Another tragedy that I see daily is clients coming in and telling me
that they "need to" or want to retire. I have to tell them that
retirement is not about age or health but about money. I have a lot of
longshoremen from the Baltimore docks as clients.
These longshoremen often make $250,000 dollars a year in salaries from
various transport companies. The longshoreman union in Baltimore is
still strong. Over the years various things have happened to the
retirement trust fund that these longshoreman pay into. These
longshoremen receive about $35,000 in retirement from the union.
Many times the longshoremen just bought a new car and have refinanced
their house with a 30 year mortgage to do those improvements they have always wanted to do, against my advise less than five years prior to coming to
my office to have the retirement conversation. I have to tell them they
cannot afford to retire, because the car payment and the mortgage payment are more than the $30,000 in retirement they are receiving.
It is very important to advise your clients to put money away for retirement. Yet since Social Security is the main income for 70% of retirees, very few people heed this advice. It might make sense to document this advice in order to keep you a bit more safe if clients sue for bad advice.
This situation only gets compounded if your clients are not putting money they could have been putting into social security by playing the FICA tax game in their S corporation. Some clients who do not make much money in their S corporations might be better served by making sure that all of their income is subject to FICA tax. This extra money would enhance the Social Security benefits after retirement and could be well worth the investment.
Knowing the social security limits and computations that feed into the amount that clients will make at retirement would be a good computation to make for your clients. Is anyone aware of any software that can help with this advice? I have been using the Social Security website calculators. Is there a better source for this information. You can also charge your clients for this advice.
As always you can call me at the office 410 747 0396 or home 410 744 9622 (410 744 YMCA the real YMCA number is 410 744 9622 and we do get calls), email me at algiovetti@gmail.com (alfred@giovetti.com if you cannot remember my gmail account), drop by the office at 1615 Frederick Rd, Catonsville, MD 21228 and have a cup of coffee (cup of joe?) or buttonhole me at the next event I attend. I would love to talk with you.