T Rowe Price recently rolled out a new Social Security benefit calculator. Unfortunately, their calculator is not ready for prime time. In fact, in its current state, it is not ready for any time. It gives incomplete and misleading advice that, if followed, could cost some married couples $100,000 or more. I will illustrate some [...]
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Archive for the 'Social Security' Category
On Social Security, Birds, Bushes, and Hands: The Time Value of Money
Many people we encounter are dead set on claiming their Social Security retirement benefits immediately when it becomes available. They often use some variation of the well-known proverb: a bird in hand is worth two in the bush. In citing this proverb, these individuals are expressing a rational preference for money now over money later. [...]
Getting the Most Out of Social Security while Meeting your Needs
For many retirees, Social Security benefits make up a large portion of retirement savings. Often, these people can only follow a limited set of strategies to optimize their benefits because they may not have the financial resources to wait as long as the mathematics of their situation would suggest. This is why our custom reports [...]
How to Calculate the Social Security Supplemental Spouse Benefit
A client recently asked me: “Should I claim my modest Social Security retirement benefit early, say at 62, and then switch to my larger spousal benefit later on?” This question shows a serious misunderstanding of the relationship between retirement benefits and spousal benefits. One can never switch from retirement benefits to spousal benefits. If a [...]
Presidential Debate: Romney and Obama on Social Security
During the first Presidential Debate the two candidates were directly asked to address the issue of Social Security. Here is what they said: LEHRER: All right? All right. This is segment three, the economy. Entitlements. First — first answer goes to you, two minutes, Mr. President. Do you see a major difference between the two [...]
Social Security COLA Watch: September 2012
New data have been released. Check here for more! The CPI-W for August 2012 was released this morning by the Bureau of Labor Statistics, and, as we predicted in our last post, the index increased considerably from last month, moving up from 225.568 to 227.056. The average of the July and August CPI-Ws is 226.312 which is [...]
Social Security COLA Watch: August 2012
New data have been released. Check here for more! The CPI-W for July 2012 was released this morning by the Bureau of Labor Statistics, and the index continued its decline from last month. The CPI-W index fell from 226.036 to 225.568, which is only 1% higher than the third quarter 2011 average (the baseline for COLA calculations). [...]
Social Security COLA Watch: July 2012
New data have been released. Check here for more! The CPI-W for June 2012 was released this morning by the Bureau of Labor Statistics, and unfortunately, the index continued its decline from last month. The CPI-W index fell from 226.600 to 226.036, which is 1.3% higher than the third quarter 2011 average (the baseline for COLA [...]
Social Security Nonsense Watch: Beware the Uninformed Expert
Statistics show that delaying Social Security benefits, as opposed to claiming immediately at 62, is becoming more popular. People realize the impact that a well thought out strategy can have on their bottom line, and they seek guidance from experts on how to implement such a strategy. More and more, people have stepped in to [...]
Social Security COLA Watch: June 2012
New data have been released. Check here for more! The CPI-W for May 2012 was released this morning by the Bureau of Labor Statistics, and the news is not good for Social Security recipients hoping for a raise leading into next year. The CPI-W index fell from 227.012 to 226.600, which is 1.5% higher than the [...]