New Savvy Social Security Planning Software Is Now Live

Jun 11, 2024 /

After years of development and months of testing, our new integrated software is now live on this site. Just click on the “Software” tab above.

Key enhancements to the Savvy Social Security Planning software include:

  • Integration of the primary calculators, including Spousal Planning, Divorce Planning, Survivor Planning, and WEP/GPO Planning, into a single unified application
  • Ability to model complex cases involving dependent benefits
  • Greater ease in modeling scenarios for multiple life spans and COLA combinations
  • Expanded support for modeling WEP/GPO in all types of client situations
  • More control over “Suggested Scenarios”
  • Increased capabilities for customizing client reports
  • Educational tips integrated throughout the tool
  • Improved performance and speed
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SSA Now Offers Video Appointments

May 21, 2024 /

In its latest blog post SSA says appointments with representatives can now be done online using Microsoft Teams.

To set up an appointment clients would call the main number, (800) 772-1213, and ask for a video appointment. If the representative determines that a video appointment would be an appropriate option, they will set up the appointment. If not, they will conduct the interview over the phone or schedule a regular in-office appointment.

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Strong Economy, Low Unemployment, and Higher Job and Wage Growth Extend Social Security Trust Funds to 2035

May 6, 2024 /

The Social Security Board of Trustees today released its annual report on the financial status of the health of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to have enough dedicated revenue to pay all scheduled benefits and associated administrative costs until 2035, one year later than projected last year, with 83% of benefits payable at that time.

In the 2024 Annual Report to Congress, the Trustees announced:

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Social Security Eliminates Overpayment Burden for Social Security Beneficiaries

Apr 1, 2024 /

The Social Security Administration has announced it will decrease the default overpayment withholding rate for Social Security beneficiaries to ten percent (or $10, whichever is greater) from 100 percent, significantly reducing financial hardship on people with overpayments.

The change applies to new overpayments. If beneficiaries already have an overpayment with a withholding rate greater than ten percent and would like a lower recovery rate, they should call Social Security at (800) 772-1213 or their local Social Security office to speak with a representative. If a beneficiary requests a rate lower than ten percent, a representative will approve the request if it allows recovery of the overpayment within 60 months—a recent increase to improve how the agency serves its customers from the previous policy of only 36 months. If the beneficiary’s proposed rate would extend recovery of the overpayment beyond 60 months, the Social Security representative will gather income, resource, and expense information from the beneficiary to make a determination.

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The Importance of Life Expectancy in Scenario Planning

Feb 16, 2024 /

A series of articles in ThinkAdvisor has been examining claiming strategies using total lifetime benefits as the measure for optimal claiming. This, of course, is the same principle we use for Savvy Social Security Planning. The software calculates the starting benefit amount for each spouse based on claiming age and adds up all benefits paid over each spouse’s remaining life based on the life expectancies you enter. The scenario that pays the highest total benefits over the couple’s joint life expectancy is deemed the maximum benefit scenario. It’s pure, simple math that provides extremely valuable direction to couples in that it incorporates survivor benefits for the longer-lived spouse, which in turn informs the higher-earning spouse’s claiming age.

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Let the Propaganda Begin

Jan 5, 2024 / 5 Comments

A Marketwatch article, This Will Not Save Social Security, tries to make the point that raising the tax cap will not save Social Security. It reads like an effort to manipulate public opinion.

As discussions ensue about the best way to bring the Social Security system into actuarial balance, the raising of the maximum wage base is emerging as a popular solution. In 2024 wages up to $168,600 are subject to the 12.4% Social Security tax, with the employee and employer each paying half and self-employed individuals paying the full 12.4%. Wages over $168,600 are not taxed and are not counted as earnings for the benefit formula.

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Will Benefits Be Cut in 2034?

Oct 12, 2023 /

As the OASDI Trust Fund exhaust date nears, clients may be worried that their benefits will be cut by 20% in 2034. This comes from the 2023 Trustees Report which expressed the system’s shortfall in a way that could be interpreted as an impending benefit cut.

The trustees’ exact words were: “Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund asset reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 80 percent of scheduled benefits.”

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Just 10% of Non-Retired Americans Will Wait Until 70 to Take Maximum Social Security Benefits

Aug 18, 2023 /

According to the 2023 Schroders US Retirement Survey, only 10% of non-retired Americans say they will wait until 70 to receive their maximum Social Security benefit payments.

Even worse, 40% of non-retired respondents plan to take Social Security between 62 and 65, thus locking in a permanently reduced benefit.

The choice to forgo larger Social Security payments is a deliberate one, as 72% of non-retired investors—and 95% of non-retired ages 60–65—are aware that waiting longer earns higher payments.

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Proposed legislation would apply Social Security tax to all income

Jul 12, 2023 /

Will benefits really fall in 2034? As the projected year of the OASDI Trust Fund exhaustion draws nearer, interest is growing in how this math problem will be solved. For clues to how or when Congress will act, we turn to several recent news items. One is testimony by SSA chief actuary Steven Goss to the Senate Budget Committee. Another is a bill by Sheldon Whitehouse and Brendan Boyle called the “Medicare and Social Security Fair Share Act.” And a third is a revision to John Larson’s “Social Security 2100 Act,” which extends the sunset date of its provisions to 2034 from 2027, extending solvency to 2066.

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‘Broke Generation:’ 64% of Gen Xers have stopped saving for retirement

Jun 16, 2023 /

While their parents belonged to the “Greatest Generation,” Gen X may soon be carving out a reputation as the “Broke Generation.”

A recent survey conducted by Clever Real Estate polled 1,000 Gen Xers born between 1965 and 1980 to find out how they fare when it comes to personal finances and the road to retirement. A staggering 56% of Gen Xers said they have less than $100,000 saved for retirement, and 22% said they have yet to save a single cent.

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General Revenue Transfers to Social Security?

May 3, 2023 /

When Social Security was founded in 1935, the intent was always for it to be self-financing. “With those taxes in there, no damn politician can ever scrap my Social Social Security program” is how FDR put it. And indeed, the system has been able to pay promised benefits from its dedicated revenue sources—payroll taxes, income taxes on benefits, and interest on the securities in the trust fund—without turning to the federal government for additional funds.

The idea of asking Congress for money in the form of general revenue transfers has always been considered a slippery slope to those who want to preserve Social Security. Do it once and it could lead to more dependence on general revenue transfers, which would subject it to the budget process and someday cause some “damn politician” to scrap FDR’s beloved program.

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Social Security Trustees Project Trust Fund Exhaustion in 2034, One Year Earlier Than Last Year

Mar 31, 2023 /

The Social Security Trustees released their annual report earlier than usual this year, on March 31. The report shows little change from recent years. They now project that the combined OASDI Trust Fund will exhaust in 2034, after which payroll taxes will be sufficient to pay 80% of promised benefits.

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Savvy Social Security Calculators Rated #1 in User Satisfaction

Mar 15, 2023 /

The results of the 2023 T3/Inside Information Software Survey are in, and the Horsesmouth Savvy Social Security Planning Calculators received the highest rating in user satisfaction, coming in at 8.70, with the next-closest competitor garnering a score of 8.29.

Since 2008, Horsesmouth has recognized the importance of having a dedicated Social Security planning tool to help clients determine the optimal time to claim benefits. Over the years our calculators have helped thousands of clients maximize their Social Security benefits while helping to shift the general thinking about when to claim. The later-is-usually-better advice targeted to higher-earning spouses can now, thanks to the calculators, be backed up by actual numbers and will result in a generation of widows enjoying higher income in their later years than if those higher-earning spouses had relied on instinct and claimed early.

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There Are Only Two Ways to Fix Social Security: Cut Benefits or Raise Revenues

Mar 3, 2023 / 2 Comments

As Social Security begins to move to the front burner in Washington, it will be important to keep a clear head when reading about possible revisions. No politician wants to be responsible for either cutting benefits or raising taxes, so we are starting to hear about “alternative” solutions, such as raising the full retirement age or revising the benefit formula through “progressive price indexing.” These are presented as a “third way” that cause little or no pain for anyone.

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Bernie Sanders Submits New Social Security Reform Proposal

Feb 15, 2023 / 1 Comments

It’s a refresh of a former proposal Bernie Sanders and Elizabeth Warren submitted a couple of years ago. But it garnered attention this week when the SSA Office of the Chief Actuary published its response to Bernie’s request for an analysis of the proposal’s effect upon the system. According to the projections, Bernie’s plan would restore full solvency to the Social Security system for at least the next 75 years.

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Social Security and Medicare Cuts off the Table

Feb 3, 2023 /

Republicans are backing away from proposals to reduce spending on Social Security and Medicare as they enter talks with Democrats over raising the nation’s borrowing limit, sidelining for now a politically perilous fight over how to best firm up the finances of the popular benefit programs.

House Speaker Kevin McCarthy (R., Calif.) has said he wants to slash federal spending in exchange for voting to raise the debt ceiling, but in recent days he stressed publicly and privately that he isn’t seeking cuts to Social Security and Medicare. Democrats for weeks have pressed Republicans to provide more specifics of what they plan to cut, while warning against entitlement-eligibility changes some GOP lawmakers had sought to tie to a debt-limit deal.

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Put Wife on Payroll?

Jan 12, 2023 /

In financial planning it is common to employ family members for various tax or other benefits. A child who has earned income can contribute to an IRA, for example. So a parent who owns a business may put the child on the payroll in order to make them eligible for IRA contributions.

In Social Security we often talk about putting the wife on the payroll in order to qualify her for Social Security benefits. (Excuse the stereotypical sexist language, but it usually is the husband who runs the business and the wife who has low or no earnings for Social Security.) There’s a whole analysis that goes into this: will paying the wife—and paying SE taxes on her earnings—qualify her for a benefit that is higher than the spousal benefit she would get as a nonworking spouse?

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How Does Local Cost-of-Living Affect Retirement?

Dec 29, 2022 /

Across the country, workers with similar skills earn different compensation to reflect the cost of housing in their local labor market. Yet, Social Security benefits are determined by a national formula that does not take local price levels into account. To the extent that living in an area with a high cost-of-living translates to higher wages, workers in these areas could end up with lower replacement rates than otherwise similar workers in less-expensive areas. If the difference is substantial, workers might respond by saving more, working longer, or retiring to a lower-cost location.

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Post-Election Social Security Cuts Less Likely Now

Nov 14, 2022 /

Prior to the midterm elections, when it was looking like Republicans might take control of both the House and the Senate, attention was focused on comments by Senator Rick Scott (R-FL), Senator Ron Johnson (R-WI), and other influential Republicans who proposed subjecting Social Security and Medicare to a renewal vote every year or every five years in the hope of reducing spending on these now-mandatory government programs. Republicans floated a number of ideas, including raising the full retirement age to 70 and cutting benefits for higher-income retirees. But subjecting Social Security and Medicare to the annual budget process would be a major distortion in how these programs operate, subjecting them to the whims of whoever happens to be in power.

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Social Security announces 8.7% COLA for 2023

Oct 13, 2022 /

The waiting is over. Benefit checks will be going up by 8.7% in January.

The CPI-W, which is the index used to calculate the COLA, rose by 8.5% over the last 12 months to an index level of 291.854 (1982–84 = 100). In calculating the COLA, SSA takes the average of the indexes for July, August, and September (291.901), subtracts the average for the same period last year (268.421) and calculates the percentage gain, which was 8.747%.

SSA made it clear in its press release that it will not be necessary to call SSA: beneficiaries will be notified by mail in early December what their new benefit amount will be. To get the information a bit faster, people can go to their Social Security account and sign up for email or text notifications. They will get an alert when their COLA announcement has been posted as a message to their account.

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