In The News

The Social Security Waiting Game

At 62 years of age, Americans can begin claiming early Social Security benefits for themselves, provided they have been working and paying taxes. Claiming at age 62 may sound appealing, but there can be a substantial downside to the amount of money you can collect. In fact, you will receive 75% of the benefit amount that you would have received by waiting until your full retirement age, which is currently around age 66 depending on the month you were born.

But keep in mind that you are not required to file at your full retirement age. In fact, from your full retirement age up until age 70, you will receive an 8% increase in your monthly benefit amount by waiting to file. At age 70, that increase stops.

Investing Benefits

What if you don’t need the money, but decide to file at 62 in order to invest the benefit? Before you decide to take Social Security early and invest the payments, you need to be aware of the risks involved. Investing in the markets means you are assuming returns based on historical performance and subjecting your retirement outcome to market risk, including sequence of returns risk, where you may not have enough of a retirement time horizon to wait out any market downturns.

And if you’re still working while collecting, your earnings may end up in the government’s pockets if you make too much. In other words, taxes need to be considered as well, because if your primary income source is too high, your Social Security benefits may become taxable, lowering the amount you have available to invest.

According to the Social Security Administration website:  

“In 2017, the annual earnings limit is $16,920 if you’re under full retirement age.”

That being said, some investments may not be counted as income by Social Security, and it’s important to work with a financial advisor when making these major decisions.

Continued from the SSA website:

“When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you’re self-employed. We include bonuses, commissions and vacation pay. We don’t count pensions, annuities, investment income, interest, veterans or other government or military retirement benefits.”

Break-Even Analysis

When it comes to age and benefit amounts, the Government Accountability Office (GAO) maintains that “the Social Security benefit formula adjusts monthly payments so that someone living to average life expectancy should receive about the same amount of benefits over their lifetime regardless of which age they claim.”

There are those that argue, however, that this model is outdated. Even though many experts say waiting as long as possible is the best strategy, it all depends on your individual situation. For example, if family history says your life expectancy is age 74, then filing early for Social Security benefits can make sense.

Another thing to consider is the complexity in determining how to factor in spousal benefits. If you’re married and die first, waiting to file may give your spouse larger survivor benefits.

How and when you claim Social Security can have a dramatic effect on your whole retirement outcome. The most important thing to do is get professional help in this process. That is what we do.

Contact Estate Planning Solutions in Glendale, Arizona  if you need help with Social Security or have any other retirement questions by calling (623) 537-3657.

Retirement Planning In a Continued Bull Market

The bull market for equities continues to defy predictions of an impending correction. Most economists maintain that it’s not if a pullback will happen. It’s when. That being said, vigilance in this environment is critical, particularly in retirement.

Is It Time to Rebalance?

Since stocks bottomed out in 2009 after the financial crisis, we’ve seen them come roaring back at about five times the rate of the bond market. If you haven’t been rebalancing your asset allocation during this period you may have too much risk in your portfolio—and it not might be from stocks. For example, former CNNMoney “Ask the Expert” columnist and “Real Deal Retirement” editor Walter Updegrave recently wrote “someone who started with a 60% stocks to 40% bonds portfolio in March 2009 would have upwards of 80% of assets in stocks and just 20% in bonds today, assuming no rebalancing and reinvestment of all gains.”1

Growth and Protection

With interest rates destined to move up, the future of bond market returns doesn’t look rosy. U.S. Government bonds are often called “risk-free.” Technically, that refers to default risk. These investments are still subject to interest rate and inflation risk.

One solution being recommended more and more these days is using fixed indexed annuities (FIAs) to manage risk in a portfolio. Recent innovations in these products have made them a very attractive bond or CD alternative for many reasons. For instance, they offer principal protection guaranteed by the financial strength of the issuing insurance carrier, and some FIAs offer more attractive returns.

This is a great time to reevaluate your risk allocation. Please contact us if you need help. Estate Planning Solutions in Glendale, Arizona can be reached at (623) 537-3657.

1 Money | Retirement, “3 Ways to Protect Your Retirement Money from a Market Downturn,” by Walter Updegrave, May 25, 2017, (Accessed July 28, 2017).

Do You Need a Will or Trust? Or Both?

When it comes to estate planning, most of us are at least familiar with the terms “will” and “trust.” However, it’s important to understand how they work. One difference is that a will goes into effect after death while a trust can be used to distribute property before or after death.


A will is a legal arrangement that has several important functions and usually requires at least one witness. (State requirements vary, for instance, two witnesses are required in Arizona.) A will is used to designate your chosen guardian/s for any minor children. A will gives instructions on how you wish your assets to be distributed upon your death. It names beneficiaries of your estate and what they are to receive. A will allows you to choose an executor, a person responsible for overseeing the distribution of your assets.

The important thing to remember is that a will is subject to probate. This court process goes into the public record, determines the validity of the will, considers any objections and pays any remaining creditors. Probate can take several months—or even longer if you die without a will.


A trust is a relationship in which an individual assigns their assets through another entity, called the “trustee.” The trustee is often another individual, a bank or an attorney, and they have the responsibility of transferring title of the assets to the trust’s beneficiaries. Usually, two important goals of a trust are to keep the arrangement private and avoid probate.

A trust, however, doesn’t allow you to name a chosen guardian for your minor children, dictate funeral arrangements or determine who gets personal property items not specifically named in the trust. This is why a trust is almost always accompanied by a will.

Not everyone needs a trust, but it’s helpful if, for example, you have minor children who will be receiving your assets when they become adults because a trust can specify requirements that must be met before assets will be transferred to them. A trust is also commonly used to assign assets to a charitable organization.

Remember, wills and trusts aren’t just for the wealthy—just about everyone has assets of one kind or another. These estate planning tools help you dictate how and when they are to be distributed. It’s important to get professional help that may include an attorney, and it doesn’t have to be an expensive process.

Please contact us if you need help with setting up or reviewing your estate plan. Estate Planning Solutions in Glendale, Arizona can be reached at (623) 537-3657.