#92 - Bye Bye File and Suspend: What You Need to Know

Hello there and welcome to this show notes page for episode 92 of the Retirement Answer man. I’m Roger Whitney, THE Retirement Answer Man, and on this episode I’m shaking it up a bit; throwing in some new segments that I believe are going to simplify and energize your retirement planning. I’d love to hear your feedback on this episode’s new format, so feel free to shoot me a note or record a message to me at www.RogerWhitney.com/RetirementAnswers. I LOVE to hear from listeners of the show… and if you leave a question or comment that seems particularly helpful to the rest of the listeners, you just may hear yourself “on the air” on an upcoming show. So don’t be shy… let me know what you think!

Are you tired of all the JARGON, yet?

To be topped only by the U.S. Government, the financial planning industry has more than its fair share of jargon and acronyms. Because of that, I’m bringing you my new “Jargon Talk” segment each week to break down the terms you may have heard repeatedly but were too embarrassed to ask, “What in the HECK does that mean?” In today’s segment I’m going to address a phrase that’s gone around a lot over the past 4 to 5 years and that is “interest rate risk.” Do you know what that means? If so, good for you! But do you know what impact it has on your retirement planning and why you should be concerned? I’m going to unpack it on this “Jargon Talk” segment for you, so stick around to listen to the show.

You can optimize your retirement planning by doing a number of smaller, “SMART Sprints.”

You may have heard the acronym S.M.A.R.T. It stands for Specific - Measurable - Actionable - Realistic - and Time-bound. Most of the time people use it in referring to goal setting or planning. Since we’re addressing retirement planning it fits very well. This is yet another new feature I’m bringing to the show starting today because I want to be as much service to you as I possibly can by providing practical things you can put into action right away. Today, on the very first “SMART Sprint” I’m laying down a challenge to you.. something that could save you $5000 in one year’s time and allow you to make serious headway toward your retirement goals. It’s so simple, it makes me hungry… that’s a hint. Listen in to find out what I’m talking about.

More Social Security Changes are coming… and you need to know about this one!

In last week’s show I spoke about the changes that the Budget Reconciliation Act is having on the way you’re able to maximize the use of your Social Security retirement fund. A listener took me to task for only focusing on one aspect of those changes so today I’m bringing you another element of the changes that could have a huge impact on your future plans. You see, in the past you could file for SSI benefits prior to actually retiring so that the non-bread-winning spouse could begin receiving spousal benefits - then you were allowed to suspend your filing. That allowed the spouse to get the benefits and the bread winner to wait before drawing theirs. But the Budget Reconciliation Act is taking that loophole out of the picture. In today’s episode I cover that and outline what it might mean for the way you plan for your retirement. Are you interested? Find out more on this episode.

A listener mentions “Preferred Stocks” as a great strategy his father used in his retirement planning. Is it still as good an option for modern investors?

Once upon a time there was a great benefit to using what is known as “Preferred Stocks” to set yourself up for retirement. But, as is often the case with long-lasting financial instruments, preferred stocks have changed over the years. Nowadays they are so tied to interest rates (for reasons I’ll cover in this episode) that they’re not necessarily the best way to go, especially in an economy like ours where everyone is concerned about interest rates going higher any day. You can listen in as I answer this listener’s question - and you can ask a question of your own so that I can answer it on future episodes. I tell you how on this episode.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

[0:01] Kevin’s retirement announcement!
[0:57] Congratulations to Kevin!
[1:37] How you can leave a message for Roger.
[2:31] A different format today...

JARGON TALK SEGMENT

[3:53] Introduction to the new “Jargon Talk” segment.
[4:32] What is “interest rate risk” and how does it impact the value of your fixed income portfolio?

TODAY’S SMART SPRINT

[6:22] Intro to the “SMART Sprint Segment.”
[7:35] What is a “Smart Sprint” when it comes to retirement planning?
[9:33] Roger’s first “sprint” challenge: Take your lunch to work every day this week.

HOT TOPIC SEGMENT

[11:58] The changes to Social Security law and the “file and suspend” aspect.
[12:53] What is the “File and Suspend” aspect of Social Security law?

PRACTICAL PLANNING SEGMENT

[17:56] Listener Question: How does it work to take out money from my 401K without penalty after I’m 55, but before I retire?
[20:59] Listener Question: Why don’t I hear more advisors talking about “preferred stocks” as a retirement planning option?

THE “BE HAPPY” SEGMENT