Most People Make This Mistake When Planning for Social Security

Lee and Doug discuss the importance of starting financial planning, including Social Security, in one’s late 50s. They also touch on potential future changes to Social Security eligibility ages due to the projected insolvency of the fund and the political sensitivity surrounding the topic.

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Transcript:

Most of the people I know start to look at that formula in their late 50s.

If I were to give people advice, it would be, if you’re going to look at a package, everything you’re going to have available to retire on.

Whether that’s your pension, 401ks, Social Security.

I mean, people ought to take into account whether or not they might sell their homes.

I mean, there’s this whole portfolio of things that if I were to be able to get into Time Machine and go back a few years, I probably would have looked at these things when I was 57, 58.

That gives me a runway of five years before the first trigger.

The first date, yeah, right.

So my advice to people would be do your financial planning, including Social Security and any other income you’re going to have to live on, do it when you’re in your late 50s.

Yeah, mid to late 50s, absolutely, because then you’ll have a good idea on the timeframe.

If you start trying to plan that in your 40s or early 50s, well, who knows?

I mean, maybe you’ll work past the time allotted and you’ll work until you are 67.

So you can take the full amount.

So it really, when you get within five years of when you’re eligible, then it’s time to take a look at it.

And there’s a good bet that at some point they’re going to start moving the goalposts back because that’s the only thing they can do because they’re you know the social security fund is estimated to be insolvent at what 2035.

That’s not all that long so um they’ll figure a way out but they’re going to move the goalposts back for sure and you know you’re not going to be able to get it to your 70 or 68 or.

Yeah listen I hate to say that I don’t hate to say it but for people who are you know 10 years away from retiring.

The most likely thing the government does is what you’re talking about.

It becomes 66, 70, 73.

All the people who fall into that area where they were just about to hit 62.

And they’ve done all the planning we’re talking about in their late 50s.

All of a sudden, they’re stuck for, let’s say, three years before they can elect to take anything at all.

I don’t think this is something people can plan on because there’s no way to know.

But people at least ought to keep in mind the fact that one of the ways the government has.

Of sort of stringing out how long the Social Security Fund is available at 100% to everybody is what you’re talking about.

Instead of the 100-yard line, it’s the 120-yard line.

Yeah. Well, they’ve been known to do it on everything else like the budget.

And again…

It’s an untouchable subject.

And any politician that says so-and-so wants to cut Medicare or so-and-so wants to cut Social Security, that’s a lie.

That’s a flat-out lie because no politician in their right mind ever touches that fourth rail, ever.

Right. Let’s move to…

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