“The concept of timing on Social Security is a huge, huge deal. The earlier you apply, the lower your benefits start,” explained Steve Younker of the Miller/Younker Group of Rossford.
With him is RBA President Brenda Schwind, left, and RBA Treasurer Cindi Selz.
‘It’s worth considering a delay’
Social Security options explained
By Beth Church
Social Security benefits may be considered “peanuts,” but retirement planning specialist Steve Younker prefers to describe those funds as “the best kept secret of the government.”
Mr. Younker of the Miller/ Younker Group of Rossford was the guest speaker at the Rossford Business Association monthly luncheon meeting November 27.
He told the RBA members that many might hear the words Social Security, and immediately think, “I’m not that old yet.”
“People are living longer– we’ve got to address that fact,” said Mr. Younker, a partner in their financial planning firm with Ray Miller since 1978.
The average lifespan of Americans has increased in the past several generations, but Mr. Younker noted that “we may be living longer, but not necessarily better.”
The retirement age of 65 originally was established because few people lived much longer.
“Today, it would be 109,” he added.
Once people pass the frequent health crises of their 50s and 60s, statistics show they likely may live for several more decades. For instance, someone who has survived to age 65 will live to an average of 84 years for men, and 86 years for women.
“What if you’re still alive at 84 and out of money?” he asked.
Applying for Social Security once was a “yes or no decision,” based on low, medium or high earnings.
But after studying the issue, Mr. Younker recognized that his wife, a retired public school teacher, could lose a half-million dollars over a lifetime by making a poor choice about applying for Social Security.
He dispelled the common perception “that Social Security is peanuts.”
“It’s real money, and we need to treat it as such,” he said.
For instance, a person with a monthly $2,000 benefit who lives 10 more years will receive $304,256 in lifetime benefits. Living 20 more years totals $673,622, and 30 more years totals $1.16 million.
A popular philosophy has been “apply at 62 to make sure I get my money because the government’s going to go bust.”
And with 30 million Baby Boomers filing for benefits in the next few years, that seems to be sound advice.
However, Mr. Younker often advises against that strategy.
Funds are available for Social Security through 2032, even if Congress takes no action to reform it.
“The government puts no money in Social Security,” he said. “You pay for it as a worker and an employer. Every single penny has been put in.”
The claims that Social Security funds are diminishing come from the federal government’s money mismanagement, he said.
Social Security funds were invested in government bonds, and now are used to pay the interest on those bonds.
“They spent the money and they have to pay the interest on the money they borrowed from us,” he said.
However, he believes politicians often exaggerate the instability of Social Security funds.
“As senior citizens, we expect to have that money– and it’s easier to frighten us,” he said.
Mr. Younker has worked with the Social Security offices in Wood, Sandusky and Erie counties.
He has found the employees helpful, but he cautioned, “Their job isn’t to tell you the best choice for you. Their job is to get you in the system. They’re not financial planners.”
Social Security personnel can estimate individual benefits and tell an individual the amount he or she currently is entitled to receive.
However, they cannot project future benefits through scenario planning, he said. Nor can they help with strategies designed to maximize benefits.
“The concept of timing on Social Security is a huge, huge deal. The earlier you apply, the lower your benefits start.
“If you or your spouse takes it early, you permanently will receive a lower amount the rest of your life, including the cost of living increase,” he explained. “It’s a huge number.
He noted that an individual who waits until age 67, would receive 108 percent of the benefits, with an annual 1.5 percent cost of living increase.
Individuals need to consider factors such as their health, life expectancy, need for income, survivor needs and whether they plan to work when deciding on the time to draw benefits.
Traditionally, financial planners have advised retirees to hold back on spending their 401K, IRA or pension plan funds, and start drawing Social Security.
But that advice is changing, he acknowledged, especially because those other forms of income don’t offer a 2 percent increase each year as Social Security could.
“With bank and CD rates kept artificially low for so long, it’s worth considering the delay on taking Social Security,” he said.
An individual can opt to receive benefits as a worker, a spouse or a survivor, Mr. Younker explained.
This allows options, he explained, such as a husband taking his wife’s spousal benefit and delaying his own benefit so it will continue to grow.
“Usually there’s somewhere between $80,000 and $250,000 in the timing difference,” he added.
This is the first in a series on Social Security. Watch next week’s Record as the series continues to explain Social Security benefits, taxes, employment and more.
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Rossford lies at the heart of the Crossroads of America, an area experiencing tremendous economic growth, located at the crossroads of Interstate 75 and the Ohio Turnpike. The city's population of approximately 6,000 is primarily a mix of descendants of Polish, Czechoslovakian, German and Ukrainian workers who came from Pennsylvania to work at the glass plant, now Pilkington.
Rossford was incorporated as a village in 1939 and as a city in 1971. The City is a municipal corporation which operates under its own charter and is governed by a mayor and seven-member City Council. Rossford is served by full-time police and part-time fire departments, dispatched from the neighboring Village of Walbridge.
The City maintains a Community Recreation Center and three parks, one of which,Veterans Memorial Park, features a seasonal marina along with picnic areas and diamonds and courts for baseball, tennis, basketball and volleyball.
Rossford has three elementary schools, Glenwood, Indian Hills and Eagle Point, a junior high and high school and All Saints parochial school for grades pre-kindergarten through eight.
The city boasts a public library and many service and community organizations such as the Rossford Business Association, Lions Club and Veterans of Foreign Wars. Its Rossford Community Service League sponsors annual activities such as a Valentine's Day Dance, Easter egg hunt, Halloween, Memorial Day parades and their Christmas tree lighting.
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