BRIAN DOHERTY, keynote speaker at CAHU’s 2018 Medicare Summit held May 17, 2018 gave us some great insights on Social Security!
Speaker’s website: https://www.gettingpaidtowait.com/
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What is the meaning by your book’s title: “Getting Paid to Wait?”
“Getting Paid to Wait”, it means that while you’re waiting to receive your Social Security benefits, you can still get paid. You can still receive Social Security income in certain situations. I show people how to do exactly that, while they’re waiting, they can still get paid while they wait.
How does this relate to Medicare?
You know, Medicare and Social Security, they kind of go together. Medicare at age 65, people can claim Social Security anywhere between 62 and 70. Most Medicare premium payments are taken out of Social Security. And so if people can maximize their Social Security income, those Medicare payments that, once are taken out, is still going to leave them with a lot of Social Security income to spend in retirement.
What should people know most importantly about their Social Security?
People don’t know or they don’t do a lot of research because they are overwhelmed by the topic. It can be massive. There could be a massive amount of information on it. But for most people, they really only need to know about three or four things. The biggest thing is that for every year you delay claiming your benefits, it’s guaranteed to increase by 6% to 8% per year up until age 70. That’s an incredible increase and in this incredibly low interest rate environment, that’s a really good deal. In fact, I call it one of the best deals out there. If people knew by exactly how much their benefits were increasing, that 6% to 8%, they would probably—they might—a lot of them would seriously consider delaying their benefits. They don’t have to do it up until age 70, but even 2 or 3 years of delaying, will substantially increase their benefit amount.
The other thing that people don’t consider and they should be aware of is, the COLA feature for Social Security. A lot of people don’t even know that their Social Security income is going to be inflation adjusted, meaning it’s automatically going to increase with the rate of inflation. So what you want to try to do, everybody gets the same percentage increase every year, which if you apply it to a much bigger benefit number, it’s going to result in bigger dollar increases every year for the rest of their life, and will put them in a better position to keep up with inflation.
Do people draw on their Social Security sooner than they should, because they lack this information?
A lot of people do. Here’s a really interesting point about that though. People that received benefit amounts of $1500 a month or less, about 70% of those people claim their benefits early. And they probably shouldn’t because that’s probably going to make up the majority of their income in retirement. People who receive benefit amounts of $2000 or more, probably had a decent living, made a decent amount of money, probably have accumulated assets and savings, almost 80% of them don’t claim early. They wait. So there’s a real dichotomy. I really think that people with smaller benefit amounts should seriously consider delaying it as long as possible because that could make a huge difference in their quality of life in retirement.
Are Insurance and Investment Advisors aware of this opportunity?
Sadly, no. Because if you go the Social Security website, it’s a massive website; a lot of information. Sometimes they get overwhelmed. I think they really get intimidated by it because what they don’t want to do is give their clients poor advice, and then they end up making a poor decision based on the advice that the financial advisor gave them. So a lot of times they choose just not to do it at all.
Sounds COMPLICATED! Is there an easy way to do the math?
You know, eight years ago when I went out and started talking about Social Security and the book was almost done, I realized—and I have talked to over 10,000 financial advisors, but just reading my book wasn’t going to be enough. They were going to need another tool, a tool that would help them with their clients, because every client situation is different. So I developed a Social Security calculator, took me four years to do it, but it’s out there. It’s ready to go. It’s really simple. All you do is input a couple of pieces of information, dates of birth and full retirement age benefit amounts. Hit the button and within three seconds, it’ll show the financial advisor three suggested strategies for that particular client. Give them the step by step process of who claims what benefit when and why. It will make the financial advisor look like an authority on the topic. They need that kind of tool to really give their clients directions, and I have it. It’s on my website at gettingpaidtowait.com. They can go there, register for it. That could be a great tool for them to use to help not only their clients, but any prospects they encounter who are asking them about Social Security.