​I first became familiar with Actor Tom Selleck in one of his early movies “Quigley Down Under” which was and still is ideal, clean family entertainment. Selleck today is a true ‘Blue Blood” police captain representing the Big Apples finest on a top television show and the official pitchman for the top reverse mortgage company in America-American Advisory Group(AAG). Reverse mortgages are not for everyone but continue to grow since their inception in 1961 for one reason: America’s retirement system is broken and needs fixing.
Reverse Mortgage viability and resource is the topic for another blog but they play a vital role in establishing a key fourth leg of a three- legged stool for a stable retirement foundation that is wobblier than ever right now. So, does Social Security and retirement income specialists across America are looking closer at a novel idea whose time has come. They are looking at research done by Yale Professor of Taxation, Anne L. Alstott. In her recently released book “A New Deal for Old Age: Toward a Progressive Retirement”.  I normally cringe at Progressives and count us a Populists but this is a decent read because it starts a dialogue when our nation is $20 trillion in debt and no one wants to talk about the third rail or 800-pound gorilla-Social Security.  Alstott is a progressive in the tradition of Elizabeth Warren or Barrack Obama and makes in her book the following presumptions:

  1. Social Security is a major achievement worth preserving but because more people are living longer and still working so the retirement age must be moved to age 76 for Full Retirement Age(FRA)benefits to kick in. Financial Planners would love this idea as it would lead to a changing dynamic for Social Security and Retirement Income Planning. I would argue that based on the last 2 years of data that longevity risk is overstated as America’s unhealthy lifestyle is beginning to take a toll.

Many Americans now count health costs as a greater risk than living too longer. A solid retirement planner should consider both longevity and healthcare risks and use hybrid financial alternatives to mitigate both risks as a fiduciary like Masterplan Retirement Consultants already does in its comprehensive planning process.

  1. Alstott also contends in her book that Social Security income is skewed towards the upper half of income earners. She maintains that the upper income earners live six years longer and therefore should get less benefits while providing more for the lower wage earners. The idea of means-testing Social Security is a viable one. Right now, workers who choose or must work are being penalized for continuing to work. How much more means -testing needs to take place. My guess is that at some point, Washington’s actuaries and politicians in their infinite wisdom, will tax all earnings for all working Americans. The current tax on the first $128,000 of wages is already the biggest silent tax in U.S. history. A tax on all income has been discussed by 2 of the last 3 administrations. Egalitarianism is a kind word for Socialism and is not working in other countries that have similar demographic headwinds that impact their social nets. As one Canadian financial planner told me one time, let’s see how those other social security nets work if a country like Canada or Sweden were to spend 6% of their GDP on the military like the U.S. Warren Buffet has said he does not want or need my Social Security but getting the masses to give it up is like trying to get Hollywood celebrities on the Queen Elizabeth II and leave America as they keep promising.
  2. Alstott also suggests a more equitable form of spousal benefits. Today’s spousal ability to collect Social Security off a former husband or wife’s benefit, if married within the last ten years, encourages divorce and reminds me of the story in the Gospels about heaven. Jesus was asked by a Pharisee that if a husband died and left a widow to his brother who died and 5 other brothers died subsequently, who would she be married to in heaven? Jesus answered that marriage does not work the same way in heaven as on earth. The greatest gift of Social Security is God’s provision for a Savior, Jesus, but on earth, that wife could have collected Social Security from 7 husbands so something must change with spousal benefits abuse and the faculty to take benefits from multiple spouses. They have begun to change somewhat with last year’s elimination of the popular “file and suspend” provision, but there are still spousal loopholes like the one described above so what is Alstott proposing?

I first became familiar with Actor Tom Selleck in one of his early movies “Quigley Down Under” which was and still is ideal, clean family entertainment. Selleck today is a true ‘Blue Blood” police captain representing the Big Apples finest on a top television show and the official pitchman for the top reverse mortgage company in America-American Advisory Group(AAG). Reverse mortgages are not for everyone but continue to grow since their inception in 1961 for one reason: America’s retirement system is broken and needs fixing.
Reverse Mortgage viability and resources are the topic for another blog but they play a vital role in establishing a key fourth leg of a three-legged stool for a stable retirement income foundation that  wobbles more than ever right now. So, does Social Security and retirement income specialists here in Cobb County and across America are looking closer at a novel idea whose time has come. They are looking at research done by Yale Professor of Taxation, Anne L. Alstott. In her recently released book “A New Deal for Old Age: Toward a Progressive Retirement”.  I normally cringe at Progressives and count us a Populists but this is a decent read because it starts a dialogue when our nation is $20 trillion in debt and no one wants to talk about the third rail or 800-pound gorilla-Social Security.  Alstott is a progressive in the tradition of Elizabeth Warren or Barrack Obama and makes in her book the following presumptions:

  1. Social Security is a major achievement worth preserving but because more people are living longer and still working so the retirement age must be moved to age 76 for Full Retirement Age(FRA)benefits to kick in. Financial Planners would love this idea as it would lead to a changing dynamic for Social Security and Retirement Income Planning. I would argue that based on the last 2 years of data that longevity risk is overstated as America’s unhealthy lifestyle is beginning to take a toll.

Many Americans now count health costs as a greater risk than living too longer. A solid retirement planner should consider both longevity and healthcare risks and use hybrid financial alternatives to mitigate both risks as a fiduciary like Masterplan Retirement Consultants already does in it’s comprehensive planning process.

  1. Alstott also contends in her book that Social Security income is skewed towards the upper half of income earners. She maintains that the upper- income earners live six years longer and therefore should get less benefits while providing more for the lower wage earners. The idea of means-testing Social Security is a viable one. Right now, workers who choose to work or must work are being penalized for continuing to work. How much more means -testing needs to take place. My guess is that at some point, Washington’s actuaries and politicians in their infinite wisdom, will tax all earnings for all working Americans. The current tax on the first $128,000 of wages is already the biggest silent tax in U.S. history. A tax on all income has been discussed by 2 of the last 3 administrations. Egalitarianism is a kind word for Socialism and is not working in other countries that have similar demographic headwinds that impact their social nets. As one Canadian financial planner told me one time, let’s see how those other social security nets work if a country like Canada or Sweden were to spend 6% of their GDP on the military like the U.S. Warren Buffet has said he does not want or need my Social Security but getting the masses to give it up is like trying to get Hollywood celebrities on the Queen Elizabeth II and leave America as they keep promising.
  2. Alstott also suggests a more equitable form of social security spousal benefits. Today’s spousal ability to collect Social Security off a former husband or wife’s benefit, if married within the last ten years, encourages divorce and reminds me of the story in the Gospels about heaven. Jesus was asked by a Pharisee that if a husband died and left a widow to his brother who died and 5 other brothers died subsequently, who would she be married to in heaven? Jesus answered that marriage does not work the same way in heaven as on earth. The greatest gift of real Social Security is God’s provision for a Savior, Jesus, but on earth, that wife could have collected Social Security from 7 husbands so something must change with spousal benefits abuse and the faculty to take benefits from multiple spouses. They have begun to change somewhat with last year’s elimination of the popular “file and suspend” provision, but there are still spousal loopholes like the one described above so what is Alstott proposing?

Here in Atlanta we wish that Tom Brady would not have extended the second half of Super Bowl 51 nor his retirement age. He certainly can come back and haunt another team again next year. In the world of Social Security and Retirement Income Planning, life’s second half, like the first half of the Super Bowl typically does not go as well for the home team with regard to family  health. Therefore, increasing the retirement age to 76, may have a dramatic income on regular working Jane and Joe’s who rely so heavily on the program. If you are uncertain about when to begin taking Social Security, Masterplan Retirement Consultants can help simplify the planning process with a series of local complimentary retirement income workshops in Cobb, Cherokeeand Paulding Counties and a You Tube Educational Series.

Investment advisory services are offered through MasterPlan Retirement Consultants, Inc. doing business as MasterPlan Retirement Consultants. MasterPlan Retirement Consultants is a Registered Investment Advisor in the State of Georgia. Insurance products and services are offered through Fricks and Associates, Inc. doing business as MasterPlan Retirement Consultants. MasterPlan Retirement Consultants, Inc. and Fricks and Associates, Inc. are affiliated companies. All written content is for informational purposes only. Opinions expressed herein are solely those of MasterPlan Retirement Consultants, Inc. and our editorial staff.  All information and ideas should be discussed in detail with your individual adviser prior to implementation.