Social Security Archives - Page 10 of 10 - Jerry Golden on Retirement

What’s Your Number? Six Reasons Retirement Calculators May Fail Individual Investors

January 26, 2016 By Jerry Golden in Annuity 4 Comments Tags: Annuities, Guaranteed Income, retirement income, Social Security

A pop-up appeared on my computer screen offering to calculate my “retirement number.” The message said it could tell me the amount of savings I’ll need to retire comfortably. I’ve seen these enticements before, usually offered by a well-known and highly regarded financial institution. Even the robo-advisors and their calculators are carbon copies of the industry’s accepted approach.

Unfortunately, these calculators are not the best way to plan your financial future.

I don’t question the so-called Monte Carlo investment algorithms used to simulate market returns. What I do fault is the entire premise of extending that simulated market performance to individual investors’
personal retirement plans. An individual investor is not a pension or endowment fund with other sources to draw on, or with a virtually perpetual existence. More

Letter to the Editor – We’ll All Rethink Our Retirement One Way or Another

April 4, 2014 By Jerry Golden in Interesting Articles, Social Security Tags: retirement, Social Security, Social Security Beneficiaries, Social Security Benefits, Social Security Reform, Wall Street Journal

Last month, the Wall Street Journal’s Letters to the Editor was on the topic of retirement.

The letter was titled: “We’ll All Rethink Our Retirement One Way or Another”.

Among several scholars, industry experts and other opinionated people with well articulated arguments, I submitted a proposal, which was published in the Wall Street Journal on March 17. Below is my submission, which argues that with added flexibility to Social Security, we could in turn save billions of dollars in the process.

Along with greater work flexibility, America needs to offer retirees greater flexibility for their Social Security benefit choices by allowing Social Security beneficiaries to delay starting benefits beyond age 70, and to gradually opt into Social Security benefits as part of a “staged” retirement.

In the process, according to my analysis, $200 billion to $400 billion in Social Security outlays could be saved over the next 20 years.

The pitfalls of our Social Security system don’t have to be as dire as they’ve been constructed. A little flexibility can go a long way.

New Year’s Wishes for Retirement Regulations

January 8, 2014 By Jerry Golden in Interesting Articles, Social Security Tags: IRA, retirement, Rollover IRA, Social Security, Social Security Reform

The start of the New Year signifies a time of change in our lives, where we resolve to better ourselves after the knowledge and experience gained from the previous one.. Apart from the resolutions of self-betterment that we all seem to make, I would hope to see changes to retirement related laws and regulations, which could benefit us all.

Due to more pressing matters in Washington; I do not foresee any specific reforms to retirement, unless it is part of a “grand bargain” that addresses long term debt and fiscal issues. However, there are several changes that I would like to see, which could ultimately better the current state of retirement.

Reform Social Security that would take long term financing issues off the table. There are many reasonable approaches that could work, including my proposal of updating Social Security to the new realities of older American workers.
Change the taxation of income annuities to encourage middle market retirees to reduce investment risk and increase cash flow by electing lifetime payouts.
Limit the excessive accumulation in Rollover IRA’s. Require faster and earlier distribution rather than restricting the types of investment or contributions.
Improve the disclosure for complex annuity products. Requires better coordination between State insurance and Federal securities regulators.
Define the fiduciary responsibility of anyone advising investors regarding retirement matters.

Whether or not these changes will come to fruition in 2014, I believe these five alterations to retirement laws and regulations could largely benefit any current or future retirees.

On behalf of the Golden Retirement team, we would like to wish you all a safe and happy New Year.

How Social Security Reform Can Improve Retiree Finances: Jerome Golden

December 19, 2011 By Jerry Golden in Interesting Articles, Social Security Tags: retirement, retirement income, Social Security, Social Security Reform

Understanding the Monetary Value of Social Security Benefits

In my Op-ed published on December 8 by Bloomberg News (at http://bloom.bg/v2UCRq ), I suggested that the Social Security System could be made financially stronger while giving Social Security beneficiaries more choices about how and when their benefits are distributed.

I indicated in last week’s blog that I would show the advantages of a strategy of staging the election of Social Security benefits.

Before doing that, it’s important to establish a principal not well understood – the monetary value of the right to receive income for the rest of your life from a trusted source such as Social Security, a pension plan, or insurance company. Just because this right may terminate at your death (which can be ameliorated with a surviving spouse or beneficiary option) doesn’t mean it has no value. As long you are of average health, that value can be calculated quite readily – and even if you are not of average health, there is still value.

For example, the value of a Social Security benefit of $2,000 per month for a male 66 in average health could be worth $400,000 or more. That’s the personal store of value referred to in my Op-ed piece. What are the implications of that number?

It’s large and can represent a significant part of your retirement savings.
You should have options on how best to utilize that $400,000 of value.
Delaying the election of benefits in whole or in part (under the reform proposal) can grow that value for future consumption.

Certain commentators described my Social Security reform proposal as overly complex. My responses are: (a) it’s a mistake not to provide the beneficiary more choices with so much at stake;(b) Social Security policymakers and administrators can determine how many choices they offer to individual beneficiaries; and (c) there’s a cottage industry today providing Social Security advice, and with this reform they’ll simply expand their tool set.

Jerry Golden
Your Retirement Advisor
www.GoldenRetirement.com

Retiree Choices Could Keep Social Security Afloat: Jerome Golden

December 14, 2011 By Jerry Golden in Interesting Articles, Social Security Tags: retirement, Social Security

In my Op-ed published on December 8 by Bloomberg News (at http://bloom.bg/v2UCRq) I suggested that the Social Security System could be made financially stronger while giving Social Security beneficiaries more choices about how and when their benefits are distributed.

Having already received questions about how this may be possible, this is the first of several blogs to provide more detail about elements of my reform proposal. Let me start with answering some of the critical questions.

Does my proposal represent a privatization of Social Security and turning over $12 to $15 trillion to Wall Street? Definitely not! It simply involves giving beneficiaries more options with their promised benefits. When the article refers to a personal retirement program, it’s not about a private investment account, but how you could customize your Social Security benefits to meet your personal circumstances.
Is the source of the projected savings the result of beneficiaries deferring the election of benefits until, say, age 75 and having Social Security recover their personal store of value at their death? Again, the answer is No, but requires a three-part answer:

While the headline writer changed the original headline above to “Cash in at Age 75 and Help Save Social Security”, there is nothing sinister about deferral. Under current Social Security rules, you can defer from age 66 to 70 and get a 40% increase in benefits. My proposal simply extends that concept.
The article states that any increase in the deferred payments reflects both interest and longevity credits. Thus deferred payments give you credit for the expected recovery to the System from deceased beneficiaries. To illustrate, deferral from age 70 to 75 might produce as much as a 70% increase in benefits.
While some few individuals will elect a 100% deferral, the more likely scenario under this reform is to stage retirement and coordinate the deferral with a savings drawdown and/or other income. A subsequent blog will show the advantages of such a strategy.

Will the future demographics of the country really help when the ratio of active workers to retired workers seems to be decreasing, creating greater pressure on the Social Security system? The answer is yes, but you need to look far enough into the future. While there’s a period with baby boomers retiring when that ratio is decreasing, that phenomenon eventually begins to reverse itself, in quite a dramatic fashion, according to US Census projections. This is particularly true using the Census Bureau’s “high immigration” scenario.

As I wrote to one individual with serious doubts about the proposal, I’m used to some initial skepticism, and I’ve always had confidence in the often predictable stages of any new idea:

*Ridicule
*Resist
*Embrace
*Self-evident

Hopefully, the information in this and future blog will help in beginning the path to the “self-evident” stage.

Jerry Golden

www.GoldenRetirement.com