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Advisors of Horizon are Registered Representatives of Cetera Advisors LLC, a broker/dealer and Registered Investment Adviser.

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  2. Things to Know About Social Security

Jul 19, 2021

In this episode of Inside the Plan with the 401(k) Brothers, Bill Bush and Andy Bush, advisors at Horizon Financial Group, talk about Social Security benefits. They share some facts about the program works, how benefits are calculated, and mention resources to use so that you can make more informed decisions about when to apply for Social Security.

 

Episodes Highlights

  • 00:56 –Bill and Andy want people to be aware about Social Security and invite them to the webinar, which is going to happen at the end of the month as they will discuss ins & outs of Social Security.
  • 03:10 - There's pre-determined part of amount of what they will receive, once they file for Social Security.
  • 05:38 – Bill shares that a lot of people have a question that, if they are not paying into this account, how is the benefit going to be calculated and what is the math behind that?
  • 07:22 – They reveal that we are first eligible for Social Security when we're 62, so we can take it then but our full retirement age is based on the year we were born.
  • 09:46 – As per Andy, if we delay and even wait till full retirement, the breakeven point is not that far out there, and so we need to understand is what longevity look like in our family.
  • 11:30 – Andy shares, we can go online there are plenty of calculators out there that will help us call the Social Security Administration office or can go online to ssa.gov and do some calculating on there too.
  • 13:03 – According to Bill, our latest Social Security statement should have our earnings by year on there and we have to make sure it's accurate.
  • 15:08 – Andy highlights the fact that up to 85% of our benefit could be taxable and then the other 15% would not be taxable at all.
  • 16:40 - Guaranteed income coming from the government that will last our lifetime as long as we're living, we're going to have bills to pay and so we're going to need some of that income to help offset those bills.
  • 18:40 - If we earn more than that Social Security is not taken out of our cheque anymore.

 

Three Key Points

  1. If we waited past our full retirement age, we can get delay credits, and basically for each year that we delay, we are going to get an 8% step up on that earning.
  2. It's also important to examine our earnings record statement.
  3. We have to keep in consideration that when we get to retirement and calculate what is our taxable income then that's going to be part of it.

 

Tweetable Quotes

  • “Social Security is only going to replace a portion of your pre-retirement income that average is about 40%, it's more of a percentage for the lower earning wage earner and less of a percentage for a higher wage earner.” – Bill Bush
  • “It's thinking more clearly about your future income needs, because you are going to need income if you're still breathing at 85 or 87 or 90 or whatever, you know, you're still going to need a bill”. – Andy
  • “And so, real quickly, just to reiterate on the early benefits you know if your full retirement age is 67, and you filed at 62 that ends up being a 30% reduction”. – Bill Bush

 

Resources Mentioned:

 

Contact Information:                        Bill Bush            Andy Bush