Business Innovators Radio - Interview with Dan Brooks Founder of Xexis Private Wealth Discussing Social Security Claiming Options

Episode Date: October 22, 2023

Dan entered the U.S. Navy’s Nuclear Power program after high school and upon discharge he purchased the family business which he operated for 7 years.After his father’s death, he discovered his father lost a small fortune due to bad advice from a stock broker. Dan decided to enter financial services to find out how this could happen and help others avoid it.In 2004 he completed the Certified Financial Planner coursework and in 2005 opened a Registered Investment Advisor firm.He owns both a Financial Advisor firm and a tax firm based in Lake Mary, Florida. Dan works with a Registered Investment Advisor firm that manages over $3 billion dollars and is one of the fastest-growing firms in the nation.Dan’s specialty is comprehensive retirement planning, including income planning, tax mitigation, catastrophic health care planning, Medicare, Estate Planning, and Generational Wealth.On a personal level, his proudest accomplishment was being a single father to his daughter, who is a Police Officer. He enjoys golf, hiking, traveling, cooking and discovering new restaurants.Learn More:http://www.xexiswealth.com/Investment advisory services offered through Virtue Capital Management, LLC (VCM), a registered investment advisor. VCM and Xexis Private Wealth, LLC are independent of each other. For a complete description of investment risks, fees, and services, review the Virtue Capital Management firm brochure (ADV Part 2A) which is available from your Investment Advisor Representative, or by contacting Virtue Capital Management. Information provided is not intended as tax or legal advice and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-dan-brooks-founder-of-xexis-private-wealth-discussing-social-security-claiming-options

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with this Dan Brooks, who's the founder of Zexis private wealth, and we'll be talking about Social Security claiming options. Dan, welcome back to the program. Thank you, Mike. Good to be here. Hey, so I think that Social Security Claiming Options is pretty much a three-day weekend seminars. So we'll try to hit the high points here and, you know, make sure we bring some of the key things for people to kind of consider.

But when you're working with your audience, your clients, your prospects, where is it that you start? What are some of the key points that you are teaching your audience about on things that they should consider when taking Social Security? Well, there are quite a few. In the first place, I've been teaching Social Security classes at local college here and also some libraries and businesses for many years. So I actually do, you know, adult education, complementary class quite often many times a year. And they're always very well attended because it's a very confusing arena for people, you know, and all of a sudden you have to make these decisions. And it is confusing. You know, if you go to Google, you get some ideas.

If you talk to your coworkers, you get other ideas. you call Social Security, you might be on hold for four hours. So, you know, it's very well attended. And it's got a time limit, which puts additional pressure on people. But the things that I get asked the most at these classes are, Dan, you know, what's the best way to maximize my social security? And that question is a lot more involved than people think, because there's so many different ways you can claim, you know, if you're married. or divorced. So, you know, that's kind of where we start and I kind of layer in a number of other items

that you and I may have time to cover today, maybe not. Yeah, I think that's a key point is just like most things regarding your retirement or wealth building or wealth preservation, there is never a one cookie cutter template that everyone gets and you're like, okay, next, you know, here's your portion. It's going to be different for everyone because everyone's, circumstances are different. So talk a little bit about where you start. If you're talking with someone and they say, oh, I've got questions about Social Security, where do you first start guiding them and asking them questions regarding where they should be a beginning?

Well, I start with giving a little more understanding of how Social Security views things. Social Security has its own language. You know, you never hear the concept of full retirement age until you start talking about Social Security. They have their own way of calculating your income and whether Social Security is going to be taxed. And they have a bunch of rules. You know, if you're a widow, you can't collect until your age 60. And if you're, you know, if you were previously married, there's rules there and you have to be married for a certain amount of time. And you can't be remarried.

So there's a lot of little nuances to Social Security, which is why people really do need help. And the smart ones seek help. You know, the people that come to classes like what I do. So then I explained to them, you know, the earliest age that you can claim and the fact that social security bumps up your income every year that you wait, and that bump up stops at age 70. So from there, we take a look at their individual situation, and there's computer programs available. I've been told that there are over 500 different claiming strategies that a couple can bake.

I know it's not crazy. Only the government can do that. So it's quite complicated, and there's computer programs, and we do use that to help people make that decision. It can show them various options of when they take Social Security. So we start with education like we always do, you know, our E's planning process. The first E is education because we feel that people are smart and if they get solid answers that they can count on, they can make the best decisions for themselves. Yeah, that's huge. And I think that, again, should I take it at 60, 60, 65, 67, question mark, you know, and what are some of the factors that would make

someone go, you know, I know I could start claiming right now, but maybe I'm going to wait a few years, because you mentioned about it increases, and there's a certain percentage that your benefits will increase each year you wait. How does that work? Well, it's an 8% increase each year. And it doesn't, it's not an annual increase. It's a monthly increase that adds up to 8% a year. So just to make them as math simple, 62 is the earliest age. And if your benefit was $1,000 at age 62, it'd be $1,000 and 80 when you're later at age 63 plus any cost of living adjustments. And almost always they have cost of living adjustments. You know, in the last couple of years, they've been huge, over 15% total last two years.

Thank God for those people collecting, you know, with the price of everything. Yeah. With inflation, yeah. Yeah. So the factors, one primary one is life expectancy. And, you know, we can make that, you know, kind of a dramatic example. if you're approaching age 62 the first time, you know, the first age when you can start collecting and you're very unhealthy.

Yeah. You know, you know you're probably not going to live a life expectancy. Well, then that would tend to make you want to take Social Security early. But then you have to balance that against the fact that if you're still working, maybe you have to keep working. They're going to ding your Social Security, you know, at around $20,000. Once you make more than that, they start taking Social Security back from you. So those are all those. iterations and decisions that have to be made.

So people really do need a guide that understands, you know, how that all works because it's totally individualized. You know, what works for you isn't going to work for your neighbor. Yeah, 100%. And I think that being able to look at the big picture is helpful because you might say, oh, you know what, I'm in, you know, as good health as I know right now, you know, wait till the next doctor's appointment. But it's not like I need to claim right this second because I'm in need of something

that way. So let me go ahead and wait, but I think it's like when you play chess and you make a move and you keep your finger on the piece, you look around and go, is this the best move? Is this the best move? Well, if someone is working with a professional like yourself and you're going, okay, well, if this, then that. If you took it now, then here's what would happen. That's right. That's right. It affects all the other financial decisions and things that you have in your life, you know. And that's a good point, Mike, you know, for example, I talk about for sure money and maybe money with Social Security. Yeah. And what I mean by that is if you're waiting to collect, like many people think, well, you know, I'll just wait till the end at age 70 where I'm going to get, I'm going to get more than 100% of my benefit if I wait to age 70. So they think that is maximizing it.

But if they spend their other money in order to live in retirement before age 70, you know, if they're draining a 401k or an IRA or other money that they have, well, that has value as well. You know, in our business, they call it lost opportunity cost. So if you're spending money on one hand while you're waiting to get possible money from Social Security, and it's only possible money because if you die, you don't get it. Yep. If you're taking it before age 70, that's for sure money. If you're waiting until after age 70 or any other age to take it, that's maybe money. You don't know whether you're going to get that or not.

And you may only receive it for a few years. You know, it's not uncommon for people to pass away in their 70s, and they never got nearly what they paid back into Social Security, but they thought they were maximizing it. So those are all of the factors. And again, it's individual and all the other financial things. I call them financial satellites that are going on around people's heads.

You know, IRA's 401Ks, you know, trust wills, all of the investment products they have. Right. You know, they all have to be coordinated. And so Social Security is not as straightforward as just making the Social Security decision. You can make what you think is a very wise maximization choice in Social Security and then find out that, It bumped your income up and now your Medicare premiums doubled and it took back everything you thought you were going to get from Social Security.

Wow. The dominoes start falling. You know, you made a really good point, which is interesting. If you're so zeroed in on maximizing with that 8% and oh, look, if I wait till this age, then my number should be this and I'm going to do that. I'm going to do that. And in order to do that, you have to dip into whatever other account, all of a sudden is that the best move? And it made me think of an example as you were describing that. That's like saying, oh, I noticed that gas is dramatically cheaper, 40 miles down the road. So let me drive down there and get that cheap gas. Well, you just spend a bunch of gas to go down there and get it. You may as well just gone around the corner.

Yeah. You know, like last year I had some new clients come in. And he was 63 and a half, I think, when we met him. And he took his Social Security at age 62. Now, they weren't my clients when he made that decision. It wasn't until a year and a half later that I met them. So we took him through the process, our ease planning process. And they discovered through that process that he really should not have taken Social Security at 62.

In their particular family situation, he would have been better waiting. And he realized that. And he said, what can I do? And I said, well, you're really, your hands are tied now. You know, once you've made that decision, Social Security gives you one get out of jail-free card. if you within a year of starting your claiming, if you change your mind within one year, you can unravel things and go back,

pay the money back and start over. But it was too late for him. He was 18 months. He was out of that window. He was past the threshold. Wow. You know, that's kind of an example. If he would have met me a year and a half earlier,

that could have potentially meant hundreds of thousands of dollars extra to him. Through his lifetime. He happened to be extremely healthy. Wow. You know, I think a lot of times people just think, oh, well, I'm just going to, right? And they hear the water cooler talk or they go to Google and they, you know, heard this or read that. And it's like, oh, I'm just going to do this because I heard. And they didn't really see that full picture. And they heard that someone, oh, I changed my mind a little bit in. And they didn't realize that there's that window. And they just, they just made a decision, but they didn't know all the facts. That's a really good example you brought up there. Yeah, and sometimes it's almost a little more sinister than that. Sinister is too strong a word, but they go to people in my industry, financial services industry, with their questions. And a lot of times, the person that they're going to isn't so much interested in answering

their question, their real goal is to sell something. Yeah. And of course, sales, there's nothing wrong with sales. Everybody sells something. But when you're talking about somebody's retirement, you know, it's not like you were a car salesman you charged them $6,000 more than they should have paid for a car. That's not going to ruin their retirement. But a huge bad decision in retirement can really devastate people.

I know that, you know, found that in my own family. Yeah. And it's a month after month after month where once it's known to you, because it's like the old saying, you don't know what you don't know, but once you do know it, then it's just like a punch in the gut every time it's like, oh, I got my Social Security disbursement and boy, it could have been or it should have been. So it really is that big lesson. And let's talk a little bit about where people can get that good guidance because we've mentioned Google.

You can also go to the Social Security Office or the SSA.gov. There's a lot of educational material there. But it's just pure info. It's not like a fine-tuned plan for you, right? Well, they're not able. They're not allowed to give you advice. They just can answer directly. questions. So, you know, at the end of our process, when we've determined what we think somebody

should do, I still tell them, call Social Security and make sure that what you're thinking about doing here is, is right, you know, check the numbers. Yes. Because Social Security will answer your questions. They just can't give you advice. So you have to know what you're doing when you go to them. Yeah. You know, that's a good point. So we moved from like Google, which is like drinking out of a fire hose to, well, I can go to SSA.gov or the office and they're just going to give you, matter or a fact, straight up answers. And then you can go to a financial professional, but then you got to figure out, okay, who is someone that really is dialed in and knows all of the changes and intricacies and the 500

strategies because, you know, my car insurance guy mentioned, oh, I can give you some advice. So talk a little bit about getting advice from like a generic financial professional air quotes versus someone like yourself who specializes in staying up to date and teaches this topic. Well, it's potentially a big difference. You know, it's, it's not out of the question that their car insurance guy or gal does know. Maybe they've, you know, studied that there's classes you can take.

I've taken the classes. You know, there's even certifications. I've gone through that training. So just because what they do doesn't necessarily mean they know it or don't know it. But Google, you mentioned Google and, you know, what are the things they teach our new clients in our ease planning, you know, that. is about Google. And when I tell them this story, they say, you know, I never thought about it that way, but you're right.

So here's the story. Google is a sales platform. If you Google something, some business paid Google money to come to the top of the search so you would click on them. So if you put in Social Security, you may get the Social Security administration is one of those, but more likely it's going to be an ad disguised ad. It doesn't look like an ad. It looks like it's going to be, you know, third-party information that you can use. And you open it up and at some point they're going to say,

fill in this forum with all of your information, we'll send you this paper to answer your question. And you just became a lead for somebody. And that's true whether you put in anything. You put in Social Security, if you put in life insurance, if you put in mutual funds, if you put in annuities, you're searching for anything. You're going to end up being a lead with a site

that looks like you're actually going to get to answer your question. I've heard that called an advertorial, you know, so it's an editorial piece, but it's an ad as well and sponsored ad. So, yeah, that's a really good point. It reminds me of the old movie with Bing Crosby, you know, White Christmas and he's like, you know, everyone's got a little larceny in them. You know, everyone's trying to get something from other people, whether it's selling your spouse on where you want to go eat dinner tonight or a movie you want to or selling an actual thing. So be cautious and careful. And I think that a lot of times, even someone in financial services can be, you know, too salesy, but someone like yourself that's teaching and going, hey, here's some options. Here's some things to consider. I don't have a horse in any race. So you tell

me, but I'm going to guide you with some of the right decisions there. I think that's the best approach. Yeah, and that's the, you know, the person that they should look for for sure is, you know, I prefer independent people because they don't have a big company looking over their shoulder, telling them what to do. If somebody's independent, they're really working for you, the client. And, you know, in most cases, that's a benefit. Yeah, opens up options. Well, Dan, it's been so great kind of getting some of that clarity.

If someone's interested in learning more about Social Security and learning what some of their options could be, what's the best way that they can do that and reach out and connect with you? Well, the easiest way to get to my Zexus wealth website is, through just type in ease dash planning.com. That's ease, E-A-S-E. Don't forget the dash, E-A-S-E-S-E-Sach planning. That'll take you to my website. And by the way, on my website,

I got a lot of other information about some of the other things we talked about. In fact, I've got a Kiplinger's article that I wrote, one of two that I wrote for them, and one of them is on Social Security. So they can get a little bit more information there. Excellent. Well, thank you so much. It's been a real pleasure talking with.

you can. You too, Mike. Thanks. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.Influentialentrepreneursradio.com.