Not only am I very grateful for the valuable information presented here, but I am also fascinated by how incredibly knowledgeable and intelligent Mike is about the topic of social security. This was a great interview. Thank you both, gentlemen!
I have heard Mike on several programs and he is clearly the most knowledgeable person about Social Security. We definitely need him back to discuss Roth conversions!
Great interview. Both these guys are great. Wow 2.5 years, 20 hours a week for a free tool that is very useful. I listen to and read a lot of retirement stuff and still learnt a couple of nuggets. One was that another benefit of delaying SS was to have more income subject to less tax (85% federal and in my state, no state). Really good stuff.
Big THANK YOU to Mike Piper on providing his tool, and to Rob for bringing Mike on to help review his tool. I have used OpenSocialSecurity numerous times and have recommended it to many people. There is not a better SS tool that is available. Mike’s tool is one of the reasons I was able to retire @60 with the knowledge of how SS can be used to supplement my retirement. But I don’t want to slight Rob with that statement, I have learned a ton from Rob’s shows. Thank you both!
This is excellent. I have watched it twice and will again. I will be FRA next year (still working and loving it) and my wife is six years behind When you play around with setting age of death vs using the table, the outcomes are very different. Now we pull out the crystal ball and start projecting our exit age.... Mr Piper is excellent.
I just watched the video since I was unable to attend the live feed. Thank you both so much! This was very informative and hugely beneficial for me as I plan for SS for myself (age 62) and my wife (age 65). Mike Piper's knowledge of the SS system is amazing and his willingness to freely share his Open SS tool is greatly appreciated.
Rob has a great channel- great guests, interesting topics abd discussion. Mike Piper - wow. Smart and makes complicated topics easily understandable. Thanks guys!
RE WEP: WEP is all about the fact some government employees are exempt from SS taxes, but work side or summer jobs that DO pay SS taxes. Without WEP, that small income that IS subject to SS taxes would make that person look much poorer than they really are. Since SS benefits are tiered (known as bend points), people with really low income histories receive much more in benefits relative to their income history. But if you let government employees receive those elevated benefits from working side jobs while letting them opt-out of SS taxes in their main job, you would be letting them double-dip and providing them special benefits that other non-government employees don't enjoy. The one really bad thing about WEP and states that provide certain state employees a pension and don't collect Social Security taxes is that some of them (ex: Texas) do not adjust their pension payments for inflation. This can become problematic for those beneficiaries, especially if they were planning on that pension to support them for the rest of their retirement years.
Thank you for this. I have used Open Social Security to both determine what our ideal times to start SS are, as well as to help determine how much life insurance I need to keep until I get close to 70 as I am the higher earner so my husband’s max survivor benefit would be at 67.
All I can say is wow! Mike Piper is always a must watch and read. Would like to hear more about his strategy to drawdown on bonds to pay for years of delaying social security. Is he counting social security and pension as part of one’s total assets besides in stock/bonds investments?
This is great. I used his tool several months ago. It help us (my spouse and I) to decide when to file for SS. I am using another tool for tax planning that addresses the Roth conversions. We plan to do Roth conversions of varying amounts over the next 6 years or so. That should limit the taxes and IRMAA we have to pay during our retirement.
@@RRin901I am using Right Capital. There is another channel that I paid to grant me access. It was/is well worth the money (less than $150) I paid to see the impact of the conversions. My wife is 4 years younger than me so I am able to do Roth conversions for 6-7 years and still stay within the 12/15% tax bracket. Also, that keeps us from having to pay IRMAA for our Medicare when RMDs increase later in life (at least until one of us passes away).
Excellent interview of a very smart (and generous) man…I still think biggest drivers are realistic WACC and potential for benefits cuts (incl means-testing); therefore, file as early as possible
Great interview! Trying to figure how/if COLA is applied within the calculator. I do see that a discount rate is used. But wondering if I should see increases over the years in the results table or not?
Rob, another great video. Thanks to you & Mike for explaining the tool & the ins & outs of Social Security. I do have one question about the On Social Security calculator. I need to put my PIA into the tool. My PIA date is 66 & 6 months. That was in September 2023. Now if I get My SSA statement, it shows my 1st benefit estimate at 66 & 10 months. It doesn't show my PIA. Should I use the benefit at 66 & 10 months? Thanks again.
@rob_berger Thank you, great interview. I was very impressed with Mike’s expertise on such a complicated topic. My wife is a retired teacher who will be impacted by WEP when she files. I understand the reasoning behind WEP, but I don’t understand GPO. In our case, she will not be eligible for spousal or survivor benefits because of her pension. This also means for me to wait until age 70 runs the risk of me passing before filing and I would have received nothing from SSA. Why is my personal social security’s spousal and survivor benefit impacted by my wife’s career choice?
WEP/GPO isn’t just “firefighters and teachers. Fir example, every single job class in Alaska who entered service prior to a certain date (Tier 1 and 2), is part of the defined pension plan. I’m one of them. My benefit is very large. I won’t qualify for any survivor benefit and my SS benefit will be cut but at $500. (I also worked in the private sector and have enough to collect about $1300)
The only real question that impacts our SS claiming strategy is how much cut and/or increased taxation of SS benefits will happen 10 years from now. If people believe that SS benefits will be cut at 23% across the board, I think they underestimate the political climate. There's huge political risk if people have other annual income sources exceeding say $100,000 to $200,000. Politicians say those are "rich people" (not understanding that rich refers to net worth not income). The politicians will establish an arbitrary income limit and further cut or completely tax SS benefits or BOTH of those people despite paying-in max SS taxes for decades. The politicians will not cut benefits of a widow(er) who's SS benefits are $1,200 per month. This is the topic that needs more discussion in our political climate and by "financial planners".
I really good podcast. I think there needs to be a clarification at the ~ 28min point about survivor benefits. Surviving children and a spouse are entitled to benefits at any age with curtains restrictions on the age of the children and if the spouse is earning an income.
If I understand this correctly Mike said in most cases where the higher earning spouse is receiving survivor’s benefits it makes sense to delay their SS benefit until full retirement age. Comments?
I would like to add another comment to my earlier comment at ~28min commeent on survivor benefits. This comment relates to miscommunication that was covered at 1:05, but it should also be relavent to o all advice people get from whatever source. Much of the advice that Mike gives is excellent. However, it is only relative to the senario that is being discussed. The addice to slightly different scenarios may be different. So it is incumbent on the wacher, reader, or listener to find out as much as they can or get professional help when making decisions on SSA benefits. I know people who have not recieved or claimed SSA benefits because they are misinformed.
Open social security is now suggesting I take it about 2 years earlier than it was some months ago. Anyone else have a similar experience? I turn 66 soon.
fixing social security is the same as fixing the border. One party needs these things to remain broken for the fear factor. Neither will get fixed until the party not in power gets something they want to fix it. Sad but true facts.
As it turnes out (I claimed mine too early... long complicated story... can't undo it now) so I used the calculator to help me decide if/when I should suspend and when to turn it back on.... I was thinking I would suspend at full retirement age... 66 and 10 months (can't do it any sooner) and turn it back on at age 70 but the calculator told me to turn it back on sooner (68 and 4 months: only 18 months later. Wow!!! what a surprize !!!
Intangible and psychological benefits of Roth/Roth converted amounts in that the money is "yours" and not the tax authority's IRMAA issues later on > ("pay a little now or a lot more later" ? Avoiding RMD (required minimum distributions) (does proper qualified Roth distribution avoid raising your "MAGI" income?) < that kick your Cap Gains + Qualified Dividends tax rates higher as well as your regular income tax rates? Also pushing your proportion of your Social Security income that is taxed higher if you are not already past the 85% threshold? Certain "financial guys" who charge according to AUM (amount under management) have an incentive to be against Roth/Roth conversion since it means your account for their charging purposes is smaller although the smaller amount might be worth more to you because it isn't getting taxed upon distribution to you? (When you convert you are probably expending some of your taxable account for paying the taxes due on conversion making that part of what they "manage" smaller) also the constant refrain that "if future tax rates are the same as now the Roth conversion is worthless" should be answered by "nobody knows what the future tax rates will be but they are more likely to go up than down" (and I doubt that that refrain is even mathematically correct) --- but one could make a very valid observation that money spent on paying Roth Conversion taxes would indeed be wasted if the Roth account value were to shrink severely due to market losses or failed investment choices that end up losing a lot of money ----- also if you just lost a lot of your income and/or personal financial nest egg due to catastrophic bad luck ----
Well your comment appears to acknowledge that there are pros and cons to Roth conversions, and of course that is true. When they are done correctly and for the right reason they tend to work out better. When not they don’t. The major psychological problem with Roth conversions is that people have an emotional attachment to Roth money being “better”. This is incorrect. It is quite simply a math problem. You allude to this bias with your statement……”and I doubt that the refrain is even mathematically correct”. The goal of conversions is to minimize taxes, and penalties(like IRMAA). But, the fact that conversions trigger taxes, and can lead to penalties, just proves the fact that it is a math equation, albeit a complicated one. You can convert too much or too little. Having only Roth money means you likely paid too much tax. Statements like “(rates) are more likely to go up” fly in the face of recent history. The last point is that the benefits of doing major conversions require longevity to bear fruit. So early death, which is what will happen to about 25% of people tends to lead to less benefits for converting, unless there is a widow left alive.
i still don't see the usefulness in Open Social Security tool over any other tool, in terms of it just being a guess based on actuarial, ss actuarial, manual input life expectancy. So, it's still a guess on life expectancy, and I don't see how you can determine its accuracy over another tool. What I see missing is that there is actual data you could compare against life expectancy assumption, by compiling and comparing data on the number/percent of people who took ss and outlived their break even points. This allows you to weight your life expectancy assumption. If say only 1% of ss recipients outlive their break even point and for how long, I'm hard pressed to believe that the life expectancy assumption is correct. Even if you have 90% drawing ss beyond break even point, you'd also want to capture the steep drop off in mortality at that point. One error I heard here was about the break even point. Break even isn't about investment returns, it is about how many years will you break even from taking ss earlier to delaying. This was a great interview, though, and well explained.
I would like to maximize my inflation protection with Social Security. My wife and I both have non-inflation adjusted pensions that are worth less each year in terms of spending power. Both of us waiting until 70 increases the percentage of our retirement income that will be inflation adjusted.
It may not be necessary for both of you to wait until age 70. Generally, it’s best for the highest earner to wait. But the lower earner filing earlier may provide the highest overall benefit. I would run your situation through Mike Piper’s software.
This is so frustrating… I’m not a high income earner, uneducated and severely dyslexic. All of this is so confusing and living paycheck to paycheck I can’t afford to higher someone to help me figure this out. I’m 58, have scrimped, saved and invested in indexed funds - i now have a 1.3 million net worth and can’t understand how to make it work to retirement. This is why the rich get rich, the poor get poorer
If you have a net worth of 1.3 million and will be getting SS you should be able to easily make retirement work. With saving 1.3 million you have proven you have the knowledge and aptitude to handle money. They key to a successful retirement is to manage your expenses. The first step normally is to ensure you live in area with a low cost of living, get and stay out of debt, don’t waste money, and you can live a comfortable lifestyle in retirement. 1.3 million should be able to safely provide about $50,000 of yearly income throughout your retirement, add in SS and you should have sufficient income to retire comfortably.
used it, way too simplistic in it's approach. Using net present value of payment stream...sure may be financially accurate, but does not take into account any of the intangibles or complexities for a given situation. Might as well throw a dart at a board that has all the months on it from 62-70. I get that if you make a tool too complicated with too many questions, people who are not detail oriented will not use it or zip through answering questions incorrectly, but making something too simple that some people will rely on to make decisions is not good either.
You are ridiculously off base. I found this calculator 7 months ago. Prior to that I had been researching SS claiming strategies for 2 years. I received numerous conflicting statements and references, including from SSA. Our situation is very complicated and includes a dependent. I actually was told by the SS worker that my claiming strategy was incorrect. I had to educate the worker after tracking down the agencies own policies and citations. Open Social Security spit out the proper strategy and the exact financials on it in like 5 minutes. Everything was spot on. If I had found this calculator before I had done all my own research it would have saved me literally 100 hours of leg work, and I would have been able to claim sooner. You obviously don’t understand what you think you understand.
My view is this is the most comprehensive SS tool, yes you need to take other things into account (taxes, Roth conversion, impact to SSI) to make your final decision, but there is no other SS tool out there (at least free to use) that has this extensive of parameters and performs this level of calculations. Mike Piper even let’s you specify any combination of filing dates to show you what your and your spouses benefits will be. In reality, the SS administration should link their site to Mike Piper’s site.
You are ridiculous. The tool is incredibly accurate. I discovered this tool AFTER I applied for benefits. I had a very complicated claiming strategy that took me 2 years and at least 100 hours to research. I then contacted SS to start my benefit. The worker had incorrect information and did not agree with my filing request. I had to quote SS rules from his guidebook to get him to reconsider. He then researched what he should know. Once he did that he did agree that I could file for a spousal benefit. However, he remained confused about deemed filing rules, until he again reviewed SS policies I had to quote him. Only then did he agree to file it correctly and allow the claim. If I had not done a huge amount of research I would have lost a bunch of money and benefits. When I discovered the Open Social Security Calculator, it took me 5 minutes to get a 100% accurate estimate of benefits I was eligible for, including all the complicated issues I had previously dealt with. This tool would have saved me countless hours of research and headaches, had I discovered it earlier. It would also have increased my total benefits by allowing me to file earlier with better and correct data. You are clueless about issues you claim to understand.
For me, it should include income earned if I continue working after starting to collect SS benefits. The tool says I should start collecting immediately but doesn't reduce my SS benefits because of the current earnings.
Not only am I very grateful for the valuable information presented here, but I am also fascinated by how incredibly knowledgeable and intelligent Mike is about the topic of social security. This was a great interview. Thank you both, gentlemen!
I have heard Mike on several programs and he is clearly the most knowledgeable person about Social Security. We definitely need him back to discuss Roth conversions!
Excellent interview with Mike. Man this guy knows about Social Security.
Great interview. Both these guys are great. Wow 2.5 years, 20 hours a week for a free tool that is very useful. I listen to and read a lot of retirement stuff and still learnt a couple of nuggets. One was that another benefit of delaying SS was to have more income subject to less tax (85% federal and in my state, no state). Really good stuff.
This guy is a total data nerd. Love it!!!!
Big THANK YOU to Mike Piper on providing his tool, and to Rob for bringing Mike on to help review his tool. I have used OpenSocialSecurity numerous times and have recommended it to many people. There is not a better SS tool that is available. Mike’s tool is one of the reasons I was able to retire @60 with the knowledge of how SS can be used to supplement my retirement. But I don’t want to slight Rob with that statement, I have learned a ton from Rob’s shows. Thank you both!
Thanks Rob and Mike. Quite a dynamic duo!
This is one of the Top 5 episodes you've done. Outstanding.
This is excellent. I have watched it twice and will again. I will be FRA next year (still working and loving it) and my wife is six years behind When you play around with setting age of death vs using the table, the outcomes are very different. Now we pull out the crystal ball and start projecting our exit age.... Mr Piper is excellent.
Bravo Mike! Thank you Rob. So much information outlined in everyday jargon.
I just watched the video since I was unable to attend the live feed. Thank you both so much! This was very informative and hugely beneficial for me as I plan for SS for myself (age 62) and my wife (age 65). Mike Piper's knowledge of the SS system is amazing and his willingness to freely share his Open SS tool is greatly appreciated.
Absolutely brilliant interview. Mike piper gave us all a master class on financial concepts. Rob was equally masterful with his questions. Bravo
Rob has a great channel- great guests, interesting topics abd discussion. Mike Piper - wow. Smart and makes complicated topics easily understandable. Thanks guys!
1st time listening to Mike Piper. I have been drawing SSI for less than a year now and it was still useful info. Thanks
Rob& Mike …. Thank you both for sharing this tool and information about this topic !
What a great informative session on SSI benefits! Thank you for this and thanks to Mike for all his work on Open SS
Excellent video. Mike Piper is the source to go. Thanks for sharing.
Fantastic discussion - packed with useful information. Thank you!
RE WEP: WEP is all about the fact some government employees are exempt from SS taxes, but work side or summer jobs that DO pay SS taxes. Without WEP, that small income that IS subject to SS taxes would make that person look much poorer than they really are.
Since SS benefits are tiered (known as bend points), people with really low income histories receive much more in benefits relative to their income history. But if you let government employees receive those elevated benefits from working side jobs while letting them opt-out of SS taxes in their main job, you would be letting them double-dip and providing them special benefits that other non-government employees don't enjoy.
The one really bad thing about WEP and states that provide certain state employees a pension and don't collect Social Security taxes is that some of them (ex: Texas) do not adjust their pension payments for inflation. This can become problematic for those beneficiaries, especially if they were planning on that pension to support them for the rest of their retirement years.
Yeah, we fall in the same boat New Jersey police & fire pension no cost of living (Cola) thanks to crispy cream former governor.
Thank you for this. I have used Open Social Security to both determine what our ideal times to start SS are, as well as to help determine how much life insurance I need to keep until I get close to 70 as I am the higher earner so my husband’s max survivor benefit would be at 67.
Amazing interview! Thanks Mike & Rob.
Wow! You guys covered a lot. Mike's perspective in the first part of the video was great: Consider that you are exchanging bonds for SS.
Great guest, thank you!
All I can say is wow! Mike Piper is always a must watch and read. Would like to hear more about his strategy to drawdown on bonds to pay for years of delaying social security. Is he counting social security and pension as part of one’s total assets besides in stock/bonds investments?
This was a very valuable episode, great job Rob and Mike! Thank you.
Thank you both so much. This is real meaningful impactful stuff. ❤❤❤❤ 🙏🏽🙏🏽🙏🏽🙏🏽Thank you
This is great. I used his tool several months ago. It help us (my spouse and I) to decide when to file for SS. I am using another tool for tax planning that addresses the Roth conversions. We plan to do Roth conversions of varying amounts over the next 6 years or so. That should limit the taxes and IRMAA we have to pay during our retirement.
I agree! What tool are you using for tax planning that addresses Roth conversions?
@@RRin901I am using Right Capital. There is another channel that I paid to grant me access. It was/is well worth the money (less than $150) I paid to see the impact of the conversions. My wife is 4 years younger than me so I am able to do Roth conversions for 6-7 years and still stay within the 12/15% tax bracket. Also, that keeps us from having to pay IRMAA for our Medicare when RMDs increase later in life (at least until one of us passes away).
@@RRin901 I don’t know what tool da1shark is using, but I use NewRetirement for my Roth conversion and tax planning.
Wow, these tools and this talk has really turned me around on the idea of waiting to file.
Excellent interview of a very smart (and generous) man…I still think biggest drivers are realistic WACC and potential for benefits cuts (incl means-testing); therefore, file as early as possible
@Rob Berger at 23:29 you were adding a spouse that was "Younger" but you made her age older instead.
Very informative interview -- Thank-you!
Excellent content. Thanks to both of you!!
Very valuable information!
Great interview! Trying to figure how/if COLA is applied within the calculator. I do see that a discount rate is used. But wondering if I should see increases over the years in the results table or not?
Rob, another great video. Thanks to you & Mike for explaining the tool & the ins & outs of Social Security. I do have one question about the On Social Security calculator. I need to put my PIA into the tool. My PIA date is 66 & 6 months. That was in September 2023. Now if I get My SSA statement, it shows my 1st benefit estimate at 66 & 10 months. It doesn't show my PIA. Should I use the benefit at 66 & 10 months? Thanks again.
Great interview! For next time, can you please devote some time to singles scenarios? Being single, I feel left out.
Excellent!
Apple CEO Tim Cook says it is a bad idea to have living heroes but Rob Berger and Mike Piper are two of mine notwithstanding!
@rob_berger Thank you, great interview. I was very impressed with Mike’s expertise on such a complicated topic. My wife is a retired teacher who will be impacted by WEP when she files. I understand the reasoning behind WEP, but I don’t understand GPO. In our case, she will not be eligible for spousal or survivor benefits because of her pension. This also means for me to wait until age 70 runs the risk of me passing before filing and I would have received nothing from SSA. Why is my personal social security’s spousal and survivor benefit impacted by my wife’s career choice?
Roth conversions all hype advisors make it sound complicated so you reach out to them. I’m not talking about Mike Piper. He’s a honest guy.
WEP/GPO isn’t just “firefighters and teachers. Fir example, every single job class in Alaska who entered service prior to a certain date (Tier 1 and 2), is part of the defined pension plan. I’m one of them. My benefit is very large. I won’t qualify for any survivor benefit and my SS benefit will be cut but at $500. (I also worked in the private sector and have enough to collect about $1300)
Good stuff!!
The only real question that impacts our SS claiming strategy is how much cut and/or increased taxation of SS benefits will happen 10 years from now. If people believe that SS benefits will be cut at 23% across the board, I think they underestimate the political climate. There's huge political risk if people have other annual income sources exceeding say $100,000 to $200,000. Politicians say those are "rich people" (not understanding that rich refers to net worth not income). The politicians will establish an arbitrary income limit and further cut or completely tax SS benefits or BOTH of those people despite paying-in max SS taxes for decades. The politicians will not cut benefits of a widow(er) who's SS benefits are $1,200 per month. This is the topic that needs more discussion in our political climate and by "financial planners".
I really good podcast. I think there needs to be a clarification at the ~ 28min point about survivor benefits. Surviving children and a spouse are entitled to benefits at any age with curtains restrictions on the age of the children and if the spouse is earning an income.
wow great info.
If I understand this correctly Mike said in most cases where the higher earning spouse is receiving survivor’s benefits it makes sense to delay their SS benefit until full retirement age. Comments?
Does the tool account for the case where the lower earner does not have enough earnings history to have a retirement benefit PIA?
Many teachers pay into SS depending on what state you live in.
My husband is 80 and I'm 77. I was the higher earner. He filed early at 62. Can he still apply for spousal benefits? and is it retroactive?
16:00 People missconflate "spousal benefits" with "survivor benefits" ,two completely different things?
In Canada yes. First used when spouse is alive and benefits can be split for taxes and latter is after death benefit to surviving spouse.
I would like to add another comment to my earlier comment at ~28min commeent on survivor benefits. This comment relates to miscommunication that was covered at 1:05, but it should also be relavent to o all advice people get from whatever source. Much of the advice that Mike gives is excellent. However, it is only relative to the senario that is being discussed. The addice to slightly different scenarios may be different. So it is incumbent on the wacher, reader, or listener to find out as much as they can or get professional help when making decisions on SSA benefits. I know people who have not recieved or claimed SSA benefits because they are misinformed.
The SSA does have a calculator to calculate the WEP/GPO. I will be eligible for 0 dollars of my husband’s SS if he dies before me.
me too I get zero survivor or spouse benefits.
Open social security is now suggesting I take it about 2 years earlier than it was some months ago. Anyone else have a similar experience? I turn 66 soon.
I really wish it wasn't this complicated
fixing social security is the same as fixing the border. One party needs these things to remain broken for the fear factor. Neither will get fixed until the party not in power gets something they want to fix it. Sad but true facts.
I’m glad I have a pension & didn’t really fund Social Security only for less than 10 years. to find out that I am affected by wep and GPO.
As it turnes out (I claimed mine too early... long complicated story... can't undo it now) so I used the calculator to help me decide if/when I should suspend and when to turn it back on.... I was thinking I would suspend at full retirement age... 66 and 10 months (can't do it any sooner) and turn it back on at age 70 but the calculator told me to turn it back on sooner (68 and 4 months: only 18 months later. Wow!!! what a surprize !!!
Intangible and psychological benefits of Roth/Roth converted amounts in that the money is "yours" and not the tax authority's
IRMAA issues later on > ("pay a little now or a lot more later" ? Avoiding RMD (required minimum distributions) (does proper qualified Roth distribution avoid raising your "MAGI" income?) < that kick your Cap Gains + Qualified Dividends tax rates higher as well as your regular income tax rates? Also pushing your proportion of your Social Security income that is taxed higher if you are not already past the 85% threshold?
Certain "financial guys" who charge according to AUM (amount under management) have an incentive to be against Roth/Roth conversion since it means your account for their charging purposes is smaller although the smaller amount might be worth more to you because it isn't getting taxed upon distribution to you? (When you convert you are probably expending some of your taxable account for paying the taxes due on conversion making that part of what they "manage" smaller)
also the constant refrain that "if future tax rates are the same as now the Roth conversion is worthless" should be answered by "nobody knows what the future tax rates will be but they are more likely to go up than down" (and I doubt that that refrain is even mathematically correct)
--- but one could make a very valid observation that money spent on paying Roth Conversion taxes would indeed be wasted if the Roth account value were to shrink severely due to market losses or failed investment choices that end up losing a lot of money
----- also if you just lost a lot of your income and/or personal financial nest egg due to catastrophic bad luck ----
Well your comment appears to acknowledge that there are pros and cons to Roth conversions, and of course that is true. When they are done correctly and for the right reason they tend to work out better. When not they don’t.
The major psychological problem with Roth conversions is that people have an emotional attachment to Roth money being “better”. This is incorrect. It is quite simply a math problem. You allude to this bias with your statement……”and I doubt that the refrain is even mathematically correct”. The goal of conversions is to minimize taxes, and penalties(like IRMAA). But, the fact that conversions trigger taxes, and can lead to penalties, just proves the fact that it is a math equation, albeit a complicated one. You can convert too much or too little. Having only Roth money means you likely paid too much tax. Statements like “(rates) are more likely to go up” fly in the face of recent history.
The last point is that the benefits of doing major conversions require longevity to bear fruit. So early death, which is what will happen to about 25% of people tends to lead to less benefits for converting, unless there is a widow left alive.
i still don't see the usefulness in Open Social Security tool over any other tool, in terms of it just being a guess based on actuarial, ss actuarial, manual input life expectancy. So, it's still a guess on life expectancy, and I don't see how you can determine its accuracy over another tool. What I see missing is that there is actual data you could compare against life expectancy assumption, by compiling and comparing data on the number/percent of people who took ss and outlived their break even points. This allows you to weight your life expectancy assumption. If say only 1% of ss recipients outlive their break even point and for how long, I'm hard pressed to believe that the life expectancy assumption is correct. Even if you have 90% drawing ss beyond break even point, you'd also want to capture the steep drop off in mortality at that point. One error I heard here was about the break even point. Break even isn't about investment returns, it is about how many years will you break even from taking ss earlier to delaying. This was a great interview, though, and well explained.
I would like to maximize my inflation protection with Social Security. My wife and I both have non-inflation adjusted pensions that are worth less each year in terms of spending power. Both of us waiting until 70 increases the percentage of our retirement income that will be inflation adjusted.
The benefit amount is inflated regardless of when you begin taking benefits.
It may not be necessary for both of you to wait until age 70. Generally, it’s best for the highest earner to wait. But the lower earner filing earlier may provide the highest overall benefit. I would run your situation through Mike Piper’s software.
This is so frustrating… I’m not a high income earner, uneducated and severely dyslexic. All of this is so confusing and living paycheck to paycheck I can’t afford to higher someone to help me figure this out. I’m 58, have scrimped, saved and invested in indexed funds - i now have a 1.3 million net worth and can’t understand how to make it work to retirement. This is why the rich get rich, the poor get poorer
If you have a net worth of 1.3 million and will be getting SS you should be able to easily make retirement work. With saving 1.3 million you have proven you have the knowledge and aptitude to handle money. They key to a successful retirement is to manage your expenses. The first step normally is to ensure you live in area with a low cost of living, get and stay out of debt, don’t waste money, and you can live a comfortable lifestyle in retirement. 1.3 million should be able to safely provide about $50,000 of yearly income throughout your retirement, add in SS and you should have sufficient income to retire comfortably.
He said “tool”. Hehehe.
used it, way too simplistic in it's approach. Using net present value of payment stream...sure may be financially accurate, but does not take into account any of the intangibles or complexities for a given situation. Might as well throw a dart at a board that has all the months on it from 62-70. I get that if you make a tool too complicated with too many questions, people who are not detail oriented will not use it or zip through answering questions incorrectly, but making something too simple that some people will rely on to make decisions is not good either.
You are ridiculously off base. I found this calculator 7 months ago. Prior to that I had been researching SS claiming strategies for 2 years. I received numerous conflicting statements and references, including from SSA. Our situation is very complicated and includes a dependent.
I actually was told by the SS worker that my claiming strategy was incorrect. I had to educate the worker after tracking down the agencies own policies and citations.
Open Social Security spit out the proper strategy and the exact financials on it in like 5 minutes. Everything was spot on. If I had found this calculator before I had done all my own research it would have saved me literally 100 hours of leg work, and I would have been able to claim sooner.
You obviously don’t understand what you think you understand.
If you're going to dismiss the tool, why not give specific reasons, other than referring to vague "intangibles"?
My view is this is the most comprehensive SS tool, yes you need to take other things into account (taxes, Roth conversion, impact to SSI) to make your final decision, but there is no other SS tool out there (at least free to use) that has this extensive of parameters and performs this level of calculations. Mike Piper even let’s you specify any combination of filing dates to show you what your and your spouses benefits will be. In reality, the SS administration should link their site to Mike Piper’s site.
You are ridiculous. The tool is incredibly accurate. I discovered this tool AFTER I applied for benefits. I had a very complicated claiming strategy that took me 2 years and at least 100 hours to research. I then contacted SS to start my benefit. The worker had incorrect information and did not agree with my filing request. I had to quote SS rules from his guidebook to get him to reconsider. He then researched what he should know. Once he did that he did agree that I could file for a spousal benefit. However, he remained confused about deemed filing rules, until he again reviewed SS policies I had to quote him. Only then did he agree to file it correctly and allow the claim. If I had not done a huge amount of research I would have lost a bunch of money and benefits.
When I discovered the Open Social Security Calculator, it took me 5 minutes to get a 100% accurate estimate of benefits I was eligible for, including all the complicated issues I had previously dealt with. This tool would have saved me countless hours of research and headaches, had I discovered it earlier. It would also have increased my total benefits by allowing me to file earlier with better and correct data.
You are clueless about issues you claim to understand.
For me, it should include income earned if I continue working after starting to collect SS benefits.
The tool says I should start collecting immediately but doesn't reduce my SS benefits because of the current earnings.