This post is not a myth. It’s a more thorough response to a question asked at the end of my last two-hour Social Security class: “What are the things Social Security can’t tell me”. This question has been asked once before, probably intended as a “gotcha!” but I was baffled both times, having just spent 90 minutes answering it.
My broad and incomplete response was that they can’t tell you what you should do, only the effects of your timing.
There are a lot of reasons for this, none of which imply Social Security rep’s withhold information or are not knowledgeable. Rather, it simply is not their job nor in their capacity to provide the answers listed below. So here is a very short partial list of:
The Things Social Security Representatives Cannot Tell You
- How and why to estimate your longevity
- How much your cumulative payout might be if you claim at different ages
- How much of your benefit may be taxable
- Strategies to reduce that taxation
- Strategies to reduce taxation in general
- Your potential lifetime income and estate tax bill
- How, whether and when to do Roth conversions
- Whether your budget and your savings permit your ideal claiming strategy
- Whether Social Security is solvent
- How to discover and make explicit your most important goals
- How to connect your goals to your finances to increase the odds they’ll happen
- The pros and cons of alternatives for achieving your goals
- How to assess the risks, fees and real return of your portfolios
- How to assess the appropriate levels and types of risk for your unique situation
- How to create lifetime income payments similar to your Social Security annuity
- How much of your savings and investments you can spend and when
- How and why to simplify and consolidate your investments
- How to find and compare appropriate Medicare coverage
- What may happen if you and/or your spouse die sooner than expected
- What may happen if you and/or your spouse live longer than expected
- The affect on your finances should one or both of you need long term care
- Creative solutions for avoiding or reducing those three risks
- What sequence risk is and how to avoid it
- Whether you can retire when you plan to
- The best ways to pass on your estate assets, the pros and cons
- How to reduce RMDs and the resulting taxes
- How long your money will last with your current budget
- How to protect yourself from losing money
- How to reduce fees and/or be sure you’re getting value in exchange
- How to structure your asset ownership
That’s off the top of my head. Other issues may come up in the planning process such as optimizing your employee benefits, advantages and disadvantage of owning a business, etc.
Your Constructive Comments are Welcome!