Birmingham, Alabama-based financial guru Jeff Roberts, who was recently named one of the top private wealth advisors in the nation by Barron’s®, came on Yellowhammer Radio to lay out the facts so people can decide for themselves.
The full conversation with Mr. Roberts can be heard on the Yellowhammer Radio podcast or in the video above, and a lightly edited transcript of his interview with Yellowhammer’s Andrea Tice and Scott Chambers can be read below.
Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.
Andrea Tice:
Hey, welcome back into yellowhammer radio. I’m Andrea Tice, sitting across from me Scott Chambers, behind the board Steve West and also on our telephone line a local financial guru Jeff Roberts founder of Jeff Roberts & Associates. His team is comprised of seven seasoned advisors who will share a hundred and twenty-five years of financial planning with Ameriprise also Jeff and his company has been ranked by Barron’s magazine as among the top 1200 financial advising practices in the country and they’ve done it six times.
Scott Chambers:
That’s awesome. Impressive.
Andrea Tice:
Six times. One is enough.
Scott Chambers:
I’ve never been recognized for anything.
Andrea Tice:
So Jeff is a local guy who’s doing big things and his team specializes in working with affluent clients to preserve and grow their wealth. They are the go-to team in town for customized recommendations concerning estate planning, retirement planning and asset management. He’s done a great job in the past couple of weeks helping us with other issues from job selection, career selection to a long-term care. He is with us today. Jeff, are you there?
Jeff Roberts:
I am indeed.
Scott Chambers:
That’s an awesome intro Jeff. You’ve accomplished a lot of things there. I’m sitting here going and I haven’t accomplished anything in my life.
Jeff Roberts:
Thank you. I have an amazing team of people that surround me and I’ve actually always said as an entrepreneur and business owner and anyone that’s in that line of work knows that if you’re good you surround yourself with people that are a heck of a lot smarter than you.
Scott Chambers:
Amen. Amen to that.
Jeff Roberts:
That’s been my objective so you know I jokingly tell people in my staff will probably jump in and agree that if you’re talking to me you’re talking the dumbest guy on the team. I have wonderful, wonderful people no doubt about it.
Scott Chambers:
That certainly sounds like it. What’s on your mind today, Jeff? How can you help the world out today?
Jeff Roberts:
Today we’re going to talk on Social Security.
Scott Chambers:
Oh boy that’s a hot button issue.
Jeff Roberts:
It’s an interesting one. We know that I like to tell you guys I like to talk about things that pop into conversations with clients. You know during the week since we last talked and a couple times Social Security’s come into play and i was going to hit a few highlights. I’m not going to sit here today and make sure everybody understands every nuance of social security because there’s a lot to it.
Scott Chambers:
We don’t have 342 years unfortunately.
Jeff Roberts:
Well, you know it’s been around since nineteen thirty-five and so it’s amazing to go back and look. Back in 1935 to get benefits from Social Security you had to be 65 years of age. Today we can actually start early benefits as early as 52 but what’s interesting about that is when you go back and look at benefits were 65 back then that’s when you could get them but life expectancies back then were nowhere near what they are today. The average life expectancy was around 61 give or take back in that time. So if you think wait a minute if the life expectancy was around 61 and you got social security benefits at the earliest of 65 that doesn’t do all a whole lot of good.
Andrea Tice:
It only help those that are lucky enough to be long livers.
Jeff Roberts:
Believe it or not this information is available on the socialsecurity.gov website. Really it’s an amazing resource and incredible historic information that you can look at even and even some life expectancy stuff or life expectancies today or obviously much older. There’s actually a calculator on their webpage we can put in your date of birth and i’ll tell you what your life expectancy is. I just found out according to them i’m going to live to age 82
Scott Chambers:
I’m gonna have to do mine. I’m scared.
Jeff Roberts:
That’s right. When we bring up Social Security with folks usually people just ask is it going to be there? It’s a common question when clients are looking at doing retirement projecting and we’re trying to figure out should we include the numbers. Of course unless you’ve been living under a rock, people have heard or believe that social security is going to bankrupt and won’t be there when it’s time for you to collect. there could be some truth to that because the Social Security trustees are projecting that the social security trust be depleted around the year 2034. But the good news is that they also say that there should be enough tax revenue coming in to fund about 75 to 80 percent of the projected benefits. So at the end of the day it’s very unlikely, this is just me talking i’m not some politician or lawmaker or Social Security employee or executives that can comment officially but I would guess that most likely politicians are gonna kick the can down the road continuously by one of three different moves. They’ll either start raising the social security tax, so they’ll make you pay more or cause people that make more money to pay more into social security. They will possibly lower benefits or reduce benefits at some point for people maybe a certain income levels or they’ll just push the retirement age out even further and quite frankly I think that probably seems like a smart move because if you go to anybody in their twenties and thirties even forties and say, “hey you think you’re getting Social Security?” What do you think most people are going to say for that age?
Scott Chambers:
My answer’s no.
Jeff Roberts:
The idea would be well let’s tell people in the fifties and sixties your benefits not going to be touched at all and the age you get it is not going to be touched and all. The people in twenties and thirties and forties it’s just index them a little bit further out in age so instead of being able to get benefits as early as age 62 maybe they could get a 68 or 70 because they have longer life expectancies anyways now. I’m not a politician, I’m not running for office but these seem like pretty simple solutions. Likely we will see some of that down the road it will sure up the social security trust.
Andrea Tice:
Jeff, I have a question. What’s the possibility of them doing all three in some level to some degree or another? You have those three options. It seems like they could kind of do all three. Raise the tax?
Jeff Roberts:
They certainly could and I want to say was the Senate Bols Council that was put in place by Obama early in his administration figure out how to get us out of debt crisis and things. And I want to say that that was kind of their whole take with it was you gotta do everything. You can’t just do one and that was to solve a lot of our problems in the United States because you can imagine that’s a very unpopular thing to have to implement all of those changes. But again those are issues at the political level above where we typically deal.
Scott Chambers:
But I fall in that bracket there, Jeff. You just mentioned someone in their thirties, I’m 34 and if you ask me that question that was my honest answer. No I don’t think it’ll be there when I get to that age and I’m not banking on Social Security period. If it’s available think that’s cool.
Jeff Roberts:
The chances are it it would be there just may be taxed more reduced at that time. Another thing to consider is how our social security benefits calculated and this is important for people especially for getting close to retirement. I won’t bore you with a long formula but the most important component of it is to understand that they take the highest 35 years of earned income and they average that and then divide it by a number of years and it’s kind of a formula. But they basically take 35 years that you’ve been contributing in. So if they’re taking 35 years and you worked for 33 years there’s gonna be a couple years where there’s a 0 averaged in and that’s important. So you want to make sure that you’ve got a full 35 years of working history if you in fact want to maximize as much benefit as you possibly can. So that’s a consideration when we’re doing retirement planning with folks to make sure that they get that magical 35 number. Now another important piece along with that and I’ve got several directions will see if we can do them fast today to get our time in but another great point and i encourage people do this is go to socialsecurity.gov and you need to register, sign on, do a password and ID so that you can have access to your social security benefits statement. Remember how you used to get those things in the mail that would show up once a year that would show your history and now you don’t get them anymore?
Andrea Tice:
They were kind of depressing when I looked at them.
Scott Chambers:
They were.
Jeff Roberts:
Yeah well you can actually log on and we encourage clients every single year to log on to check that benefits statement. You can print it out save it save it as a PDF. And it’s a smart move not just because you’re wanting to see what your benefits are but you also want to check the look at your earnings record because they estimate that somewhere in the neighborhood of about three percent of all those records have inaccurate data where maybe somebody fat-fingered a stroke or something like that or something in there wrong. So if you had a hundred thousand dollars earned income but they only showed $10,000 in earned income you want to be able to catch that and adjust it with the social security administration. So a very smart move on an annual basis but in addition to that I mean there’s other things you can do when you log on and establish a password and ID for yourself. Now you can get that personal information that anytime that you want to do on your own benefits. You can actually run various estimates, various ages you can look at the payment information, you can change your address and phone number you can even start and change direct deposit. Now information let me give you a quick example and my colleagues in the office experiences with the family member. They had their social security numbers compromised and went through that whole process of having identification theft that sort of thing, well somebody had taken their social security numbers that had been compromised logged onto social security administration set up a password and ID and were able to change the direct deposit information for the social security checks. If you haven’t set up a password and ID through social security and your social security number is compromised in theory somebody will have access to be able to set up a password and ID for you and redirect your benefits.
Andrea Tice:
Wow, that is scary. You’re totally getting hijacked.
Jeff Roberts:
So anytime you’re losing or have identity theft that’s an issue in itself but one way to share that up is just establish your own password and ID so if your social security information is compromised will be more difficult for people to access your online accounts and change that something. Extremely important to do. Social security does have some great accessible tools they also have some great retirement estimators where you can just projectile Security benefits of various ages those ages make a huge difference because if you start benefits at 62 obviously it’s a lot reduced than your full benefits at say age 66 and every year you delay your benefits into the future it typically goes up about eight percent per year. So you’re getting an eight percent pay raise by delaying your benefit further down the road. We’re just scratching the surface and I know for the sake of time we’ll have to wrap up but there are a million issues to address with social security, there’s a bunch. So it’s a part of a good comprehensive financial plan and retirement plan asking these questions, addressing these is extremely important. One last piece, see you gotta figure out if your social security benefit is going to increase in the future once you start it. A lot of people don’t realize social security actually does go up a little bit every year. If you ask retired people they’d probably tell you “no, it doesn’t go up and hardly ever does it.” It pretty much tracks closely with the Consumer Price Index for the last oh gosh 30 years its averaged about three-point-eight percent per year on average but it’s only gone up about 1.7 percent in the last 10 years. So it does increase a little bit and you get a little pay raise but it’s not tremendous and so that’s important to calculate in your retirement planning too. If we can help look at that JeffRoberts&Associates.com or 313-9150.
Scott Chambers:
I tell you what, Jeff you have you really touched a hot button issue and topic here today because you lit up the phones. We actually have a couple of callers standing by that wanted to ask you some questions but unfortunately I know your your time was short here so unfortunately not going to get to them. You really did you lit up the phone. Some people want to ask you some questions today so get the numbers one more time so they can call you directly your office.
Jeff Roberts:
Sure, it’s area code 205-313-9150.
Scott Chambers:
Very cool. Jeff we appreciate you as always being with us and we look forward to talking to you again next Wednesday.
Jeff Roberts:
Talk to you next week.
Scott Chambers:
Alright Jeff Roberts of Jeff Roberts & Associates what a cool guy right there.
Andrea Tice:
Maybe we’ll continue to talk about social security because it seemed like it was very valuable raising the issue just to do some simple things to avoid identity theft. Let alone plans for the future.
Scott Chambers:
And by the way Jeff was talking about the calculator available on social security’s website. I went there, my estimated age Steve West and Andrea Tice, 82.2 years old how about that my estimated age. They didn’t ask if I smoked or drank or drive fast but they’re just telling me 82.2.
Andrea Tice:
Just base on the timeframe you were born in?
Scott Chambers:
Yeah. 82. I’m 34 years and 7 months old so I’m estimated live another 82.2 years.
Andrea Tice:
I hate to sound negative but to leave it up to the government to totally not factor in a lot of others personal decisions.
Steve West:
You’re 34 now and they estimate you to live another 82? to know
Scott Chambers:
No, they estimate that I’ll live another 47.5 years.
Steve West:
I’m sitting here thinking, wait a minute 34 and 82 is like 115.
Scott Chambers:
Ok I’ll take it. Actually, would you really want to live to 115?
Andrea Tice:
Did they ask you if you live in Chicago?
Scott Chambers:
Your estimated life expectancy is delete, delete, delete, delete you’re dead.
