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welcome my friends to another edition of the heritage wealth planning youtube channel hey i came across this article uh the other day from u.s news and world report that says what you do if you file social security too early i thought it's very very interesting because as some of the languaging now and maybe some of the techniques are getting more and more kind of exposed out there to the uh the pre-retirement scene and maybe some of the fallacies that people have too like oh i should take it at 62 because social security isn't going to be there or i better check out 62 because i'm going to die tomorrow or the average life expectancy is only 78 i better take it at 62 because i might not live to the average life expectancy all these things are falsies doesn't mean they won't happen but it means the likelihood of them happening to you as you're considering one to take social security are quite small and so the problem that we have is that some people will file social security they'll read some information maybe we'll even watch this video from me maybe they'll watch this guy devin carroll um i forgot what his social security channel is uh he's does great great stuff i just forgot his channel i might read a book or an article by larry kotlikoff over at boston university side note if you go to the josh scanlon podcast i interviewed larry kotlikoff as well and uh his website maximized my social security i think like for 40 bucks you can download the software and use it it's called software as a service so you're not really downloading it it's just basically through the web like almost like cloud it's wonderful i use that with my clients too it's uh for me as a professional advisor it's more than 40 bucks but man for the the level of in the the deep dive that you get with holocaust stuff man it's just been phenomenal absolutely so a big fan if you go to the josh gamlin podcast you can read or listen to the uh the interview i did with larry uh just great guys done wonderful wonderful work in terms of social security research uh he's the one because of his prominence in the field make sure my mic is up there he's a guy who uh made the congress and obama get rid of the old file and suspend file and suspend is no more because kotlikov is a guy who wrote about it in his book uh get what's yours so i came with the title of it but get what's yours i think it was what it was we talked about file and suspend and that just took off like uh and because it took off so much and it grew like weeds so many people were doing that technique that congress said whoa we didn't mean for that to happen so they got rid of it so thanks larry but anyway so he's done just seminal work on social security at the end of the day though you might say you might have heard some crazy guys say you better top file at 62 uh because you're going to die your uh average life expectancy 78 social carry might not be there blah blah blah they'll say trump or obama or whoever it doesn't matter all politicians if you're on the democratic side you hate the trumpster if you're on the republican side you hate obama you want to blame them all when it's so much more than that my friends it's so much more than trump or obama it goes well beyond uh trump or obama the facts are social security used to have 16 workers per one beneficiary and here pretty soon it's only gonna have like one and a half i think it's like two now and uh just it's not sustainable in that in that regard it's just not everybody knows it's not the question is there any politicians going to want to pay the price politically to fix it and the answer is probably no so with that said there are some issues with social security i'm sure there'll be a commission that will study make recommendations and the commission will be granted authority they don't have constitutionally to raise taxes increase the retirement age that way the politicians don't have to you know like take the blame but at some point that's going to happen but even right now even the social security the folks who analyze it even say at the end of the day we're fine until about 2035 and then we're gonna have to cut back say 20 cents on dollars so it's not like it's destitute it's just it won't give you the full benefits and frankly they need to raise the retirement age it's just no getting around that they need to raise a retirement age to keep up with the fact that people are living longer okay so with all that said say you said i filed for social security too early and i want to uh reclaim that what can i do uh there used to be a pretty good strategy before the obama and the republican congress and bipartisan uh fixes to the social security system in 2015 we could pay it all back without interest essentially had an interest-free loan for as long as you wanted and you could just pay it back and then start taking your delayed earnings credits which is pretty sweet so if you file that 62 let's say you got 30 000 of social security uh which you just banked and now you got 5 000 of interest off that you could say at 66 you know something i don't want that social security i'm gonna send them a check for thirty thousand bucks and i'll keep the five thousand dollars of interest that i've accumulated that worked you could do it um and then on top that you could allow your benefits to grow with the delayed earnings credits up until you're seven years old uh it's wonderful but you can't do that anymore so those days are gone for that i do hear on occasion people still asking about that i think i've used that twice with clients back in the before they got rid of that rule back in 2013 and 14 i think we did i've only done that twice it wasn't very prominent um all right so here's a guy jeff williams i'm not familiar with jeff uh us news and world report um and he says what to do if you file for social security too early so let's look at what jeff says and again i'm not familiar let's see what his byline says if it says anything here um about who old jeff is so i'm not familiar with him doesn't mean that he's not righteous or doesn't know he's talking about i just generally speaking there's some people i get familiar with and others i don't know and my thing is giving me a hard time uh yeah i don't see anything for a byline here okay so let's look and see what jeff says though be interesting to find out um all right so we'll see if he has a byline someplace on here um no guess not okay nope uh nope okay so there's no byline on jeff i guess i could click on that but given how slow my wi-fi is working i'm not sure i want to so all right so maybe you're overconfident or perhaps you felt that you needed the money now but some buyers remorse exactly you've read an article you've seen a video you know your brother-in-law told you blah blah blah or even worse he realized that at the end of the day when you look at the taxes on social security relative the taxes on rmds require minimum distributions social security is much more favorable and social security is guaranteed so you say yeah that sounds better and social security leaves a surviving spouse a significant benefit that your iras may not so you might say to yourself i should have i need to do over uh it's a common 11 dilemma according to kate stalter co-owner and senior financial advisor of better money decisions a financial services company in albuquerque um surveys and statistics back her up uh the bankruptcy the vast majority of people take s62 which is before the full retirement age is 100 correct uh while the trend to file for benefits is to foul for benefits later in life according to a 2017 study from fidelity 28 of americans still plan to file as early as possible that seems awfully low to me actually um 20 28 of americans still claim plan to file a 62. now i don't believe that um and the reason i believe that is because then people who file for benefits at 62 are overwhelmingly overwhelmingly the majority of people not it's not 28 by stretch it's way above that so my inclination is they might say they plan on delaying it but as that number approaches of the age of 62 they might say you know something the reality is i might not live and i'm going to file so i can get something i it's hard to argue against that frankly i mean that's the fear of the unknown i don't know what's going to happen i want to get my benefit so i get something out of it you can you know give me all the research and the statistical analysis and the excel spreadsheets at the end of the day though if i'd kill over tomorrow i don't have any social security benefit and i don't want that to happen just on that alone it's hard to imagine that most people won't file at 62. it's just as hard unless they have a law that says at the end of the day you can't file until your full retirement age and again i don't think congress will ever pass that law and the president will ever sign it all right so if you feel you're taking your benefits too soon and wondering what you should do here you have some options uh okay so first familiar familiarize yourself around the retirement benefit we already talked about that early so you can file basically 62 years old you actually file that 61 years and nine months because they need a three year time for a three month time for your benefit to kick in uh but that is the earliest you can receive a benefit at 62. um and then we talk about you you will receive less money if you foul before your full retirement age and this is all stuff you've been watching my videos you know um the fourth time in age is 67 if you're born in 1960 or later we already talked about that 66 if you're born before 1960 and 66 and some months depending on exactly what year you're born after 1954. uh so okay so here what's what we talked about man we talked about i've had a couple people that had given the money back they taken on social security it was interest free now they've accumulated many years of social security and they were able to pay the whole thing back 30 thousand bucks you can still do that as long as the benefits claim has been less than a year okay so as long as you've only had the benefit for less than a year you can give back the amount you've accumulated back to social security here's what jeff says all you have to do is submit in writing that you would like to withdraw your claim for benefits then you go back to not receiving your social security and wait until a later period when your benefit payments will be higher the bad news you have to pay back all the money you received uh from social security including any payments made to a spouse or child uh that may not be too hard it's just been a month or so um but if it's been seven months several months and you're on a fixed income and money's tight it will be kind of hard without question so remember let's just say you're making two thousand bucks a month and six months goes by and you say i need to pay it back you take out your trusty calculator two thousand dollars a month times six months is twelve thousand bucks you gotta stroke them a check for twelve thousand no interest is needed and uh and then you don't get the benefits not only are you out there twelve thousand bucks but you're going to be going out going forward the money that you're receiving on a monthly benefit because you're saying i don't want it right now i want to postpone my benefits essentially and allow my benefit to grow uh to my full retirement age or more with delayed earnings credits so it's a it's a it's a winning scenario in the long run but if money's pretty tight it's gonna be hard to do that my friends all right let me pause just real quick i've been i need to start doing this a little bit more i keep forgetting i've watched this guy if you're like youtube and you're wondering how to do youtube there's a guy named brian g johnson that i'm a fan of and he says make sure you tell people to subscribe so don't let's pause subscribe all right so you see the little subscribe button down there make sure you subscribe okay so we got with that we're going to do that a couple times i'm trying to practice my uh my my encouragement to get people to subscribe i usually wait till the end of the video but if you look at my video metrics most people watch pretty good amount of time which is pleasing to me um not that many watched the very end though because i do long videos i get that but so don't forget to subscribe my friends okay so back to a jeff's uh paper here suspend your benefits if you reach your full retirement age but aren't 70 years old you can contact social security and assay suspend your benefit at that point you receive a higher uh later retirement credits delayed earnings credits we call it drc is a college fine uh same thing which worth eight percent a year all right so what's going to happen here is you say you got you know 30 000 of benefits over the last two years you say oh it's just suspended but i'm not going to pay it back just suspend them and they will stop paying you your benefit to allow your earnings credits to kick in at the eight percent a year now remember um if you reach full retirement age that's when you have your full pia primary insurance amount okay so four retirement age 66 or 67 depending on exactly what year you were born that's the only two numbers you got to remember 66 or 67 and you only need to remember 67 if you're born in 1960 or beyond all right so if you hit your full retirement age and say yeah i don't want my benefits after all so spend them they'll stop paying you and allow your benefit to kick in with the delayed earnings credits at eight percent a year and then you can go back you can take it at 68 you could take it at 69 or 70 whatever the situation dictates um let's see here if you are full at before time rate start working it man this is a good strategy here too um actually i think this gets overlooked quite a bit now i've shown you in previous videos on how to maximize your social security remember how this works they look at your adjusted your average index monthly earnings your a i m e they're looking at aime which is your top 35 years of earnings they're looking at your top 35 years of earnings adding each of those up each and every year and then they're dividing that by 420. so one way to increase your earnings your aim is to have another year of earnings especially if you have a year of high earnings that will replace a year of bad earnings so you just inherently dropped off of what member cycle was like grading on a curve you dropped off the lows you added the highest that will inherently bring all your benefits up now i might not bring it up much because you only have one year out of 35 but you got rid of one a low one and you added a higher one so it's a double whammy there again it won't be a huge amount but you know 20 extra bucks 25 bucks a month that's real money and so like jeff was saying if you aren't retired at full retirement age uh keep working or start working if you aren't yet at your fra you could work while you receive your social security benefits and see higher earnings later i would challenge that to some degree uh that you probably don't want to take your social security benefits while you're working not because you lose your benefit for the love of marriage you don't lose your benefit they just withhold a portion of your benefit in which to pay you higher uh pay you that benefit later with a higher monthly payment so it's not you don't lose it so i don't have any problem with people working while they're claiming benefits before they hit their full retirement age but if you're working well do you need the benefit anyway i mean you might you might but if you don't that don't get your social security benefits because you've you're earning uh money that you can use to put food on table and you're growing a benefit you've drawn a benefit that's being reduced from the rest of your life but all the rest of the life of your surviving spouse as well so if you start at 64 years old and you take ben you took benefits early you say you know something this isn't working out like i thought suspend your benefits suspend them right now that way you can stop the reduced benefits right then and right there you allow your benefits to kick in to grow at that eight percent a year from the day you started taking them and if you wait till 66 67 68 you you increase your benefit by that amount times eight by that many number of years that you delayed times eight which is wonderful all right so three years that's a 24 increase then if you start at 64. it starts you can figure this out if you start 64 you stop your benefit you start your benefit at 62 and stop at 64. you have a reduction of benefit if you stop it at 64 and go back to work all right so now 64 goes 65 66 67 68 that's four years of not retaking your benefit four times eight is 32 percent you increase your benefit by 32 from what it was when you're at 64. and then you're also going to have cost living adjustments as well my friends that's a big deal that is a big deal i show you in other videos how the cost of living adjustment gets way overlooked in terms of social security people don't realize it though but the cost of living adjustment starts this beyond and gap here it is right here without a cost of living but as a low benefit and a lower cost living adjustment higher benefit and again a higher cost living adjustment and dollar pure dollars the same percentage but in dollars it gets larger and larger and larger the larger you wait the longer you wait the more the cost of living adjustments actually puts money in your pocket all right so i'm telling you right now that coal is our big deal the more you wait the more social security benefit you have the more those coals actually give you pure dollars that it goes back into your pocket it's amazing how that works uh just watch my other videos on how to maximize your social security to see what i'm talking about there all right so now you say i'm 64. you know my first three years of work there in my 35 years of my average index monthly earnings i wasn't making that much man i was washing dishes at you know olive garden or something like that um if there's any way i can reduce those or even eliminate those three years instead replace it with a year where i'm making real estate commissions or what i mean whatever it is i'm replacing a 30 000 a year on my aime and i'm replacing with a 90 000 a year as a you know whatever computer salesman i mean i don't care what it is that is a win you're going to get a 90 000 aimee and you're going to get rid of that 30 000 uh and that when he had a bad career a bad year that years and that's a huge one on top that because you stop taking your social security benefit you're going to get an eight percent improvement each and every year until you re redo that it's a wonderful strategy um so good job for jeff for bringing that out uh if you claim benefits too early don't beat yourself up 100 agree with that uh social security can be complicated for anyone says david demko a clinical gerund gerontologist based in jacksonville uh says that he decided to file for social security too early uh even experts on senior issues can make mistakes that result propects and consequences yeah uh he took his benefits at 65 by the age of 67 he wound up refunding his benefits and posting until six until 70 uh by the age of 66 68 he reversed the decision and the social care administration paid him back what he had refunded right that i mean come on man that's a lot going on there sometimes we can overthink this stuff uh he isn't wishy-washy there you go that's they're reading my mind they're saying he isn't wishy-washy he just had a lot of life choices to make uh he had some health issues uh well okay i see what this guy did including mysteriously losing pounds in six weeks that made him think he wouldn't live until age 70. okay so i take that back uh sir you're not uh wishy-washy um you didn't overanalyze that i take that back losing 55 pounds in six weeks would make me concerned i would lose my benefits as well uh and that made him think he wouldn't live until age 70 and that's the content consideration if you think you're not going to be long-lived then take your benefits asap without question um remember though i would say at the end of the day i don't know if this guy's married or not there's a second part of this if you are married what are you gonna leave your surviving spouse with and i'm not gonna get that here but just you know keep that in the back of your mind you might not be long-lived uh but that doesn't mean your spouse won't be and if she's long lived and you're not um and you took too early that that could really put her up against it you definitely want to think that through uh don't be afraid to seek advice demko says return money social security um was a nightmare literally it created an irs tax return nightmare yeah i bet uh if okay that's why god leaves advice would be smart to eat if you feel you made a mistake or just aren't sure and you want to make a change find an expert in social security planning the way i look at folks if you feel you made a mistake um i wouldn't pay money back frankly i just you know you only have 12 month time this so this mr demko must have did it before the new loss kicked into because you can't do it over two years um it only has to be in the first year you file i i wouldn't return it i just keep the money and then allow the delayed earnings credits or the eight percent of annual growth to kick in from then on return the money i'd the two people i had do that it was more of a house than you think it wasn't that big of a deal but it wasn't a walk in the park i mean you're dealing with a federal government my friends they're gonna get a check for thirty five thousand bucks and like what i mean how many checks of 35 000 bucks has the irs received uh from you know where social security administration received yeah not many all right uh so it may cost you upfront to consult an expert but if you make more changes with your social security account uh and don't fully understand what you're doing after filing too soon opting not to work with a professional may be the second biggest mistake you make okay so that's a good sales pitch i guess for what we do in this line of work all right so at the end of the day what to do if you file for social security the the two things if it's in the first year you can pay the money back all right and just stop your benefit that's fine number two that's number one number two if you if you took too soon and you're filing benefits now just stop say don't pay me anymore i want my earnings my my eight percent to grow calm up i don't know if you have to go down there just call them up say i want to stop my benefit i took that 62 i'm 64 now i want to stop my benefit um don't pay it back you just say i'm not going to get it anymore again you might need to look at your cash flow that might be easier said than done um that'd be something for you to decide but that's been that's number two thing you do number three i'm gonna stop my benefits and i'm going to work all right so that way i can earn more money that i will a to pay for my living expenses so i don't have to draw my social security so i can allow my social security to get those eight percent each year improvements from the previous year up till i 70 and b if i have low aime on the first part of my working career i can get rid of some of those uh low years of earnings and replace with a higher year of earnings for sure and that's where you got to know your aime my friend oh stop subscribe this is going to be awkward subscribe so right down there my subscribe button don't forget to do it please all right and also thumbs up like i always say it occurred to me that no one's really at the end of my videos as i said before so i need to say it and throughout just to get you uh excited to subscribe to the stuff all right but anyway at the end sorry guys um at the end of the day make sure that you look at your aime your average index monthly earnings that 35 years of cash flow your earnings cash flow that you see and then you say yourself huh i'm 64. it doesn't have to be 64. it could be whatever age you want it won't be after 70 but you say i'm 64. i made 35 000 bucks when i was 25 years old it's in my ai me because it takes my top 35 and this year i'm going to make 60 000 bucks on washing dishes because inflation whatever if i do that i'll make 5 000 a month which means that will be more than enough to live on which means i don't need to take social security which means if i don't take social security i can continue to get eight percent a year on my social security growth from when i did take it and then on top of that because i'm working with a higher income that higher income will be added to my 35 years aimee and will lop off the bottom of my 35 years aimee and thus i make more social security it's a wonderful strategy that's probably my favorite strategy right there all right my friends hope this helps thumbs up already told you to subscribe so i won't tell you it again i just did see that trick i won't tell you to subscribe again but i just did thumbs up we're always helpful my friends without question i'll put a link to this article in the show notes at us news um hopefully look at i think you'll find it pretty interesting for sure there was no place or comments that i could find that's too bad cause i would have liked to have seen some of the folks who uh asked questions on this stuff and then uh but do put your comments below you have any thoughts or or any um workings with social care administration so i interviewed this woman uh named liz hand who's a financial advisor out in canton ohio and she's on my podcast episode 40 i believe podcast episode 40. and uh so i interviewed her and uh and she's gone to the social administration twice with clients and she says fine so the people there wasn't like going to dmv uh it's fine people are helpful uh knowledgeable now they cannot give you specific advice they're not tasked to do that but they can say based on this is what we're looking at today this is how you max your benefit today not future for looking just what is the way to maximize benefit today they are tasked to do that and they do that very well now i always thought they're doing that as under some consideration that they want people to take now as opposed to delaying i don't think that's the case anymore i think actually what is this case they look at your numbers they say this is the way you can draw your most amount of benefit today and they make that recommendation not a recommendation they make that uh observation i guess so the right word and uh because that that's that's helpful but and that's there's more to the the story here and you really need to dive into it and the first place to do it my friends look for the love of mary at your aime your average index monthly earnings look at it look at it that is what everything is driven off your aime make sure that puppy is correct all right subscribe comments uh don't forget to hit the little notification bell down there and of course the thumbs up is always helpful too we'll see you next time on the heritage wealth planning youtube channel thanks guys