4 Reasons Why We’re Excited that Retire Secure! is Interactive on the Web!

If you haven’t made your way to www.langeretirementbook.com yet, now is the time!

Here at the Lange Financial Group, LLC, we are very excited to bring you an interactive version of Retire Secure! A Guide to Getting the Most Out of What You’ve Got.

Reason #1 – The entire book is on this website. Yes, all 420 pages of the book, including the front and back covers, all about the best strategies for retirement and estate planning.


Reason #2 – The book is divided into chapters for ease of reading. Meaning, you don’t have to flip through 400-some pages to get to Chapter 11 – The Best Ways to Transfer Wealth and Cut Taxes for the Next Generation.


Reason #3 – We honestly haven’t seen anything like this before. Granted, I’ve read magazines on viewers where you can flip the pages as you read. But not a website for a book that includes a viewer, as well as a forum where readers can engage with each other.

The comments are moderated by the Lange Financial Group, LLC staff and myself. One of us will reply to your comment as soon as we can. To leave a comment, all you need to do is connect with your Amazon, Facebook, or LinkedIn account. This measure is for your protection, as well as ours. We don’t want spammers posting comments or incorrect information about such an important topic.


Reason #4 – We are hoping this interactive website encourages you to purchase the book! Retire Secure! is available from Amazon and JamesLange.com. Once you’ve read the book, feel free to return to LangeRetirementBook.com to ask questions, as well as Amazon and Goodreads to review the book for the benefit of others.


Tomorrow’s Radio Show: Supporting the Four Corners of your Financial House

Join us tomorrow evening at 7:05 pm on KQV 1410 AM. Program also streams live at www.kqv.com. Encore presentations air EVERY SUNDAY at 9:05 am.

Most people recognize that proper asset allocation is essential to the long-term financial success of their retirement planning, but too many investors fail to consider all the factors of their situation.

For perspectives on making sure all four corners of your financial house are supported with leading edge solutions, tune in tomorrow evening, Wednesday, June 18th, at 7:05 p.m. when The Lange Money Hour welcomes P.J. DiNuzzo, CPA, PFS®, AIF®, MBA, MSTx back to the show.

A nationally recognized expert in investment management, P.J. has been featured in numerous business publications and TV shows. Approved as one of the first 100 Dimensional Fund Advisors (DFA), he is rated a 5-Star Advisor by Paladin Registry/Investor WatchDog, ranking in the top 1% of America’s more than 800,000 investment advisors. Based in the Pittsburgh area, his firm, DiNuzzo Index Advisors, also consistently ranks among the county’s top 500 investment companies.

Among other topics, Jim and P.J. will discuss are the “Advisor Alpha” and the benefits of “one stop shopping.”

Since tomorrow’s show will be live, you can join the conversation by calling the KQV studios at 412-333-9385 after 7:05 p.m. Email questions in advance by clicking here.

In addition to being broadcast at KQV 1410 AM, the show will be simultaneously live-streamed at www.kqv.com.  KQV will also rebroadcast the show this Sunday, June 22nd, at 9:05 a.m. The audio will also be archived on our web site at www.paytaxeslater.com/radioshow.php, along with a written transcript.

Finally mark your calendar for Wednesday, July 2nd at 7:05 p.m., when Jim will welcome back Larry Kotlikoff, a nationally recognized Social Security expert, to the next new edition of The Lange Money Hour.


Social Security Analyzed – Part 2 of 2

Running the Numbers for a Single Social Security Recipient

To accurately compare the financial benefits of waiting until age 70 to take benefits vs. starting to at age 62, we are going to assume that you will not spend any of your benefits from the time you start collecting until the time you reach age 70. In fact, we are going to assume that you will reinvest all the benefits you’ve received, until age 70. If we don’t make that assumption, it is extremely difficult to make an “apples to apples” comparison.

For our example, we have two single people with identical earnings records. One starts collecting at age 62 and invests all the benefits at 4%. The other one waits until age 70 to begin collecting.

The gold line on the chart on page 3 represents the accumulation over time for the 62-year-old, and the green line represents the accumulation over time for the one who waited until age 70 to begin taking benefits.

If you take benefits at 62, you receive 75% of what you would have received if you waited until age 66, and if you wait until age 70 you will receive 132% of what you would have received had you taken benefits at age 66. By waiting until age 70 you will see a 76% increase in your monthly benefit from what you would have received at age 62.

The math here may not be immediately obvious so, consider an example. If your PIA at 66 is $100, and you decide to begin benefits at age 62 you will get $75. If you wait until 70, you will get $132. The additional amount you would get for waiting is $57 ($132-$75 = $57). The percentage by which you will have increased your benefit is 76% ($57/$75).

The person who waits until age 70 to take Social Security and lives past age 81 will ultimately receive a lot more in benefits than the person who takes the benefit at age 62 (age 81 is roughly the break-even point). That assumes a 4% (after tax) rate of return. If you assume a lower rate of return, the break-even age would be even younger. Now, you might think that age 81 is a long time to wait to break-even, but let’s think about the issues of long-term financial goals and concerns in more detail.

If you don’t absolutely need your Social Security benefits to maintain a reasonable lifestyle, and you anticipate living past age 81 (or even if you only think you only have a reasonable chance of surviving until age 81), here is why you should consider waiting. You may think the conservative thing to do is to take it early because if you don’t survive to age 81 you will “win.” That is the way I used to think about it until I was enlightened.

Larry Kotlikoff, an economist at Boston University, and a guest on The Lange Money Hour, taught me a better way to think about it. “Don’t think like an actuary,” declares Larry, “think like an economist.” You have to think about what you should be afraid of and what you should not be afraid of for financial purposes. For financial purposes, you should not fear an early death. You will be dead, and therefore you will have no more financial problems. What you should be afraid of, though, is living a long time and not having enough income to meet your needs. The big problem you could face is not having enough money to comfortably sustain you over your extended lifetime.

What you are doing when you hold off on taking Social Security is ensuring a greater income into your old age. In our example, if you live to age 95, the difference, in terms of the total amount collected, would be $3,345,019 vs. $2,587,914. That’s more than $750,000 additional dollars in your own pocket. The key concept to understand is this: the longer you live, the bigger the difference in the amount you collect and the greater your financial security if you live a long time.

Let’s face it, if you begin taking benefits at age 62 and you don’t absolutely need them, and you die shortly thereafter…well y ou are dead. No more worries. “But wait,” you say, “what about my spouse who is still alive. I want to take care of him/her too.” Exactly. Remember, in the previous example we are only talking about an individual who is not married. As will be seen, marriage introduces a completely new set of concerns that make waiting longer to collect benefits even more lucrative.

To receive the rest of the chapter, please e-mail us at admin@paytaxeslater.com or call Alice at (412) 521-2732.


Social Security Analyzed – Part 1 of 2

We have been “running the numbers” for Social Security benefit optimization to help clients choose the best strategy. We also analyzed Social Security more deeply that we ever have before in order to write our new book, Retire Secure! for Same-Sex Couples. This post is an adaption of a portion of the chapter on Social Security in the book that is applicable to everyone. If, after reading this excerpt you would like the rest of the chapter, please e-mail or call our office and we would be happy to send you the rest of the chapter. Of course we also offer custom analysis.

There are several sophisticated strategies that can be successfully used to maximize your benefits if you are married. But we find that many clients and readers need to understand some of the basic concepts and strategies before we move to the more sophisticated strategies which are usually possible if you are married.

For now, however, we will forget about the marriage issue. A point of contention regarding Social Security is when to begin receiving benefits: as soon as you are eligible, several years later, or even waiting until you are age 70. Let’s just talk about whether it makes sense, in general, to take Social Security early. For discussion’s sake, let’s assume your attitude is, “Well, gee, I’m retired, I’m 62 years old, I’ve been paying into this system for my whole life, and now it’s time for me to get some money out.” Should you start collecting Social Security benefits at 62?

Comparison of Taking Social Security at Age 62 or Age 70

First, it is important to understand that the dollar amount of your retirement benefit depends upon the age at which you begin to collect it. Let’s assume you were born between 1943 and 1954. Your Full Retirement Age (FRA) is 66. This is set by law. The amount you will get if you begin to collect benefits at age 66 is called your Primary Insurance Amount (PIA). If you begin to collect benefits at a different age, the amount you will receive is a function of your PIA. If you begin early, you obviously start receiving an income earlier, but allowing for interest, etc. (details to follow) you will receive less per month than if you had waited. If you start taking benefits at 62, the earliest age at which you can begin to collect benefits, you will suffer the maximum reduction in benefits. If you begin to collect benefits after full retirement age, you will receive larger benefits. You can get the largest benefit by waiting until age 70. So, the two extremes would be signing up for benefits at age 62, or waiting and taking at age 70. The earlier you collect, the lower your  benefit will be for the rest of your life.

The table on the left shows the percentage of your PIA (the amount you would get at age 66) that you will receive based on the age when you apply. For every year that you wait to collect benefits after Full Retirement Age (FRA) you will earn an extra 8% per year. Please note this table doesn’t include Cost of Living Adjustments (COLA), which in all instances make the advantages of waiting even greater.

Our next post will touch on running the numbers for a single Social Security recipient as well as Social Security breakdown analysis with benefits reinvested at 4%.