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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to How to Retire on Time, a show that answers your questions about all things retirement, including income, taxes, social security, health care and more. This show is an extension of the book, How to Retire on Time, which you can grab on Amazon or by going to www.how to retire on time.com. My name is Mike Decker. I'm the author of the book, How to Retire on Time, but I'm also a licensed financial adviser, insurance agent, and tax professional, which means when it comes to financial topics, we can pretty much talk about it all. Now that said, please remember, this is just a show.
Mike:Everything you hear should be considered informational. That's it. It's not financial advice. If you want personalized financial advice, then you can request your wealth analysis from my team today by going to www.yourwealthanalysis.com. With me in the studio today is my esteemed colleague, mister David Frandsen.
Mike:Thanks for being here.
David:Yes. I'm glad to be here.
Mike:And David's gonna be reading your questions as they're submitted, and I'm gonna do my best to answer them. Now you can send your questions in by either texting them to 913-363-1234. Text them anytime during the week. 913-363-1234. Or you can email them to hey mike@howtoretireontime.com.
Mike:Let's begin.
David:Hey, Mike. People keep telling me to take Social Security as soon as I can, but the reports I run tell me to file at 70 years old. Which is it?
Mike:Yeah. So Social Security is an interesting one because people tend to put themselves into a silo, and they say, I wanna get the most money from Social Security. Yeah. That's the wrong way to look at it. That's
David:Emotionally, it feels like the right way, though. Right? Well, you paid into it. I want the big payback. Yeah.
Mike:You paid into it. So you want the most out of it. But there could be some consequences, some unintended consequences in other parts of your plan. So here's how I measure it. Time is your most precious asset.
Mike:So when can you afford to retire? And do you want to retire? So to retire on time means a couple of things. First off, it's that you're done with your work and you would find more purpose and fulfillment doing something else and that you can afford to do that something else. If that's you, then great.
Mike:Whether it's 60 years old, 55 years old, 70 years old, everyone's different. Many people I work with can retire. They just don't want to.
David:Right.
Mike:Nothing wrong with that because time's your most precious asset So spend it how you wanna spend it. But they all have this is why they come in. They have a plan. So when it happens and they have a couple of bad days and they say, I don't need to keep doing this. I'm done.
Mike:They can easily exit. So when it comes to Social Security, here's an expression I created years ago. I'll say it once then I'll explain it. If you file too early, your income could be hurting. But if you file too late, you could be hurting your estate.
Mike:Here's what I mean. If you file too early, your income could be hurting. If Social Security is a part of your retirement plan and it is for most people.
David:Right.
Mike:Let's say you retire at 62 years old and you take Social Security at 62 years old and a 62 in 1 month. You're going to take social security at discount. You'll never recover that discount. So is that okay? Are you going to get overall less income because you're taking social security discount or if you file too late, you could be hurting your estate.
Mike:If you retire at 60 years old and you file for Social Security at 70 years old, you've got 10 years. You've got to bridge that gap. So let's say your benefits $30,000. That means you're taking an additional $30,000 to live the target income or the target lifestyle you want. So it's a very difficult question to say from an oversimplified standpoint.
Mike:If your assets grow faster, then it may be better to pull income from Social Security earlier on so you're taking less from your assets. But if you need to do a lot of IRA to Roth conversions, maybe you delay a few years so you have a larger threshold to either spend down IRA assets or do conversions. There's a ripple effect that happens based on your plan and when you file for social security. And it's really hard to explain because everyone has different lifestyle goals and legacy goals. Everyone has different emotional competence and comfort when it comes to the market.
Mike:So the only way I have found to really solve this is to first articulate lifestyle legacy goals and then run a plan as if you were to file for social security as soon as possible at 67 years old and at 70 years old. And just see how it affects other parts of your plan and then ask yourself, which one am I more comfortable with? It may surprise you what the answer is. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast.
Mike:Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist. Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis.
David:Learn more about Your Wealth Analysis and what
Mike:it could do for you regardless of your age, asset, or target retirement date. Go to www.yourwealthanalysis.com today to learn more and get started.