Decoding Social Security

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Episode 202: In this enlightening episode, hosts David Bezar and Bret Elam of Thrive Financial Services provide an in-depth exploration of a topic that has become a prominent concern for retirees and pre-retirees: Social Security. After a week of reflective consultations and deliberations, the duo zeroes in on this subject, fueled by the myriad questions and concerns they have encountered.
While the world around us changes—politically, economically, and socially—the uncertainty and curiosity surrounding Social Security remain constant. Tapping into their extensive knowledge and experience, our hosts strive to shed light on this vital subject, equipping their listeners with professional insights.
Listen & read along to unlock the mysteries of Social Security and stay updated on what’s shaping the world today


Joe Krause  00:52

Welcome everyone to another edition of roadmap to retirement to radio show today along with David Bazar and Bret Elam. I’m Joe Kraus, we thank everybody for tuning in. And being a part of the broadcast today we’ve got a special conversation that’s going to focus I think, David, specifically on Social Security. And we’re going to use the entire platform or the entire show today to educate the public.


David Bezar  01:16

Yeah, we spent a good amount of time this week thinking about, you know, we try to figure out what our audience wants to consume. And I think we get a pretty decent temperature on that from all the people that we make throughout the week. You know, we kind of Bret and I sit down, we talk a little bit about, hey, what do you hear this week? What are people asking and consultations and all of that. And it just so happened? I think with everything that’s happening out there, right, from a political perspective, how the economy’s doing all of that a big question for retirees and pre retirees. There’s a lot about social security today. And Social Security is an area that we’ve worked on for a very long time. We know a lot about it, we really help people kind of navigate through that. So we decided today, this show is going to be a show. That’s all things Social Security. And as a matter of fact, we’re going to do two new things here. So one, instead of calling in, we’ve come to the conclusion that people rather make rather text than make phone calls, it’s a lot easier, it’s a lot quicker, it’s a lot more direct. It’s more instant gratification, all of that. So we put together a fantastic, fantastic brochure. You see how many pages this thing is here. Our team did a great job on this. This is 13 pages of a paper called what when, who and how the social security decisions. And the Table of Contents. There’s an executive summary, there’s status of Social Security, that’s a big question that people have today, there’s timing, on how to take your benefits. And then it really goes pretty granular on it. So 13 pages of things that will help our audience if they have not yet taken Social Security, and are curious how to do so this is going to be a great, great item for them to download. So the way to do that very, very simple is your going to text Social Security. And the number you’re going to text to is 215-999-3272. So let me give that again, you’re going to text the word Social Security, to 2159993 to seven, two. So today, we’re going to spend a lot of time on social security. Our first segment that we’re going to go through, is we’re gonna talk a little bit about current events before we jump into everything related. Because we again, we want to keep our audience kind of up to date with with what’s going on out there. So I think some of the two big news is news is when you think of that word,


Bret Elam  03:59

I don’t think it exists. It doesn’t exist.


Joe Krause  04:00

I’m just gonna say that word.


David Bezar  04:03

already. I’m good at that. Yeah. So let’s see if we can get Webster’s to adopt it, just add a few things. And I don’t know what the Latin root is to it, but we’ll figure that one out. So the big news, there’s two items in that. One is that it is a big deal. The US government’s debt has been downgraded by one of the credit rating agencies. So that’s a big announcement. Right? That means that the faith in the US Federal Government has been diminished a little bit on its ability to cover its debt payments. Now, this has happened a couple of times in our history. We had a bit of a pullback in the market on Thursday because of it. Some additional news came out on Friday, but it’ll talk a little bit about that. But we’ll talk a little bit about what impact that has before we get into that breadwinner you kind of update our URL depends on the jobs report.


Bret Elam  05:01

Yeah, jobs reports that Miss meeting would be they did not create as many jobs as what they thought they would. However, inflation growth continues to be there, connecting all those dots, what that means is continued inflation, don’t expect the Fed to pause increasing interest rates. And yet, what that’ll do is continue to postpone when they’ll finally start to decrease interest rates. So a lot of what you hear there is a lot of the same of when they think this economy is inevitably going to turn around what you see is resilience and a lot of strength, even though with a little bit of a weak jobs report that wage growth is pretty incredible. And again, just fair warning, credit card interest rates, home equity, loan, interest rates, all those things are going to continue to stay high. And if not go even higher.


David Bezar  05:46

Yeah, there’s just a lot of puzzle pieces trying to fix. There’s a lot of things, and I’ve been doing this, you know, 35 years, you’ve been doing it for 25 plus years at this point, a lot of things just don’t make sense right now, right? Now, if you dig into some of the granular details, as a matter of fact, like when the jobs report fell a little bit short, there is growth, like we keep hearing, the administration talked about, you know, we’ve made these many new jobs, so on and so forth. Most of that job growth that has occurred, is in two primary sectors. One is technology. And then the other is healthcare. And those are two industries that are subsidized by the federal government. Be, you know, the federal government passed the chips act, right, where we wanted to get more domestic production of computer chips and not be as reliant on foreign powers for that. So you know, a lot a lot of money has been dumped in, and that’s made the job growth look bigger than it may be really is. And that’s the same thing on the healthcare side. Areas that are really being affected is the food industry. No growth, like no growth in this new jobs report, there was no growth, the construction industry. Alright, so these are more your main street type jobs that people need. And you know, Bret and I were looking for new office space in the Princeton, New Jersey area, we see a fantastic opportunity, though not a lot of people are being served properly over in that area. And we’ve been talking to commercial real estate agents, there is so much commercial real estate vailable it’s ridiculous. So the only reason we’re covering these types of things


Joe Krause  07:30

good for you, by the way to get into the Oval Office not not so good for the individuals that hold all those empty buildings, right? That’s it


David Bezar  07:38

and they’re looking like, you know, you’re starting to see where they’re converting them to apartments now, right? Because that’s another segment of the population, right, with interest rates rising and people having these 30 year mortgages, you know, that they got four years ago, three years ago with two and a half or 3%. Nobody wants to sell their house and lose that 3% mortgage and move into what is now a 7% mortgage. Right. So we got a housing issue, that doesn’t make a whole lot of sense. We’ve got a jobs market that isn’t making a whole lot of sense. But but the market keeps moving with and if you’re listening, that’s what you have to ask yourself the question, right? The market keeps moving, how and why right. The NASDAQ’s up 35% year to date, which is unbelievable. The s&p is up 16%. And the Dow is up about 7%. The market keeps moving with all of this weirdness happening. So it’s just about getting prepared, prepared, having all the detail necessary. We’re going to cover a lot just wanted to make sure everybody listening, got that kind of information to kind of set the base on current events. The next three segments, all things Social Security. So remember, text the word Social Security, to 2159993 to seven, two


Joe Krause  08:56

good stuff and a good show lined up for roadmap to retirement to radio show David Bazar and Bret Elam along with Joe along with me Joe Kraus glad to be here. And glad to join you on this program. One more time text Social Security to 215-999-3272 Bret and David continue on the other side back in the moment Welcome back everyone to roadmap to retirement the radio show you’re listening to David Bazar and Bret Elam We’re glad you’re with us the show entire show today is everything Social Security Bret and somehow I feel as though taxes factor into Social Security. But our conversation today all social security, so


Bret Elam  09:43

we’re gonna we’re gonna leave taxes alone today. Yeah, we’re gonna go deeper early on that social security topic is something that we take pride in as a company and in fact, some of our clients being social security managers, retirees from the government, we really pride ourselves on that education. So again, talking All Things Social Security, one of the most important things to understand related to social security are these things called DRCs, which means a deferred retirement credit, the government is really good at using these acronyms that are out there. And it simply means this, the longer you wait to start collecting Social Security, the greater your check will be. So on the surface, that sounds like a phenomenal idea, here’s the issue, less than 10% of Social Security filers wait to take full advantage of those D those those delayed retirement credits. So this is how it works is each and every month a lot of people think it’s year to year, but again, each and every month that you delay your Social Security benefit, your benefit goes up by two thirds of 1%. So that’s 8% per year. Again, it’s not a percent year over year, again, each and every month has a unique number associated with it. So born in 1960, your full retirement age would be age 67. If you’re now 67, in one month, it’s now two thirds of 1% greater than it was the month before, that can create a lot of additional income in retirement. So the most important thing that we that we always encourage you to do is always review that Social Security statement for mistakes, making sure all the numbers are appropriate that’s on there, you do get your Social Security statement, approximately three months before your birthday. Or you can always log on to SS a that Social Security Administration to go pull that information. So that you can see right in front of you what your age 62, h 63, etc, every single year, they show you what your benefit will be. But what it does, is it gives you a false sense of understanding that it actually goes up each and every month, not just each and every year. So it’s important to understand that factor and and a little bit, just a quick example, if you were born in 1960, again, full retirement age being 67 years old, if you collected it at your age 67 That would be approximately $2,500 a month. However, if you delay those delayed retirement credits till age 70, that’s $3,100 a month, which equates to $7,200 extra per year, you look at that impact over 10 years at $72,000, over 20 years $244,000 That can be a major impact.


David Bezar  12:48

Yeah, and again, if you’re going to log you in, like Bret said to, one of the things you’ll learn that the federal government does, and Bret said this, they will have a lot of acronyms to everything. All right. So one of the things is when you look on there, you’ll see p IA and P IA stands for primary insurance amount, that’s your actual monthly benefit, but they call it primary insurance amount. And then you know, full retirement age, you’ll see fra for that. So you know, sometimes they’re just using words that some people don’t necessarily relate to. So we just want to make sure you understand it. And definitely, you know, login. It’s a way you can audit, make sure you got all the credits that you deserve, so on and so forth. Now, waiting can actually and a lot of people make their decisions. And we’ll talk a little bit about this later in the show. They make the decision more emotionally than they do logically. And we do talk to a lot of people when they come in initial thought is we’re going to take Social Security early, it’s probably going to run out of money bla bla bla bla bla, but they’re not taking in consideration. All of the conditions, such as waiting can actually be more money for a widowed spouse. And, you know, statistically, men tend to pass away prior to women. And in a married couple, it leaves a wife, you know, with a situation. So planning out. There’s more at stake when making social security plans, because a widowed spouse is eligible for 100% of the deceased spouse’s benefit. And for some people that can really be pretty darn significant. So let me give you an example on this. Let’s say Harry filed for benefits at his full retirement age, which was 67. His benefit was going to be 30 to 50. On a monthly basis, a few months younger Sally files for a spousal benefit, and that spousal benefit is equal to half of that 3250 number that style the rule works. That’d be $1,625 they receive 4875 in monthly benefits. And that’s 58,000 Plus what an annual income. Now, let’s say unfortunately, Harry passes away at age 73. Sally loses this is where the rule works, Sally would lose her spousal benefit, but she would retain Harry’s benefit of 3250 a month, or 39,000 a year. So that’s almost $20,000 less to run the household that she and Harry were living in. Now, depending on what other assets they owned, that could mean a change in lifestyle for Sally, we see this all the time. Now, here’s the kicker. If Harry had waited to file for the benefits three years longer, age 70, maxing out his delayed retirement credits that Bret talked about, his benefit would have been over 4000 $4,030. So Sally would have had to delay receiving a spousal benefit until Harry filed. But at Harry’s death, assuming she had reached her survivor fra full retirement age, Sally’s monthly and annual annual benefits would have been $4,030, or a total of 48,360 bucks. So this is a simple example, that assumes Sally didn’t qualify for a benefit higher than Harry’s based on her work record, which is, you know, just reality. That’s the situation a lot of time. But it does illustrate how important it is for social security planning to be a family affair. And I would say assisted by somebody who’s got more sophisticated financial planning tool, I


Joe Krause  16:37

was just gonna say it also validates the fact that Social Security is confusing as hell complex, very complex,


David Bezar  16:44

no doubt. So that, you know, that’s why we recommend that, you know, if you’re interested, this white paper that we have 13 pages of information, I’ll give you all the detail we’re talking about. You just simply text the word Social Security, to 215-999-3272.


Bret Elam  17:01

I mean, you think about the the, you said it, the emotional driver. And that’s what we are, we’re emotional beings, sometimes forgetting the rational side of things. And we see so many people that do that breakeven analysis, of saying, hey, well, if I live to this age, but the point that David just made, and again, if you care about your spouse, and the quality of life, that their impact, that they are going to have that example, that David just went through, not leaving that surviving spouse with that deficit. That’s a big deal. That’s a big deal. I mean, that breakeven analysis does not take into account the larger of the two benefits, actually survives that second spouse. So I mean, those two topics that we just spoke about deferred retirement credits, the DRCs, that the government uses that acronym, and that widow benefit. That’s actually on page five and Page seven on our guide that David was just talking about. And again, to receive a copy of the what, when how who, the social security decisions, you want to text, Social Security, again, text the word Social Security to 215-999-3272. Again, that’s 215999327. To to get this great sources, again, it’s a 413 page document goes through the ins and outs of Social Security. And knowledge is great, but when you can apply it, it becomes even that much more greater.


Joe Krause  18:32

David, what’s the percentage? Or Bret, you? Maybe you would do? I’m sure you both know it? What’s the percentage you put 100 people in the room? How many of those 100 people miss file for starting their Social Security? A lot? 70% 50% 60.


David Bezar  18:51

Statistically, what we hear from the Social Security Administration is that 50% of the American population files at the earliest possible age of 62.


Joe Krause  19:00

So in their mind, maybe that’s not they’re saying, Maybe I asked the question incorrectly. But if you’re starting or you’re filing at 62, you’re, you’re you’re punching the earliest that you can take.


David Bezar  19:11

Yeah, yeah. And it’s, it’s a permanent reduction in the ultimate benefit that you get. And now there are many people go, Okay, well, retirement, and Social Security are somewhat synonymous. So I’m going to, you know, I’m going to wait till I retire to kick it on, and then people kind of pick that full rate. Again, it’s a little misleading, but at full retirement, age 67. Well, we saw for Harry it was 30 to 50. That if he woulda waited three more years, it’d be $4,030.02. Big difference, right? I mean, especially if that’s just, you know, kind of one of the, let’s call it the stable incomes of your retirement plan.


Joe Krause  19:49

Right. Yep. And then I think the other variable is, everybody’s working longer. So that factors into that decision as well. thing I mean, you can’t


Bret Elam  20:00

collect it as


David Bezar  20:03

well, actually, Joe, here’s this is kind of interesting because what you just said, like, there are, there is what’s called a do over, right. So things can change, like you just said, perhaps, you know, somebody retires, but they get wooed back into working, right, because the opportunity is good, or they inherit some money or whatever it may be, clients under full retirement age can file a request for withdraw of application within 12 months of being approved for benefits. So like, if you start, and maybe you’re listening, you have started, and you’re going, Oh, geez, you know, this really makes sense. And you’re in your first 12 months of apply, or you have applied and receiving that benefit, you can submit a request for withdraw of application. And there’s a process and we can explain how that works. It’s actually in the brochure that we have. So you know, that’s a way to kind of do over things. All of this 13 pages, has all the information that we’ll be covering in the show today. And if you want that just text the word Social Security, to 215999 30 to 72.


Joe Krause  21:14

Today’s show is all about Social Security with Bret Elam and David bizarre, we’ll get to a commercial break. Back in a moment,


Announcer  21:22

this program is paid for by Jacob media partners.


Joe Krause  21:25

And welcome back everyone to this edition of roadmap to retirement, the radio show, as always, we thank everyone for tuning in. And listening to us every week, we hope at the end of the hour, you are more educated than when the show started. Today, we hope you’re more educated about Social Security, the entire program today is talking about Social Security. And as David said, going into the break, remember to text Social Security to 215, triple 99993272. And that will get you that 13 page document, which is filled with information, David, a lot of


David Bezar  22:09

great information on there. Now, as we came out of the last segment, or as we concluded the last segment, you know, we talked about, you know, spousal benefit, Why the delay makes sense what these delayed retirement credits are so on and so forth. You asked the question, Joe, about, you know, what percentage of the people start early, all that kind of stuff. We’ve we hear from people the reasons that they consider to take Social Security as early as possible. It really does come down to a psychological situation, right? A little of it is fear of missing out, hey, I want to get my money while I need it. The fund is probably going to dry up at some point they’re gonna reduce my debt, whatever it comes down to. It’s really psychological. Like the question is, will you claim Social Security early? Or will you hold out as long as possible? So your psychology is going to play a big role in determining whether you’re going to be an early or late claimer of Social Security? What what we hear what we see what we read about is early claiming is rationale is rational. In certain cases, such as when a claimant is maybe in poor health, or comes from a family with a history of shorter life expectancies. Those are good reasons to consider taking early, we asked those questions. Tell us about the gene pool tell us about Mom and Dad? Did they live a long life? Did they pass away early what’s How’s your health? So we bring those up, but the incidence of early claiming is far greater. And that can be explained by these other variables. And it’s a huge financial consequence. Right? There’s been some research done it says researchers recently calculated that relative to what is optimal given those variables, early claiming reduces the present value of the lifetime discretionary spending, I ready for this one by $182,000 for the median worker approaching retirement 182 grand by making the wrong financial decision related to social security. So why then do retirees leave so much money on the table? A big part of the answer is psychological ownership. Social Security’s my money, I want it. It’s really that simple. It’s like I know there’s this pile of money that I put away the federal government’s been holding. Maybe they haven’t done a great job managing it, but they in holding it, it’s mine. And I want it as quickly as I can get it. It’s a psychological ownership situation of it, and it causes people to make a more emotional, sometimes irrational decision about taking claim versus trying to figure out how not to give up 182,000 bucks a lot of money.


Bret Elam  25:00

To a lot of money, it’s the emotional side of it. And again, and we talked about it, you paid into it. And it’s like, I want to get out yesterday, what is mine. So I think it’s probably one of the reasons that people probably start at age 62. Again, like 50% of the population that’s out there. But a lot of it in David’s use the term psychological ownership is, is also sharing this concept called loss aversion or risk aversion. We meet a lot of people that they think of risk differently. Some people are risk lovers, some people are risk adverse. Last week, I was at a conference. And it was at a casino, I didn’t lose $1. I also didn’t make $1. I avoided it at all, I like more well done. I like more calculated risks, like social security. So I feel like hey, taking risk out of I can take a little bit more math out of the equation, but blackjack or roulette tables. That’s, that’s not for me. I mean, when you look, even though logic tells you, you’re gonna earn more your standard of living will be better later, you get paralyzed by running that breakeven analysis. And again, I want to get my money back. It’s almost like if I asked you a question saying, Okay, let’s, let’s do a coin flip. If you win, get $150. But if you lose, you gotta give up $100. Like, ah, I’m not sure I want to do that. And it’s like, okay, but if he went, I’ll give you $200. Or if you lose $100, everybody has that number where they might start to play that game. And the higher that number, the more likely that person is gonna start and want to get their money back sooner. It’s all about what you think about from a risk standpoint. Why? Because it’s that fear of if I die early, I’m never, I’m never going to get my money back. So,


David Bezar  26:53

you know, these researchers, what they concluded is that if the retiree or pre retiree had better education, and educational materials to review, they would potentially make better decisions, and there’ll be less emotion, more logic. So one of the things that we do here at Thrive is we provide awareness. So like today’s show, and when we do our, you know, workshops and seminars, we bring up the topic of social security, like we try to get people that it shouldn’t be a haphazard decision, it should be a critical decision in your retirement planning. So we create the awareness. The second thing we do is we prepare, we provide the education. So you know, this brochure that we put together for the listening audience, we, you know, we have a bunch of different PowerPoint slides in our presentation that address how Social Security works. And what we also have is we have a very sophisticated software that does the actual calculation. And what I have found when you show people things in black and white, the before picture and the after picture, right, one of the great founders of our country, Benjamin Franklin, he used to think do a thing called the Franklin Tea Bar, he put all the pros on one side, put all the cons on the other side when he was making the decision, and whichever side had more features to it, that would be the best decision to make, while our software actually does that, for our clients.


Joe Krause  28:21

Sounds like sounds like that approach is perfect for today as well. Simple.


David Bezar  28:25

Right? It’s a T bar, right? And that’s what our software does. It says, Okay, I’m thinking about taking it at 62. I’m thinking about taking it full retirement age, I’m thinking about taking it at the maximum age of 70. Well, we run all those reports that are collected into one piece of paper, and it shows you the financial difference in waiting. So at least you have that right. Add to it this brochure, which is very simple to get right tech, Social Security to 215-999-3027. I really want to get those into the listening audience hands, I think it’d be very valuable. You put all that together, you’re now going to make a much better decision in Social Security.


Bret Elam  29:07

Yeah, we actually had John in last week, and we ran that Social Security Report, he was 62 year old, and he was going to get $1,789 If he waited till he was 67. But he came in, I’m taking it at 62. So the report that we ran for him, we showed okay, if you started at age 62. Now his life expectancy was age 81. What we show it we went through three different scenarios with them. We said okay, if you start at 62 Let’s look at where you’re at at age 70. And at age 70, obviously, you’ve collected nothing if you waited all the way till age 70 Put your head $116,000. Now if you look at his life expectancy of which is 81. He waited to his full retirement age of 67 or delayed it. He actually would have earned a little bit more but very close on the break even analysis. But here’s the here’s the big deal. At age 90 It turns into an additional $130,000 People forget about the 130 they’re thinking of the fear of missing out what happens if I did not claim that $116,000 So that’s what this report does. That’s what this this giveaway today helps you come to more rational decisions, not emotional decision. So again for a copy of that brochure, you want to Texas Tech Social Security again text the word Social Security to 215-999-3272


Joe Krause  30:33

roadmap to retirement to Radio Show with David Bazar and Bret Elam back in a moment. Here’s one opportunity for the upcoming week to get registered and get educated and the Thrive financial services workshop on August 8 at the Lambert build station in starting at 6pm Go to thrive financial to get registered. That’s August 8, at the Lambertville station inn inside the Riverside ballroom go to thrive financial Get educated get connected with Thrive financial services. And welcome back everyone to this edition of roadmap to retirement to Radio Show with David bizarre and Bret ALM today’s show is all about it’s everything. Social Security. And as mentioned going into the break, if you text Social Security, to 215-999-3272, you’ll receive that 13 Page informational packet at no charge, which is chock full of information.


David Bezar  31:41

All right, Joe. So we save the this last segment to talk about the question that we get a lot from people about how are they going to change Social Security? How are they going to? How are they you know, they will cover this in there, you know, what happens in 2030, something, you know the trust fund is going to run out of money, all these types of things. Now, depending on where you position yourself, related to what we’re going to share with you will either be good news or bad news is really what it comes down to. Like the question is, if they come for Social Security, and your retirement accounts, how are they going to do it? Right. And you know, one of the things that we know among Americans kind of in their 50s and 60s, only those that are in the highest earning 20% Are the people who’ve really made progress today in savings towards their retirement. I mean, the statistics are a little bit scary. I mean, a lot of people really are not prepared. But you know, if you’re part of our listening audience, and you have been diligent and you’ve done the things necessary, and you’ve kind of been in that top 20%, you may have squirreled away some money, you got to start listening to what we’re going to share here, right, like, will the government raise taxes on retirement contributions? Will they re will they increased the Social Security tax rates? Will they cut benefits for workers classed as higher earners?


Bret Elam  33:09

That’s an interesting concept, right? And that’s


David Bezar  33:11

in quotes, right? Because what’s the definition? What’s the ambiguity of what’s classified as a higher earner?


Bret Elam  33:18

The government is terrible given us definitions on that. So we’re gonna dig into that. So David just said in a moment, you get those social security statements, and you’re gonna share, you can go to If you’re not sure what that Social Security statement is, and it says right on, right on there, it’s reaffirming, it says, like the year 2035, we have enough money to pay you 77 cents on the dollar, which strikes a little bit of that fear and emotion about why people do things a little bit earlier. But most recent report that came out of the government has, quote, unquote, what’s in there of how we go to fix it. Here’s the problem is what was collected in the report is what they’ve continually kicked the can down the road. I remember decades ago, I think I was in college. They talked about privatizing Social Security, where you could take your piece and you could go invest it yourself. It doesn’t talk anything about that. Imagine if, if Congress of government took part of the $2 trillion that’s in Social Security, and actually invested it invested it just like how pensions, not only here but around the world are invested. They’re allowed to go out into the stock market. But we don’t do that here. We probably would not be having this conversation right now. Because the fixes would already have been done if they would have just simply invested that money. You know what they also don’t mention in the report, they don’t talk about all the money, all the taxes that are not collected on untaxed or under tax trillions of dollars by who? People making contributions to politicians, lobbyists, and so forth. And then they use this terminology all over the report. That doesn’t happen. Those that never happened, some of them were talking about. And then and then all over that report and David said it a minute ago, is high earners and when they say the word high earners means those who work for a living and earn a couple $100,000 a year, not a couple million dollars a year, a couple $100,000 a year.


David Bezar  35:18

Yeah, this, this report that Bret’s addressing that was done by the GAO reports that higher earners are the main beneficiaries of tax expenditures, which is the term that the political class uses for money that Uncle Sam could tax, but doesn’t. Second, it notes that the staggering fact that among the Americans, like I said early, it’s only the top 20% Over the past 15 years that have really accumulated the retirement assets. So the disparities between low income and high income older workers, the retirement accounts were greater in 2019 than in 2007. The report says back in 2007, those in the top 20% of earners had a medium retirement account balance, just four times as big as those in the middle 20%. But by 2019, those balances were nine times bigger. So there’s a big disparity there. And that’s why, if you I said it could be good news or bad news, if you are kind of in that 20% of the what they classify as higher income earners, and in today’s society with everything that’s going on. And this is not to belittle anything, but we just meet tons and tons of people that are making $100,000 Plus, that’s getting you today classified as a top 20% income earner, that puts a pretty good bullseye on you, for the federal government to fix this hole that they’ve created for themselves.


Bret Elam  36:50

Yeah, so also what is in the report, and we talked about this a little bit earlier New Year with the secure Act that was passed in December of 22, where they’re starting to change things like tax breaks on contributions of 401, KS, and IRAs of the sorts. So right now, you pay Social Security taxes on income up to approximately $160,000. The change in the report that’s being proposed is eliminating that cap altogether, for people earning $400,000 or more of income, dot, dot, dot, without any increase to the benefits, meaning they want you to contribute more money, but you won’t get any more money than you would have before when that contribution was capped at four or pardon me at that $160,000 today. So the other issue that I frankly have is this regime or the campaign, and this report, uses terminology words, millionaires and billionaires and they lump them together. To me, that’s like talking about astronauts and delivery drivers. They’re two different segments of the population. There is a pure difference between a millionaire and there is a pure difference with a billionaire. I have not yet met a billionaire in my life. I meet millionaires every single day. They’re Middle America, because the word Millionaire is just simply a million dollars of net worth here, around the Philadelphia area, just your house can be worth a million dollars. So understanding the difference between millionaires and billionaires, and a lot of these loopholes are not even being addressed.


David Bezar  38:38

I think you actually said million neighbor’s


Bret Elam  38:40

apartment I was firing was at one Oh, call Webster’s on that one. Yeah.


David Bezar  38:44

I’m just trying to go one for one. If I made one, you gotta


Bret Elam  38:47

check. Checkmate. Millionaire, millionaires and billionaires. Absolutely different people. Yeah,


David Bezar  38:51

you know it. That’s a great point, right? Because we, we have a kind of a coin phrase in some of our marketing and some of the things that we talked about our summary, you know, Ira millionaires, right. Some of the examples we give people accumulated a million dollars for retirement. And people kind of forget what that means and what the potential impact of all that is. Now, one of the things that I think this segment may bring to light for people is if the government does go through with some of these changes to the higher income earners losing their tax deduction, on their contributions and things of that sort. I’d like to remind people have this and I say this in my workshops all the time. How many of you have bought if you’re listening, how many of you bought into the idea that I’m going to put money into a tax deferred plan, right, an IRA, a 401 K or 403 B, whatever it is, I’m gonna get a small tax deduction on that contribution. And then that money is going to sit and compound over the next 2030 or 40 years, or in some good interest build up to This nest egg, and then when the government forces me to take money out in a required minimum distribution, I should be, quote unquote, in a lower tax bracket. So most people start nodding their head go, Yeah, I recognize that story. my follow up question is how many of you are coming to the conclusion that that story is false? And every hand in the room goes up? Right? Because you start thinking about to Social Security checks, if you’re lucky, you get a pension check. And then you got to required minimum distribution checks. You’re making the same money they did while you’re working, you’re not in a lower tax bracket. And then if the government has its way, what’s the chances that they’re probably going to increase taxes over the next 15 or 20 years, you’re not going to be in a lower tax brackets, it costs you a heck of a lot of money. And we already know they’re going up in three years. We know that, right? I mean, at the end of the tax cuts and Jobs Act, which expires at the end of 25, we already kind of know if Congress doesn’t intervene, taxes are going up my point of saying, Well, that is, it may be a good Wake Up Call right now for people to teach, number one, their children, maybe these tax deferred programs are not the best, and they should be funding Roth’s. And if you did buy into that store, you may be coming to the realization that Roth conversions I know we weren’t really going to talk about taxes, but Roth conversions, taxes, and Roth conversions in a accelerated fashion might be the answer to preventing what the government wants to do.


Bret Elam  41:36

I had an accountant then just this past week, and he had been doing Roth conversions all the way up into that 35% bracket for exactly what you just shared. Right there. It’s like knowing what’s coming in not making an emotional decision, making a rational decision. And I said, Well, is there any other reasons you’re looking to do that? He goes, Yeah, he goes, so that when I have the turn age 73, I don’t have to pull any money out. But I’ve already figured out I know, we weren’t going to talk about taxes. But I just figured out how to make my Social Security tax free for the rest of my life. So sometimes it’s a short term sacrifice for long term gain. And we talk about fixes to Social Security. And today’s show is talking about all things Social Security, we talk about how do we fix it? We talked about the psychological barriers of us making so many emotional decisions, not rational ones. We talk about just the importance of delayed retirement credits, and how do we ensure that our the quality of life is protected for our spouse, they don’t make it easy. They don’t make it easy. So my encouragement is to get and get a great summary of today’s show a phenomenal brochure that we put together for you again, what when, how and who are the social security decisions, you want to text the word Social Security, again, want to spell it all the way out text the word Social Security, to 215-999-3272. Again, that’s 215, triple 93272.


Joe Krause  43:00

And as we’ve said many many times as we wrap up this edition of roadmap to retirement, a radio show, all things 360 degrees of your retirement are impacted by multiple areas and all areas good stuff today, get that 13 page document, text Social Security 2215999 3272. And that’s going to do it for this edition of roadmap to retirement, the radio show on behalf of David Bazar, and Brad Elam, and all of our listeners tuning in today. I’m Joe Kraus. See you next time everybody.


Announcer  43:39

Thanks for listening to roadmap to retirement the radio show from Thrive financial services. If you’re like most Americans, you have more questions than you do answer is about what to do with your retirement savings. If you have a question about your IRA or your 401 K pension or other tax deferred accounts, if you have a question about reducing taxes, generating income or filing for Social Security, whatever it is, David Caron and Bret are here to help and often your questions can be answered in a simple phone call. Just call 215-798-9088 to 15798 9088 and so you know no statements made during roadmap to retirement the radio show shall constitute tax legal or accounting advice you should consult your own legal or tax professional on any such matters information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific Securities Investment or investment strategies investments involve risk and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial adviser and or tax professional before implementing any strategy discussed here. David bizarre brandy lemon Karen bizarre Thrive financial services and thrive Capital Management are licensed to offer investment advisory services through Thrive Capital Management LLC and SEC registered investment advisory firm office headquarters located in Fort Washington and offices of convenience used exclusively for client meetings and Exton Yardley in Cherry Hill roadmap to retirement the radio show was a paid commercial announcement from Jacob media Park nerves if you’d like to learn more about the power of the radio our contact Joe Kraus at 267-261-3428 Today’s program has been pre recorded

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