1 00:00:00,000 --> 00:00:02,340 INTRO: Hi, I'm Ed Slott and I'm Jeff Levine. 2 00:00:02,460 --> 00:00:06,090 And we're two guys who just love to talk about retirement and taxes. 3 00:00:06,120 --> 00:00:10,050 Look, our mission is simple to educate you the saver so that you can make 4 00:00:10,050 --> 00:00:14,160 better decisions because better decisions on the whole lead to better outcomes. 5 00:00:14,190 --> 00:00:16,500 And here's how we're going to do that each week. 6 00:00:16,590 --> 00:00:20,010 Jeff and I will debate the pros and the cons of a particular 7 00:00:20,015 --> 00:00:21,480 retirement strategy or. 8 00:00:22,260 --> 00:00:25,920 With the goal of helping you keep more of your hard earned money. 9 00:00:26,040 --> 00:00:29,820 Yeah, but we won't know which side of the debate we're taking until we flip a coin 10 00:00:30,150 --> 00:00:33,630 winner of the coin flip gets to pick which side of the debate they want to argue. 11 00:00:33,660 --> 00:00:38,760 And both of us will have to argue in favor of our respect positions, whether we 12 00:00:38,760 --> 00:00:41,670 agree with them or not at the end of each. 13 00:00:42,295 --> 00:00:45,925 There's going to be one clear winner, you a more informed saver 14 00:00:45,925 --> 00:00:49,045 who can hopefully apply the merits of each side of the debate to your 15 00:00:49,045 --> 00:00:52,795 own personal situation, to decide what's best for you and your family. 16 00:00:52,825 --> 00:00:53,695 So here we go. 17 00:00:53,695 --> 00:00:55,885 Welcome to the great retirement debate. 18 00:01:02,070 --> 00:01:06,390 Jeff Levine: Welcome to episode one of the great retirement debate. 19 00:01:06,390 --> 00:01:09,145 I am Jeff Levine with me ed slot ed. 20 00:01:09,149 --> 00:01:11,215 It is great to be with you today. 21 00:01:11,215 --> 00:01:15,804 And I am really looking forward to our first great retirement debate. 22 00:01:16,345 --> 00:01:20,365 Ed Slott: I'm excited about getting these critical topics out to people 23 00:01:20,365 --> 00:01:21,835 who are viewing or listening. 24 00:01:22,104 --> 00:01:26,155 These are critical issues for those heading into retirement already there, 25 00:01:26,160 --> 00:01:28,494 and even beyond to your beneficiaries. 26 00:01:28,765 --> 00:01:29,155 Jeff Levine: Yeah. 27 00:01:29,160 --> 00:01:33,475 We'll be talking about a, a slew of issues related to retirement and 28 00:01:33,565 --> 00:01:36,955 sort of highlighting the pros and cons by arguing each side, but of. 29 00:01:37,664 --> 00:01:40,725 No decision is, or rarely is a decision. 30 00:01:40,725 --> 00:01:46,065 All pluses are all minuses and it's just gonna be a matter of individuals weighing 31 00:01:46,065 --> 00:01:50,714 these decisions and pros and cons for themselves as to how they should act. 32 00:01:50,720 --> 00:01:55,664 But simply knowing the pluses and minuses is a really important first step. 33 00:01:56,455 --> 00:01:57,175 Ed Slott: That's true. 34 00:01:57,175 --> 00:02:00,715 And the big takeaways you'll get from each of these items, each 35 00:02:00,715 --> 00:02:04,495 of these debate episodes, you know, we may be debating aside. 36 00:02:04,495 --> 00:02:08,005 We don't even agree on we're gonna flip a coin, but the benefit to 37 00:02:08,005 --> 00:02:10,345 you is you'll have a good list. 38 00:02:10,345 --> 00:02:12,865 You know, if you are thinking about making this decision, 39 00:02:13,045 --> 00:02:14,635 you'll have the pros and cons. 40 00:02:14,635 --> 00:02:16,345 And as Jeff said, the pluses and minus. 41 00:02:16,600 --> 00:02:20,500 Benefits or drawbacks, and you'll be able to formulate, which of these 42 00:02:20,500 --> 00:02:24,640 items are most important to you based on your own particular facts 43 00:02:24,640 --> 00:02:26,560 and finances and circumstances. 44 00:02:26,620 --> 00:02:30,220 And I believe this will help you make important financial decisions. 45 00:02:30,280 --> 00:02:31,780 Jeff Levine: Well, that's certainly the goal. 46 00:02:31,785 --> 00:02:35,140 And over the course of, uh, over the course of time, ed we'll 47 00:02:35,140 --> 00:02:38,049 debate things that may apply to some people, but not others. 48 00:02:38,049 --> 00:02:43,035 But today in episode one, We're going to kick it off with a topic 49 00:02:43,040 --> 00:02:46,965 that applies to just about everybody and that's social security. 50 00:02:46,965 --> 00:02:51,105 And specifically, we're gonna start by debating, should I 51 00:02:51,109 --> 00:02:55,005 take social security at age 62? 52 00:02:55,005 --> 00:02:58,965 Ed, my topic means your choice for the coin flip. 53 00:02:58,970 --> 00:03:00,285 What do you want head I'll say or. 54 00:03:00,950 --> 00:03:02,600 Ed Slott: I'll say heads, heads. 55 00:03:02,630 --> 00:03:03,109 Jeff Levine: All right. 56 00:03:03,410 --> 00:03:03,740 Heads. 57 00:03:03,740 --> 00:03:04,130 It is. 58 00:03:04,130 --> 00:03:06,799 We're gonna flip a coin here and you're listening. 59 00:03:06,799 --> 00:03:08,510 So you're just gonna have to take our word for it that we're 60 00:03:08,515 --> 00:03:09,859 flipping the coin, but we've got it. 61 00:03:10,220 --> 00:03:11,750 And ed, it is heads. 62 00:03:11,750 --> 00:03:13,340 So what do you want to argue? 63 00:03:13,345 --> 00:03:17,720 Do you wanna argue today, uh, that you should delay social security beyond 62? 64 00:03:17,720 --> 00:03:19,850 Or do you want to argue, take it as early as possible? 65 00:03:20,000 --> 00:03:22,940 Ed Slott: Oh, I got a break on this first episode because I would always 66 00:03:22,940 --> 00:03:27,320 say not always, nothing is always, but I feel more comfortable holding off 67 00:03:27,320 --> 00:03:29,390 till age 70 when you get the highest. 68 00:03:30,025 --> 00:03:30,505 Jeff Levine: All right. 69 00:03:30,505 --> 00:03:31,675 Well, thanks very much. 70 00:03:31,675 --> 00:03:35,185 I will then take the, uh, the side of the argument that says, take it 71 00:03:35,185 --> 00:03:38,845 at 62 and I'm gonna start with my potentially biggest argument, which 72 00:03:38,845 --> 00:03:41,005 is, I don't know what the future holds. 73 00:03:41,005 --> 00:03:43,255 Ed, what if I die at 63? 74 00:03:43,255 --> 00:03:44,875 What if I die at 64? 75 00:03:45,055 --> 00:03:46,010 What if I die young? 76 00:03:46,010 --> 00:03:46,990 Ed Slott: Let me stop you there. 77 00:03:47,215 --> 00:03:49,795 If you die at 63 at 64, you're dead. 78 00:03:49,795 --> 00:03:50,955 You won't need it anymore. 79 00:03:51,650 --> 00:03:54,920 Jeff Levine: Yeah, but think about all the money I would've left on the table. 80 00:03:55,100 --> 00:03:59,960 If I had delayed taking social security until let's say full retirement age, 81 00:04:00,020 --> 00:04:05,390 somewhere between 66 and 67, or even as late as 70, I might not get anything. 82 00:04:05,390 --> 00:04:10,310 If I wait until 70 and I die at 69, there's no back check that my airs 83 00:04:10,310 --> 00:04:13,640 get for nine years of missed payments. 84 00:04:14,720 --> 00:04:15,530 Ed Slott: That's true. 85 00:04:15,710 --> 00:04:19,669 And it always is going to come down to your best estimate 86 00:04:20,000 --> 00:04:21,620 of when you're going to die. 87 00:04:21,620 --> 00:04:22,640 Sorry to say. 88 00:04:22,819 --> 00:04:24,200 I mean, it all comes out. 89 00:04:24,260 --> 00:04:27,679 Even social security actuarily has this figured out. 90 00:04:27,679 --> 00:04:30,439 I don't know what the actual break even day, uh, year is. 91 00:04:30,730 --> 00:04:31,210 Age? 92 00:04:31,360 --> 00:04:32,620 Uh, I think it's 83. 93 00:04:32,620 --> 00:04:33,640 Is that about right? 94 00:04:33,640 --> 00:04:34,810 82, 83? 95 00:04:34,815 --> 00:04:35,110 What, what is? 96 00:04:35,110 --> 00:04:37,750 Jeff Levine: Yeah, roughly somewhere in there depends upon the individual 97 00:04:37,750 --> 00:04:40,450 and when they're full retirement ages and all their benefits, but yeah, 98 00:04:40,659 --> 00:04:44,440 usually you have to live to about 82, 83 to see a crossover benefit. 99 00:04:45,110 --> 00:04:45,500 Ed Slott: Right. 100 00:04:45,530 --> 00:04:47,150 So that's really the question. 101 00:04:47,390 --> 00:04:52,310 Do you want smaller checks for a longer period of time or larger checks for 102 00:04:52,310 --> 00:04:57,740 a shorter period of time, but if you hit break, even you will break even. 103 00:04:58,190 --> 00:05:02,930 Uh, but if you live hopefully a long and healthy life, then you're going 104 00:05:02,930 --> 00:05:04,650 to benefit from those extra years. 105 00:05:06,440 --> 00:05:09,680 Jeff Levine: Yeah, I, I, well look, most people end up doing that and 106 00:05:09,680 --> 00:05:11,690 most people do end up taking it early. 107 00:05:11,900 --> 00:05:15,170 Uh, in fact, there's research from social security and we can put, a 108 00:05:15,175 --> 00:05:19,960 link to this in the show notes that talks about how more than seven in 109 00:05:19,960 --> 00:05:23,050 10 people, more than 70% of people. 110 00:05:23,750 --> 00:05:28,040 Are taking social security, uh, before they hit 64. 111 00:05:28,040 --> 00:05:33,050 So maybe not as early as 62, but pretty early well before full retirement age, 112 00:05:33,320 --> 00:05:38,000 and one of the reasons they may be doing it is that they may need that income. 113 00:05:38,060 --> 00:05:41,480 You know, unfortunately there are a lot of people we'll talk about a 114 00:05:41,480 --> 00:05:45,570 lot of topics that on this show that applied to, uh, people of all different 115 00:05:45,765 --> 00:05:49,620 wealth spheres, people with right less wealth people with more wealth. 116 00:05:49,800 --> 00:05:53,640 But those who work kind of the typical blue collar jobs, the, 117 00:05:53,880 --> 00:05:58,290 the physically demanding jobs, they tend to need to retire sooner 118 00:05:58,295 --> 00:06:01,020 because they can't work anymore. 119 00:06:01,020 --> 00:06:02,580 They're physically not able to. 120 00:06:02,760 --> 00:06:06,120 And if you're not able to do that well, social security may 121 00:06:06,120 --> 00:06:07,630 be your only income stream. 122 00:06:08,310 --> 00:06:10,830 Ed Slott: Right, so then obviously I agree with that because if you need 123 00:06:10,830 --> 00:06:14,880 the money, you have to take it, but then you are also, uh, locking in 124 00:06:14,940 --> 00:06:17,700 lower checks for the rest of your life. 125 00:06:18,000 --> 00:06:22,080 One option is if you really needed the money and you were fortunate enough 126 00:06:22,080 --> 00:06:26,440 maybe to have an IRA, you're better off taking from your IRA, even though 127 00:06:26,440 --> 00:06:28,510 those distributions are taxable. 128 00:06:28,510 --> 00:06:34,190 If you needed the money, you'd probably be in a much lower bracket and, uh, IRAs 129 00:06:34,195 --> 00:06:36,520 are, you know, a hundred percent taxable. 130 00:06:36,520 --> 00:06:41,740 Whereas social security, at most is only 85% taxable, but you may do better. 131 00:06:41,740 --> 00:06:46,630 I think you would do better, tapping your taxable IRA at low rates for 132 00:06:46,630 --> 00:06:54,080 those years, 62 to 70, and then, uh, your RMDs at 72 will probably be lower 133 00:06:54,080 --> 00:06:58,940 because you tapped in earlier and then you can, uh, have the larger social 134 00:06:58,940 --> 00:07:00,980 security check take over at age 70. 135 00:07:01,755 --> 00:07:01,995 Jeff Levine: Yeah. 136 00:07:01,995 --> 00:07:04,515 So let let's break down some of what you were just talking about. 137 00:07:04,515 --> 00:07:07,095 Cause there's a lot to unpack there, ed, for, for those listening today. 138 00:07:07,365 --> 00:07:12,165 So first off as hopefully most people know if you take social 139 00:07:12,165 --> 00:07:16,345 security early at 62, you will have your monthly benefit reduced. 140 00:07:16,345 --> 00:07:19,625 At full retirement age, which varies depending upon 141 00:07:19,625 --> 00:07:20,975 your ear, your year of birth. 142 00:07:20,975 --> 00:07:25,685 And we'll put a link to that, uh, site for social security in our show notes as well. 143 00:07:25,895 --> 00:07:30,035 Uh, depending upon the year you were born, your full retirement age is likely to be 144 00:07:30,035 --> 00:07:32,735 right now, somewhere between 66 and 67. 145 00:07:32,735 --> 00:07:36,215 If you take social security early for each month, you claim early, 146 00:07:36,215 --> 00:07:37,415 there's kind of like a penalty. 147 00:07:37,415 --> 00:07:38,015 If you will. 148 00:07:38,900 --> 00:07:42,560 Then at full retirement age, you get what's called your UNUC benefit 149 00:07:42,560 --> 00:07:46,610 effectively, your full social security benefit, but that's not the 150 00:07:46,610 --> 00:07:48,080 biggest benefit that you could get. 151 00:07:48,080 --> 00:07:53,390 Because if you wait beyond your full retirement age, you get an 8% increase 152 00:07:53,420 --> 00:08:00,260 per year or one 12th of 8% per month that you wait beyond your full retirement age. 153 00:08:00,405 --> 00:08:04,725 You see your payments for life automatically increased by that amount. 154 00:08:05,025 --> 00:08:07,335 In addition, ed, you referenced RMDs there. 155 00:08:07,335 --> 00:08:09,825 Of course you were referring to required minimum distributions, 156 00:08:09,825 --> 00:08:10,175 Ed Slott: Right, right. 157 00:08:10,395 --> 00:08:15,255 Jeff Levine: The requirement that once you hit 72, you must begin to 158 00:08:15,260 --> 00:08:17,835 take distributions from your IRAs. 159 00:08:18,060 --> 00:08:21,840 Which can increase your income and cause other sorts of tax impacts, whether 160 00:08:21,840 --> 00:08:26,600 it raises your Medicare part B premium or increases your tax bracket, etc. 161 00:08:26,840 --> 00:08:28,880 So, a lot to unpack there. 162 00:08:29,050 --> 00:08:33,100 But , I think one of the other issues I would point to here is that is, 163 00:08:33,105 --> 00:08:36,600 is actually echoing a thought that you made, but looking at it from the 164 00:08:36,605 --> 00:08:43,200 opposite side, which is, if i don't if I take my retirement dollars and 165 00:08:43,200 --> 00:08:48,060 I delay social security, that means i'm burning down my retirement assets, 166 00:08:48,065 --> 00:08:51,900 my liquid assets, the things that I could leave to an heir or that I might 167 00:08:51,900 --> 00:08:53,700 use the assets later on in my life. 168 00:08:53,940 --> 00:08:58,170 Whereas if I take social security early, That means I can leave maybe 169 00:08:58,170 --> 00:09:02,160 more of my IRA or 401k or other assets invested for the long run. 170 00:09:02,400 --> 00:09:05,910 And if something happens to me, those assets do get past the heirs. 171 00:09:05,910 --> 00:09:09,600 And if I can let them grow, then they are available later in life for me. 172 00:09:09,930 --> 00:09:11,340 Well, here's what I would say to that. 173 00:09:11,610 --> 00:09:14,460 Ed Slott: If you need the money, that would be the only reason. 174 00:09:14,460 --> 00:09:16,680 If somebody came to me and said, should I take it early? 175 00:09:16,685 --> 00:09:18,150 And they absolutely need the money. 176 00:09:18,330 --> 00:09:21,000 If you need the money, you shouldn't be worried about your heir. 177 00:09:21,225 --> 00:09:22,755 They're gonna get whatever is left. 178 00:09:22,965 --> 00:09:24,285 They're an afterthought. 179 00:09:24,375 --> 00:09:28,185 If you need the money, you have to take your take care of yourself first. 180 00:09:28,425 --> 00:09:31,485 And if you need the money, you're better off taking from your IRA. 181 00:09:31,485 --> 00:09:32,025 Don't worry. 182 00:09:32,025 --> 00:09:33,705 What you're going to leave to your kids. 183 00:09:33,915 --> 00:09:37,575 Take from your IRA, uh, because you'll have a much lower tax. 184 00:09:37,625 --> 00:09:41,315 Bill, because I'm assuming if you need the money, you're probably in a lower bracket 185 00:09:41,705 --> 00:09:44,315 and then you can get that much larger. 186 00:09:44,315 --> 00:09:46,265 You can lock in a larger check. 187 00:09:46,445 --> 00:09:49,625 If you hold off on the social security till age 70. 188 00:09:49,835 --> 00:09:55,265 Yes, you'll have a lower IRA, but that's lower taxes you'll have going forward. 189 00:09:55,720 --> 00:10:00,700 While you'll have social security now, uh, it could be that if you've taken down more 190 00:10:00,700 --> 00:10:06,080 of your IRA during your lifetime, maybe your income would be low enough with RMDs. 191 00:10:06,085 --> 00:10:10,990 Those required minimum distributions that less of your now locked in 192 00:10:10,990 --> 00:10:15,850 largest social security check, actually largest, uh, uh, 70. 193 00:10:15,850 --> 00:10:17,050 It doesn't go past that. 194 00:10:17,050 --> 00:10:22,120 That's your lock in less of that will become taxable due to increased income. 195 00:10:22,450 --> 00:10:28,485 If you, um, Have a larger IRA because you held off your RMDs could be larger 196 00:10:28,485 --> 00:10:33,915 and that could trigger taxation of, of your social security or higher taxation. 197 00:10:34,155 --> 00:10:37,185 But to one of your other points, Jeff, you said if I need the money and 198 00:10:37,185 --> 00:10:39,825 again, I think we both agree if you need the money, you have to take it. 199 00:10:39,830 --> 00:10:41,235 And there are no alternatives. 200 00:10:41,565 --> 00:10:45,435 But if let's say, uh, I'll talk about another penalty you didn't mention. 201 00:10:45,825 --> 00:10:47,025 Let's say you need the money. 202 00:10:47,025 --> 00:10:52,185 You take social security early, but you still need money and you get a job at 62. 203 00:10:52,185 --> 00:10:53,255 What happens then? 204 00:10:54,135 --> 00:10:57,360 Jeff Levine: Well, if I make too much, they withhold my social security and it's 205 00:10:57,360 --> 00:10:59,010 like, I never claimed in the first place. 206 00:10:59,190 --> 00:11:00,000 Ed Slott: And that's gone. 207 00:11:00,870 --> 00:11:03,120 Jeff Levine: Well, if you live long enough, if you live, let's 208 00:11:03,120 --> 00:11:04,620 say until full retirement age. 209 00:11:04,860 --> 00:11:04,950 Yeah. 210 00:11:04,980 --> 00:11:07,500 They effectively will add back those dollars. 211 00:11:07,500 --> 00:11:07,680 Right. 212 00:11:07,680 --> 00:11:10,740 It treats it as though you hadn't claimed it, but yes, you're certainly not 213 00:11:10,740 --> 00:11:12,390 getting social security for those months. 214 00:11:13,560 --> 00:11:16,740 Ed Slott: So if you need the money, obviously you have to take it, but 215 00:11:16,740 --> 00:11:18,450 you should look for other resources. 216 00:11:18,455 --> 00:11:21,150 If you do have traditional IRAs, I always say you're better off 217 00:11:21,150 --> 00:11:23,650 in your sixties using your IRAs. 218 00:11:23,655 --> 00:11:25,920 Not before sixties at 59 and a half. 219 00:11:25,920 --> 00:11:27,850 There's a penalty if you tap it too early. 220 00:11:28,380 --> 00:11:31,470 But you're better off using, in my opinion, I'm taking that side of 221 00:11:31,470 --> 00:11:35,430 the argument and I'm glad I'm taking that side because many times on 222 00:11:35,430 --> 00:11:38,850 these debates, you're going to find, uh, based on the flip of the coin, 223 00:11:38,855 --> 00:11:42,360 we're taking a side we really don't agree with, but that's your benefit. 224 00:11:42,360 --> 00:11:44,430 We're arguing both sides of the coin here. 225 00:11:44,790 --> 00:11:48,180 Uh, but, uh, that's the side I would've argued anyway, to hold off 226 00:11:48,180 --> 00:11:53,305 to lock in the largest possible check, uh, given today's life expectancy, 227 00:11:53,305 --> 00:11:54,775 you could go into your nineties. 228 00:11:54,775 --> 00:11:58,825 I'd rather you have a check, a larger, a larger check locked in at 229 00:11:58,825 --> 00:12:00,715 age 70 for the rest of your life. 230 00:12:00,895 --> 00:12:01,225 Jeff Levine: All right. 231 00:12:01,225 --> 00:12:05,515 Well, I'm gonna, I'm gonna hit on that for a moment by delaying 232 00:12:05,515 --> 00:12:07,135 you a larger check down the road. 233 00:12:07,135 --> 00:12:08,065 Like at some point. 234 00:12:08,490 --> 00:12:10,500 I'm not gonna be traveling as much anymore. 235 00:12:10,500 --> 00:12:11,820 I'm not gonna be doing the things, right. 236 00:12:11,820 --> 00:12:15,990 Like in retirement, we often hear people refer to as the three phases of retirement 237 00:12:15,990 --> 00:12:21,360 to go go years, your slow years, and then sadly your, your no go years. 238 00:12:21,360 --> 00:12:21,720 Right. 239 00:12:22,380 --> 00:12:26,340 And so what, what do I care from getting a bigger check when I'm 85? 240 00:12:26,340 --> 00:12:29,700 Like who really cares, cuz I'm not gonna be able to enjoy it at that time. 241 00:12:29,970 --> 00:12:34,240 Whereas at 62, you know, I, 62 63, 64. 242 00:12:34,955 --> 00:12:37,385 Hey, ed 62 is the new 42. 243 00:12:37,475 --> 00:12:37,865 Right? 244 00:12:37,865 --> 00:12:42,245 So , so with that in mind, maybe I'd rather have that 245 00:12:42,245 --> 00:12:44,165 income, even if I don't need it. 246 00:12:44,170 --> 00:12:44,345 Right. 247 00:12:44,345 --> 00:12:47,525 Even if I do have these other assets that I could tap, maybe I'd rather 248 00:12:47,525 --> 00:12:51,575 take that social security now, you know, if it means a lower check later 249 00:12:51,580 --> 00:12:55,595 in life who cares, cause I got more money, more income at the time of 250 00:12:55,595 --> 00:12:57,425 my life when I could enjoy it more. 251 00:12:57,695 --> 00:12:57,995 Ed Slott: All right. 252 00:12:57,995 --> 00:13:01,685 Here's where all of you will benefit from, uh, Jeff and I doing 253 00:13:01,685 --> 00:13:03,395 this great retirement debate. 254 00:13:03,485 --> 00:13:07,365 Our age difference probably around 30 years. 255 00:13:07,665 --> 00:13:13,125 Jeff has just described the mantra for maybe his generation Yolo , uh, 256 00:13:13,155 --> 00:13:17,685 you only live once, spend it now and don't worry about the future. 257 00:13:17,775 --> 00:13:18,075 Jeff Levine: That's right. 258 00:13:18,165 --> 00:13:22,635 Ed Slott: Uh, but I'm with my generation, the baby boomers, maybe 259 00:13:22,635 --> 00:13:25,545 more of you, uh, listening here now. 260 00:13:25,815 --> 00:13:26,205 And. 261 00:13:26,610 --> 00:13:28,260 Everybody wants a larger check. 262 00:13:28,260 --> 00:13:31,650 So watch you don't spend it on the things you can't do as many things. 263 00:13:31,650 --> 00:13:33,690 There's other things you will need that money. 264 00:13:35,280 --> 00:13:35,760 Jeff Levine: All right. 265 00:13:35,910 --> 00:13:36,390 Fair enough. 266 00:13:36,390 --> 00:13:37,860 Maybe some generational differences. 267 00:13:37,860 --> 00:13:39,990 I'm also forced to make this argument. 268 00:13:40,200 --> 00:13:42,020 I must point out once again. 269 00:13:43,560 --> 00:13:48,450 uh, ed, what any other key insights you have as to why someone should 270 00:13:48,450 --> 00:13:50,520 not take social security at age 62? 271 00:13:50,670 --> 00:13:54,020 Ed Slott: It's simply to lock in the largest possible check 272 00:13:54,040 --> 00:13:55,950 for the longest period of time. 273 00:13:56,130 --> 00:13:57,690 And I believe that's by holding. 274 00:13:58,340 --> 00:14:00,130 If you can, Jeff makes a good point. 275 00:14:00,340 --> 00:14:05,950 If you can, till age 70 and lock that in now, Jeff, a point you didn't make, 276 00:14:06,160 --> 00:14:09,340 uh, which I'll go on your side, but I don't think it's a big point, but 277 00:14:09,340 --> 00:14:11,880 I'll, I'll throw one on your end of the 278 00:14:11,940 --> 00:14:12,760 Jeff Levine: Yeah throw me a bone. 279 00:14:12,765 --> 00:14:14,080 I got a hard argument here to start, 280 00:14:14,140 --> 00:14:15,230 Ed Slott: Right, right. 281 00:14:15,230 --> 00:14:16,954 You see, I saw a story. 282 00:14:16,954 --> 00:14:19,925 I mean, you see it every day, social security's going bankrupt. 283 00:14:19,925 --> 00:14:22,985 So get it while you can back to your Yolo argument. 284 00:14:23,165 --> 00:14:23,765 Jeff Levine: That's right. 285 00:14:23,765 --> 00:14:26,975 Get it while you cause right now, if we do nothing and, and that's a fair, 286 00:14:26,975 --> 00:14:30,515 I was gonna, I was gonna to, to bring that up here at the end, but I, I 287 00:14:30,515 --> 00:14:32,600 appreciate you, you raising it , right? 288 00:14:32,600 --> 00:14:35,105 Social security is currently scheduled to go. 289 00:14:36,040 --> 00:14:39,160 Now in fairness, not bankrupt, truly in the sense that it won't be 290 00:14:39,160 --> 00:14:42,610 able to pay anything, but benefits are only scheduled to be about 291 00:14:42,610 --> 00:14:49,210 75, 80% of what they're promised beginning in about 10 years or so. 292 00:14:49,420 --> 00:14:54,310 And so do you want to count on our politicians creating this fix at the 293 00:14:54,340 --> 00:14:58,875 last minute as they often do or, are we likely to continue to see a lot of 294 00:14:58,875 --> 00:15:03,495 what's going on today in our political climate, which is no compromise 295 00:15:03,495 --> 00:15:05,625 on anything, no matter what it. 296 00:15:06,375 --> 00:15:06,855 Right. 297 00:15:07,064 --> 00:15:07,305 And 298 00:15:07,305 --> 00:15:09,945 Ed Slott: here's another benefit of the generational difference. 299 00:15:09,975 --> 00:15:14,475 I'm not worried about that because, uh, no politician, it's the third 300 00:15:14,475 --> 00:15:18,645 rail is gonna touch social security for people of my age, who vote. 301 00:15:20,325 --> 00:15:22,095 They're not going to touch it. 302 00:15:22,245 --> 00:15:25,875 And you know what I paid in all those years, let the kids and the 303 00:15:26,265 --> 00:15:28,125 grandkids behind me let them pay in. 304 00:15:28,125 --> 00:15:29,865 And, uh, they're on their own. 305 00:15:31,445 --> 00:15:32,074 . Jeff Levine: All right. 306 00:15:32,525 --> 00:15:34,535 Well, so now, now we really are on our own. 307 00:15:34,535 --> 00:15:36,335 See, now, you know, now I know why we want to YOLO. 308 00:15:36,865 --> 00:15:37,415 Ed Slott: Yeah, yeah. 309 00:15:37,505 --> 00:15:37,835 Right. 310 00:15:38,045 --> 00:15:41,615 No, I, I admit it that way, but really, you know, if you're looking 311 00:15:41,615 --> 00:15:45,455 at it from our, my age to baby boomers, we've been paying into 312 00:15:45,455 --> 00:15:47,525 this for most of our working years. 313 00:15:47,525 --> 00:15:49,895 Since the, the day I got that first check and just... 314 00:15:49,895 --> 00:15:51,574 Jeff Levine: yeah, but you've been paying in for other people 315 00:15:51,574 --> 00:15:53,135 and I'll be paying in for you, 316 00:15:53,285 --> 00:15:53,735 Ed Slott: right. 317 00:15:56,220 --> 00:15:56,910 Jeff Levine: That still me. 318 00:15:56,910 --> 00:15:59,460 Unfortunately, there were just too many of you, ed. 319 00:15:59,460 --> 00:16:02,820 There's just so many darn boomers that we're gonna run outta. 320 00:16:02,820 --> 00:16:03,300 Ed Slott: Oh, I know. 321 00:16:03,300 --> 00:16:07,070 So I'll wait till 70, but you keep paying in for me, Jeff. 322 00:16:07,670 --> 00:16:11,130 I think that's so, so great of you in the generation below me. 323 00:16:11,280 --> 00:16:12,570 Jeff Levine: I am happy to do it. 324 00:16:12,570 --> 00:16:13,710 It's it's it's my, my. 325 00:16:14,400 --> 00:16:18,630 My privilege that's uh, well, and I'll give you one more, uh, ed and, and I, 326 00:16:18,630 --> 00:16:22,080 and I'll, I'll make, uh, you know, you were so kind as to throw me a bone, I 327 00:16:22,080 --> 00:16:25,890 I'll make, uh, I'll make an easy argument for you if you're the lower earner. 328 00:16:25,895 --> 00:16:28,800 So already I know where you can go here with another argument, but if 329 00:16:28,830 --> 00:16:33,810 you are the lower earner of a married couple claiming it's 62 can be pretty 330 00:16:34,020 --> 00:16:36,570 beneficial as well, because there. 331 00:16:37,785 --> 00:16:41,175 Either you or your spouse die young. 332 00:16:41,535 --> 00:16:44,955 That becomes a good decision because if you are the lower earner, 333 00:16:45,195 --> 00:16:47,595 when whoever dies first dies. 334 00:16:48,225 --> 00:16:51,585 So too, does your lower check, right? 335 00:16:51,585 --> 00:16:55,695 So if you are the lower earner, it's really not a matter of when will I die. 336 00:16:55,695 --> 00:16:59,085 It's a matter of when will I or my spouse die. 337 00:16:59,415 --> 00:17:02,955 And while mathematically and actuarily, we could say, well, if you live to 338 00:17:02,955 --> 00:17:07,440 82 or 83, It actually, if you're married couple, most couples, the 339 00:17:07,440 --> 00:17:11,400 lower earner probably shouldn't wait until 70 because it requires both 340 00:17:11,400 --> 00:17:15,270 people to live a really long time in order for that decision to pay off. 341 00:17:15,510 --> 00:17:18,900 So maybe 62 is, is early and I'm forced to make an argument 342 00:17:18,900 --> 00:17:21,300 Ed Slott: that's too early, but maybe if you're in your late sixties, 343 00:17:21,300 --> 00:17:22,980 that argument could hold water. 344 00:17:23,369 --> 00:17:26,210 Uh, for example, if spouse is older than you, like you. 345 00:17:27,195 --> 00:17:27,645 Jeff Levine: Yeah, right. 346 00:17:27,645 --> 00:17:31,455 Because at, at, at the first death, that higher check will 347 00:17:31,455 --> 00:17:32,895 live on with the survivor, 348 00:17:32,955 --> 00:17:33,195 Ed Slott: right. 349 00:17:33,225 --> 00:17:34,155 Jeff Levine: No matter who it is. 350 00:17:34,545 --> 00:17:37,455 And so the lower spouse, like when people come into my office, right? 351 00:17:37,455 --> 00:17:39,435 You, you talk about like real office situations. 352 00:17:39,440 --> 00:17:41,895 When people come in and they're kind of set and they say, well, we really 353 00:17:41,900 --> 00:17:43,365 wanted to start taking social security. 354 00:17:43,365 --> 00:17:45,885 I always say, if you wanna play with one of them and get it early, 355 00:17:46,365 --> 00:17:51,495 use the lower income spouse, like have them take it early and let the 356 00:17:51,495 --> 00:17:53,855 higher spouse be the one to delay. 357 00:17:54,545 --> 00:17:56,514 Ed Slott: All right, these are all good arguments. 358 00:17:56,514 --> 00:17:59,935 I still stick, uh, stick to my guns, get the largest check for 359 00:17:59,935 --> 00:18:03,225 the longest period of time, but not everything's for everyone. 360 00:18:03,475 --> 00:18:08,034 So, Jeff, I want you to explain how each one of these episodes are going to end 361 00:18:08,034 --> 00:18:10,165 that you have to make your own decisions. 362 00:18:10,170 --> 00:18:13,525 We hope we gave you all the information, the pluses, minuses, 363 00:18:13,525 --> 00:18:17,995 benefits, and drawbacks, and all the considerations to make the best decision. 364 00:18:17,995 --> 00:18:20,455 Remember, this is a long term decision. 365 00:18:20,455 --> 00:18:21,865 There's no going back on that. 366 00:18:21,865 --> 00:18:22,645 So it takes a lot of. 367 00:18:23,385 --> 00:18:23,835 Jeff Levine: You're right. 368 00:18:23,835 --> 00:18:28,815 And, and that's why we say there are two sides to every coin, but your 369 00:18:28,815 --> 00:18:32,985 life, your retirement decisions are too important to leave up to a coin flip. 370 00:18:33,435 --> 00:18:37,665 And so the one thing that ed and I always agree on is that you should 371 00:18:37,665 --> 00:18:42,240 make sure you're discussing these important decisions with a knowledgeable 372 00:18:42,245 --> 00:18:45,720 financial advisor or tax professional so that you can weigh the pros and 373 00:18:45,720 --> 00:18:50,520 cons of the different options against your specific goals and circumstances. 374 00:18:50,730 --> 00:18:54,010 Now, ed and I would love to hear from you what'd you like. 375 00:18:54,455 --> 00:18:55,445 What can we do better? 376 00:18:55,715 --> 00:18:58,895 Do you have a thought on why you should take social security earlier 377 00:18:58,895 --> 00:19:01,355 later we didn't mention, or a particular point you thought was, 378 00:19:01,655 --> 00:19:06,035 uh, that important or you just have a topic for us for a future debate. 379 00:19:06,035 --> 00:19:07,805 Again, we'd love to hear from you. 380 00:19:07,805 --> 00:19:12,015 You can reach out to us on Twitter, reach out to ed at @theslottreport. 381 00:19:12,035 --> 00:19:15,425 That's at the slot with two Ts report and you can reach out to. 382 00:19:15,865 --> 00:19:18,315 Using the, handle @CPAPlanner. 383 00:19:18,335 --> 00:19:20,235 Again, that's @CPAPlanner. 384 00:19:20,525 --> 00:19:22,355 Uh, we thank you for joining us. 385 00:19:22,355 --> 00:19:23,705 We look forward to this project. 386 00:19:23,705 --> 00:19:27,125 We've got a lot more topics lined up, uh, for the future. 387 00:19:27,125 --> 00:19:31,055 And I sincerely hope that you're able to make better decisions 388 00:19:31,055 --> 00:19:34,115 because of some of the information you've learned here today and in our 389 00:19:34,115 --> 00:19:36,245 future episodes, ed, this was fun. 390 00:19:36,245 --> 00:19:37,955 I look forward to doing this again real soon. 391 00:19:38,015 --> 00:19:38,825 Thanks so much. 392 00:19:39,155 --> 00:19:41,585 Ed Slott: All right, Jeff, we'll see, on the next episode 393 00:19:41,590 --> 00:19:43,155 of the great retirement debate!