Posts Taged social-security

5 Compelling Reasons to Rethink Social Security

Relying extensively on social security may not meet your retirement needs


When it comes to planning for retirement, Social Security benefits have traditionally been viewed as a safety net for many individuals. However, in recent years, there has been growing concern about the long-term viability and sustainability of the Social Security system.

As a result, it is becoming increasingly important for individuals to reconsider relying solely on Social Security benefits as a retirement plan. Here are five compelling reasons why you should not solely depend on Social Security as part of your retirement plan.

Uncertain Future

One of the key reasons to be cautious about relying heavily on Social Security benefits is the uncertainty surrounding the future of the program. The Social Security Administration has projected that the trust funds supporting the system will be depleted by 2034. While this doesn’t mean that Social Security will disappear entirely, it does suggest that future benefits may be significantly reduced. Depending solely on a benefit that might be subject to cuts or modifications is a risky proposition.

Demographic Challenges

The aging population is placing immense strain on the Social Security system. As baby boomers retire and life expectancy continues to rise, there is an increasing number of retirees relative to the number of workers paying into the system.

This demographic shift is expected to result in a decline in the worker-to-beneficiary ratio, potentially leading to reduced benefits in the future. Relying solely on Social Security benefits means exposing yourself to the risk of diminished financial support in retirement.

Inadequate Replacement Income

Social Security benefits were never intended to replace one’s entire income in retirement. The formula used to calculate benefits replaces a higher percentage of income for lower earners and a lower percentage for higher earners. For individuals with higher incomes or those who have invested in building substantial retirement savings, relying solely on Social Security benefits may not provide the financial security needed to maintain their desired standard of living. It is essential to consider other income sources and savings to supplement your retirement plan.

Rising Healthcare Costs

Healthcare expenses are a significant concern for retirees, and Social Security benefits alone may not be sufficient to cover these costs adequately. As medical advancements and inflation drive healthcare costs higher, individuals may find themselves struggling to afford necessary medical care and long-term care services. Planning for retirement should include provisions for healthcare expenses, which may necessitate seeking additional sources of income beyond Social Security benefits.

Lack of Control

Dependence on Social Security benefits puts your financial future in the hands of government policy and economic factors beyond your control. Changes to legislation, such as adjustments to the retirement age or modifications to benefit formulas, can have a substantial impact on the amount of benefits you receive.

By diversifying your retirement plan and not solely relying on Social Security, you gain more control over your financial destiny, allowing you to adapt to changing circumstances.

Your Financial Professional

While Social Security benefits can be an important part of retirement income, relying solely on them may not be sufficient to meet your financial needs.

Engaging the services of a financial professional can provide valuable expertise, tailored advice, and a comprehensive approach to retirement planning. By understanding your unique goals, creating a diversified investment strategy, managing tax efficiency, and providing ongoing guidance, a financial advisor can help you build a robust retirement plan that goes beyond accounting for Social Security benefits.

Investing in professional assistance today can set you on the path towards pursuing a confident and fulfilling retirement tomorrow.



Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
This article was prepared by FMeX.
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Ask an Advisor: What Do I Need to Know About Social Security?


Jake: 00:08

Hi, I’m Jake Sturgill, with Puckett & Sturgill Financial Group, and our Ask An Advisor series. Today, I’m going to be asking Paul Sorenson about Social Security, and the things that our clients need to know about Social Security.

Paul: 00:24

Social Security, Jake, as you know, is one of the first things that many clients ask us about, is, “I know I have a decision to make at some point in the future, whether it’s now, or 20 years from now, or next year, or I already made a decision.” It’s something that we get asked about a lot.

Paul: 00:41

The bottom line is, everybody’s circumstance is different when it comes to Social Security. So the planning surrounding Social Security is very specific, and there’s a lot of complexity involved with that decision. It’s something we talk about regularly. And as a part of that, people ask us, “When should I start thinking about it?” With our clients, we start thinking about it, no matter their age, we at least add it as a part of the plan. Because we do approach things from a holistic standpoint. So it’s always top of mind as a part of our planning, as a baseline, a foundational piece of the planning that we do for a client.

Jake: 01:12

Right, and so if we’re starting and incorporating it into the planning process, really as soon as possible, when should people start to think about actually taking it or claiming Social Security?

Paul: 02:28

Right. Just because you can start at 62 doesn’t mean you should do it as early as possible.

Paul: 02:33

Yeah, yeah. You may have a whole pool of assets that help you delay that decision, or help change that decision for you. It’s a very individual decision.

Jake: 02:41

It’s such an important decision, because pensions are, as I’m sure you’ve seen with your clients, largely going away. Maybe fewer and fewer people have them. So Social Security is becoming such a foundation and core component of a retirement income plan. Taking all these factors into consideration, there’s a lot that goes into that process, and it’s unique to everybody.

Jake: 03:06

If you have any questions about Social Security or your retirement income plan, please contact us. Visit our website, email us, give us a call at the office. We’re always just a phone call or an email away.

It’s Your Turn to Ask

    Considerations for Married Couples Claiming Social Security Benefits

    If you are a married couple approaching retirement, no matter how long you’ve been married, you’ve weathered both great joys and storms. To best enjoy each other’s company in your retirement years, it’s essential to have a holistic retirement plan. And if you’re like most American couples, one important aspect of your joint retirement plan is the use of Social Security benefits.

    Today, we’re going to address some of the top considerations for married couples claiming Social Security benefits.

    When Should I Start Collecting Social Security Benefits?

    Timing plays a big role for couples when they are planning to start collecting Social Security. Waiting to collect benefits until you reach your Full Retirement Age (FRA) can make a big difference in the amount of spousal benefits that you can claim. Your financial advisor can help you to determine the optimal time to begin claiming Social Security benefits.

    How Does Circumstance Impact the Benefits I can Collect?

    All couples arrive at retirement with a unique set of circumstances that must be taken into account in order to maximize benefits through their timing. Here are some common situations to consider:

    Long Life Expectancy and Even Incomes

    If both you and your spouse have a long life expectancy and have maintained similar yearly earnings throughout your careers, a strategy that involves waiting as long as possible before claiming could help you to maximize your Social Security benefits. In general, the longer you wait to claim your benefit, the better the payout.

    Long Life Expectancy, Uneven Incomes

    In the case that both you and your spouse are planning for long life expectancies, but one of you has earned significantly more than the other, the higher-earning spouse might delay their collection while the lower-earning spouse collects their own earned benefits. Once the higher-earning spouse has begun collecting their benefits, the lower-earning spouse may switch from their own benefit and apply for spousal benefits instead. 

    Other Circumstances

    There are, of course, other combinations of life expectancy and income comparisons to consider. In some cases, it makes sense to begin collecting Social Security benefits immediately at age 62. In others, a delay is advisable. As always, your financial advisor is the best person to ask in regards to how your unique circumstance impacts your when to claim benefits.

    What Other Factors Might Impact my Claim and Benefits?

    There are other factors that influence when and how you and your spouse should claim Social Security to maximize your benefits. 

    Updates to “File and Suspend”

    You may have heard of the “file and suspend” strategy where the higher earning spouse waits to collect their benefit while the lower earning spouse cashes in on the spousal benefit. If you’ve considered this strategy for your own filings, you’ll likely need to think again.

    In November 2015, Congress passed the Bipartisan Budget Act, which got rid of the potential for the higher earning spouse to “file and suspend.” Unless you and your spouse were born before 1954 or turned 62 before 2015, this option is off the table.


    Depending on your income during retirement, you will have to pay taxes on your benefits. A formula that determines your Provisional Income (PI) determines the level of taxable Social Security benefits you are receiving.


    Your healthcare, which may include Medicare premiums, may be taken out of your Social Security benefits. Depending on the Medicare plan and other healthcare expenses you have, this can affect how you plan your Social Security benefits collection.

    Government Employment

    Lastly, if you or your spouse are/were employed by a governmental organization, your Social Security benefits (both from benefits you earned or spousal benefits) can be reduced to reflect the pension you receive or for not paying Social Security taxes as a government employee.

    Bottom Line: Your Situation is Unique

    There are so many factors that contribute to you and your spouse’s optimal time for claiming Social Security benefits. Thankfully, you do not need to navigate these waters on your own! Our CFP® professionals know the questions that need to be asked in order to get you on the right track to get the most out of your Social Security benefits.

    To learn more about retirement planning and Social Security, contact us today for a complimentary consultation!

      Plan Your Retirement with Longevity in Mind

      There are two important questions that investors need to answer in regards to their retirement planning:

      1. How much money do I need to save? AND
      2. How long should I expect it to last?

      Increasingly, investors need to consider even a third important question as they work through their retirement planning:

      What if I live to 100?

      As medical advancements improve quality of life and offer the potential to extend one’s longevity, there’s the very real possibility that individuals retiring today, next year, or within another few decades are going to enjoy longer, more active lives than generations before them. While this is great news for you and your loved ones, it adds some complexity to the retirement planning equation.

      Accordingly, you should plan your retirement with longevity in mind. Read on to learn how.

      It’s essential to plan your retirement with longevity in mind. Read on to learn how.It’s essential to plan your retirement with longevity in mind. Read on to learn how.Consider Your Retirement Age

      Age is an essential factor to consider as you look toward your retirement plan. Not only should you think of the age you ideally wish your retirement income to hold out until, but you also need to consider the age at which you’ll retire. The individual who plans to retire at age 65 needs to account for many more years of retirement savings than the one who holds off until age 72.

      You should also consider what your income will look like in the years as you approach retirement. Do you plan to work full-time at a day job and then launch straight into a full retirement? Or are you anticipating that you’ll have a gradual shift from full-time employment to part-time, and then a post-retirement hobby job that brings in some extra income on the side?

      The employment-to-retirement mix looks different for everyone. However, if you plan to remain employed to some degree throughout even a few of your retirement years, you can offset the amount of money you’ll need to rely on from retirement investments during that time. This can help you to extend the life of your retirement savings and may be a longevity strategy to consider.

      Hold Off on Claiming Social Security Benefits

      Social Security benefits are a part of most investors’ retirement plans, but they aren’t the same for everyone. It’s important to have a good understanding of what your Social Security benefits might look like in order to plot the best course for the remainder of your retirement income needs.

      One essential factor in determining the amount of Social Security income that you can rely on during your retirement years is the age at which you plan to start withdrawing your Social Security benefits. The longer you wait, the greater your month-to-month benefit will be.

      Ideally, you want to wait until you achieve your Full Retirement Age (FRA) or possibly to the maximum of age 70 in order to take advantage of all that your Social Security investment has to offer. You can consult an FRA table to understand more about maximizing your Social Security benefit.

      Evaluate Your Investment Mix

      You don’t want to put all of your eggs in one basket when it comes to your retirement planning. A diversified investment portfolio can help to provide confidence as you move forward in your plans.

      To plan your diversified retirement strategy, you should consider a variety of investment vehicles and strategies. Often investors will gravitate toward investments that offer certain guarantees or income benefits.  While these may be worthy of consideration, it is always important to remember that every investment has advantages and disadvantages and these products may carry additional fees, charges and restrictions. In the world of finance, diversification is important. Bear in mind that there is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. 

      Your financial advisor can provide personalized recommendations for diversifying your portfolio according to your income goals and risk acceptance. Additionally, they may have helpful tips for seeking to maximize your investments with the anticipation of longevity in mind.

      Stay on Top of Your Expenses

      It is never too early to begin preparing for the phase of life where you will either choose not to work, or be unable to maintain employment.  This is an inevitable event for almost everyone, but unfortunately many individuals fail to plan. Establishing good spending habits is one of the most basic, but also most significant steps that you can take as you think about retiring.  It is common for people to anticipate spending less in retirement, but learning new habits is extremely difficult. By controlling spending during your working years, it will make for a smoother transition to a phase of life where living within your means becomes even more critical. 

      With this in mind, it’s important to plan for your retirement with realistic figures that represent your desired lifestyle, length of retirement, and set expenses you can’t avoid. You need a retirement budget that accounts for the dollars you will spend year-to-year so that you can build a retirement income that matches your expenses.

      There are calculators and general rules of thumb that can help you to estimate an ideal retirement budget for your lifestyle and longevity plans. But when it comes to getting the best idea of what you as an individual will actually need for your future plans, it’s best to work with a financial advisor who can show you how your financial goals align with your retirement needs with longevity in mind.

      Work with a Professional to Plot Your Course

      Establishing a retirement savings plan isn’t a simple task. If you’re looking at popular financial resources, blogs, and free calculators to help you put the pieces together, you probably have a lot of questions.

      You don’t want to tackle the task of retirement savings on your own. There are too many variables – including the longevity question – that complicate the planning process and challenge oft-repeated rules of thumb.

      Don’t leave your retirement savings plans to your best interpretation. Instead, call on the aid of a professional financial advisor who can evaluate your specific situation and help you determine a course that makes sense for your desired retirement.

      Your financial advisor will work with you to look at lifestyle factors, anticipated retirement needs, and your risk acceptance to give you some practical options for building a portfolio that’ll work to serve your needs once you hit your retirement years. The experienced advisor will even give you some practical pointers for considering retirement with your longevity in mind.

      To learn more about how a CERTIFIED FINANCIAL PLANNER™ professional can help you work through your retirement planning, contact Puckett & Sturgill Financial Group today for a consultation!

      How to Maximize Your Social Security Benefits

      Are you approaching retirement age and considering how your Social Security benefit plays into your plans? Did you know that there are a variety factors that can contribute to your ability collect your full potential benefit?

      When it comes to understanding your Social Security benefit, you may be wondering about your eligibility and how to maximize your Social Security income. Here are some of the most important factors to keep in mind when calculating your potential Social Security benefit.

      Requirements to Qualify For Social Security Retirement Benefits

      Social Security retirement benefits are based on your lifetime average earnings and your age when payments begin. In order to qualify, you must work for at least 40 quarters (10 years of work where you paid Social Security taxes) and have attained age 62.

      Determine Your Full Retirement Age

      Before you can figure out what your Social Security benefit will be, you need to determine your full retirement age (FRA), which is calculated based on your birth year. You can use this chart to find yours:

      Birth YearFRA
      1943-1954Age 66
      1955Age 66 + 2 months
      1956Age 66 + 4 months
      1957Age 66 + 6 months
      1958Age 66 + 8 months
      1959Age 66 + 10 months
      1960+Age 67

      Once you know your FRA, you can strategize the timing for collecting your benefit. There are certain advantages to waiting until you reach your FRA, rather than cashing in early.

      If you wait until you reach your FRA, you can collect 100% of your benefit. And if you wait until between your FRA and age 70, your benefits have the potential to increase by 32% by the time you reach 70.

      On the other hand, if you begin to collect before you reach your FRA, you risk losing out on some of your benefit. You can start benefits as early as 62 but in doing so your benefits may be reduced by as much as 30%. If you collect between age 62 and FRA, you may end up with up to a 25% reduction in the total benefit you receive.

      Look into the Impact of Your Marital Status*

      Your marital status impacts your Social Security benefit, depending on whether you are married, widowed, or divorced. In any of these cases, you may be eligible to collect benefits based off of your spouse’s past earnings. Speak with your financial advisor to learn more about how your situation will affect your benefit.

      Consider Your Employment Situation

      Your past and current (if applicable) employment situations will also affect your Social security benefit. While your FRA and retirement status are the biggest factors here, other retirement benefits and your income leading up to the year of your FRA may also come into play.

      For example, if you qualify for an employer sponsored pension plan that is not covered by Social Security, such as Federal Civil Service, your Social Security benefit may be lessened or eliminated.

      You also want to take care to pay close attention to your income in the years leading up to your FRA. If you plan to work between age 62 and your FRA and will be earning more than $17,640, you’ll lose out on $1 in benefit for every $2 you earn above the income threshold. If you do not plan to work beyond age 62 but still have income in excess of $46,920 in the year before the month that you reach your FRA, you’ll lose out on $1 for every $3 you earn above the threshold.

      Note: the earnings limits are as of 2019 and adjusted annually for national wage trends.

      Calculate Your Tax Responsibility

      Lastly, once you’ve run the numbers on your anticipated Social Security benefit, you’ll want to take a look into how this benefit will be taxed once you begin receiving checks in the mail. To calculate your tax responsibility, you can add your provisional income plus 50% of your Social Security income and see which tax bracket you fall into.

      If you’d like to learn more about planning for retirement, contact Jacob Sturgill today!

        *Information received from MFS 2019 Social Security Reference Guide.