Free Social Security Optimization Report


Social Security can be devilishly complicated to optimize. But it forms the core of a guaranteed lifetime income strategy.

In the past it’s been hard to make accurate recommendations because the rules of Social Security are complicated. So we have recently started using an online tool from

Social Security

With just a few pieces of info, the tool produces a comprehensive report tailored to you that shows you the optimal and most lucrative time to take Social Security.

This report is normally $125, but for a limited time we’re offering it free to new customers as we work it into our practice.

If you have been resisting calling us, now’s a great chance for us both – get yourself a $125 value for free, and we’ll give you an award winning, customize report on your personal, optimal Social Security strategy.

Give us a call at 800-438-5121 today!

Boost Your Social Security Check


Maximizing Social Security can  have a dramatic effect on your lifetime guaranteed income. Social Security is a source of  guaranteed income that is indexed to inflation, so it makes sense to get that benefit as high as you can.

This Wall Street Journal article discusses some of the various  strategies, which include  ‘File and Suspend’ and ‘Restricted Applications.’

If you’re considering an annuity and know that Social Security is a part of your retirement plan, give us a call.  We have tools that assist you in making an informed decision about getting the most out of the System.

The File and Suspend approach is described this way:

A claiming strategy called “file and suspend” can help get the most money. Say a husband plans to delay his benefit until age 70. He is allowed to claim his benefit at his normal retirement age—say it’s 66—and then immediately suspend it.

That way, his benefit amount keeps growing—thanks to those delayed retirement credits—but since he did make that initial claim, his wife, at her full retirement age, can file a “restricted” application to claim spousal benefits based on her husband’s record, but not her earned benefit.

Generally, spousal benefits are up to 50% of the other spouse’s monthly benefit at full retirement age (some age restrictions apply). In this scenario, her own benefit now can grow until she hits 70, too.

In one hypothetical “file and suspend” scenario, a couple, both 66, could collect an additional $60,000 by delaying their benefits and the wife taking spousal payouts while they wait, says Lisa Colletti, New York-based director of wealth management at Aspiriant.

How to Beat Bonds Using Social Security


Knowing when to take Social Security can be a real chore.  We frequently work with clients to determine the optimal time to take the benefits.  There are different ways to calculate the benefits of waiting, and this recent WSJournal article equates the return to a bond investment, with a surprisingly high payoff.

Consider an unmarried man in average health, age 62—the youngest age for starting retirement benefits. His payoff for waiting until age 67 to collect is the equivalent of buying a long-term bond that pays 3.2% a year. For a woman, all else held equal, it’s a 4% yearly return, according to Mr. Shoven and his research partner, Sita Slavov at Occidental College.

Here’s the whopper: For married couples, if the higher-earning spouse delays payments from age 62 to 70, but at age 66 begins collecting spousal benefits from the lower-earner’s plan (as Social Security allows), the return is like owning a 7% bond.

Not just any bond, either. The fictional alternative would have to be government-guaranteed and provide periodic inflation adjustments. And the income would have to be tax-free for most recipients.

The closest real-world investments are Treasury inflation-protected securities, or TIPS. They’re government-backed and inflation-adjusted, but they’re subject to federal (but not state and local) tax. Ten-year TIPS on Thursday paid minus-0.21%. That’s not a misprint; bond rates are so low that investors are paying to own TIPS just to get the inflation adjustment.

Put differently, a 7% annual return for delaying Social Security payments is for many investors better than a bank certificate of deposit that pays more than 10%, considering the inflation adjustment and tax advantages.

But beware- making any long term plans based on politics is bound to disappoint.

Some retirees find advice on when to start Social Security benefits confusing. That’s because even a ballpark calculation must consider not only factors like gender, marital status, income and health, but also long-term changes to life expectancies and short-term changes to interest rates.

For now, the deal remains sweet. The plan’s trustees say there is enough cash to pay full benefits through 2036 and three-quarters of benefits thereafter, and Mr. Goss says such deadlines historically have served as a call to action for Congress.

Members of both parties are considering legislation to rein in costs. “We clearly have to make changes to things like the retirement age to keep the program affordable,” says Sen. Tom Coburn (R., Okla.), the ranking member of the Finance Subcommittee on Social Security, Pensions and Family Policy.

If you’re making plans based on maximizing Social Security, be sure you have a fallback or contingency scenario in case benefits change during your waiting period.

Stock Picking Robots


This week, from SmartMoney, I’m going to feature a story about a supposed scam about two brothers from England who developed a magical strategy for picking stocks and selling advice. The SEC charges that this scam involved the brothers selling newsletter subscriptions to unwitting investors who believed in the ability of a mythical robot to pick winning trades in the market.

Read the article here… Wall Street is Full of Stock-Picking Robots

Apparently investors were told “the ‘robot’ was a highly sophisticated computer trading program and the product of extensive research and development.” Over several years roughly 75,000 investors handed out more than $1.2 million in subscription fees for the service. The whole thing gets a little dicier when we learn that the duo had a separate business where they were paid to promote certain stocks. In turn, for a price, the robot would pick the paid-for stock in the next newsletter.

The article actually suggests what would be my biggest question with this whole story. How is that different from what happens on Wall Street on a daily basis? Hedge funds and asset managers are constantly promoting their proprietary computer trading systems as a reason for you to place business with them. Not to mention the fact that there are plenty of firms who pump an enormous amount of money into certain stocks as a way to artificially inflate the stock’s price, only to sell it moments later at a profit.

I certainly don’t condone these actions in any way but I will tell you that for the average investor, the game is rigged. Have you ever felt powerless as you watched your hard-earned assets evaporate? Well, in many cases you are. Fundamentals favor the long haul while many of today’s trading practices emphasize short-term profits. The problem is that short-term dips in the market cause emotions to drive decisions for many people.

It’s hard to ignore the healthy returns available in many market cycles. But as you approach retirement, wouldn’t it be wise to protect your baseline first? That allows you to take the risks needed to capture real growth over time without threatening your ability to retire when you want.

So, protect the assets that are needed for sustainable retirement income first. Then you are free to chase massive returns with whatever ‘stock picking robot’ most appeals to you.

If you’re tired of the Wall Street games, give us a call.

Have a great week!

Bryan J. Anderson
[email protected]

Funding The Post Pension Retirement- Wall Street Journal


The weekend Wall Street Journal brought us another piece that underscores the need for stable lifetime income in retirement.   Fewer and fewer people retire with employer pensions, yet we all must plan for retirement that may stretch into our 90's or longer.  The article says:

Far more people will retire without pensions and will need to rely on their accumulated savings to pay for everything that Social Security doesn’t cover.

So how will you turn those funds into the monthly income you will need to pay your bills? The answer is murky at best.

Previous generations built "ladders" of bonds with staggered maturities and invested in dividend-paying stocks, expecting to live solely on the returns. But low interest rates and a volatile market have made those strategies difficult

The article continues with good pointers and explores the pitfalls inherent in relying on any one strategy alone.  It should sound familiar to regular readers of Annuity Straight Talk.  Our pages on building your own Private Pension explore the  topic thoroughly.

The Lifetime Income Answer:

It doesn’t take extensive analysis by The Wall Street Journal to get to a Main Street common sense conclusion: In retirement, individuals need to convert their assets into income, and need it to last a lifetime.  And in to be in harmony with their risk tolerance, they should find as strong a guarantee as possible to absolutely, positively ensure that they can never run out of income.  That is a secure retirement. 

Turn that statement around for a second- if you are comfortable facing the chance of losing a significant portion of your assets in a stock market downturn, and possibly being forced to radically alter your standard of living to suit your diminished means, then by all means, stay invested in the markets. 

Hopefully, this illustrates that a more prudent strategy is to lock in enough income to guarantee your base standard of living.  Take care of housing, food, and cost of living with Social Security, annuities, and/or pensions- and then leave your remainder assets invested in the markets, real estate, or other endeavors.  That way, when the next market crash comes, you will have insulated yourself from the most dire consequences.

The Journal closes with this advice as well:

Ultimately, we may have to become as alert to retirement asset-allocation and withdrawal strategies as we have become at investing and accumulating. Depending on how much you save and how much you want to spend, you may find you want a mix of products and services.

A mix of products and services is definitely appropriate, and will vary for everyone.  No one size fits all.   Annuity Straight Talk stands ready to assist you in devising a lifetime income strategy suitable for your needs.  Give us a call at 800-438-5121.


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Don’t Join The Ostrich Generation: Wall Street Journal


Yet another superb article for Annuity Straight Talk readers on retirement planning.  Some of the highlights:

50% of people age 45 and up have not calculated their savings needs

25% of people now 65 will live to age 96

62% of married couples disagree on when to retire.

These and other statistics in the article underscore the need to take control of your own destiny, plan for retirement properly, and take action on those to ensure that your goals become reality. 

The home is the first place to start- agreeing on goals, retirement location, and retirement financial needs is hard but essential groundwork.   We stand ready to assist with the financial side of the equation, but I'm afraid we can't help much with the personal issues 🙂

The article is here, and quoted below.

Stocks are volatile, the economy is stagnant, and corporate pensions and Social Security seem less viable by the day. One might expect such a dismal confluence of events to jolt aspiring retirees into financial-planning overdrive, furiously making budgets, cutting spending and salting away every spare nickel.

Yet many Americans are responding to the market and economic malaise by putting their heads in the proverbial sand. Half of U.S. workers who are at least 45 years old haven't even tried to calculate how much they will need to save to live comfortably in retirement, according to a March study by the Employee Benefit Research Institute.

Others are shelving retirement dreams because they are paralyzed by fear. According to EBRI, 20% of employees say they intend to retire later than they had planned, for reasons ranging from the slowing economy to worries over the future of Social Security.

Even wealthier people are nervous. Two-thirds of "affluent investors" with at least $250,000 in investable assets surveyed in June were concerned that their retirement stash won't last throughout their lifetimes, up from 57% in December, according to Bank of America Merrill Lynch.

"People are frozen because they don't know which way to go," says Jeannette Bajalia, president of Petros Estate & Retirement Planning in St. Augustine, Fla. "Anytime there's ambiguity, it immobilizes them."

The good news is that there are ways to fix derailed retirement plans. Among the essential tasks: talking honestly with your spouse, planning realistically for health-care expenses and rethinking your retirement age and Social Security assumptions.

The first step is looking beyond the current market realities of volatile stocks, low-yielding bonds and slow economic growth—and having the fortitude to continue taking measured risks.

Many investors are too rattled to invest in anything except cash these days. "There's a level of conservatism in couples in their 50s and 60s unlike anything I've seen," says Greg Sarian, a certified financial planner at Merrill Lynch for 19 years in Wayne, Pa. "Even if they already had a defensive investment posture, there's been more pullback."

Yet giving up potential growth on money meant to last the rest of your life can be risky as well. Say a couple with $2 million in savings, panicked over increasing market volatility, moves a portfolio of stocks, bonds and cash investments entirely to certificates of deposit and short-term Treasurys earning 0.5% a year and never shifts it back. Assuming they withdraw $120,000 in their first year of retirement and 3% more each year thereafter, they could run dry in about 14 years, says Michael Martin, president and chief investment officer of Financial Advantage in Columbia, Md.

For clients approaching retirement, Mr. Martin's firm puts 28% into equities, including 22% in individual stocks and 6% in three emerging-market mutual funds. A larger portion—36%—goes into six bond funds with a combined duration of less than three years and a 4% yield. Another 16% is in cash reserves, 13% in "hard assets" (10.5% in gold and 2.5% in timberland) and 7% in a tactical fund that jumps into asset classes as conditions warrant ( Pimco All Asset All Authority Fund).

This conservative allocation appeals to retirees who make portfolio withdrawals for living expenses, because their investments have some growth potential, but it also spreads risk enough to make it more likely that their nest eggs can last, Mr. Martin says.

So far this year, the portfolio has brought a 3% return, he says, compared with the average money-market and savings account return of 0.15%, according to

Saving strategies are only the beginning, however. Advisers say people should start thinking about other important matters, from where to live to Social Security expectations, in their 40s, if not sooner. Here's a guide.

• Start talking with your husband or wife—now.

Couples are having trouble connecting on retirement-planning issues. A May study by mutual fund giant Fidelity Investments found that 62% of couples approaching retirement disagreed about their expected retirement ages, and 47% disagreed on whether they will continue to work in retirement.

Scott Anderson took a buyout late last year at age 51 from his job as precinct deputy inspector of the Nassau County, N.Y., police force. He spent much of last winter helping his twins apply to colleges, he says, and working out an income plan with Craig Ferrantino, a financial adviser in Melville, N.Y.

"One person in the couple usually handles it," Mr. Ferrantino says, "but we have a holistic approach, and we like to talk to both people in the couple." By doing so, Mr. Ferrantino often finds that partners have different ideas about how much income they need, and how large an investment loss they could tolerate, among other potential conflicts.

Mr. Anderson's wife, who has a part-time job at a boutique, plans to work another 10 years—and isn't sold on his idea of moving to Utah for its world-class skiing. "If I'm going to move from my primary residence of the last 20-plus years, I see it coming sooner rather than later," he says.

The idea is bringing up issues, he says, because Ms. Anderson's mother lives near them on Long Island. As a way to compromise, he is starting to think about buying a beach house there.

Couples also can try taking a quiz together to see how they match up on basic expectations. Fidelity offers one at that focuses mainly on finances, and there are others more focused on time at and (click on "Relationships").

A rule of thumb: Vow to spend at least half the time talking about your retirement plans together as you do about summer vacation plans, says Mr. Sarian of Merrill Lynch.

• If working till you drop is your plan, think again.

Half of baby boomers expect to be in their 70s before they fully retire, according to research released last year by First Command Financial Planning. But people laid off in their late 50s and early 60s, often because of their relatively large paychecks and benefit packages, have a hard time getting back to those levels.

"Anyone who is 55-plus working in corporate America has a bull's eye on their back," says Kevin Reardon, a fee-only financial adviser in Pewaukee, Wis. "We tell everyone who's not the owner of a business to prepare."

The unemployment rate for 55-plus workers was 6.6% in August—lower than the 9.1% rate for the total labor force. But since the start of the recession, both the number of unemployed and the unemployment rate have increased by a greater percentage for the over-55 age group, according to an AARP analysis. What's more, the average duration of unemployment for older job-seekers is a solid year, compared with 37 weeks for younger workers, the group says.

Of course, an economic rebound could change these trends. But few economists are predicting robust job creation in the next few years.

One potential salve is part-time work. Even a modest paycheck could help early retirees give their battered investments a chance to bounce back before they start tapping them.

Mr. Reardon, the Wisconsin planner, counseled one couple recently to have the wife hold on to her job three to four years longer than planned. She works part-time running a travel agency, making about $25,000 a year. She didn't view it as a large contribution to the couple's finances, so she considered quitting so they could move.

Mr. Reardon explained that if she kept working, their investments should last at least two additional years—until she's 84, rather than 82. She has continued—and can do most of the work in six months each year, he says.

• Plan for rising health-care costs—especially if you're healthy now.

Most boomers realize that care is pricey, but typically don't grasp the scale of rising costs.

A private room in a nursing home, which now costs $82,125 a year on average, according to the American Association for Long-Term Care Insurance, could escalate to $190,000 a year by 2030, according to estimates by insurer Sun Life Financial. Yet in a survey of 1,015 people who are 50 or older that Sun Life released earlier this month, the median guess was that costs would go up half that much.

Some 70% of Americans older than age 65 will need long-term care, meaning help with daily activities such as eating and bathing, according to the U.S. Department of Health and Human Services. Yet the same survey found that almost no one had discussed long-term care with a financial adviser or lawyer.

Financial planners who confront their older clients with such statistics say the clients usually spring for long-term-care insurance, which costs about $2,350 a year for a 55-year-old couple (including discounts for good health and being married), or $4,660 a year for a 65-year-old couple, according to the American Association for Long-Term Care Insurance.

The main moving parts are the length of the benefit, which generally should last at least three years; the daily benefit amount, which should match up to costs where you live; and the "elimination period," meaning the period of time you choose to pay your expenses yourself before coverage starts. Particularly for people under age 70, many planners also recommend paying up for a rider that provides a 5% bump in the benefit each year to protect against inflation.

Another option is a "hybrid"—an annuity or life-insurance policy with a long-term-care benefit. Ms. Bajalia in St. Augustine recently set up an indexed annuity for Barbara Deckman, a 62-year-old retired teacher, which has a lifetime-income benefit and a "double confinement" rider, meaning the policy pays twice as much each year if Ms. Deckman qualifies for long-term-care payments.

• Don't jump the gun on Social Security.

One of the benefits of advance planning is that it can allow you to delay taking Social Security for as long as possible. Depending on your financial situation, life expectancy and other issues, that could be a wise move.

Unless a person is terminally ill, there is little upside for someone in their early 60s to tap Social Security. By collecting at 62, rather than at the government's "full retirement age" of 66 for people born from 1943 to 1954, you would slash your monthly benefit. Wait until age 70, however, and you would get 132% of the monthly benefit you would collect at your full retirement age.

A retiree eligible for $18,750 a year in Social Security at age 62 who waits to collect $33,000 a year starting at age 70 could substantially increase the after-tax amount he could spend by age 95, according to T. Rowe Price. Assuming the benefit would increase 3% a year for inflation, and that the retiree was in the 25% marginal income-tax bracket, he would get $850,000 in all by starting the benefit at age 62—or $1.4 million by waiting until age 70.

Becoming a nonagenarian isn't unthinkable: One in four of today's 65-year-olds will live to 90, and one in 10 to age 95. So, if your family members typically live into their 80s or 90s, and you think you could, too, you should consider delaying the benefit as long as you can.

Of course, the big challenge in postponing Social Security is figuring out how to fill the gap between age 62 and whenever you start collecting benefits. Couples in which both spouses worked could try to live off the early benefit of the worker with the smaller paycheck, saving the larger one for later.

Another strategy, living off retirement-account withdrawals for a few years, might help cut future tax bills. Starting in their 70s, retirees generally have to take mandatory withdrawals from retirement accounts, and pretax contributions and earnings are subject to income tax. By lowering those account balances in their 60s, at the same time they aren't drawing Social Security income, they might be able to take smaller mandatory withdrawals later and also pay tax on those withdrawals at a lower rate.

Bottom line, Mr. Reardon says: "If there's a good chance one of you will live into your 80s, delaying Social Security is a good way to guarantee your rate of return for your collective lives."

If you wait until age 70 to begin collecting Social Security benefits, you will get 132% of the monthly benefit you would have collected at your full retirement age. An earlier version of this article said you would get 132% of the monthly benefit you would have collected at age 62.

Retirement Income


How are you planning for retirement income? What are some of the forces you are up against, and what do you need to be aware of for retirement income when making long term plans? Read more