How Investment Fees Destroy Retirement Plans

What do you do if you filed for Social Security benefits too early?

In this video I will share with you three things you can do to improve your Social Security benefit, even if you already filed.

1. Stop your benefit and pay back what you received. Now you can only do this in the same year you filed, be advised. Before the 2015 changes you could repay all your benefits, interest free, even if you took those benefits years prior. Those days are over now.

2. Stop your benefits to begin receiving the increases each year you delay taking them up until age 70,

Say you are 64 and started your benefits at 62. Because you took your benefits before your Full Retirement Age of 66, your Social Security payment was reduced by 25% of your Primary Insurance Amount (PIA).

However, if you stop your benefits now, you can still receive increases of 8% each year until you decide to start the benefits up again. No big deal.

Of course, if you do this, you’ll need to ask where the income will come to replace the Social Security benefit you no longer receive. Just keep that in mind.

#3. My favorite strategy is to stop your benefits AND go back to work.
This strategy could double your winnings because the extra year of work may replace a lower earning year in your Averaged Indexed Monthly Earnings (AIME)calculation.

Remember your AIME is based on your top 35 years of earnings. Let’s say you have a couple years in your AIME when you were making 20k as a dishwasher.

Well if you now you get a job selling cellphones or whatever and make 90k in commissions, not only have you lopped that 20k year off your AIME but you’ve replaced it with 90k!

On top of that because you’re no longer receiving benefits you’re taking advantage of the 8% a year increase on your total benefits.

A win/win/win scenario here, if you ask me.

Moral of the story: If you took benefits too early, don’t fret. There are ways you can “fix” what you’ve done and be better off for it.…

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Investment fees are one of the two biggest detriments to successful investing. I discuss this in detail when it comes to using Monte Carlo analysis to determine one’s ability to retire in my podcast here.

In this video though I show you how a portfolio with an all-in fee of .18% has a 95.7% retirement success. Whereas the exact same portfolio with a 1.50% fee has a 74.4% success.

Everything is the same. I use the calculator at if you want to run your own numbers.

The lower cost portfolio not only had a 28% higher success than more expensive one but its average account balance after 30 yrs was over $1 million.

The higher fee portfolio average account balance after 30 yrs was less than $500k.

So, if an advisor were running a monte carlo analysis based on this portfolio and NOT taking into consideration investment fees that advisor would provide a very misleading end-result.

Now, the one drawback of is it does not take TAXES into consideration. So you’ll have to do your homework on that. Taxes are a big deal and should not be overlooked.

However, for what it’s worth offers the best financial planning calculator on the web when it comes to retirement projections.

You can change your scenario a bunch of different ways. Too many ways to get into here.

I can not recommend this tool enough.

As always if you have questions, thoughts or concerns, please let me know.

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