Hi, everyone. Danielle Roberts from
Boomer Benefits here. Many of you know that we
run a free private Facebook group where we answer your
questions about Medicare. But we also get a lot of
questions about Social Security in the group. And while I'm a Medicare
insurance expert, Social Security is a
whole 'nother ballgame. Fortunately, I
know a true expert when it comes to
Social Security. So today, I've got a
great interview for you in which I speak with Devin
Carroll from Carroll Investment Management. Devin is a financial planner,
a YouTube star, and also co-host of the very popular
podcast called Big Picture Retirement. Most importantly,
he is a whiz when it comes to Social
Security, and he's even written a book about
Social Security basics. In our interview, Devin gives
us his best tips and insights on when to file for Social
Security, what factors should go into your decision, why
a break-even analysis is not the best factor for
determining when to file, and how benefits can be taxed if
you earn too much while you're taking them. Be sure that you stay tuned for
the part where Devin tells us exactly why it's so critical
that we check our Social Security statements
every single year. If we don't, we can seriously
impact the amount of money that we get someday in
our monthly benefits. The guidance that Devin gives
us on this is so helpful. Hope you enjoy this
interview, and thanks for participating in the Boomer
Benefits YouTube channel. Good morning, Devin. Thank you so much
for joining me today. Hey, Danielle. Thank you for having me. I know that our
listeners and viewers are going to be so
excited, because we get so many questions here at
Boomer Benefits about Social Security. So they see online that
we're experts in Medicare, and they just roll in the
Social Security questions. And I think that's
very common, as people kind of think they go together. But in reality, that's
not always the case. So I've got some great
questions for you today. But I thought we
would just start by having you tell everyone
who you are and what you do. Well, thanks for having
me, first of all. And you're right. I do Social Security stuff, and
I get the Medicare questions. So I know what you're
talking about there. It does seem like that they are
interrelated, because you go and you file for Medicare at
the Social Security office. It's generally-- if you're
taking Social Security benefits, the Medicare
premiums are taken out of your Social Security check. So it does seem like
if someone knows a lot about Social
Security, they should also know a lot about Medicare. But I'm here to tell you,
that is not the case. I struggle with Medicare still. I may know more about
it than most people, but there's still a lot of areas
that's completely confusing. So it's fantastic
to have experts out there such as yourself. So I'm a financial planner,
and I've been in this business for about 16 years. And I came to a point
where I realized that I don't know nearly as
much about Social Security as I should. And that was after I advised
clients for probably 10 years in retirement planning. And yet, here was this super
important retirement income stream that I didn't really-- I knew the basics,
but that was about it. Well, I didn't understand how to
go back and calculate someone's benefit if they
said, hey, Devin, if I'm thinking
about retiring early, how is that going to impact
my benefit if I retire at 55 and then wait till 67? Yeah, so complicated. All of these things, I just
couldn't give any advice on it. So I went back and I
relearned everything that I probably should
have already known about Social Security. And once I did, for some reason,
there was a hook that was set. And this hook went deep. I mean, I swallowed it
hard with Social Security. And I literally gave
up a lot of my hobbies, and now this is kind
of what I nerd out on. I started the blog Social
Security Intelligence, and that's turned into
the YouTube channel. And this is what I
have fun doing now. Yeah, and you've
got a great channel. I was looking at
it this morning-- almost 50,000
YouTube subscribers and just so much
content out there. I thought Medicare was big, and
then I saw the number of videos that you've put out
on Social Security. And it just makes you
wonder, what were they thinking to make all of
this just so complicated for the average American? The level of stress
that people have trying to figure out Social
Security and Medicare is ridiculous. It is. And it's deceptively
complicated, too. It's one of those things
that on the surface-- you get a statement, and you
have three options, right? So you could file at 62, your
full retirement age, or age 70. Those are the three benefits
estimates they give you, as if it's this simple decision. But it's not. It's not simple at all. What goes into
making that decision? So that age old question
of, should I file at 62? I know that there's a lower
benefit if you do that. And then for every
year that you wait, that increases your benefit. Should people be looking at-- I know that if you work, and
you also take Social Security, your Social Security
can be taxed. So when you have someone
that's nearing age 62, and you're sitting down
or talking with them about that horizon and
when they should file, what are some of the things
that you discuss with them that are factors in deciding that? Well, there's a few things. Really, there's 12
factors that I've identified that any individual
needs to at least consider when they're thinking about
their own filing strategy and when they file. First of all, a lot of
the people in my industry, finance, whether
it's doing what I do or just writing content for
these financial articles, they do tend to
take this hard line approach that everyone should
delay as long as possible. But then on the other hand,
if you read the comments in my YouTube channel, which
are very amusing by the way-- So entertaining. You should read some of those. But a lot of those
individuals take the approach that you should file
as early as possible. And they take this approach
for a number of reasons. Some of it is distrust
of the government. Some is, you may die, which is
one that I hear quite often. And the truth is, really,
some of those are right, but they're not
right for everyone. So if we back up and
we look-- let's take an individual who's full
retirement age is 67, for example. Now, you could file
as early as age 62, or you could file
as late as age 70. Well, technically, you
could file at any point, but there's no reason
to delay past age 70. So if your full retirement
age is, let's just say 67, and you file at 62,
you're only going to receive 70% of
the benefit that you would have received if you
would have waited till age 67. If you delay that
until 70, you'll receive 124% of the
benefit that you would have received at age 67. So it's increased. And that's the big
discussion and argument, is should you delay? Should you file early? Yeah, if you file
early, you're going to get probably more
checks in your lifetime, but they're going to
be smaller checks. If you wait, you're
going to get less checks, but they're going
to be larger checks. And so unfortunately, a lot
of times, individuals boil it down to this old break-even
analysis, which I think is a horrible idea on its own,
with the break-even being, OK, I need to figure out
how long I'm going to live. And if I'm looking at
filing at age 62 versus 67, I know I've got to
live to at least 76 for those cumulative
payments to catch up. So if I can live
past 76, I'm good. But if I die before that, I
would have been better off to have filed at 62. It's the rationale used. In fact, the Social Security
Administration for years had a break-even analysis
of their website. Thankfully, they've
taken that down. And now, instead,
they just say, hey, we don't give any advice about
this sort of thing anymore. Yeah. Yeah, probably some danger
in doing that, I could see. Yeah, absolutely. I tend to turn the advice
back on its head a little bit when people say, Devin, listen,
I'm going to file early. What if I die? So let's talk about some
statistics real quick. According to the Social
Security Administration, men's benefits-- I don't have the numbers
right in front of me, but men's benefits are much
higher than women's benefits. And that's because the
average earnings of men are higher than women
for a variety of reasons through their careers,
which then when you take the statistic that men
have a shorter life expectancy, here's the way this
breaks down, then. You have a man and a woman. The man has the higher benefit. The man is probably going
to die before his wife. When he does that,
his benefit is most likely to become her benefit. So if he files at the
earliest age possible, because what if I die, well
now he has seriously hurt, potentially, his spouse's
survivor benefits. So that's certainly
one of the things that we have to consider when
we're trying to figure out when we're going to file. What's the relative
importance of that income should the higher earner die? If it's fairly
high, then we need to preserve as much
survivor benefit as we can for the spouse. I've seen more than one
spouse just about impoverished when the higher
earning spouse died and they lost a large chunk of
those Social Security benefits. I see. OK. Wow, so much goes into it. It's just a lot to figure
out and so many things to think about--
whether you're single, whether you're married, what
your life expectancy is. And we hear all the time, people
are like, I took those benefits at 62. I could die tomorrow. I'm not taking any chances. But then, I read something about
the highest Social Security check you could possibly
get if you'd had the highest amount of earnings over
35 years was under 3,000, and then the average
check being around 1,400. And I'm really surprised
at how many people we see coming into
Medicare who literally have absolutely no savings. They're depending on that
Social Security check, and then they're just
devastated to see that it's barely enough to
cover rent and groceries, let alone what they're going
to need to live for 20, 30 years now with the medical
technology that we have. Yeah. Yeah, it is sad. Social Security was always
designed as a safety net. It was never designed as
a primary retirement plan. They even put that message on
the Social Security statements now. Oh, they do? That's good. Yeah, it's there. But I don't know how many
people are reading those. Yeah. Yeah, and I hear people, too-- I heard the thing when
we're talking to them about how much Medicare costs. And so the common misconception
that we run across all the time is, you know, I worked
all these years, and I saw these
FICA taxes, and that goes to pay my Social
Security and my Medicare. What do you mean
Medicare costs money? And then they find out that
that Social Security check isn't even going to be as big as
what they're actually getting, because they've got to pay their
Medicare Part B and D premiums. And it can just be
really overwhelming. So sometimes I feel like I'm
shouting from the mountaintops, learn this stuff
when you're age 50. You should have to go
to a class and find out that it's not going to
be free, and you're going to need supplemental coverage. And there needs to be more
so that you don't end up in this situation where you're
scraping pennies together, robbing Peter to pay Paul. Yeah. And I think because
it seems simple when you get that
simple statement that shows what you're
going to receive, people tend not
to dive in and try to figure this out beforehand. For example, I've seen
more than one person file at the earliest age
they could, at 62, because their statement said
they could file as early as 62. What they didn't think about
was that if you're still working and your earnings
exceed a certain amount, they're going to start
to withhold benefits. And where it really
gets messy is, let's say that you're
not working at 62. You file for benefits. Then you get hired at-- you go to work for someone. Your earnings exceed that
limit, and the Social Security Administration doesn't
know for a little while. And then they find out. And then they send you
this nasty overpayment notice, which are almost
impossible to unravel. When you get one of
those, it's just horrible. So if you're planning
to work, and you're under full retirement
age, you need to make sure your
earnings are not going to exceed the income
limitation, which this year is in the $17,000 range. And that does increase
on an annual basis. But you need to
absolutely understand that if you do
exceed that, they're going to withhold benefits. Yeah. So if you do find yourself
filing for Social Security and setting up your
Medicare benefits and realizing that
this check is not going to stretch as
far as you need it to, and you want to pick up some
side hustle driving for Uber or pet sitting or
something like that, you can't just do
that unlimited, because that could be-- Social Security
coming back on that in five years with a chunk
of change that you owe would be even more devastating. So that has to be
carefully considered. And it's not the
same for everyone. I think I saw that that changes. Certain states tax differently. And so it's really important
for people to do their research, and I know that they can
do some of that with you. So talk to us about how
people can find you online and what you would recommend
for somebody, let's say, that is 55 or 60, coming up on
this time in retirement. What are some of the
steps that they can take and how they can
educate themselves? So a couple of things. Let me give you the
first and what I think is the most important step. Just yesterday, I heard
from a lady that said, hey, Devin, in 1978,
'79, '80, and '81, my earnings record shows a zero. That's not right. How can I get that fixed? That's a long time ago. One of the most
important things that you need to do every year-- you're filing your
taxes every year. There's other steps that
you're doing every year. Check your earnings
record to make sure that your earnings have
been added appropriately. You can work at the same
employer for 20, 30 years, and right in the middle
of that employment, you'll often find
missing earnings. And that may be because a Social
Security number was transposed or a number of other things. But you've got to get
that fixed pretty quick, because the IRS is
only keeping your tax returns for seven years. Most individuals are
only keeping them for seven years or less. And W-2's-- if the business
has already going out of-- if you worked for someone that
the business is closed now, it's very difficult to go
back and substantiate income once you've let
several years pass. And it can make a big difference
in your benefits formula, too, because that formula
is based on 35 years. Whether you have 35 years or
not, they will use 35 years. So if you have 30
years of earnings, they're going to have
five years of zeros. OK. That's a really important point. It is. And those zeros bring an
average down substantially. So make sure to get in
there and figure out what your earning statement
looks like every year. It's usually updated for the
prior year by mid next year. So by mid-2019, we should
be able to see your 2018 earnings at least by then. Some of them are
already updated. But that's probably the most
important step you could take. And then the YouTube
channel that we have-- you could find a
wealth of information there on the earnings limit
and on Social Security taxation, which by
the way, Danielle, two completely separate issues. The way your benefits
are taxed as income, you know, added to
your income tax, and then the way that
they'll withhold benefits if you make too much-- two separate issues
then people need to understand how those work. And then you can
also find me online at
socialsecurityintelligence.com, which is a website
that we started just to talk about Social Security. Fun stuff. Yeah, really exciting
reading but so important, because it's a place
that you can go. And it's an excellent website. I visited it myself
several times. And so you can kind of
pick and choose the pieces that you need. But a lot of different
topics covered there. And another thing that also,
folks, that Devin offers is a podcast. So tell us a little bit about
that, because I really enjoyed listening to your podcast. I'm sort of a podcast junkie. I have all my
marketing podcasts, and then I have my money nerd
podcasts, which includes you. And on my way home
from work, I've got the true crime ones for fun. So talk to us about the Big
Picture Retirement show. Yeah, so Big Picture
Retirement podcast-- we've been recording these
for a couple of years now. But it's myself and a
co-host on this, John Ross. And John is an
elder law attorney-- former accountant, now
elder law attorney. And the perspective
that the two of us bring from a financial planner,
to the accounting side, to the legal side, we
kind of bring all of that in and talk about that
big picture of retirement. So we certainly get into a lot
more in the podcast than just Social Security there, too. I reserve some of
the other channels to talk about Social Security. But there, we talk
about how to take that big view of
retirement and make sure that you're covering all of
the areas that you should. Yeah, and I like
that the perspective that he's able to bring in. Because from the whole estate
planning, elder law type side-- the things that you also
might think about as people get older, and they might
need long term care. And there's a whole
other aspect of things that retirement touches on. And he's kind of able to
bring that conversation in, where a lot of times-- with Medicare stuff,
I'm just telling people the bad news, which
is, you're going to pay for your own long term care. Well then, having
him on your show, there's ideas that he can
bring about what people can do when they're
facing that situation, and so many other
things that just gives a different perspective to
the whole Social Security retirement angle. Yeah. Yeah, without a doubt. It is an interesting
partnership, for sure. And we've had a blast
recording the podcast. We release an episode
every other Monday. And you can find that on iTunes,
Google Play, or anywhere else you like to listen
to your podcasts. Awesome. Well, thanks so much
for joining us today. And folks, I really
recommend checking out all of Devin's information as
we have hot Social Security questions upon us. Hopefully, Devin, I
can call on you again to enlighten us every
now and then here on our YouTube channel. Please do. So there you have it, folks. Some easy, great
info from Devin, who is truly the most
knowledgeable person that I know when it
comes to Social Security. I encourage you to check out
his channel here on YouTube and subscribe so that
you can get notifications whenever he posts a new video. Hope you enjoyed this episode. There will be more
like this to come. Thanks for watching, and we'll
see you in the next video.
