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.
- 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
- 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
- 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
- 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
- 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
- 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.
- It's also important to examine our earnings record
- 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.
- “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