Displaying items by tag: social security

The Hands Off Our Social Security Act, introduced in July by Reps. Melanie Stansbury and John Larson, would require congressional approval before the Social Security Administration (SSA) can make changes to benefits or services. The bill aims to protect SSA operations by blocking unauthorized data use, privatization efforts, workforce reductions, and office closures. 

Supporters, including Social Security Works and the National Committee to Preserve Social Security and Medicare, say the bill is a response to Trump-era staffing cuts and service barriers. 

Critics point to Treasury Secretary Scott Bessent’s recent comments about "Trump accounts" as evidence of ongoing privatization attempts, though he later claimed they would supplement—not replace—guaranteed benefits. Policy strategist Greg Valliere says such proposals have little legislative chance but reflect real pressure on both parties to address looming Social Security insolvency. 

Finsum: Keeping your clients abreast of the latest news in retirement, is a good way to build a trusting relationship. 

One of the most important decisions that retirees will make is their Social Security claiming date. It’s only made once, and it will have long-term repercussions. Therefore, it’s crucial to make the best decision. 

There are single-premium, non-variable fixed or indexed annuities that are designed to offer retirees income at one level during the first benefit period and then at a different level during the second benefit period. 

This can help retirees push back their claiming date so that they can receive a higher level of benefits. The initially higher level of income can last up to 8 years. The median premium is $100,000, with an average of $155,000. 

These offerings have been popular with middle-income clients and even some wealthier clients, especially among workers in government jobs who can retire at earlier ages. Additionally, these products are also amenable to investors with less tolerance for risk who value steady income over asset appreciation. One obstacle to greater adoption of these types of annuities is that it’s challenging for advisors and agents to explain the benefits of pushing back the Social Security claiming date. 

Finsum: Annuities can help retirees by pushing back their Social Security claiming date. One annuity product is increasingly popular as it comes with a higher level of income in the upfront years to help bridge the gap.

The U.S. is seeing 30-year records on inflation, and whole generations of American’s have never seen inflation this high. Even worse inflation is even more elevated for healthcare services. Healthcare inflation is expected to be nearly 12% for the next two years according to HealthView Services. This could be a huge hole in retirement savings as a couple of retirees today can expect to spend over $85k on healthcare, those retiring in a decade over $160k and those in the next two decades just shy of $260k. Moreover, social security won’t be enough as the cost of living adjustment doesn’t track healthcare inflation or even standard inflation. Meaning healthcare costs will eat away at most of Social Security.

Finsum: HSAs are more valuable than ever given these ridiculous healthcare inflation costs.

Covid has forever changed lots of industries but one of the most apparent is healthcare. Incidents for the chronic and specifically geriatric population are growing at an alarming rate and will significantly benefit from an increase in at-home care. The current at-home healthcare market is around $3.2 billion but growing at a 13.4% CAGR by projections will move this to a $7 billion industry over the next 4 years. This isn’t limited to just domestic products an aging population is driving rapid growth across Europe and Asia as well.

FINSUM: It makes sense that healthcare will move more at home. Software and digital products will improve the healthcare many in treatment will have access to inside their own home.

There are a record number of people with over a million in the 401(k) accounts which means even more people are considering retirement in the upcoming year. However, there are lots of factors that investors need to consider before even thinking about early retirement. Many consider a $1 million nest egg enough however the 25x rule (retirement is 25 times your annual expenses) might not go far enough. Rising healthcare costs are eating away at existing retirement accounts, and many fail to accurately gauge their retirement healthcare costs. Additionally, rising inflation is eating away at the paper wealth and needs to be a factor in. If you are planning on retiring early you will need a series of tax loopholes to do so without paying high penalties. Finally, an early retirement needs to rebalance their portfolio to a less risky strategy sooner which may leave you with less than you were projecting.

FINSUM: Meet with an accountant or your financial advisors so you can fully gauge how expensive an early retirement could actually cost.