I had a once-in-a-lifetime experience this month– I got to visit the College Football Hall of Fame in Atlanta - right after spending an extraordinary weekend at the Super Bowl!

Talk about having good friends in high places.  A college buddy works for NFL Films and he generously invited me to attend Super Bowl LIII in Boston, I mean Atlanta, at no cost.  It just seemed like I was in Boston mingling with the half million New England Patriot fans lingering in every direction.

Despite the consensus opinion that the game was a dud, I enjoyed the stout defense, seeing “Gronk” play at a higher level than everyone else on the field and to witness Belichick coach circles around the Rams.  I don’t especially like Belichick, but it’s obvious he’s playing football chess while most other NFL coaches are playing dominoes.

And I found Atlanta as advertised: friendly, sprawling and congested.   Their obvious lack of any metropolitan civil planning is ridiculous; it makes Dallas look organized.

While it is utterly irrational to pay several thousands of dollars for a ticket to a three-hour (non-college) football game, the spectacle of the Super Bowl is something to behold, even bucket-list caliber.  

If pro football is one of your favorite pastimes, consider adding a Super Bowl city visit to your bucket list, just don’t pay to sit in the stands.  We met several people who flew in for the weekend without a ticket just to experience the hype.  I like that plan:  enjoy the pre-game spectacle then find a nice watering hole to watch the game in HD TV with cheaper beer, no bathroom lines and you get to see the commercials.

So thank you Mick for an unforgettable experience, the (remaining) lifetime of payback will be fun.

I made a presentation last week about one of my “high horse” planning subjects, Social Security retirement benefits.  I’m known to often espouse to clients and the unwashed about the importance of Social Security in their retirement plan.  It is a substantial but transparent financial asset on your personal balance sheet that requires planning and forethought.

I beseech most everyone to wait until at least full retirement age to their start Social Security benefits, in many cases waiting to age 70 to max out survivor benefits.

Once you make it to full retirement age, then the optimal Social Security start date gets more personalized based on each individual’s unique situation.

In the presentation, I shared a timely article about the reasons who so many people choose to start their Social Security benefits at age 62 – three out of every four people start early! – the earliest start date.

Aside from serious health issues, the reasons provided for starting early benefits were usual lame ones:  peer pressure, bad advice from their brother-in-law, anxiety about the program going broke, the inability to delay gratification, among other unflattering excuses.

One of the key benefits to the Social Security program is that is works as effective longevity insurance, providing a guaranteed inflation-protected annuity income for your lifetime.  If you start benefits early, your total cash benefits will start to lag your higher full-time benefits once you reach your late 70s and then, should you live to full life expectancy or more, you’ve made a really bad financial bet.

Making matters worse, many of the “early bird” Social Security recipients are ignorant of the work restrictions placed on receiving benefits before their full retirement age.  They get a rude introduction to the rules when their benefits are reduced, even eliminated once the Social Security Administration reviews their tax return data looking for earned income.

Here’s the deal.  If you start Social Security before your full retirement age, which, depending on your date of birth, is between age 66 and 67, your retirement benefit is lowered by an actuarial reduction”, a fancy term for benefit haircut.

Even worse, if you continue to work, either as an employee or self-employed after starting your benefits as age 62, you start to lose benefits for earned income reported above a statutory threshold.  For 2019, for every two dollars you earn above $17,640, you would lose one dollar of benefit.  

There is a small break for working early beneficiaries who are one year or less from their full retirement age – they lose one dollar of benefit for every three dollars of earned income.  Big whoop.

Doing the math, Social Security benefits are eliminated fairly quickly when working while receiving early benefits. 

Note the definition of “earned” income.  It includes wages and salary along with commissions, deferred compensation, bonuses and vacation pay.  It does NOT include pensions, annuities, investment income, interest or government / military retirement benefits.

Also note that all benefit haircuts cease once you reach your full retirement age and you don’t lose any suspended benefits; they get added back to your unrestricted benefit at full retirement age, but are spread out over your remaining life expectancy, which is a real time value penalty.

Another little-known feature of the Social Security program is that you can increase your permanent benefit by working while collecting benefits.  If one of your highest thirty-five years of earned income occurs during your retirement years, you get credit for it in the benefit formula.  For folks who didn’t work during child rearing years and have a number of “0”s on their Social Security work record, working in retirement can be a way to boost your household income.

Lastly, if you are married and not working at age 62, there are some situations in which having the lower earning spouse start his / her own benefit while the primary earning spouse waits, can be a winning combination, just not when work is involved.

Is it clear that we strongly encourage everyone to delay Social Security benefits if they intend to work past age 62?   For most, retirement before Medicare eligibility (age 65) is non-viable anyway because the outrageous cost of individual health insurance.

Sermon over, until next time be well…..Tim