Social Security Bankruptcy Insurance, Ep # 161
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Are you worried about the seemingly constant news stories which claim that Social Security may run out of money? These articles highlight any problems that the Social Security program is facing which can lead the reader to fret about the future of the guaranteed income source in retirement. Not surprisingly, there are companies out there that want to capitalize on this worry.\\xa0
Does Social Security insurance sound like a good idea to you? On this episode of Retirement Starts Today I read from and discuss an article about Social Security Insurance. You\\u2019ll learn what it is and how it works and hear my thoughts about this product.
Outline of This Episode
- [3:22] Make sure there is not a planning solution before rushing out to buy a product
- [6:37] How does Social Security insurance work?
- [9:48] What is my opinion on Social Security insurance
- [12:10] How to begin a migration into bonds
There is a product out there to solve every problem
Investors are always looking for less volatility in their investment portfolios, but oftentimes they don\\u2019t realize that proper investment planning is the best way to achieve that. Those who don\\u2019t approach their portfolios with an investment plan in place are often looking for a product to buy to solve their problems. The low volatility fund is one product for people who want to buy a risk solution rather than plan.\\xa0
Is a low-risk fund all it\\u2019s cracked up to be?
Does this low volatility fund end up raising risk in the short run while at the same time reducing risk in the long run? These low-risk funds often paint a distorted picture. While trying to reduce the downside they ultimately limit the upside which leads to less risk yet ultimately fewer returns. Zweig explains it beautifully, \\u201cthe market loves to make monkeys out of people who think they\\u2019ve solved it.\\u201d
Solve your investing problems with strategy rather than products
It is important to remember that in investing as well as in other areas of retirement planning there will always be someone there to charge you a fee for a product as a solution to your investment planning problem. So before you rush out to buy the first product that comes along, my advice to you is to think about your own behavior first. Consider if there is a planning or behavior management solution that could replace this product.\\xa0
What is a good alternative to Social Security insurance?
If you think that Social Security will run out of money or that you may see your benefits reduced that\\u2019s okay. But instead of rushing out to buy a product to hedge against the Social Security problem, be a prudent pessimist. A prudent pessimist doesn\\u2019t take a cut on their Social Security benefit by filing early, they wait until age 70 to receive a 32% bonus. That way if there is a cut to your benefit, it will be a cut on the bonus rather than on the reduced benefit. Press play to hear more about Social Security insurance, investment planning, and a listener question about how to migrate into the bond market.
Resources & People Mentioned
Connect with Benjamin Brandt
- Get the Retire-Ready Toolkit:http://retirementstartstodayradio.com/
- Follow Ben on Twitter:https://twitter.com/retiremeasap
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