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Father’s Day weekend means grilling out.  Grilling out has several steps involved.  Timing is crucial.

First, there is, “When should I start the grill?”

Which, in the Tannery house, is interpreted by those not involved in supervising the lighting of the grill as, “Can I get you a cocktail or possibly do you need me to refresh your cocktail?”

This window of time before the steaks hit the grill is my favorite time of Father’s Day.   For the next 30 minutes or so it like a grown-up campfire.  We gather around and talk and drink and snack.

Father’s Day is also a time for relatives and friends to join us and someone inevitably will ask me about a financial headline they read or heard about the past week.  Knowing who is attending dinner, I am sure that the “Social Security is going broke” headline will be discussed.

Social Security is NOT GOING BROKE.

After 35 years of being of being cash-flow positive, Social Security is expected to pay out more to beneficiaries this year than it generates in revenue. This is a pattern that’s expected to continue in each of the next 16 years. By 2034, per the Trustees, Social Security’s asset reserves will be completely gone.

The depletion of Social Security’s asset reserves is commonly associated with the program’s insolvency. In other words, folks assume that Social Security would be bankrupt without any excess cash in its coffers. In reality, though, this is fiction.

Social Security’s asset reserves aren’t the same thing as the program running out of money.

You see, Social Security currently generates income three different ways: a 12.4% payroll tax on wage income (up to $128,400 in 2018), the taxation of benefits, and interest income earned on the program’s asset reserves. Assuming Social Security’s asset reserves are depleted, this interest income component could disappear forever. But it ensures that Social Security generates income from its other two funding sources.

Five Tips You Need to Know About Social Security

Check for Accuracy

Social Security statements are sent every five years

You can get immediately at (www.ssa.gov/myaccount)

You have 3 years, 3 months, and 15 days to correct mistakes

Make Sure You Get Enough Quarters of Work

You need 40 quarters or 10 years of work to qualify

A quarter in 2018 is $1,320 of EARNED income

Be Careful About Earning Money When You Take Social Security

If You Take Social Security Early (i.e. 62) &

Make more $17,040 a year in 2018 and your benefits are reduced $1 for every $2 you make over the cap

You Can Get A Bigger Benefit the Longer You Wait

Every year you delay Full Retirement Age, Social Security benefit will go up by 8%

Today, this means you could get 30% more benefit if you wait until 70

Know the benefits you can receive if you are divorced or widowed.

If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse’s record (even if they have remarried) if:

You are unmarried;

You are age 62 or older;

Your ex-spouse is entitled to Social Security retirement or disability benefits; and

The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse’s work.

If you are the widow or widower of a person who worked long enough under Social Security, you can:

Receive full benefits at full retirement age for survivors or reduced benefits as early as age 60.

Begin receiving benefits as early as age 50 if you are disabled and the disability started before or within seven years of the worker’s death.

Social Security is an integral part of retirement for most Americans and most have questions about how it applies to them.  Clearly, there are many considerations when it comes to claiming Social Security benefits. What works for others may not be your best strategy, vice versa. Being informed is the first step toward a good decision making. Visit the Social Security administration’s website at http://www.ssa.gov to download your social security statement. Then schedule an appointment with us to review how Social Security strategy fits into your financial plan.  Just use the Schedule Time with Me in the bottom right corner.

Enjoy your time with Dad this weekend,

Michael Tannery CPA, CDFA® AIF®

Registered Principal

Tannery & Company

Tax – Accounting – Wealth Management

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