1 00:00:00,470 --> 00:00:06,992 If you and I were talking face to face and I said, have you ever thought about the bridge strategy, what would come to your mind? 2 00:00:07,272 --> 00:00:10,893 San Francisco, Golan Gate Bridge, Brooklyn Bridge? 3 00:00:11,053 --> 00:00:12,193 Are you sure? 4 00:00:12,233 --> 00:00:14,372 Well, that's not what I'm going to talk to you about today. 5 00:00:14,372 --> 00:00:17,815 I'm going to talk about using bridge strategies before you file for social security. 6 00:00:17,815 --> 00:00:19,696 This is Floyd, standby. 7 00:00:19,696 --> 00:00:24,437 You know, many retirees can improve their protection against living longer and expected bridge strategies. 8 00:00:24,437 --> 00:00:25,477 uh, find 9 00:00:25,589 --> 00:00:31,572 Ways to maybe delay claiming social security, not to say that you should, but maybe delay that. 10 00:00:31,572 --> 00:00:39,897 And one option is to spend down the 401k or spend down your TSP While other retirees may purchase income annuities or draw on their inheritances. 11 00:00:39,897 --> 00:00:43,671 The key question here is what's right for you? 12 00:00:43,671 --> 00:00:48,973 Don't let anybody, including myself, listen to this podcast and say, that's exactly what I want to do. 13 00:00:48,973 --> 00:00:54,164 Make sure you're talking to an advisor, making sure you're talking to someone that understands your position. 14 00:00:54,164 --> 00:00:58,404 all right, your financial position to help you make these smart decisions. 15 00:00:58,404 --> 00:01:04,184 Whatever strategy that you think you want to claim, which is fine, but we want to look at maximizing your income. 16 00:01:04,184 --> 00:01:05,544 That's my opinion. 17 00:01:05,544 --> 00:01:19,024 So if you have an income today of $2,200 here in 2025, and you want to maximize that benefit by delaying starting social security at date 70 versus 62 or 65 or 67, that 18 00:01:19,024 --> 00:01:22,228 benefit over time can be substantial. 19 00:01:22,228 --> 00:01:27,828 So we believe that longevity risk for our retirees is really different today than when it was. 20 00:01:27,828 --> 00:01:34,088 I remember when my grandmother passed away at age 65, she had led a long, long, hard life. 21 00:01:34,088 --> 00:01:37,848 And when you hear people dying today at 65, what do you say? 22 00:01:37,848 --> 00:01:39,248 Man, that's awful young. 23 00:01:39,248 --> 00:01:42,068 So rethinking that strategy sometimes. 24 00:01:42,128 --> 00:01:51,348 There was a reel recently on one of the social medias that says when you get ready to retire, take your net worth and divide it by 280 paydays, because that's what you really 25 00:01:51,348 --> 00:01:52,084 have to spend. 26 00:01:52,084 --> 00:01:53,564 Interesting concept. 27 00:01:53,564 --> 00:01:56,884 Math is pretty close, but is that all you want? 28 00:01:56,984 --> 00:02:05,144 So using a bridge strategy could help you adjust to the cost of living, the inflationary trends that take place today. 29 00:02:05,184 --> 00:02:11,604 And the big thing is not allowing someone to say, is the only way to do something. 30 00:02:11,744 --> 00:02:16,344 And many times I get in these arguments when someone turns age 62, I got to have my social security. 31 00:02:16,344 --> 00:02:16,624 Why? 32 00:02:16,624 --> 00:02:17,164 It's mine. 33 00:02:17,164 --> 00:02:18,504 I want my money. 34 00:02:19,004 --> 00:02:20,464 Number two, what's the other reason? 35 00:02:20,464 --> 00:02:21,896 Well, we're afraid it's going to go bankrupt. 36 00:02:21,896 --> 00:02:24,939 Well, that's possible, but what's the definition of bankruptcy? 37 00:02:24,939 --> 00:02:26,350 Inability to pay your bills. 38 00:02:26,350 --> 00:02:27,742 Well, that's social security. 39 00:02:27,742 --> 00:02:28,623 Not quite. 40 00:02:28,623 --> 00:02:31,386 They're going to fix that one-way shape or form, I believe. 41 00:02:31,386 --> 00:02:32,607 That's my opinion. 42 00:02:32,607 --> 00:02:34,439 So making sure we coordinate. 43 00:02:34,439 --> 00:02:36,030 Let it run the numbers. 44 00:02:36,030 --> 00:02:40,114 Just make sure you know exactly how much money you're going to get. 45 00:02:40,114 --> 00:02:45,812 Historically, averagely, on the medium earner, not the high-income earner, not the low-income earner. 46 00:02:45,812 --> 00:02:49,052 Social Security is going to provide about $66,000 a year. 47 00:02:49,052 --> 00:02:52,452 Then it's adjusted for inflation for a number of periods of time. 48 00:02:52,452 --> 00:03:01,432 But we would anticipate that during your working years with inflation, you're going to get an average of about $5,000, $5,019 a month. 49 00:03:01,912 --> 00:03:10,452 Now, assuming the generous target income replacement rate of about 80 % of your income that is needed, and understand something, this is exactly right. 50 00:03:10,452 --> 00:03:15,096 In my 40 some odd years of doing financial planning, I've never had a client say, 51 00:03:15,096 --> 00:03:17,397 I want to take a 40 % reduction to my spending. 52 00:03:17,397 --> 00:03:19,637 They've looked at me said, that's all I'm going to have. 53 00:03:19,637 --> 00:03:24,536 So planning is paramount and social security should be part of that. 54 00:03:24,536 --> 00:03:26,889 40 years ago, we didn't plan on social security. 55 00:03:26,889 --> 00:03:28,660 Didn't think it's going to be around. 56 00:03:28,660 --> 00:03:34,802 Now that I'm drawing social security, now that I'm advising people drawing social security, I'm going to hope it's going to be around. 57 00:03:34,802 --> 00:03:37,162 So I think that's very, very, very important. 58 00:03:37,162 --> 00:03:41,483 So my recommendations is to consider the bridge strategy. 59 00:03:41,483 --> 00:03:43,920 So instead of claiming social security upon retirement, 60 00:03:43,920 --> 00:03:46,300 which would roughly $1,700 a month. 61 00:03:46,300 --> 00:03:53,980 my example here, if you delayed until you reach full retirement age at 67, that would be 2,477 bucks. 62 00:03:53,980 --> 00:03:56,400 Pretty substantial increase. 63 00:03:56,860 --> 00:04:02,580 So looking at funding between 62 and 67 would require roughly $104,000. 64 00:04:02,660 --> 00:04:11,180 And then we draw that down by the taking money out of the TSP, out of the 401k plan at retirement. 65 00:04:11,180 --> 00:04:12,484 The bottom line, 66 00:04:12,484 --> 00:04:16,488 The decision to claim or not claim is basically up to you, all right? 67 00:04:16,488 --> 00:04:21,412 And don't let friends and neighbors and TikTok and so on tell you which one to do. 68 00:04:21,412 --> 00:04:27,037 Find an advisor, sit down with them, make sure they understand what you want and need. 69 00:04:27,037 --> 00:04:29,219 Devise a strategy to help you do that. 70 00:04:29,219 --> 00:04:36,706 And if you're looking for advice, planyourfederalretirement.com, log on and ask to speak to one of our advisors and we'll be happy to go through this basics with you. 71 00:04:36,706 --> 00:04:39,528 This is Floyd, until next time, happy planning. 72 00:04:40,762 --> 00:04:44,054 Thanks for listening to another episode at Plan Your Federal Retirement. 73 00:04:44,054 --> 00:04:49,138 We're on a mission here to help one million federal employees understand their benefits more. 74 00:04:49,138 --> 00:04:58,975 But first, understand that the opinions voiced in Plan Your Federal Retirement are for general information only and are not intended to provide specific advice or 75 00:04:58,975 --> 00:05:01,466 recommendations for any individual. 76 00:05:01,527 --> 00:05:05,009 Past performance is no guarantee of future results. 77 00:05:05,029 --> 00:05:09,762 All indices are unmanaged and may not be invested into directly. 78 00:05:09,954 --> 00:05:14,865 Investing involves risk, including possible loss of principal. 79 00:05:14,865 --> 00:05:18,866 No strategy assures success or protects against loss. 80 00:05:18,887 --> 00:05:26,169 To determine what may be appropriate for you, consult with your attorney, accountant, financial, or tax advisor prior to investing. 81 00:05:26,189 --> 00:05:31,730 Guests on Plan Your Federal Retirement are not affiliated with CWMLLC. 82 00:05:31,730 --> 00:05:37,250 Investment advisory services offered through CWMLLC m 83 00:05:37,250 --> 00:05:40,573 and SEC Registered Investment Advisor. 84 00:05:40,573 --> 00:05:43,020 Until next time, happy planning.