congrats and thanks for your service!
While I love having a fully paid off mortgage, if this couple has a low mortgage rate it would make sense to just let it ride while keeping that money invested.
Congrats on 55 retirement! I am hoping for 56 myself. Cheers.
I agree, their withdrawal rate is too high for the investable assets. Personally I would look to reduce expenses and/or find a part time job (if possible). I would also suggest the highest earner delay until 70 for the survivor benefit. In addition I would employ a dynamic SS strategy where I delay SS as long as the portfolio is not rapidly depleting. We often look at worst case, but markets are up ~ 3 out of 4 years on average.
Luckily, my spouse and I were able to pay off our mortgage early. We took the money we were spending to accelerate our mortgage repayment and invested it right away while we were both still working. We were able to retire early after accumulating what would have been our home payment for over 7 years and maxing out our 401K/403B plans. Thankfully, both of our parents taught in us the importance of living within our means.
Investing without proper guidance can lead to mistakes and losses. I know this since I've been there myself.Seeking guidance from a professional is preferable if you're new to investing or don't have much time.
Investors can have different investing results even with the best strategy and suitable assets. Understanding how experience plays a critical part in successful investing is key. Since I was aware of this, I consulted a market analyst for advice, which helped me build my account to about a million dollars. Having strategically cashed out just prior to the market correction, I'm now taking advantage of buying opportunities once more.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances
Leah Foster Alderman is the licensed expert I use. Just look up the name online.
She seems to be literate and well educated. Thank you for sharing, I found her webpage when I searched for her online.
I lost over $70k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Natalie Rose Strayer
I'm surprised that you just mentioned Natalie Strayer here also Didn’t know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
The very first time we tried, we invested $2000 and after a week, we received $9500. That really helped us a lot to pay up our bills.
Natalie Strayer has really set the standard for others to follow, we love her here in Canada 🇨🇦 as she has been really helpful and changed lots of life's
I'm new at this, please how can I reach her?
After I raised up to 125k trading with her I bought a new House and a car here in the states also paid for my son's surgery
Glory to God shalom.
Several things to think about. Before taking SS pull all of the needed money from the IRAs and let the brokerage account grow. When SS kicks in at 70 take enough from the IRA so that their provisional income is such that less that 50% of their SS is taxable and pull the rest of their spending needs from the brokerage account. I think this will provide the best performance and the lowest taxes.
Why aren't they drawing down that tax deferred account while they have such a low tax rate? What about Roth conversions while they;re still at a low tax rate? Why use up their after tax brokerage only to be hit with higher RMD taxes and possible additional tax on their SS payments by waiting? Doesn't sound like the way I would approach the SS age to start drawing from!
Good comments. He could do a forward looking tax plan to help resolve a lot of those issues he doesn't cover.
Good question. I discuss forward looking multi-year tax planning by using Roth conversions in this video ua-cam.com/video/Ukdkb5hR7bM/v-deo.htmlsi=N43OZeMVxUyTOTur
8% per year 67 to 70
A divorce and raising children cost me a lot of money, and I’m not alone when it comes to this.
How many viewers of this video actually fall into this level of financial wealth??? The point is, how relevant is this to the viewers or is this just a FLEX as in look how smart I am. For the average couple these decisions aren’t applicable.
We do and are just getting ready to retire. So these types of analysis are helpful. But we recognize we are not “average”.
@@bilo6832 anyone who has $2M Plus and asks the question…… “can I retire” are out of touch with society. Just because you’re wealthy apparently doesn’t mean you’re smart.
Thank you for bringing this SS claim strategy. I claimed my SS retirement benefit this month (June 2024), at my FRA (66-1/2 born 1957). I’m initiating a strategy to recoup the 3-1/2 years (or an 8% per year) of increase in waiting until 70 to claim. I’ll invest 100% of my monthly SS benefit in high-risk high-return ETFs, for 42 months, or at least until I turn 70. See where we’re at then. The distinction here for return is simple interest (a straight 8% which is static cash flow), and personal investment which generates compound interest). I collect four hard pensions with zero debt, so I can afford to play high roller for awhile. We'll see how the "great experiment" pans out. Best of luck to your clients!
Lisa aged quickly from 63 to 64, lol. I question not looking at Lisa claiming SS today while Don delays to age 70. Preserve and grow the highest SS benefit for the surviving spouse. Also, consider tapping the IRA now whether for cash flow or Roth Conversion. Taxes are on sale in 2024-2025 so take advantage of them! The taxable account can be accessed strategically instead of being exhausted first. The tax plan should look further down the road than just 2025 and 2026. Lots of planning opportunities to evaluate annually.
Good eye! Lisa is currently 63 but based on her DOB will be 64 by end of year (hence why it shows her at 64 on the cash flow breakdown). One factor on getting Dons benefit highest was because Lisa had another piece of guaranteed income via her pension. Didn’t get into Roth conversions in this specific video but I’ve covered that in a few others. Thanks for watching!
Both taking at 67 if both have good earnings records is likely a mistake. The higher earner delaying often is the best compromise. Assuming both die close together goes against the reality of most couples, so a large survivor check is desirable. The lower check goes away!
I would have Lisa take SS at 63 and Don at 70. Assuming Don is the highest earner. This gives Lisa the higher survivor benefit. The only reason they would both wait until 70 is if they were doing Roth conversions. But they’re aggressively spending their portfolio early in retirement. So they don’t really qualify there.
The main reason I'm choosing to delay to 70 is to maximize survivor benefit.
I am waiting to 70 to maximize my ROTH conversions.
Social Security TRAP? Everyone is different, I am not comparing myself to others.
You said that by taking SS at 67, their legacy to their heirs will be less. So it seems like in the long run they are better off delaying. Also I would be withdrawing some portion of their tax deferred income in early years rather than getting hit with bigger RMD’s later pushing taxes into higher brackets. In your scenario you are depleting the taxable acct before touching tax deferred. But passing on assets with a low basis to your heirs would be the best assets to pass on (aside from Roth) given the step up in basis they would get.
Good comment. I discuss forward looking multi-year tax planning by using Roth conversions in this video ua-cam.com/video/Ukdkb5hR7bM/v-deo.htmlsi=N43OZeMVxUyTOTur
Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $400K. considering all the inflation, i'm thinking of investing in stocks, i dont just have idea on market strategies.
Do you plan on retiring before 59?
That is what determines it for me. I switched to cash flowing assets because I wanted to retire early.
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an adviser, as this allows you make smarter investing decisions.
@@williamDonaldson432 Could you kindly elaborate on the advisor's background and qualifications?
Annette Marie Holt is the licensed adviser I use. Just research the name. You’d find necessary details to work with to set up an appointment.
Assets way over average retirees,get real
For some of us it’s right in the right ballpark, so it’s very real. He can’t make videos that don’t apply precisely to you?
In many areas 10k/month is quite realistic. $3-4k/month alone for mortgage/property tax/home insurance and that is not for a big house, add utilities and other essential expenses and it quickly adds up. And don’t forget taxes, and if you have kids it easily gets to that without any pricy vacations. I can understand that for many living in areas with lower costs may be difficult to understand, and moving is not always a simple option.
@@richardb9419Yea right. What percentage of people have this wealth? 1-2%?
@@thepokerpilotapp that's not really the important question though. A more apt question would be "what percentage of people that are consuming UA-cam content about the subtleties of retirement planning have this wealth?" I would guess that number is a lot higher.
@@circusfreakRob I disagree.