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Income for life #1

In this very uncertain world we live in today, it is nice to know that one thing is for sure....or at least more “for sure” than most of the world in the year 2020.

What if your investment advisor offered you a program that called for you to contribute 6.2% of your wages for your entire working life? If you were an employee, your employer had to match your contribution.  If you worked for yourself, then you are required to pay both halves.

By doing this for your working lifetime, you would receive a guaranteed income for life.  Plus if you died, your children would receive a benefit until they were 18 and your widow could collect a benefit when she / he reached age 60.  But now comes the best two parts.  If you delayed collecting your benefit beyond your “full retirement age(FRA),” your benefit grew by 8% each year until you started to collect.  Plus, as long as you lived you would receive a cost of living benefit based on the CPI-W until you died. (1)

Almost forgot.  If the benefit your spouse is able to collect from their contributions is less than half or your benefit, the benefit paid to them at their FRA is increased up to at least half of your benefit.  Plus, if you die before your spouse and your benefit is greater than their benefit, they then start receiving what you were receiving before your died.

And then another part.  If you are divorced after being married for ten years, you may be able to collect benefits from X-spouse’s account.

WOW !!!  Too good to be true.  Well maybe.  But it is true.  It is called Social Security.

The concept of “social insurance” goes back to the Greeks.  The US provided benefits to men disabled during the Civil War.  The Depression of the early 1930’s saw nearly half of the elderly in this country unable to provide for themselves.  In 1934, President Roosevelt decided to find a solution. (2)

“Subsequently, the President created by Executive Order the Committee on Economic Security, which was composed of five top cabinet-level officials. The committee was instructed to study the entire problem of economic insecurity and to make recommendations that would serve as the basis for legislative consideration by the Congress.” (2)

“In early January 1935, the CES made its report to the President, and on January 17 the President introduced the report to both Houses of Congress for simultaneous consideration. Hearings were held in the House Ways & Means Committee and the Senate Finance Committee during January and February. Some provisions made it through the Committees in close votes, but the bill passed both houses overwhelmingly in the floor votes. After a Conference which lasted throughout July, the bill was finally passed and sent to President Roosevelt for his signature.”(2)

Unique concept, the President suggests a study be done.  A report is made and sent to the Congress to pass a law.  Committees consider it and vote and the matter is sent to full Congress and Senate and is “overwhelmingly” passed.

Social Security

Social Security is big deal.  Lifetime benefits for a married couple are often in excess of $1M.  Decisions as to when to begin receiving benefits are critical.  Don’t screw this up!

Often suggestions by well-meaning friends to “take the money as soon as you can” maybe short-sighted and frankly just bad advice.  Filing too soon can reduce your lifetime benefit by as much as 30%.  When to file is a math problem.  One that cannot be done with a simple calculator.  If you are unsure of your benefits, go to SSA.gov and establish your account to review your benefits and earning history. (3)For your reading enjoyment and personal growth, the end of this blog has several websites that may be helpful.  (4, 5, 6)

Closing Thoughts

In closing, the Social Security Administration is not responsible for helping you determine when is the best time for you to begin receiving benefits.  Their job is to file your application and make sure the money gets to your bank every month.  The decision about when to file is your responsibility.  Let me repeat. Your responsibility. This is a big-deal decision worth hundreds of thousands of dollars to you and your spouse.  It is critical to get it right.

Call us to “run the numbers” for your situation so you can make an informed decision based upon facts.  Every family’s situation is different.  What is right for one may be very wrong for another.  Know your numbers!  Make informed decisions.  Call us.

It just does not seem real.  It is almost September.  School is starting...sort of, there is baseball without fans, the NBA is in a bubble, football ??? California is on fire; masks & social distancing; and oh yeah....an election.  Pray for us all.  Keep the faith.  Remind yourself that “this too shall pass.”  Get some fresh air.  Go for a walk.  Exercise.  Watch a comedy.  Laugh out loud at least daily but more often if you can.

Entertainment Options:

  • Yellowstone... Starring Kevin Costner.. various streaming services
  • Sebastian Maniscalco: StayHungry..Netflix..StandUpComedy....One of the Best New Standup Comics

And do you have a questions about social security and your finances? I'm here to chat. 


1) https://www.ssa.gov/cola/
2) https://www.ssa.gov/history/briefhistory3.html
3) https://www.ssa.gov/benefits/retirement/
4) https://www.investopedia.com/retirement/when-take-social-security-complete-guide/
5) https://www.fool.com/retirement/how-apply-for-social-security-step-by-step-guide.aspx
6) https://www.schwab.com/resource-center/insights/content/when-is-the-best-time-to-file-for-social-security-benefits

Approval # CN1312163_0822