Our Online Social Security Application – Latest Update

Category: Financial and taxes in retirement

July 18, 2018 — Back in May we reported on our experience of applying online for our Social Security retirement benefits. The plan was to have the application completed and accepted in time to start receiving benefits in August, 2018, the month we turn 70 years old. Here is our report on the latest chapter in that process – in short, we are making progress, but not there yet! (You can read the entire report, including this update, at “Applying Online for Social Security- Our Experience“.
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July Update – Not quite there yet!
Since I filed my application in mid May I have been waiting to see what would happen with it. I did receive a letter from SS saying my application had (more…)

Posted by Admin on July 17th, 2018

The 10 Cheapest States to Retire

Category: Financial and taxes in retirement

June 11, 2018 — Some of the more reliable “10 Best Places to Retire” Lists come from Kiplingers. They recently came out with their “10 Cheapest States to Retire” version, and we think it is a pretty good effort. To come up with their ratings they looked at cost of living, taxes on retirees, average health care costs for retirees, and fiscal health of the state. As is often noted, sometimes you get what you pay for, although in the case of most of these states, you do tend to get more for your retirement dollars.

Although they didn’t numerically rank their “cheapest 10”, one ranking that is clear was cost of living compared to the rest of the U.S. Note that these rankings are on a statewide basis: different areas of different states can have dramatically different living costs. In big (more…)

Posted by Admin on June 11th, 2018

Should You Hire a Financial Advisor, or Do-it-Yourself?

Category: Financial and taxes in retirement

— “Beware those free dinners”—

May 9, 2018 — One of several recent Member article suggestions was this one: “Is it better to hire a financial advisor or handle that financial planning yourself? And if you hire one, how should you go about it?” Thank you Lewis, that is a topic we know a lot of retired people struggle with.

We should preface this article by saying that we are not financial experts. This piece summarizes recent interviews with four baby boomers who have wrestled with this topic themselves, plus some of our own experiences with financial advisors. At the end you will find links to some other great resources about how to/whether to hire a financial (more…)

Posted by Admin on June 8th, 2018

Applying for Social Security Online: Our Experience

Category: Financial and taxes in retirement

May 16, 2018 — (Updated July 18 with more experience feedback). Back in March I received a letter from the Social Security Administration – “It is time for you to register for your retirement benefit!” I was impressed with their timing and efficiency, since my 70th birthday will be this August. Nicely done. This article will chronicle my experiences in registering for my Social Security retirement benefit online – lessons learned that hopefully will help others when it comes time to claim their benefits.

My decision was to wait until age 70 to claim. Fortunately we have been able to afford to live without that benefit so far. That blessing, coupled with very good genes (my parents’ average age before departing this earth was 97), made it seem like a good bet to wait until 70. That way I could capture the 8% increase a year for delaying from age 66, and then enjoy that extra money for a long time past the breakeven point in my late 70s (and my wife after I pass). Time will tell if that was a good move or not.

Registering for Social Security retirement benefits
My plan and hope was to register online, and not have to spend time on the phone or waiting (more…)

Posted by Admin on May 15th, 2018

Tough Questions: Mixed Results from Our ‘Social Security IQ Quiz’

Category: Financial and taxes in retirement

May 2, 2018 — Even though the average scores were quite low on last week’s Social Security IQ Quiz, there is still plenty of good news. Best of all, we are happy that so many people, over 2,000 and climbing, took the time to take it last week. It wasn’t easy, particularly with its occasionally tricky multiple choice options. But after having taken it, gotten a score, read the answers, and understanding why they were correct – a lot of people now have a better understanding of this critical retirement benefit. Hurrah!

In this article we are going to cover the highlights of the quiz and how our test takers did on it. We won’t go into the nuts and bolts of every answer, because we already provided all the correct answers and explanations at Your Social Security Quiz Results.

Overall scores
The average score on the quiz was 50%. Of the 2046 taking it as of (more…)

Posted by Admin on May 1st, 2018

Take the Quiz: What Is Your Social Security IQ

Category: Financial and taxes in retirement

TAKE OUR SOCIAL SECURITY QUIZ
April 21, 2018 — For most Americans, their Social Security retirement benefits are a critical part of retirement. So here is an important thing to remember about Social Security – IT IS NOT ONE SIZE FITS ALL – YOU HAVE OPTIONS – AND YOU HAVE TO MAKE SOME IMPORTANT DECISIONS. Those mostly revolve around when to take it – the way you decide that question will have a significant effect on on the rest of your financial life.

We find there is a fairly shocking lack of knowledge about Social Security. People tend not to know how their benefits are calculated, and they don’t realize how big a difference there is in the benefits, depending on when you take it. To help you get the most out of your benefit we have prepared a 13 question quiz on Social Security. The quiz is pretty challenging. The good news is that even if you don’t ace it, going through the process of taking the quiz, and then using our point by point explanation of each answer will be very educational. You’ll get pretty much all the knowledge you need about your benefits and options.

Note: We developed a similar quiz in 2014 and over 7500 people took it. Most did pretty well. But since then there have been some important changes to Social Security, hence this new quiz. We developed it ourselves; it does not represent anything official from the Social Security Administration, which is the ultimate arbiter of the rules concerning your benefits.

Here is the link to the Social Security quiz

Test prep: To maximize your learning experience, we strongly recommend that you read one of these articles first, then take the quiz, then look at the answers. (After you take the quiz you will see a link to the answers).

Social Security Overview
What You Don’t Know About Social Security Could Hurt You

Take the Quiz!


Comments? Let us know what you think about this quiz. Should we do more, and on what subject(s) – was it too hard? Any of the questions unfair? Please share your thoughts in the Comments section below. We will also report on the results in next week’s newsletter.

Note: The answers and commentary are hard to get back to once you go off that page – so if you want to go back to them, here is the answers/comments link (no cheating!).

Posted by Admin on April 21st, 2018

Your Results: How Did You Do on Our Social Security IQ Test

Category: Financial and taxes in retirement

Thanks for taking our Social Security Quiz. (If you haven’t taken it already, here is the link to the Quiz). To make sure you don’t miss out on useful tools and information like this, sign up for our Free weekly Best Places enewsletter.

Overall results
It is clear this was a hard quiz – Social Security is complicated. The average score after more than 2,000 people took it is 50%. Of the 13 questions, more people in aggregate got the correct answer than not. There were, however, 2 questions that most people missed (by a narrow margin). See Question 3 (how Social Security calculates your benefit – (more…)

Posted by Admin on April 20th, 2018

Rethinking the ‘When to Start Collecting Social Security’ Question

Category: Financial and taxes in retirement

March 14, 2018 — A crisis will affect Social Security just 16 short years from now, and it has some experts rethinking their strategies for when to start taking Social Security. Instead of urging people to wait until age 70, some are recommending beginning at age 66.

The crisis
In 2034 the Social Security reserves are expected to be exhausted. With no reserves available, the only money available to pay benefits is what comes in from current worker and employer contributions into the program. Sadly, that won’t be enough; starting in 2034 there will only be enough coming in to pay 77% of scheduled benefits.


A new recommendation to think about
Mark Hulbert of Market Watch reported on the argument posed by Richard Band, editor of the Profitable Investing advisory service, in “Why it might be better to take Social Security at age 66 instead of 70“. To Band, the question of when to start taking the benefit hinges on your confidence in the federal government. The advisor, who is 66, facetiously wonders if anyone really (more…)

Posted by Admin on March 14th, 2018

How the New Tax Bill Affects You As a Retiree

Category: Financial and taxes in retirement

December 19, 2017 — The imminent passage of the Republican tax bill makes us wonder how our audience – retirees and people about to retire – will be affected by it. We will attempt to answer that question here, recognizing that everyone’s situation is unique and might be affected differently. We are not tax experts, but have tried to digest various media reports to provide this overview.

The bill will have direct effects on retirees in 2018, as well as some possible indirect effects down the road. Let’s look at each of those in turn.

Direct effects on retirees
1. Lower tax payments. With the exception of the people described in #4 below, almost everyone will pay lower federal taxes in 2018 than they do now. However, those cuts will expire in 2025.
Effect: Good news for retirees who pay taxes, except in those who live in high tax states. Who wouldn’t want to pay lower taxes!

2. The standard deduction is now much higher, at $12,000 per person vs. the current $6500. This means that far fewer people will have enough deductions to itemize, and filing will be simplified. On the other hand the current personal deduction of $4500 has been eliminated, so the net effect in the increase in the standard exemption (more…)

Posted by Admin on December 18th, 2017

3 Things That Could Save Social Security

Category: Financial and taxes in retirement

November 28, 2017 — As if there wasn’t enough bad news to go around, your Social Security retirement check is in trouble. If Congress doesn’t act soon, retirement benefits will probably have to be cut by 23% in 2034 – when someone who is 66 years old now will be 83. Most everybody knows the two major reasons driving this – too many baby boomers getting benefits compared to the number of younger folks paying into the system, and our ever-increasing life spans. Combine that with the fact that 60% of Americans rely almost entirely on Social Security for their income, and we have a disaster in the works.

Recently we saw a very practical article in MarketWatch by Paul Brandus, “3 things that could help put Social Security back in the black“. His common sense approach so simply gets to the bottom of the issue that we thought we would repeat it:

1. Raise the retirement age. Brandus suggests that we start raising the normal retirement age for full benefits by a month a year. It wouldn’t take too long to raise it to age 68, which would do a lot to help stabilize the fund.

2. Raise payroll taxes. This one might hurt a bit. Currently employees pay 6.2% in FICA – the SS trustees recommend increasing that by another 2.83%. So if you make $50,000, your FICA share would go from $3100 to $4650 – ouch!

3. Raise — or eliminate — the cap on taxable wages. In 2018 if you make more than $128,700 you and your employer would stop paying into Social Security at the point when you earned that much (there is no limit on Medicare). SS misses a lot of potential revenue from CEOs who get those nice $50 million paychecks. The Center for Budget and Policy Priorities, a nonpartisan group, estimates are that from a quarter to as much as 90% of the SS shortfall could be solved with this idea alone.

Seems simple enough, right?
We have to do something, as every month of inaction makes the problem harder to fix. Yet neither party is talking about it. Neither is the guy who signed the rather dire Audit Report, Steve Mnuchin. It is a national embarrassment, in our opinion. Next time you talk with an elected official, ask them what their plan is to save your Social Security.

For further reading:
Full Social Security Trustees 2016 Report
Social Security: The Can That Keeps Getting Kicked Down the Road

Posted by Admin on November 27th, 2017