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#32 - The Essentials of Social Security: An Insider’s Insights to Help You Plan with Confidence

Eric Blake: Welcome to another episode of the Simply Retirement Podcast. I am your host, Eric Blake, practicing retirement planner with over 25 years of experience and the founder of Blake Wealth Management. On this show, our goal is to provide education, resources, and support to empower women to live the retirement you deserve. Whether you're single by choice, divorced, widowed, or simply ready to take control of your financial future, this show is for you. If you want to listen to past episodes, ask a question, or even maybe suggest a topic for the show, you can go to www.thesimplyretirementpodcast.com. We're also available on YouTube at the Simply Retirement Podcast. As a self-proclaimed social security nerd, I am very excited about today's episode. On today's episode, we are going to be joined by a former employee of the Social Security Administration. Nolan Russell spent 25 years on the inside, and I've long said that social security is one of the, maybe the under.

If it's not the most undervalued, it's definitely the most underappreciated source of retirement income. Regardless of the varying opinions about Social Security, for most, it is the one source of lifetime guaranteed income that will go up every year with inflation and the decisions you make on when to start benefits, and more importantly, knowing what benefits you're eligible for is crucial. But one of the challenges can be getting the correct information from our friends at the Social Security Administration, but part of that is making sure you have the right expectations about what information they can provide and what they can't provide. And Nolan has actually written a book specifically on this topic. We're going to be talking to him about that on today's episode. The name of the book is The Essentials of Social Security Insider Insights to Help You Plan with Confidence. So Nolan Russell, welcome to the Simply Retirement Podcast.

Nolan Russell: Thank you, Eric. I really appreciate this. I've been looking forward to this for a long time.

Eric Blake: I have as well, again, you and I have actually had a chance to go back and forth a little bit on some different questions, some things I've come across in our practice on a day-to-day basis. So hopefully we'll touch on a little bit of that. But if you wouldn't mind just give a little bit about your background and also just your insight or your inspiration behind the book itself. What caused you to want to write a book about Social security?

Nolan Russell: Thank you, Eric. Like Eric said, I've been an employee for over 25 years with the Social Security Administration. I started in the field office, I as a claims representative, and then I worked later in a regional office. Then I managed a call center and I concluded my career managing a field office. And so I've been very involved in the day-to-Day operations for several decades. And when I retired just a couple years ago when I retired, all the things that I had said to so many people who had called in who had visited the field office, kept running through my head. And I knew that people were coming to Social Security and they didn't really know, they didn't really plan. They had some idea that they were going to retire at some point, but they were coming into a cold. Some people do, some people plan quite a bit.

Other people come to a cold. And so I took everything that I talked to people about all the different subjects that people encountered that they were surprised by, that they weren't aware of. And I thought, I'm going to make a resource. It'll be my effort to help people plan to help people understand because as people know and as they're made aware of the things that are available to them, it helps them be able to plan. And I know that you do a great job. I I've listened to your material and you do a great job. Along those same lines,

Eric Blake: What I thought I would share just a quick story because I think this really leads us into the value of your book and the value of the insight that I think you can provide today. And you and I actually traded emails on this particular case. I won't go specific names or anything like that, but this is a lady that is going through our initial process, our Simply Retirement process as we speak. We've got our second meeting coming up probably here in the next couple of weeks. But during that first meeting, we had a conversation about her situation and she falls right in as far as who we really focus on, women who have unfortunately lost a spouse at some point, whether it's divorce or widowed. She was widowed a few years ago and one of her big questions is, what do I do about social security?

She's going to be eligible for her own benefit, but she's also going to be eligible for a survivor benefit. And we'd actually originally spoken a few years ago and I said, Hey, we probably need to get some updated numbers. Let's make sure we have the right numbers so we're not making false assumptions. We can really put together a good plan for you. So I said, well, let's do this. I'm going to email you with a phone number that you need to call to get an updated estimate on the survivor benefit. So I emailed that to her and she calls and she gets somebody and the person says, she says, oh, I need to get an updated survivor estimate. And they said, well, your husband's deceased so I can't give you that information. And she said, well, I need to get that information doing some planning.

But she kept, and the associate kept saying, well, he's deceased. I can't do this. So she got to a point where she said, I don't need you to remind me that he's deceased. I just need to figure out how do I get this estimate. And this was the phone number, this is the page on the social security website that says, call this number to get a survivor benefit estimate. So she got her own estimate, she got that updated. She said, okay, I'm going to call back. I'm going to try to talk to somebody else. She calls back, she ends up actually getting an appointment set, which a lot of times that's the recommendation is if you can't get the right answer or maybe call back and schedule a time that with somebody that can get you the answer. So she does that and in this case, she actually gets the information she needs.

But the associate, and I know you and I have talked about this, that they're not really supposed to provide recommendations and we'll get into that here in just a little bit. But she actually put in a note to me that the recommendation of the associate was that she should start her survivor benefit in January, 2025 if she decides to retire. But in reality, that's not going to be the optimal option. And this is potentially, maybe this could cost her, if I do the analysis based on life expectancy, this could potentially cost her about 60 grand. She just lives to an average life expectancy because what most likely I will propose is that she starts her own benefit first so that then her survivor benefit grows to the maximum amount at full retirement age. But he gave her, and this was her words, he gave her the recommendation that she should start her survivor benefit.

And the reason for that is she should start it in January, 2025 because she's going to lose most of it because she's working, she's going to lose it because of the earnings test, which is also not correct. So I don't want to it to harp on it too much, but that's kind the challenge that is having done this for 25 years, that's just one example, A recent example of, Hey, we don't always get the information we're looking for from the Social Security Administration, so how can we go into these conversations with the best information to make sure we're getting the information that we need? And I think that's really where, I actually haven't read your book. One of the things you talk about is the challenges is staffing. That's one of the challenges that people run into is how things are staffed. Can you just talk there? Let's start there. Can you discuss some of the current challenges that staffing presents with our friends at Social Security Administration?

Nolan Russell: Sure. As I outlined in my book, I would say the last 2020 years has been quite a bit of a change. Social Security went through a big retirement wave, just like we had the silver tsunami, which I'm not up to date with all the genealogical studies and everything like that. We might still be on the downside of that, I don't know. But I just know on social security that they had a huge retirement wave. Well, that coincided with a lot more people coming into social security. And I give some information in my book how the retirees went up by 20 million in the 20 year time period. And social security staffing has remained level or dropped. Not only that, but they've lost a lot of seasoned people. When I was with the agency 20 years ago, there were quite a bit of people who had 20, 30 or more years of experience working for the agency.

Now those people have all gone. And so the agency hasn't been able to replace those people. And it's been hard because the agency budgets for staffing pays for brick and mortar, it pays for guard service, it pays for pens and paper, things like that pays for systems. But one of the big things that's discretionary is the number of people in the offices, the number of people doing the work. And so it's been hard. The agency has tried to invest in technology and there's some very good technologies that are available, particularly my social security that is a great resource and I want to plug that in. If you should go and create an account before you need it, have that login information to be able to have that available. Sometimes people run into some trouble getting validated and set up in that, so get that in advance. But with the technology, it hasn't been quite the boon that it was expected to be because every application, even if you go online to do it, there's going to be somebody reviewing it behind the scenes. There's no automated application, no purely automated application. You still have to have somebody look at it. There's still a lot of manpower effort that has to go into processing applications, processing everything that you do at the Social Security Administration. And so it's tough. It's a challenge within the agency, the experience level and the staffing level. Absolutely.

Eric Blake: Right. One of the quotes from the book that I found really valuable, and I think again, something that you and I have traded some emails about, and even in the example story I just talked to, social security representatives are not in the position of being an advisor to recommend a particular course of action. Can you talk a little bit more about that, what the expectation should be of going into a phone call or even a meeting with somebody with the Social Security administration?

Nolan Russell: Yeah, I wanted to let people know because sometimes people would come to me and say, well, what do you think I should do? And I really kind of hedged on that every time I ran into that situation. And I state that for people to understand that they should come up with their own plan and they should come up with their own priorities. And this is, I know something that you help people with and that's awesome, and different people do it different ways. Some people go to advisors or they'll, they like to do things on their own. I'm a do it yourselfer, and so I like all the research and other people do not. Absolutely do not like that. But I would say, come with an idea of what you're after. Now, the social security representative may give you some insights, may give you additional information that may or may not apply, but to recommend a course of action.

When I talk to somebody and they say, well, what do you think I should do? I have no idea what their life is like. I don't know what kind of savings they have. I don't know what goals they have in mind. I don't know about, there's a lot that I don't know about. And for me to say, okay, well you should do this. I always really hedged on that and I would caution people, I mean, yeah, take what the representative tells you and take it and consider it, but put that in the bigger plan of what you want to accomplish in retirement.

Eric Blake: What I think that's one of the things that would be helpful is just, and just in your mind, what are the most common types of assistance that they can provide that you should call if you're calling social administration, what types of information would you suggest that they're able to provide?

Nolan Russell: Right. Well, and that's the one thing that's of reality in all this is that in order to get estimates, you have to contact social security. I mean, granted, again, another plug for my social security, the resources that are available there to get estimates on your own benefit and to review your earnings history, that's an automated way that you can go and create an account and get that information. They've improved that quite a bit to where you can adjust the dates and times and have a lot of different, see your retirement estimate from a number of different vantage points. And you can also get spouse estimates, something like that. But in order to get in different situations, getting estimates on auxiliaries or survivor benefits, you have to contact social security and the people who answer the phone at the 800 number or at the local office, they're all equipped to be able to provide those estimates. Now, in your situation, unfortunately, I mean, I don't know the situation with the agent, and unfortunately they weren't able to provide that. It may be that they may not have been comfortable in being able to do those kind of estimates. That may be so, and that's a hard thing for people to be able to navigate through. Like, well, they say I should do this, but I'm not getting it. And I think your client took the right approach, contact back, try and get the information through another resource because it has to come from social security.

Nolan Russell: Yes, a widow who contacts them should be able to get an estimate and get an idea of what they're due coming up. That's the one thing that people need to go through the agency in order to get. There's other information about timeframes with Medicare, different filing options when they can file for retirement or auxiliaries. So a lot of general information, but the most specific information like estimates, yeah, that absolutely requires a contact Social Security Administration.

Eric Blake: Could you just touch on, you mentioned you refer to one word in there that I'm not sure if everybody would understand, and I know there's a couple of other examples we might touch on as well that you outlined in your book, and that's some of the terminology that you might be familiar with that the Social Security administration staff might be familiar with, but the public might not be. So you refer to auxiliary benefits, for example. Can you kind of talk about what auxiliary benefits are? Maybe a couple of examples of that just so people can understand what that refers to.

Nolan Russell: Right. Terminology means that the number holder is the person who works and earns and pays the social security. So I work a job, I work several jobs. I pay the FICA withholding from the taxes. And so those earnings are work that I've done, and I'm the number holder. My record is my earnings over my lifetime. So my wife, she, when it comes to what she's due off of my earnings, we are married and that can be established and she's an auxiliary. So when it comes time for her to retire, then she can file as a spouse, as my spouse, and that she can be due a benefit as my spouse. Now, other auxiliaries include minor children, disabled adult children as well. And so those are auxiliaries. So long as I'm alive, the beneficiaries who can draw on my record are auxiliaries. Now also, I don't know if you're going to ask about this, but I'm going to leap to this, is there's also survivor. Now in the event of my death as the number holder when I die, the people who can draw on my record, which would be former spouses if I had them, current spouses, children, those are all survivors. And so that's the difference between an auxiliary survivor is basically whether or not the number holder is alive.

Eric Blake: Got it. Fair enough. So auxiliary basically, if I'm understanding, just to make sure it's clear, auxiliary is going to be your eligibility to receive a benefit based on somebody else's record.

Nolan Russell: Right. Fair enough.

Eric Blake: One of the other things I think that would be helpful is just understanding what information can they not provide in our situation with when we work with women who are going into retirement on their own, it's not always from being widowed. In many cases it's being divorced. We know the great divorce numbers are going up. So many cases, it's a situation where they've gone through divorce, but the ex-spouse is still alive. Can they get an estimate of their spousal benefits? In that situation?

Nolan Russell: Yes, they could get an estimate of a prior spouse. And then that's one of the things that social security is very helpful with is being able to take your life circumstances and compare the entitlement options that are available. So for instance, if I had been married a couple of different times, okay, do each of those marriages meet the qualifications to be entitled? If it's a former marriage, was I married for at least 10 years if I'm currently married? Okay, well, I'm not eligible to file on a prior marriage except in certain circumstances, the entitlement issue is a very complicated one, and you can get into a lot of what ifs and hypotheticals that get really confusing. A lot of times it's better to have the information, let the representative go through either that or if it's general enough in you're talking with a financial planner like you who knows a lot of these entitlement scenarios to go through that and say, okay, well be able to file, you would be entitled in this circumstance and that circumstance and this not in another. So to go through those and actually apply the rules to a person's situation.

Eric Blake: So let's talk about that a little bit. I think that's something that could be really helpful as well, is you have somebody individual, whatever the case might be, they're working with a financial planner or not. What information would you suggest that that person have available before making the call?

Nolan Russell: Yes, that's, that's a great question because when someone contacts social Security regarding an ex-spouse, we have to know who that person is. What's most helpful is if the potential auxiliary or survivor has the number holder social security number and has that available, that way they can provide that to the representative. They can look it up. Now, the representative cannot provide information about the number holder because that's the number holder's information, but at least they can get, okay, well, what would I be entitled to? What sort of benefit would I be able to get? What estimate would that be? And if the potential auxiliary or survivor doesn't have that information, at least having a name, date of birth would supply enough information to where the representative can look it up and find out, be able to access the record and provide an estimate. Now, again, it's just limited to providing information on the estimate, not any other information regarding the number.

Eric Blake: Got it. And there's another quote that I found really valuable as well, and you've already touched on it once, but I think just coming back to that and just going through a little bit more detail, but it says, and this is specifically, you said, I gave the best help to those with a vision of retirement already. So what tips, advice do you have that can help people ensure that they get the interactions with Social Security folks are as productive as possible? Is there anything else you would add to that, I guess?

Nolan Russell: Yeah, and one of the hardest things that I had when people would contact and say, oh, when's the best time to retire? I would like, well, it's when you want to. There's a lot of things that people can do. For instance, I took a retirement from the government. I wanted to be an author, I wanted to write books, and there's a number of other things that I love doing that I want to pursue. And so those kinds of things, it's what it is that you're going to do because met some people, they retire and it's like they step off into a great unknown. And I would say even though I took a retirement, it is been unsettling for me. It's taken me a while for me to gain my footing because I was so used to the routine of going in Monday through Friday, going into work and shifting gears to more of a self-employed structure is much different than the nine to five.

And so whatever you plan you want to have to happen in retirement is as I would say, people would really benefit from considering spending a great deal of time thinking about what that would be. And even if it's to travel or to volunteer or whatever it is that you want to pursue in retirement, I recommend having that. And then also, as you are so helpful with retirement planning is how is the money going to work? How is it that you're going to provide for health insurance? How is it that you're going to provide for your monthly income and how is that compared to what your expenses are? How is it you're going to avoid getting hit with a big huge tax break? And also, how do you plan for the unexpected? We never know, especially as we get on yours, what if our health changes?

What if a divorce happens? What if my spouse dies? What if there's a lot of what ifs? And I would say plan it the best. You can come in with an idea, and especially when it comes to estimates. If you've got an idea I want to see about retiring in 2028 and filing that, then I can go, okay, great. This is what you'd be doing at that time, timeframe, or what if I want to decide between 20, 27, 28, what would that be? And then I could go, okay, yeah, this is what you'd be doing. This is what you want to think about regarding your health insurance. This is what you want to think about regarding if you work or whatever it is that you want to do.

Eric Blake: Well, I think that kind of ties to, I often describe retirement income planning specifically as very much like a puzzle. So if I'm understanding what you're saying, it's you have some of that puzzle put together already, and then contact Social Security Administration to kind of put those final pieces in place, have an idea of what your view is, what your vision of retirement is going to be going into it, rather than, Hey, I'm going to call these people and have them recommend a particular strategy. So go into it and having an idea of what you feel like is appropriate.

Nolan Russell: And I would say too, that preparation, especially about auxiliaries and things like that, one of the big challenges in the agency is always missed entitlements. And a representative goes through the application, and it could be on the representative, it could be on the applicant, is that they miss a connection there about a potential entitlement. And so someone could have filed as an auxiliary versus filing on their own record that can get missed. But if you know in advance, okay, this is what I want, this is what I want to achieve, you're better off working in order to get that.

Eric Blake: So as far as your book goes, I want to make sure we share the details there, but as far as who the book's for, is it for do what yourselfers for everybody, who would you suggest that your book would be most beneficial to you?

Nolan Russell: I would say it's probably good for just about anybody do it yourselfers. Sure. Because sufferers love to get information. They love to dig and love to find out all the love to research. I love to research, but I would say even for people who aren't necessarily in that way, it's a brief book. It's short, but pithy, but it just gives you an overall, the things that you need to consider when you approach retirement, things you need to look out for. There's things that you can miss that will come back and have pretty dramatic effects. And being aware of those is really, really the most important thing. Having awareness and being able to plan around those things so you don't miss something.

Eric Blake: Well, that's really what I think I found, again, being a social security nerd myself, is that I really felt like the book could be utilized by almost anybody. If it's just more, Hey, I need to prepare, how would I best prepare to make a call to get the information that I need? But also you do include some different variables, considerations, people who may be more on the do it yourselfer side of retirement planning, some of the considerations, some of the variables they need to think as far as just planning overall as well. So I think it was, as you said, it's not an extremely long book, but extremely valuable. How can people find the book first?

Nolan Russell: I've got it currently on Amazon, and yes, the title is The Essentials of Social Security Insider Insights to Help You Plan With Confidence. And yes, it's currently available both in paperback and in Kindle formats.

Eric Blake: Perfect. Are there any other resources, any other websites, any social media, anything like that that you'd like to share with the audience?

Nolan Russell: Yes. I've got my LinkedIn page and also, and I brought up that the book is available on Amazon, and that's what I've got currently.

Eric Blake: Perfect. Well, Nolan, thank you so much for joining us today. Please be sure to check out Nolan's book. Again, it's not a long read, but it's got some tremendously valuable information in there. We'll make sure we include a link to the book in the show notes as well as Nolan's LinkedIn page. Thank you so much for our audience for joining us today. Please like, follow and share the show. If you'd like to learn more about our firm, you can visit our website at www.blakewealthmanagement.com.

We will see you again on the next episode of the Simply Retirement Podcast.

In the meantime, please remember that retirement is not the end of the road. It is the start of a new journey.

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