A New Beginning

The last few months have been an adventure here at the Korn household. With moving, a graduation party, and working on a house our daughter is going to live in, there has not been much time to relax. However, the biggest news is that we decided to start our own firm, K Financial LLC. Therefore, in this week’s email, I want to take some time to discuss why we felt that this was not only the best decision for our family, but for your family as well. From the beginning, working with clients like yourself, I have discovered that if I focus only on doing the best for my clients, that things will work out for everyone. What I mean by that, is that there is a lot of pressure in the insurance industry, to sell. From monthly sales meetings, to competitions with incentives, to yearly trip offerings for production, some people lose sight of the real goal—you. If they become too focused on the wrong things, they can stop looking out for their clients and simply focus on making that sale. When Jill and I started talking about moving, it just made sense for us to also look at having our own firm, here in our new community. The more we chatted, the more excited we got about the opportunity, and the more we discovered that it was definitely the right choice. I spend a ton of time thinking about what I do and how to best help my clients. Jill can certainly attest to that. What’s great, is that now I have the freedom to structure and implement ideas that I believe will best service my clients, as well as reflect upon what my role is your life. Whether it came from looking at our kids growing up, reflecting on our own lives and our own future, chatting with our parents about theirs, or from the many conversations we have had with clients, like yourself, over the years, it has really helped us to see what we hope to accomplish with our business; helping you to live your best life. To do this we want to build and maintain strong relationships with all of you. Quite honestly, I’ve always felt that my best meetings are the ones in which we talk about what excites you. I love hearing about the RV trips you’re planning, how you finally plan on buying your dream car, a Cobra Roadster, all of the countries that you want to visit, enjoying your grandkid’s activities, woodworking, and each and every one of the other hobbies and goals that you have for yourselves. You guys have amazing plans and I learn so much in those conversations, about what living your best life means. I spend many hours each week, studying all aspects of retirement, so that I can help you have the freedom to go live your best life. Jill has spent over seven years in the industry, understanding and learning all of the operational aspects, through many long calls and conversations, so that she can make sure we are equipped to make decisions that will serve you best. There will be bumps in the road, of course, like any new challenge, but our focus will always be to take care of our clients. We are focused on growing and strengthening relationships, not just making a sale, to grow assets. We recognize, and value the fact that you have chosen to put your trust in us. We will continue to earn that trust over and over again, each and every day. We look forward to continuing to serve you and we want to thank you for the opportunity to be a part of you, living your best life. If you would like to discuss any of this in more detail, please reach out to us. Enjoy the rest of the week. Talk to you soon.– Greg and Jill

What a Year for Social Security

I hope everyone’s AC is pumping out the cool air during these hot summer days! We enjoyed our first 4th of July at our new place. My initial observation is that it is a lot different being outside of a major town. The fireworks shows were plentiful, all around us, and went well into the night. A client of mine told me that he knew where everyone spent their stimulus money – fireworks! 2020 is going to be one of those years that we will remember for a very long time, and it will surely find its place in the history books. It will also have an effect on everyone’s foundation in retirement – Social Security. The pandemic had two major effects on Social Security Income that you should be aware of; the Cost of Living Adjustment (COLA) for 2021 is projected to be close to zero, and it could shave two to four years off the Social Security trust fund. First, of all COLA matters. Social Security is one of the only guaranteed monthly incomes that increases over time. The average monthly Social Security benefit for 2019 was $1,470 a month, or about $17,640 annually. The average historical COLA is around 2.5%. What does this mean in real dollars? That $17,640 (with COLA) grows into $28,905 annually, in 20 years, and $37,001 annually, in 30 years. That amounts to an extra $938 per month and an extra $1,613 per month! When we do not get any COLA, it affects the growth on both individuals receiving SSI, and the growth of everyone else that will receive SSI in the future. That means smaller checks across the board. I always start income planning with a client by figuring out how much Social Security they are going to get, and figuring out when the best time to take it would be, in order to maximize it for their situation. This is, after all, the foundation of your retirement income. For those receiving checks, it does not look like there will be much of a raise until 2022. Now, the other issue that is looming is the Trust Fund running out – currently projected to happen in 2035. This does not mean that you would not get a check; it means that everyone will get around a 21% cut in pay if nothing is done PRIOR to the trust fund running out. That $17,640 I mentioned, shrinks down to $13,582 annually, or $338 less per month! With low interest rates and record high unemployment, that means less going to pay current recipients of checks, therefore more out of the trust fund, causing it to deplete earlier. It could actually move that date up to 2032! You will hear talk about fixing it during this political season, but there has always been political talk about fixing this during an election year. The real question, after all this talk, is this: Does something that is 12-15 years away, put enough pressure on our friends in Washington to do something about it? We can only hope, because it is a lot easier to make changes now, than having to make major ones in six to ten years from now. For these reasons, and many others, it isn’t wise to jump into taking Social Security. Instead, you need to fit it into your overall plan, as it is just one of the many puzzle pieces. This stuff matters when it comes to all of your other sources of income, and it will really matter in 10, 20 or 30 years from now. How Big Will The Raise For Social Security Recipients Be In 2021? Coronavirus Could Shave 2-4 Years Off Social Security Trust Fund: Wharton Formula Folios Latest Blog Back To Baseline Who said having teenage boys is a tough thing? When we moved, it came with the chore of mowing about eight acres, which seems like a daunting task. Not the case if you have a 13-year-old boy that wants to drive anything he can get his hands on! Every day, Austin is either out there in the morning or evening (or both), knocking out a part of those eight acres. He has also discovered that the mower has lights, so darkness has not deterred him one bit. I am not sure if our neighbors have taken to his night mowing, but there is some distance between us, so hopefully they haven’t noticed. I motivate him in any way I can, pointing out that our 78-year-old neighbor keeps his lawn looking nice and cut. Who says competition is a bad thing? I know I only have a few more years until Austin has his license, and I might (will) have to be the one back on the mower, trying to keep up with our neighbor. At least with this heat wave, the grass will not be growing much at all. I guess that means we are going to have to find something else to fill Austin’s time. Do you think he’ll like pulling weeds as much? If there is anything you want to chat about, please reach out, especially if you’re planning on starting Social Security anytime soon. Have wonderful couple of weeks.