Where to Get Clear Social Security Answers

One of the most confusing topics that I hear about from clients relates to the ins and outs of social security. Look here for some insight into learning some straight forward answers on this topic.

Please recommend a resource that clearly and plainly explains the various options for Social Security benefits. I turned 62 in October 2016.

We receive more questions about Social Security than almost any other topic. And that’s strangely reassuring. It makes me think that people, first, are taking the time to make sense of an all-too-complicated program, and second, are recognizing how large a part these benefits will play in their lives.

If you are entering the Social Security maze, I first would turn to “Social Security Made Simple” by Mike Piper. This relatively short book (109 pages) is the best plain-English guide on the market. Mr. Piper, a certified public accountant who also writes the Oblivious Investor blog, does a great of job of walking readers through the mechanics of the program and explaining how various claiming options work. (Note: The Oblivious blog features several excerpts from the book.)

If you want to cover all the bases, I would combine Mr. Piper’s book with either of the following two books: “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security,” by Laurence J. Kotlikoff, Philip Moeller and Paul Solman ; and “Social Security: The Inside Story,” by Andy Landis. Make sure you get the latest editions of each, which include the big changes in Social Security rules in 2015-2016.

Where Mr. Piper’s book is brief and to the point, the Kotlikoff and Landis books (each more than 300 pages) dive into, and actually make sense of, the maddening minutiae of Social Security. Again, if you pair the Piper book with either of these, you can’t miss.


I am 45 years old, self-employed and in good health. Here’s my asset allocation (all tax-deferred): 40% in domestic stocks and 30% in international stocks (all through exchange-traded funds); 20% in U.S. bonds; and 10% in cash. My question: Is that allocation too simple?

Not at all. But please keep in mind that this question should take a back seat to others.

Simplicity is certainly a virtue when it comes to investing. Your nest egg has four pieces; many people do nicely with just one, a target-date fund. These products, which typically consist of several underlying mutual funds, are designed for people planning to retire at, or near, a specific point in time. Such funds gradually adjust their asset allocation (fewer stocks, more bonds) as the date approaches.

For instance, individuals planning to retire in about 20 years reasonably could invest all their dollars in the Vanguard Target Retirement 2035 fund (VTTHX). This single product consists of four underlying funds: a total U.S. stock-market index fund (currently about 47% of holdings); a total international-stock index fund (32%); a total U.S. bond-market index fund (15%); and a total international-bond index fund (6%).

Simplicity, though, misses the point. It doesn’t matter a great deal if you’re invested in one fund or a dozen. What matters are diversification, risk, fees and constancy.

In other words, are your dollars invested across a range of assets? Are you comfortable with the amount of risk in your portfolio? (Put another way, could you stomach, with your particular asset allocation, a 50% drop in the S&P 500?) Are you keeping investment fees and taxes (when the time comes) as low as possible? And are you sticking with a thought-out plan—or are you forever tweaking your investments and second-guessing yourself?

Again, your portfolio, simplicity-wise, is fine. Although we could debate some of the particulars. For instance, at age 45, you might not need 10% of your holdings in cash. But keep these other issues—asset mix, risk, fees and a stay-the-course attitude—top of mind.


I’m approaching age 65, and I’m confused about when I can sign up for Medicare and when coverage takes effect. Can you explain the rules?

Medicare, for better or worse, has several different enrollment periods. The one tied to a person’s 65th birthday is known as the “initial enrollment period.” At first glance, this particular window gives you lots of time to sign up for benefits. But the date you need to keep in mind is when your coverage actually begins.

In all, the initial enrollment period gives you seven months to join Medicare without penalty: the three months before your birthday month, your birthday month, and the three months after your birthday month. So, let’s say you turn 65 in February 2018. That means you could sign up for Medicare without penalty as early as Nov. 1, 2017, and as late as May 31, 2018. If you miss enrolling during this window, you could face higher premiums—for life—for Medicare Parts B and D.

Again, the key is when coverage actually begins. If you enroll during the three months before your birthday month, your coverage will begin on the first day of your birthday month. In our example, a person with a birthday in February will see coverage begin on Feb. 1 if she or he signs up for Medicare in November, December or January. But if you enroll during your birthday month or later, your coverage could be delayed by as much as three months. (Go to medicare.gov and search for: when will my coverage start, or click here.)

The risk is that you end up with a gap in protection. For instance, if your medical benefits at work end when you hit 65—and if you delay signing up for Medicare until late in your initial seven-month window—you could easily find yourself without health insurance for two or three months.

The lesson is clear, says the aforementioned Mr. Moeller, author of “Get What’s Yours for Medicare”: “Make sure your current health coverage doesn’t end before your Medicare coverage begins.”

Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. His column examines financial issues for those thinking about, planning and living their retirement. Email questions and comments to askencore@wsj.com.

Appeared in the September 5, 2017, print edition as 'Where to Get Clear Answers About Social Security.'

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