On Wednesday, February 22nd at 4 pm, ProVise will host a special one-hour webinar on Social Security for clients and friends. Sandra Risgaard, CFP® will provide information for pre-retirees who are wondering when, where, and how to take Social Security. Sandy will also discuss the importance of watching your income closely to not have a negative impact on your premiums for Medicare.

Register at https://us02web.zoom.us/webinar/register/WN_27SBZdsORjSQfTgmezfMtg and you will receive a confirmation email with a link to join us for the webinar.


Many times, we recommend that our clients wait until age 70 to begin taking Social Security which is the latest age you can take the benefit. Why? Because each year that you delay after full retirement age, your benefit increases by 8%. Recently when some folks have called to begin taking Social Security a few months before starting the benefit, the folks at Social Security are offering up an intriguing option. You can take a lump sum that might approach $25,000 and then begin at age 70. Sounds good until you realize that your monthly benefit will go down and it might only take 7.5 years before you start losing big time. Remember that it isn’t just your lifetime that is important, it is the joint life expectancy of you and your spouse. If both are age 70, the joint life expectancy is about 24 years according to Capital Group. On top of that the “bonus” may increase your tax bracket. Further, it could also make the cost of Medicare Part B increase for a year. Beware of Social Security agents bearing gifts.


Unfortunately, it appears that Congress is going to take us to the brink of economic disaster on raising the debt ceiling. Both sides agree that decreasing the deficit is a good idea, but the Republicans want to do this through cost cutting and the Democrats see an opportunity to raise taxes, especially on the “rich.” But some of the proposals being floated could affect more than just the rich. These ideas have been raised by the Congressional Budget Office (CBO) which is supposed to be bipartisan. We do not know if any of these ideas will be adopted into law, but rumored changes are out there and we are keeping an eye on them.

    • A reduction in federal employee benefits by using a voucher system would save $16-18 billion.
    • There are various proposals for Medicare, including changing the cost-sharing rules (saving $27-$112 billion) and increasing the cost for Part B ($57-$488 billion).
    • Something must give when it comes to Social Security reform. Reducing the Social Security benefits for high-wage earners could save $40 to $180 billion while raising the Full Retirement Age from 67 to 70 might save $121 billion. Further ideas include using a different inflation adjustment formula for Social Security and other mandatory programs ($257 billion in savings), setting Social Security benefits to a flat amount ($270-$593 billion saved), and increasing the amount of wages subject to Social Security payroll tax ($670 billion to $1.2 trillion).
    • Limiting charitable deductions could raise another $257-$272 billion.
    • Reducing or eliminating the tax deductibility of health insurance benefits would raise $500-$893 billion and decreasing the deductible amount to retirement plans provides another $152 billion.
    • New tax revenue could come from a tax on financial transactions ($264 billion).

If all of these were adopted, which will not happen, it would increase revenue/create savings of $2.63 trillion which would not only knock out the deficit but create a surplus of about $1.4 trillion to help reduce the debt. One way or the other, it is the American taxpayer who pays. In the meantime, the circus continues.

12 Federal Budget Cut Ideas That Could Hit Retirement Savers Hard | ThinkAdvisor


You may have heard of the 4% rule in retirement; basically it means that you should be able to safely take out and spend 4% of your retirement portfolio in the first year of retirement, and then increase that dollar amount by the inflation rate for the next 30 years, and you should be able to count on that income no matter what the markets do.

Notice all the ‘shoulds’ here. This ‘rule’ was formulated by a financial planner named Bill Bengen back in the mid-1990s when he became curious about Money Magazine’s advice that retirees could take 10% out of their portfolios each year. At that time, stocks had generated an average 10% return since the mid-1920s. Bengen pulled out his spreadsheet and assumed a $1 million retirement and began taking out ten percent each year starting in 1926—and the portfolio ran out of money during the Great Depression. He iteratively tried a lot of other amounts and formulas and came up with the 4% amount inflated thereafter because that portfolio distribution not only survived the awful markets of the Great Depression, but also the stagflation era that included the 1974 and 1975 stock market downturns.

The reason you can’t sustain the same distribution as the markets is simple: you’re taking money out of the portfolio every year, and in bear markets (particularly severe ones) the portfolio amount is declining by the downturn plus your distribution. The next year you have to pay out a larger percentage of the portfolio, which will generate less return going forward, and you can bet there will be another bear market in there somewhere. Because markets are erratic, you have to reduce what you take out to account for the uncertainty.

The problem with the 4% ‘rule’ is that if you don’t encounter a Great Depression or stagflation, and particularly if you get a nice sequence of market returns in the early years of retirement, it could mean you will end up with a huge pot at the end of retirement—and maybe some regrets that you didn’t spend some of it earlier.

Other issues make a ‘set it and forget it’ policy less-than-ideal. One is that if much of your retirement income comes from Social Security and/or a pension, then you are much less reliant on the markets—and you can probably take out more from the portfolio side of your wealth. If all or the bulk of your income comes from an investment portfolio, then market movements become proportionately more impactful.

And the 4% ‘rule’ doesn’t account for taxes. The most astute retirees have their retirement assets in different tax buckets: a Roth IRA (no taxes on distributions), if possible, given the limitations for high-income individuals, a traditional IRA (full income tax rate on distributions), and a taxable account (not taxed each year on distributions, but only taxed on capital gains when stocks or ETFs are sold for cash flow). At ProVise, we try to control the tax bite by taking a certain amount from each—and by keeping income below certain thresholds, we can potentially reduce Medicare IRMAA surcharges as well.

This suggests that the best approach to determining retirement income is to set a reasonable retirement budget and re-evaluate it every year. If the markets go up, great! You might be able to go on a nice trip. If the markets go down, that’s a year where you can tighten your belt. The key is that you want to remain flexible.

Source: https://www.investopedia.com/terms/f/four-percent-rule.asp


According to a recent IRS memo, a holder of cryptocurrency cannot take a loss deduction for a decline in value. First, cryptocurrency is not an investment (at least not yet), so the capital loss write-off is not available to individuals. Next, even if there is only a very small value still attached to it you can’t take a deductible loss. Lastly, if you try to claim it as an ordinary loss you cannot do that either since the 2017 tax law removed ordinary losses until after 2025.

Source: Kiplinger Tax Letter Vol 98, No 3


Although New England claimed him for most of his career, Tampa Bay had him for three seasons which led to one Super Bowl title, two NFC title games, and two conference championships. It is estimated that throughout his tenure in the NFL he made over $330 million in salary. So, what will he do to keep money flowing in retirement? After all, he lives a pretty big lifestyle. Well, not to worry too much as he has lots of business interests already and there are surely more to follow and perhaps even in the investment world.

As an example, both Steve Young and Joe Montana, two multiple Super Bowl winning quarterbacks, have gotten into the private equity space. Unfortunately for Brady, he was a spokesperson and investor in FTX which blew up late last year and caused significant financial harm to the digital currency space. He has lots of endorsement deals in place and he will be approached by others. Oh yeah, let’s not forget he has a $375 million contract with FOX Sports over ten years. In short, he is well prepared for retirement financially. Just as he went into every game with a plan, he knows the value financial planning brings to an enjoyable retirement.