Apprise’s Five (Four) Favorite Reads for the Week of May 29, 2022

Senior Cyclist Enjoying Retirement by the Water
Articles centering around Social Security
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The S&P 500 rose Friday, marking the fourth daily gain of the week. The strong gains for the week helped the benchmark index snap a seven-week losing streak.

All three major indexes posted solid gains for the week, a sharp reversal from a streak of weekly losses that had the S&P 500 teetering on the edge of bear market territory. The S&P 500 was down more than 20% in mid-day trading on May 20th.

This week’s gains have offered a reprieve from what has felt like a constant battering of portfolios. Many investors and analysts pointed to earnings this week as a reason for the optimism, with companies such as Nordstrom, Macy’s, and Dollar Tree reporting strong sales increases. This was in stark contrast to the previous week when weak results from retailers such as Target helped push stocks lower.

What Story Do You Want Others to Tell About Your Life?

“I want them to not only do what’s legal obviously, but I want them to judge every action by how it would appear on the front page of their local paper.”

That’s esteemed investor and CEO Warren Buffett describing how he wants his 330,000 employees at Berkshire Hathaway to work every day.

Imagining how your own life would look on the printed page can be a helpful exercise when you’re building a Life-Centered Financial Plan. After all, a financial plan’s purpose isn’t just to help you earn more money. It’s designed to position you to grow assets that can help you live a life that fulfills you. A life that you’re proud of.

As you think about the story of your life, ask yourself these three questions. They can allow you to reflect on what’s happened so far and to write an inspiring rough draft for the chapters ahead.

1. What goals have I achieved?

A legacy filled with positive stories doesn’t happen on its own. The happiest and most successful people are often those who live their lives the most intentionally. Rather than waiting around for life to happen to them, they dream big, set goals, and work hard every day to make progress.

If you want to be thought of as a consistently high achiever, start small. Identify one or two goals you’d like to achieve in six months to a year that build towards bigger overall goals. Then, break down those goals into daily actionable steps.

The great thing about this technique is that you can apply it to just about any aspect of your life. Long-term financial goals might start simply. You can bring a brown bag lunch three days per week and increase the monthly contributions to your retirement accounts. You might start a fitness goal by taking a long walk every morning. And creating your own dream company could begin with an online class you take to learn a new skill or earn a new certification.

2. How did I learn from my mistakes?

No person’s life journey avoids every bump in the road. (I know mine sure hasn’t.) There were, and perhaps will be, times when you make the easy choice instead of the right choice. Sometimes you’ll do things that hurt others. You could embarrass yourself. You might lose perspective and place your friends and family behind things that aren’t as important.

Try to accept that these kinds of mistakes happen. But will you let these errors define your life? Or do you want people to remember how you responded, rebounded, made amends, course-corrected, and came out the other side a better, more thoughtful, more caring person? When you’re looking back on your life decades from now, these stories of learning and growth will be far more important than any stumbles along the way.

3. How did I impact others?

Many people don’t start thinking about their legacy planning until after they retire and are nearing the end of their lives. But your legacy is bigger than what you bequeath in your last will and testament. Your legacy is defined by the actions you take and your daily choices.

You may not love everything about your job. But you can choose to show up every morning with a smile on your face and treat every coworker and customer with kindness. You may not be rich, but the weekend volunteer shifts you put in at your local food bank will make life easier for folks who are in need. You may never achieve a perfect work-life balance. But your family will always remember the summers when you coached the kids’ sports teams or carved out enough free time to take that big family vacation. (Doing these things have had a hugely positive impact on the relationship my wife and I have with our children.)

Again, authoring these kinds of life stories doesn’t just happen. Living your best life possible with the money you have is a process that combines long-term vision with intentional planning. If you need help writing your next chapter, please get in touch and we can talk about our Life-Centered Planning process, your life, your goals, and your legacy.

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For many retirees, Social Security benefits provide an important source of income in retirement. For many, deciding when to start collecting benefits can be one of the most important retirement-related decisions they make. Unfortunately, most individuals do not know the ins and outs of the Social Security system. This can lead to many misconceptions and result in claiming mistakes. For example, many remain concerned that the program will go broke. While the full retirement age for those born in 1960 or later is 67, many think it’s earlier. (See this article for more on these and other common myths about Social Security.)

It seems unlikely that the Social Security system will go broke. I say this for several reasons:

  • The 2021 Social Security Trustee report finds that in 2034 retirees will start receiving a reduced benefit if Congress doesn’t fix funding issues for the social program. They will still receive 78% of their full benefit.
  • Many voters receive Social Security benefits. Politicians like to stay in office as long as possible. Eliminating Social Security benefits would cost votes.
  • While covid-related effects have reversed this trend recently, life expectancies have increased overall. They can raise the full retirement age above 70.
  • They can reduce – rather than eliminate – Social Security benefits.
  • In 2022, we pay Social Security taxes on wages up to $147,000. House Democrats previously proposed the idea of reapplying the payroll tax to individuals making more than $400,000.

For couples, the decision about when to start collecting benefits should be a joint decision. Why? A surviving spouse receives the higher of the couple’s two benefits when the first one dies. When the higher wage earner is considerably older than their spouse it’s hard to make a good argument for starting benefits before age 70 – the maximum age at which you can start claiming Social Security benefits.

I am considering offering a workshop on Social Security benefits in mid-June. In this week’s favorite reads, I am only sharing articles related to Social Security benefits. I am also including links to previous blogs I have written on the topic as well.

Please keep an eye out for additional information about this workshop. You will receive an email later this week asking if you would like to attend.

Here are the links to this week’s articles as well as a brief description of each:

1. Workers Show Interest in Social Security Bridge Strategy.

When I suggest that clients wait to start collecting Social Security benefits, the first question I get is something along the lines of “What do I do for income?” This story discusses one of the options. You can start withdrawing money from your 401(k) or IRA before you begin to collect your Social Security benefits. The example shared in this article takes you from age 62 to age 65. You can also use it to get from 65 – or whenever you retire – until age 70.

2. The Pros and Cons of Delaying Social Security.

Do you know the main reason people start collecting Social Security benefits early? They need the money. Or they link when they stop working with claiming their benefits. As a result, they start receiving benefits before they need the money. This article shares some of the pros and cons associated with delaying your benefit to the maximum age of 70.

3. When You Claim Social Security Can Have Huge Implications for Your Spouse.

As noted in the introduction to this topic, married couples should consider the implications their Social Security claiming decision can have on their partner. You should take the steps you can to maximize the survivor’s benefits.

4. How Clients Can Ease The Sting Of Medicare’s IRMAA Fee.

Your Medicare premiums are deducted from your Social Security benefits. The amount you pay for Medicare can increase based on your income. This amount is referred to as the Income Related Monthly Adjustment Amount (IRMAA). You may receive the same benefits as your friend or neighbor. But you could pay a lot more for them. This article discusses some strategies that can potentially limit your Medicare premiums.

5. Apprise Wealth Management’s Social Security-Specific Blog Content.

In addition to these articles, here are four blogs I’ve written discussing other aspects of Social Security benefits.

A. Social Security and Taxes – Could There Be a Tax Torpedo in Your Future?

How much tax you pay on your Social Security benefits depends on your overall tax situation. If you’re not careful, you could pay a very high rate as your income crosses certain thresholds. This blog provides more information related to these special rules.

B. 5 Facts Every Woman Should Know About Social Security.

On average, women live longer than men. The typical wife is also younger than her husband. As a result, Social Security benefits often matter more to women than men. This blog shares some facts every woman should know about Social Security. It also provides some thoughts related to claiming strategies, particularly for couples.

C. Social Security: Some Key Benefit-Related Concepts.

This post reviews some key considerations related to how your benefits are calculated and when to claim them.

D. Social Security: Some Questions and Answers About Benefits.

In this blog, I review some of the most common Social Security-related questions I get. I also share a few basic planning ideas.

Social Security benefits represent an important part of any financial plan. These articles and blog posts discuss some of the important aspects. If you have additional questions or would like to learn more, please attend the workshop I would like to host in mid-June. You can also schedule a call if you have any questions I can help with more urgently.

Our practice continues to benefit from referrals from our clients and friends. Thank you for your trust and confidence.

We hope you find the above posts valuable. Please complete our contact form if you would like to talk to us about financial topics, including your investments, creating a financial plan, saving for college, or saving for retirement. We will be in touch. You can also schedule a call or a virtual meeting via Zoom.

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