Mystery: The Case of the Jumping Social Security Income


Glad you are here and I wanted to try to make this article a little LESS BORING by telling the story of a MYSTERY that needs to be solved.  sherlock-holmes-147255_960_720-pixabay-publicdomain

Do you have a bit of Sherlock Holmes in you? Can you crack this case? 

The taxation of Social Security is a bit of a complicated topic, but the basics are that the IRS has a specific worksheet that you can fill out to figure out the “tax” you will owe on your Social Security.  Part of your Social Security is tax free, but then it can jump up to 50% or 85% taxable depending on other income and various factors.

If you want to learn how to calculate it, then consider getting the “Social Security Taxation Kit” that we offer which explains it all through video and worksheets.

Meanwhile, I wanted to share a SPECIFIC case study that an advisor sent in that shows an interesting “visual” anomaly in the RetirementView program.  NOTE: this not a the real file but a copy and all identifying information has been removed.

So let’s dig in… first look at the main Retirement Income Graph below.  The advisor sent this file in asking “Why does the Social Security jump up by over $4,000 for 2 years and then drop back down? ”  You can see where we point out this anomaly in the following graphic:

2016-04-14 Income GraphIf you are an advanced RetirementView user, think to yourself “Why would this happen?”

To search for clues about this, I flipped to the Spreadsheet to examine the numbers.  If you scroll to the right you will eventually get to the royal blue Social Security columns.  Indeed, we see that there are 2 years where the taxation drops from 85% to 0%.  This causes the amount of income from Social Security to INCREASE.  Notice that’s counterintuitive to think about… taxation DROPS but income INCREASES.  I guess that’s why everyone would like lower taxes (except maybe our government).

Here is a graphic showing the spreadsheet columns that are relevant.  Now this is an internal copy where we have columns for every one of the Social Security taxation lines on the IRS worksheet so we can validate our calculations.

2016-04-14 Spreadsheet

The question is WHY is this happening.  Well first you have to understand the Social Security taxation algorithm which is too much to explain here.  But the revelant key is that Tax Free investment withdrawals from a Roth IRA account, do not get added into the calculation of taxes on Social Security.  So when you withdraw money from your Roth IRA in retirement, it won’t affect your Social Security taxes at all.

Whereas, when you withdraw from Taxable accounts or Tax-Deferred Accounts like Traditional IRAs and 401(K) plans, then that income IS included in the taxation algorithm for Social Security.

The second clue you need to figure this out is to look at the Savings Graph.  When we looked there we see that Taxable investments get depleted right before the anomaly.  At that point the program begins to tap the Tax Free investment bucket to satisfy the target retirement income needs.  When that happens, the taxation on Social Security drops to 0% and thus the income from Social Security increases by over $4,000!

Here is a screenshot of the Savings Graph pointing out the depletion of Taxable:

2016-04-14 Savings Graph

Now go back up and see the original Retirement Income Graph picture… you can see the Social Security jump up for two years.

In Retirement View the order of investment depletion is Taxable, Tax Free, Non-Qualified, then last is Qualified.  So program taps the Taxable until it is gone and then switches to Tax Free.  When it does so, the withdrawals reduce the taxes on Social Security which then increases the net Social Security income after taxes.

And now mystery solved!  You know why this is happening. 

Another retirement planning case closed.  Til next time and Happy Planning!



Effortless Marketing for Financial Advisors

Hey, if you are a financial advisor I highly recommend the book “Effort-Less Marketing” for financial book-effortless-marketing-smadvisors by Steve Moeller.

It has some great foundational chapters that talk about marketing without a bunch of technobabble.  The nuts and bolts of the “5 Steps to a Super Profitable Business and a Wonderful Life”.

I have recommended this book before and even given it away as gifts to clients.

If you’d like to see a MIND MAP of some of the principals in the book, here you go.  I think you can click to make it bigger:

Effortless Marketing for Financial advisors - Mind Map by Tim Turner

Effort Less Marketing Mind Map

Redesigning Your Practices

Stand OutFew situations can zap your enthusiasm like not having enough time in the day for your to-do list. Unless you get control of your schedule, you could burn a lot of energy without getting the results you want.

Performance matters. In 2014, 52 percent of compensation adjustments were based on performance, according to a PayScale study.

Writing in, productivity coach Casey Moore says your daily rhythms should be maintained, like doing projects in the a.m. if you’re an early riser.

Stay on track and build breaks into your day to help your brain refresh.

Tame your in-box. Average office workers spend 2.6 hours a day reading and answering email. Laura Stack author of What to Do When There’s Too Much to Do recommends  setting up sound alerts to define which emails need immediate attention (the boss’s). Using filters in Outlook or Gmail, funnel away messages that are less pressing will help you avoid interruptions and avoid the need to constantly monitor your in-box.

You can multitask if you do it right.  Researchers at Stanford have found that doing two things at once is a brain drain. But Bob Pozen of MIT’s Sloan School of Management says it’s OK to pair the right activities. Physical chores like tidying up while checking voicemail pair well. Or you could listen to a conference call while sorting your email.

Open office chatter can be a productivity killer. You can collectively develop a nonverbal signal (hat, headphone, sign) that discourages interruptions. Then decide what issues are worth the break-in, such as a client problem.

Perseverance – Top Quality of Business Owners

Hello again and Happy New Year!  Wishing you much success in your practice this year.  

It’s time for all of us to revisit our goals both personal and professional.  What goals have you already set for 2016?  I often talk to advisors about their goals for bringing on new clients, growing their practice, having better time management, finally hiring new people, etc.

The trick to setting goals is to be “specific”.  It’s not just about “getting new clients”.  For example, getting more specific…”I want to add 5 new clients each month in 2016 for a total of 60 new clients”.  Then break that goal down into the “how” you are going to make that happen.

Remember that you can’t keep doing the same old thing and expect new and better results (assuming the same old thing isn’t really working).  You have to try new things.  Some will fail miserably.  Some will work great.  Some will fall in between there somewhere.

Did you know that” perseverance” is one of the top qualities of business owners?  Being able to persevere, adjust, change courses, and try new things to reach your goals.

Setting AND revisiting your goals AND working on them all are required to ACHIEVE them.  Let me tell you a story about Torrid.  About 3 years ago I set a goal to redo our website.  It was a bit dated and a little cluttered.  Too much information on the home page.  It was overwhelming for people to look at.  I realized we needed a complete redesign.

In 2013 I investigated our options.  We have our own web developers and thought about just having them do it all, but most of them are better “coders” than “designers”.  And I wanted fresh ideas anyway.   By the end of 2013 I knew we wanted to use WordPress, but that was about it.  I didn’t keep pushing towards the goal hard enough.  I kept procrastinating and putting it off.

In 2014 it was still on the goals list.  The website was still looking bad.  This time I broke it down into steps.  First, I ran a web design contest on  I described what I wanted and let the designers battle it out.  It took way longer than I thought to just pick a winning design and get it tweaked.

Once the winner emerged, they just gave us the photoshop design files.  We then had to convert it to actual HTML and images for the web pages.  That is a bit of a special skill, so we hired a contractor to do that part.  That took a couple of months right there.  By this point we were already into 2015!

I doubled down determined to get this new website done.  I hired another firm that was going to convert it to a WordPress template.  They did that… in about 4 months.  But the navigation wasn’t right.  The images needed all kinds of sprucing.  And on top of that, we still had to set it up on our server AND move over all the content we wanted to still keep.

Still focused, but taking a lot of time, I had to hire yet another firm that would move everything from the development firm to our server.  Now luckily our own people manage our web servers and could set up the site and the WordPress and all that goes with it.  These new guys moved over the template and tweaked it until we liked it, including the navigation.   Then they moved over all of our pages.  It took a lot of work to get that done.

Our new site rolled out in the Fall of 2015, almost 3 years after I first set the goal!  So sometimes we have to “persevere”, but none of it would have happened if we hadn’t set the goal and pursued it relentlessly.

There are many ways to design a website and in retrospect I picked the “custom website” route, which is the longest, hardest, and most expensive route.  Regardless we did finally hit our goal and more importantly learned many lessons on the journey.

On the “success” side of goal setting, if you didn’t see the webinar we had one in December with advisor Bill Schultheis.  His firm Soundmark Financial grew 700% from $80 million to $550 million in AUM over about a 9 year period.  Talk about setting goals and hitting them!  If you haven’t heard his story you can see it at


How to Use Webinars to Grow Your Financial Practice by 700%

OK so that may seem a bit “over the top” but one advisor we work with that uses our RetirementView software AND webinars to do periodic marketing events, grew his practice from $80 million to over $550 million in about 9 years.2014-01-15Tim-Sm-200

You may not get the same results, but you should DEFINITELY consider doing webinars….


2015 Budget Deal KILLS the Social Security Claiming Strategies

Many financial advisors and insurance agents have been going gang busters over seminars about Social Security.

Well that gravy train is now OVERRRR.  Thanks to our wonderful Congress they are calling the “Social Security Claiming Strategies” a loophole that needs to be closed.

And indeed in this disgraceful budget deal they are eliminating the loophole.  That means “claiming strategies” can’t be used in the future.  The final closure age and birthdates may change slightly.


Well you better go back to what has worked for the last 20 years… build their total retirement picture and focus on discussing it with the client.  That’s the 100% best guaranteed way to get their attention, engage them, and get them talking about their situation.  Of course the RetirementView program is the best way to do this….

To read the full story on Investment News, use the link below:

Will a financial advisor’s Client Portals cause SEC fines?

Hey Financial Advisors,

BLOCKBUSTER article… SEC is examining cases in which clients give advisers usernames and passwords to accounts they are not the custodian of… SEC is considering fines due to worry over “Madoff” like situations where the client’s accounts are plundered by the advisor.

Does this mean that client portals and “aggregation” is now a problem that may cause fines from the SEC?

Read this article for yourself and see what your take is on this issue.

Medicare Confusion

I was listening to a local Atlanta show today that stated 70% of Americans don’t understand Medicare.

Then came the nugget of gold: UnitedHealthcare has been working to make all the ins & outs of the program easier to understand.

Maybe you know just the client that could benefit from this easy to comprehend FREE resource.

Check out the “Show Me Guide” from UnitedHealthcare at or by clicking HERE.

October Advisor Newsletter

Check out our Tech Talk Newsletter by clicking below.

You’ll find:

October FA

How Do You Stay Excited About Your Job?

Pre-season football is all about motivation. The second and third-string players might have one shot to prove their worth. If they don’t, the consequences can be ruthless and rapid.

Entrepreneurs might sometimes wish motivation was that simple.

How do you stay engaged when

  • your plays fail,
  • your team is losing, or
  • the game is boring?

Successful business people have their ways of staying alert on the field.

Writing for Fortune, Julie Smolyansky, CEO and president of Lifeway Foods, recommends checking up on competitors to see what others are doing. This review may give you the competitive spark you need to crank up your game.

Lee Polevoi, writing for Intuit, advises business owners to find their original entrepreneurial spark. What was originally the source of your inspiration and vision? Reconnect.

Most writers on motivation talk about goal setting. Write precise goals. Don’t let negative thoughts get in your way. Set future goals now.

Many entrepreneurs had already set a goal when they created the original business plan. If you have one of these plans, it might be time to review it. According to, start-ups are 90 percent likely to survive the first 18 months of business if they’ve written a business plan.

Many things might have changed since your original business plan, but it was once your playbook. Imagine you are a startup trying to outline your vision, attract investors and draw up a new game play for the next year or 10 years. Maybe writing a new business plan today can help you clarify your motivation.

Finally, if you wonder about how your business is really doing, talk to customers. Find out how you have helped them and how you could do better. Then do it.

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