John, so good to see you. Big Social Security news: insolvency now projected for 2032, which means your benefit could be cut by 22%. According to this new trustees' report, ongoing tax revenue will only cover 78% of scheduled benefits after the fund is depleted. So, let's just start with: what does this mean? Because a lot of people then assume that in 2032, they're not going to get a check. But that's not quite it.

Yeah, you can't go straight to doom and gloom and say, "Oh, Social Security's gone, it's insolvent, it's bankrupt." What it means is—Social Security is an annuity; it's based on math and the algorithms and the actuaries within the government. So, what it's going to mean is you're going to be looking at a potential pay cut in 2032. It's not going to just go away, but we're putting money in a bucket of water. The bucket was once full and sturdy, but as time wore on, we started to get cracks, known as our government spending, and we tried to put band-aids on it. We all know that once band-aids get wet, they're worthless. So, these cracks started getting bigger and bigger, and we're having a faucet—when we're talking about people taking out and people putting in—we're having a faucet of water that's not as powerful as it used to be. So, we have a leaking bucket. The bucket's not empty; it just means you're going to have a pay cut. So, you know, the biggest thing is you need to start thinking about this and planning for it before it's too late.

Right, which we will of course talk through. Just again to talk about what we could see cut: the average person is going to see their benefit cut by $500; that's according to the Committee for a Responsible Federal Budget. Does this mean, then, John, that we should claim as soon as we are able at 62?

No, and honestly, Erin, go back to our other videos on Social Security claiming. This does not impact… again, I said Social Security's not going away, it's just going to be reduced. So, you have the option to either reduce on the smaller number or reduce on the bigger number. And the fact of the matter is, Social Security claiming still has to go into a predictable and sustainable income plan. It has to be considerate of your health, of your overall assets, and your tax situation because, yes, Social Security is an integral part of income and tax planning.

So, we've talked through possible solutions as well before. They include increasing the retirement age, decreasing benefits, increasing payroll tax revenue. Which, if any, do you think we'll see, and how will that change retirement income planning?

Yeah, I think we're going to probably see little bits from every piece of that pie you mentioned. Personally, I think the biggest thing that they're going to do is probably increase payroll taxes. I think that is going to be their easiest way not to hurt the Boomer generation. But, you know, we could see cost-of-living adjustments being modified, we could see full retirement age get pushed back even further, perhaps we start to see a 100% bracket where now, you know, once you pass provisional income at a certain percentage, now 100% of your benefit is taxed. And we could see some changes to, you know, benefits for potentially higher-income earners.

Social Security benefits are funded by payroll tax receipts and the trust fund. So, once the fund is tapped, that means that the government will only be able to pay benefits equal to the incoming payroll tax revenue under current law, meaning benefits will face cuts if Congress does nothing—which they're very good at. So, what do we do now to prepare?

Well, you start having conversations and you start looking at how things may shape up. So, you may want to start looking at, well, what would my income look like in 2032 or 2033 when, you know, my Social Security went from, you know, a thousand down to, you know, $700 or whatever the pay cut will be for that person, and you start planning for it. And that means not claiming Social Security early but sitting here saying, "Okay, now how are we going to fill that 22% gap?" And again, that's going to go into income planning as a whole, making sure your supplemental income streams are predictable, sustainable, and have growth potential. And then the other thing is, when we talk about buckets, having that good income bucket but also being very conscientious of your growth bucket because you want your growth bucket to be able to do what it's titled and grow. So, you want to make sure these buckets are perfectly aligned to where your income is not—you're not robbing Peter the income bucket to pay or the growth bucket to pay Paul the income bucket. You want these to be able to really be maximized. And then if 2032 comes and you need that 22%, well now you've had that additional growth and you've also, within that growth, made a very conscientious decision of how you're going to protect that money in the event we have an '07 to '09 market crisis again. You always have to plan for those worst-case scenarios. And I think by maximizing your income streams, looking at taxes because again, taxes erode your everyday paycheck, and how you're going to take that growth and safely grow it to where you can potentially absorb that 22% gap with other funds.

I really like the bucket analogy, John. There are holes in this bucket and we need to have a plan that does not rely on that water, right? We have to start preparing now for that. So again, John, you and I have created so many really wonderful in-depth videos about Social Security claiming strategies, what you give up if you claim early. So just to remind everybody to check out your YouTube page so they can digest all of that on their own time... what's the best way to reach you?

Yeah, you can visit our website, www.gosecurus.com, where you can read a little bit more about us... visit the "Contact Us" tab where you can schedule a 20-minute phone call where we'll answer any general questions you might have... Or you can schedule a vision and clarity consultation, totally complimentary, and we can dig in more to your personalized situation.