Imagine this is "Mount Everest Retirement Peak" and you've finally reached the summit - the top! You’ve been saving all your life and you’re in your 60s with retirement to look forward to, along with the Social Security benefits you’ve earned. It's a wonderful feeling, isn't it?
Here's the next questions to ponder:
"How do you get back down in the most optimal way?"
"How will you make sure you maximize your resources so you
don't run out of money in retirement?"
Most people don't necessarily know and realize that
the Social Security system that they've
paid into all their working lives...
can actually be up to a 7-figure asset
for them, their spouse, and their families!
They could be
"Social Security Millionaires"!!
However, there are two obstacles to ensuring that you and your family receive the most out of your Social Security benefits:
1) How you file to claim your benefits.
2) How much of those benefits you get to KEEP through the tax code.
The first obstacle deals with how you directly file and claim your benefits. There are a number of factors that go into this portion of planning. However, let me give you a quick scenario:
What is the best age to claim your Social Security retirement benefits?
If you file for your Social Security at age 62... but you live until age 92... didn't you and your family lose out on tens to hundreds of thousands of dollars of hard-earned benefits?
If you planned to file for your Social Security at age 70, but you passed away at age 62... didn't you and your family lose out on tens to hundreds of thousands of dollars of hard-earned benefits?
(There may be a balanced approach between the two!)
This image is from my "Maximizing Social Security and Minimizing Taxes in Retirement" educational workshop. It shows the ultimate benefits of THREE ways of claiming your Social Security Retirement Benefits...
and it was then that I realized that Social Security...
can be a 7-figure asset!
Note: These projections did not factor in any inflation or COLA (Cost of Living Adjustments) which is why I'm confident that most people will become Social Security Millionaires!
The second obstacle deals with the tax code. Most people are not aware that Social Security can be subject to being taxed.
How much it will be taxed...
will depend on your other income sources in retirement.
I don't care HOW much wealth you have... losing $250,000 hurts!
An Important message for business owners:
I believe all of this affects business owners MOST of all!
First, you are paying into Social Security each year through FICA or Federal Insurance Contributions Act, not just as an employee (6.2% + 1.45% for Medicare), but as an employer matching your contribution (+6.2% + 1.45%) for a total of 15.3% total... up to a given maximum wage base limit each year. For 2022, it's $147,000. (Note: there is no Medicare wage base limit.)
Now, let's say that you decide to sell your business, and let's say that you NET $1 million after taxes for the sale of your business. Most business owners often have other assets or income (such as rental income) that is taxable that can make their $1 million+ Social Security benefits taxable and can potentially cost them over $250,000 of THEIR Social Security benefits!
Did you know it worked that way?
Does that bother you? It bothers me... on your behalf.
Below is an image from a retirement income analysis
created for a client.
With all of their retirement assets and income optimally coordinated and put together, we were able to create a plan that increased their retirement income by 33%. This is the software we use to do the math in addition to the more complicated math around taxes, IRA income, annuity income, etc.
I call this planning The Tax-Exempt Retiree Income Optimizer™
These are retirement income plans that I do at my expense
and they seek to answer these six questions:
1) When you retire, how much cash flow can you potentially take per year AFTER TAXES?
2) When is the "optimal time" to file to optimize both a primary earner's benefits as well as spousal benefits?
3) How do we increase your AFTER TAX retirement cash flow?
4) Could we even get you to a ZERO PERCENT tax bracket?
5) What about Long Term Care?
6) When would be the best time to begin YOUR plan?
If I could show you how YOU could be a Social Security Millionaire...
and how you could be PAYING BACK OVER $250,000
of your hard earned benefits through the tax code in retirement...
Would you like that money back?
Very simple and easy to understand.” – H. R.
A "Shameless 90 Second Plug" from my friend, economist, author, and PBS Presenter
If you were to learn that YOU could collect
A MILLION DOLLARS of Social Security Retirement Benefits...
BUT... that you'd end up paying back OVER $250,000 of it
through the tax code in retirement... would you want it back?
Even if you believe you're too wealthy to even bother with Social Security...
Wouldn't you find it useful to learn how the tax code will
treat you and your success in retirement?