Jerry Golden on Retirement

What’s the smartest way to claim Social Security benefits?

November 27, 2019 By Jerry Golden in Social Security Tags: Claiming benefits, Income annuities, Social Security

Many clients and friends ask my guidance about Social Security – particularly the question of whether they should claim their benefits early or late. I have crunched the numbers. And I have not come up with a one-size-fits-all answer – because there isn’t one.

It turns out the best way for you to get the most from Social Security may not be the best way for your neighbor, colleague, friend or even your spouse. Add Social Security to the list of topics you discuss with family over the holidays. You will find more opinions about when to start taking benefits than you do about qualities of the best dessert.

It’s not one or the other

If you do research on your own, you will quickly find articles that want to push you in one direction or the other. One will remind you that less than 5% of retirees wait until the maximum age of 70 to collect their benefits. Those who take their benefits at or before their “full” retirement age leave trillions of dollars on the table. The authors of those articles make you feel stupid if you claim “early.”

Working the percentages for a better retirement

November 4, 2019 By Jerry Golden in Income Allocation Tags: advisor fees, Income allocation, Income annuities, retirement income

When dealing with percentages, an offer that sounds good at first may turn out to not be so great, depending on where you are in your retirement planning.

As you accumulate savings, for instance, you’re looking to generate growth in your account and so you may hire an investment advisor to help you make the best choices.

Their fees are typically around 1%.

That number seemed low to my trainer, for example: “Only 1% a year,” as he said.

(Of course, on $1 million of savings, you would pay $10,000 – and more – each year.)

Don’t bet your retirement on Monte Carlo models

October 21, 2019 By Jerry Golden in Income Allocation Tags: Income annuities, Monte Carlo model, retirement

When you sit down with a traditional financial advisor to plan your retirement you will provide her with the spending budget you have in mind. The advisor will adjust that amount for inflation and after running through a “black box” model, will predict how many years your retirement savings – typically made up of cash, stocks and bonds — will last.

The model to make this prediction is called “stochastic” — a fancy way to describe what is a typical Monte Carlo simulation model.

How to reduce taxable RMDs and improve your retirement income plan

September 19, 2019 By Jerry Golden in Annuity, Income Allocation, QLAC Tags: Income annuities, QLAC, retirement income, RMDs

A reporter called me to ask whether investing in a QLAC would reduce a retiree’s RMDs and the tax that must be paid on them.

The short answer is Yes.

The complete answer is, think about the QLAC decision as part of a broader consideration of your retirement finances. Properly combined with your IRA investments, it can provide steady, lifetime income and may help you to fund a legacy to your heirs.

Let’s examine how you might create a retirement income plan that balances various investment opportunities.

Here is a case study

A step-by-step guide to building your retirement income plan

August 26, 2019 By Jerry Golden in Income Allocation

For all the saving and planning you do to prepare for retirement, there remain two questions that are impossible to answer about the strength of your plan:

What will the stock market do during my retirement?
Will I outlive my savings?

A lot of planning expresses those risks like this: “Under our Monte Carlo analysis, you have a 90% chance that your money will last until age 90.” Or if you’re more sophisticated, they’ll give you a plot point like the following and then ask you to select the best set of outcomes.

There are two problems with these approaches: