08/9/16

A Quarter Of Recent Retirees Would Delay Social Security If They Had a Do-Over

By Rodney Brooks, July 4, 2016, Washington Post

I seldom write about Social Security without a huge response from readers. That’s not a bad thing. It seems that just about everyone has an opinion about Social Security – especially when it comes to the decision on when to take it.

Many financial advisers recommend that people wait until 70, very few do. In fact, most people don’t even wait until full retirement age, and end up taking it as soon as they are eligible – at 62. Well, a new survey says that, given the chance, a quarter of Social Security recipients would take it later than they did. But that also means that most would not change their decision – for a variety of reasons.

The third annual “Nationwide Retirement Institute” survey of nearly 1,000 people 50 or older, approaching retirement or retired, found that 23 percent would change when they started drawing Social Security to a later age. And 24 percent of recent retirees said their benefits were less than expected.

Of those who said they would not change when they started receiving benefits, 39 percent said they were forced to start drawing benefits by a life event. Thirty-seven percent of current retirees said health problems keep them from living the retirement they expected. And 80 percent of recent retirees say those health problems came earlier than expected. In fact, health care expenses keep one in four current retirees from living the retirement they expected.

Other highlights:

People are waiting longer to take their benefits. In 2016 the average age that men began receiving Social Security is lower than it was in 2014 (60.5 vs. 62.3).

Those who have yet to collect expect to start at age 66 on average, compared to age 62 for recent retirees.

Of future retirees who plan to draw Social Security, only 29 percent plan to draw these benefits early.

The majority of retirees would not change the age they started drawing Social Security. Seventy-seven percent of people who had been retired for 10 or more years say they would not change the age, and 69 percent of recent retirees say they would make the same decision.

Of the people who would not change their decision on when they took benefits, the reasons varied:

They retired earlier than planned (24 percent of recent retirees, 27 percent of people retired for 10+years)

They needed the money (19 percent of recent retirees, 27 percent of 10+)

Forced to by health problems (19 percent recent, 20 percent 10+)

They didn’t think they would live long enough to optimize benefits (12 percent recent, 16 percent 10+)

To Your Successful Retirement!

Michael Ginsberg, JD, CFP® 

08/1/16

Four Ways To Bust Elder Financial Fraud

By John Wasik, July 4, 2016, Forbes

It’s not hard to sniff out how swindlers prey upon the elderly. They know they respond to mail, phone and front-door solicitations. Older people like to talk to people they don’t know. Holidays are a good time to talk about scam merchants. Families get together and it’s easier to talk about money stuff over beer and bbq.

Swindlers prey upon fear and insecurity. They blanket a neighborhood after a storm, offering to do “free storm damage asssessment.” They’ll pose as IRS agents or bill collectors to collect fake debts. There’s an art to elder financial fraud and it’s practiced every day. If you know the danger signals, you can ward off these scamsters.

The most basic defense is a recognition that when people get into their eighth decades and beyond, they process information differently. While they may have perfect memories of something that happened 60 years ago, it’s difficult for them to make complex decisions, including financial ones. This cognitive decline in “executive function” has been noted by neuro-scientists. The part of the brain responsible for decision making doesn’t work as well as it did 30 years ago. It’s a natural consequence of aging.

“While there are some ‘super agers’ in the population (individuals in their 80′s and beyond who function at much younger intellectual levels),” reports the SIFMA Senior Investor Protection Quarterly, “the vast majority of adults will experience at least some isolated cognitive decline associated with typical brain aging as they progress through their sixth, seventh, and eighth decades (or beyond). Cognitive change in older adults is uneven and dependent on many factors, including educational background, overall intellectual capacity, health conditions, and lifestyle habits.”

 To Your Successful Retirement!

Michael Ginsberg, JD, CFP®