Influential Entrepreneurs with Mike Saunders, MBA - Interview with Jack Peregrim Founder of Fourth Quarter Advisors Discussing Social Security as an Investment

Episode Date: April 7, 2026

Jack Peregrim is the founder and President of Fourth Quarter Advisors and he has a long career in business and strategy including his 30 years as the founder and owner of PARAGON Development which focused on providing strategic management services to many Fortune 50 global corporations.On his ‘retirement’ he personally recognized the complexity in Social Security options as well as Medicare. And, there is very little support and education available other than that offered by individuals and organization driven by revenue received for selling products and services.Jack and others are trained and committed with Certified Financial Fiduciary® designations. And, we are volunteer presenters for workshops sponsored by a number of non-profits which are non-profit 501(C)3 organizations and support programs in a wide range of retirement issues.Jack is a Certified Financial Fiduciary ™ in addition to his involvement in numerous professional and personal organizations.Learn More: https://www.fourthquarteradvisors.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-jack-peregrim-founder-of-fourth-quarter-advisors-discussing-social-security-as-an-investment

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 us Jack Paragram, who's the founder of fourth quarter advisors, and we'll be talking about Social Security as an investment. investment, how to maximize a 10 plus guaranteed percent return. Jack, welcome back to the program.

I'm glad to be here and especially talking about this subject. You know, isn't it interesting that a lot of times people just go, oh yeah, so security check the box at this age, set it up and move on, and that is just so far from all the intricacies you should consider. And so I love your perspective of looking at it differently than just filling out some forms. and hoping for the best. So where do you start when you're working with your clients to help frame up and educate them about Social Security? What should we think of regarding Social Security as an investment, not just some, you know,

box we need to check off? Well, the first thing you have to do is change what's between your ears because you're coming in with a paradigm that in many cases, Social Security as a government program, it is something you should just start whenever the last day you work ends. so it should be segued right into it. We want people to look at this as an investment. Because really, you have an account in Social Security, just like your 401k account, your bank account,

insurance accounts, you have a Social Security account. And it's based on the money you put into it and what employers match. So you have X amount of dollars in there and you want to manage it as an investment. And you want to know, well, how can I best manage it as an investment and get the best return on it? Just like any other account or investment you have. Now, yet, that really is a mindset shift, isn't it? It is.

It is. And unfortunately, most people never look at Social Security that way. as an investment. It's, as a matter of fact, I love talking about the fact that Social Security in comparison to say a 401K

has incredible advantages in delaying one and not delaying and we feel really psychologically that we're delaying something and that way we don't get what we've delayed. But no, you're doing is you're letting an investment grow better than another investment will. If I told you

that I have an investment that in this year, 26, it would grow 10.8 percent. And you gave me funds. I would give you a 10.8 percent increase in one year without any risk of any losses. I don't know if anyone that would say no to it. Now, if you delay Social Security this year, you could have claimed it and you delay it one year, it will go up 8%. In addition, it goes up 2.8% cost of living. So it's going to go up 10.8%. And, well, by the way, this 10.8% it goes up, you also have a tax break in it. because when you get that money, you only declare 85% for tax purposes.

So 15% of it is tax free. So getting $3,000, like getting $3,300 or $3,400, on top of the 11% growth. And besides that, it went up 11.11%. And I get that every year as long as I live. So it's a gift that keeps giving. So now if I look at that as an investment, and basically the specific investment is it's an insurance annuity. And if you went to some insurance agent and said, listen, I want to give you some money and I want to turn it into an income annuity, what are you going to ask them? What are you going to ask them, how does it grow before I start my income?

How big is my payment going to be when it starts coming? And how many times do I get paid? That's my payout. And Social Security, we want to look at it the same way. Is it growing adequately before I start taking my benefits? And when I start getting the payments, am I going to get the payments long enough to have a good return on investment? And your real Social Security break-even is between 77 and 78 years old. If you take the raw number of Social Security has in your report, it looks more like it's 80 or 81.

But if I consider 15% of it is tax-free and none of the projections with Social Security include cost of living. So if I start getting 2.8% in my mid-60s and then 2.5% the next year and 2.5% after that, and I compound that. your break-even is between 77 and 78 years old, and yet if you're mid-60s, a man in reasonably good health, not perfect health, reasonably good, your actuarial tables look at your life expectancy 81 to 85. And that includes people that fall downstairs dying car accidents. A woman's life expectancy is 85 to 89. So let me think. I break even at 77 to 78.

And that's if I claim at 62 or 70. By the time I reach 78, I will have collected more money total. By waiting until 70, as I would have if I had eight years more payments at age 62. It's not a numbers to be throwing around. But it emphasizes the good investment nature of it. So we want people to look at this as an investment. And what I like to do is also, let's compare it to other investments. Somebody might be 63 years old and want to retire at 63.

And they might have a pension started at 65 or they just might have wanted to start to Social Security at 63 is to segue into their retirement. But they have money in 401Ks and IRAs and IRAs and, other qualified funds. And I love showing the graph of the two horses. And the question is, what horse do I ride? Do I ride my Social Security horse,

which means I need funds and I'm going to start my Social Security to fill in what I might need? Or do I ride the other horse that represents the assets I have, such as 401ks or IRAs? And in many cases, actually in the overwhelming majority of cases, you're better off riding the 401k and IRA,

because two things get me excited when we educate people. And one of them is we get excited if we can show you how you can get more money from Social Security than they wanted to give you. And we get excited if you can pay less taxes than somebody wanted to take from you. Well, Social Security can help you meet both of those ends because, Let's say I have money in a 401k and I retire. Well, my income level is going to be the lowest that will ever be in my life. I need money to fill in just to meet what I need to live on my budget and not to mention even discretionary things like on vacations and enjoying yourself.

But if I'm at the lowest tax rate I'm ever going to be at, I'm always going to have to pay tax on my money I have in my 401K. And here's something nobody is explaining to you, but you're better off paying tax when you can pay it the least, even if you pay it sooner. And we go into our retirement thinking, oh, never pay tax before you have to, hold off on it, just keep letting that gross grow. and no matter what tax rate will have, we'll always have more in between. And that isn't true. So not to bounce around too much,

but I've talked about Social Security, but let's look at the other asset because it's related to when you claim Social Security. So now I have money in a 401K. And I'll give you a simple example, and let's say I have $100 in that 401K. And I can see that some point in the future, after my delayed Social Security starts, when I have to start taking it out with required distributions,

after I might have a pension that starts, after spousal contributions to our joint income starts, I take all those other factors and I say, I can show people that you're going to be paying 22% at some point in the future. It might be eight years when you start taking your required distributions, but you're going to be pushed to 22%. Now, what if I can take 12% tax if I take it out of those funds now? And to make the math easy, I'll just say that I have $100 today, somewhere in the future. I'll say 14 years, it could be it grows to $200 on its own. And if I have that $200 in the future and I have to pay $22% tax on that,

Well, that means I pay $44 and I'm left with $156 after I pay my federal taxes. Now, what if I have an option to pay a 12% tax on it now? I take that same $100 and I pay my $12% tax and I'm left with $88. Now, if I make the same investment, same period of time and nothing changes, that money is going to double. So what happens? Well, my $88 now becomes 176, not 156. It's in the future.

I call it invisible money. It's money that I don't see, so I don't know I need to address it. But if I understand, if I have the information that lets me make informed decisions, I recognize this. So now I'm back to where I am at 63, and I've got two horses I could ride. I can start my Social Security. But now I'm looking at the investment value. My gosh, it's going to go at over 10% with a tax break and give me foundational income that I'm going to need as long as I live.

On the other side, I have a 401k or an IRA. And I could take that out and pay less tax than I will in the first. future. And you're not only getting a tax break from the Social Security you will be saving and a better investment, but you're also washing tax out. You're doing what rich people do. You're washing, doing tax harvesting and tax washing. You're washing the tax out when you can pay the tax when it's less. It's once people understand that, and if they see any significant difference. That's why we like to do 10-year projections and show people what tax rate they're going to be at each year. And an example, we met with somebody very recently and collectively

between the two people, you know, between a couple, they had a million dollars in their 401k. And I asked them, I said, so what, you're telling me you have a million dollars in your 401K. They said, yes, we do. I said, no, you don't. What do you mean we don't? I said, you have about maybe $700,000 within IOU to the state and federal government for $300,000. Now, how can I reduce that IOU? Because if I can reduce that IOU by $100,000, that means I have $800,000, not $700.

And one of the ways you do that is you basically do it the way you eat an elephant, one bite at a time. One year I can take funds out from my, maybe I take $50,000 out of a 401k and pay 12% or 15, or I pay 22% where I might be 25 or 28 in the future. Well, I have saved that amount of tax by reducing an IOU and I started with a million dollars. I will just end up with more of it. That's had invisible money too. We're not seeing it, but there's certain things we can do that have long-term benefit.

And we're finding most people aren't even talking about it or even helping to educate people on these. So that's been kind of our passion is to help people understand these things. And once you kind of get that thought in mind with some of those numbers and and calculations, talk a little bit about the timing because I kind of at the top end of our conversation here, you know, kind of just flippantly said, oh, a lot of people just go, I'm this age, I need to file for Social Security and move on. They don't think much about it. But there's a lot of calculation and thought process that needs to go into when do you take Social Security, right? You can take it too early. you can ignore a lot of things.

Where do you start educating your clients on timing? Well, I don't want to make Social Security sound like it's a simple option. You just hold off on it because that also isn't true. What blows me away is that there are 567 different variables that determine what your Social Security benefit is. And I'm going to humbly say I've been doing this over six years, and I won't run into anyone that knows Social Security as well as I do in my lifetime, and I may know 50 to 60 of them.

There are just so many different variables. So now you also have to deal with the complexity, and the main one is really coordinating among spouses, because in many cases, it is much more beneficial for one spouse to claim even earlier than they thought, while another spouse maximizes their benefit. If I have two spouses and their full retirement age is 67, and their plan was each of them would claim at their full retirement age, I could show them that it's much better if one claimed three years earlier,

but another delayed three more years to 70. So it has to do with the, there's unfortunately enough complexity, it that we use algorithms in the programs that also incorporate cost of living allowances and tax benefits. But I wish there was one easy formula. There isn't, unfortunately. But if you deal with people that you trust and will do things that are in your best interest, you'll find the ways that you can optimize Social Security, recognizing that Social Security, the Social security itself isn't in a vacuum. It has to be incorporated in with whatever is going on in your life. How long you're going to work? What your budget is? What other assets do you have? What tax situation you're at?

What your objectives are in retirement? You just want to run out of your money and have a ball or do you want to leave your money to your kids? Those are all factors that go into you're doing the right thing. You know, and I think a lot of times people just think also, and correct me if I'm wrong here, well, I think I've got it dialed in pretty good, but if I made a mistake or if I need to change anything, I'll just click edit. But isn't it true that once you set up your Social Security, it's pretty much a done deal unless some emergency happens in the first few months? Well, it is pretty much a done deal, but there are some things that Social Security,

doesn't tell you about. For instance, what if I claim my Social Security early and I'm retired? I claim it early and then I find out that I just listened to my Uncle Vinny that said you always claim it early and I shouldn't have. When you reach your full retirement age, you're allowed to suspend it. So whatever point you suspend what you're receiving, you'll stop receiving. but it's going to grow at 10.8% at least from that point. That's one thing you can do.

Another thing is, what if you claim your Social Security before your full retirement age? And the main reason we run into this is where somebody loses their job. If they claim their Social Security and ageism is a thing, tough to get hired when you're 63 years old, well, you wait six months and you claim your Social Security. and then you get your job back or you get a job. And now you don't need the Social Security. But when you claim Social Security before your full retirement age and you have any income, you're penalized. So you really don't get your Social Security.

It could all be penalized away. So you get your $20,000 in Social Security and then they give you penalties for $20,000. You end up with nothing. Plus, it didn't grow. you're missing out on one heck of an investment. But there is one way that you can actually, there's a form 521 that you would file with Social Security. You'd have to pay them back what you received,

anything up to 12 months, and it's as if you never claim. So yes, you can make that claim your benefits one time in your life. And with just about those two exceptions, you are locked into it. But there are a few ways, and Social Security doesn't promote,

them or tell you about them. You know, I think that's something that I think we've mentioned before, but you might assume that talking to Uncle Vinny or going to Google or going to AI and asking questions that you'll get the right answers, but you don't know until you talk to someone that knows some of these 500 plus variables and how it could apply to you. So that's an important piece right there. I also know that there are decisions that go into claiming as it relates to a husband and wife. So what if the husband retires first or the wife retires first or what happens if the husband passes away first? Where do you frame up some of the thought process for claiming when it's a husband and wife and both could retire? But you're saying, well, why don't you work a little longer or if you can? So where does that begin?

Well, it begins by understanding the things that are going to affect your benefit. And in the case of a couple, there's probably five or six main considerations. One, what benefit level can each of them receive? Does one have a much higher benefit than another? Another is age differences. What if there's a significant age difference between the two? That has to be entered into it. if one party could get a higher benefit than the other, the second party could be entitled to spousal benefits.

And what a spousal benefit is, they're entitled to 50% of what the higher earning spouse would get provided that their benefit isn't that high to begin with. An example, if one party can get $3,000 and the other didn't have the same earning record and they could only get $1,000. It both reached their full retirement age. The higher earning spouse gets their $3,000 benefit. The second spouse gets their $1,000 benefit plus an additional $500 bringing them up to 50%. By the way, that brings up one thing that he said he listened to Uncle Vinny. one of the more dangerous things people do is they listen to Social Security too because some of the things with Social Security,

I've had numerous people that have been told erroneous things by people working for Social Security. I've had Social Security representatives tell somebody to claim their spousal benefit at an early age because their benefit is higher and that way they'll just switch to their own benefit later on. And that's erroneous because once you claim any benefit, you're deemed to have filed at that age. So if I claim a spousal benefit at 63,

figure, well, I'll let my own benefit grow until 67. I'll switch to that benefit then. When you switch, they're going to give you a benefit as if you claimed your own benefit at 63. So you're locked into it, and that isn't explained. Plus, Social Security is now pushing a lump sum, and they're not explaining it to everybody. So I've had people go to Social Security, and Social Security will tell them,

okay, you want to start your benefit. Would you like us to give you a one-time payment of $15,000, and then we'll start your benefit in the following month? And it's not explained any further, and people say, well, heck, yeah. Yeah, I'll take that. And you know what they do? They basically pay you what you would have gotten if you filed six months early. And they give you the last six months in arrears.

But now, if this benefit would have gone up 11%, that means in the last six months it would have gone up five and a half percent. And what they've done is reduced your benefit as long as you live by five and a half percent by giving you a lump sum. And so there's a lot of things you have to be careful with even engaging social security. And to that point there, too, the Social Security Administration has a wonderful website with gobs of information. But if you go there or you sit down and talk to them or call on the phone, like what you were mentioning, they either will give you generic information or sometimes misinformed information. but the big thing is they cannot give you deep strategy. They're not going to get into learning as much as they can about you and structuring some strategic moves because they're either not allowed to or they just don't know that, right?

Actually, by law, they cannot give you advice. They can answer your questions, but by law, they're not allowed to give you advice. They can, and, you know, unfortunately, they do recommend things, and some are well-meaning, and they are right, some are wrong. But they're really only supposed to answer your questions. They're not supposed to tell you, you should look for this or claim at a certain age, and it would be better for you. They will just tell you that if you do want to claim at 65, this is how much you'll get. But then again, they can't include the value of the tax benefits or cost. of living because they're not allowed to even talk about cost of living increases until Congress

passes them forward each fall for the coming year. Yeah. So they get even projected ahead or even mentioned that there'll be cost of living ahead. And talking a little bit about ahead, I know you've touched on the tax aspect, but sometimes people don't realize that their Social Security benefits can be taxed. what are some of the considerations they need to keep in mind that way? Well, I think the main one is to recognize the investment value that the little bit of tax savings provides.

If I could get $30,000 in my benefit from Social Security, well, that means I declare 85% for tax purposes. So I declare $25,500 in my tax. and my taxes on that. Well, that means that $4,500 is tax-free. So if I look at a different way, I have $30,000. Let's say I pay 30% total taxes, state and federal put together. Then it's like getting, well, 10% higher income.

So that means my $30,000 is like getting $33,000 to $34,000. because I keep more of it than I have to pay in taxes. There's also state considerations. Many states do not tax Social Security income at all. And if I look at that, my gosh, the benefit is incredible because now I'm receiving money that I have to declare his income out of my 401k or IRA. It's 100% taxable. It'll be declared for income tax purposes.

And if I have to pay 100% tax on that state tax as well where I have income taxes, that has a large impact. But I may be in a state that has no income tax on Social Security. Or many cases, your state has a threshold. If your adjusted gross income is into $100,000, you do not pay any tax. state tax on your Social Security income, as long as you adjust the gross income, is under a threshold. So every state is different, but we also want to look at the state taxability of Social Security as well. And that just, it doesn't make it negative in any way. It just has an extra benefit you may get depending on the state you're in.

Yeah. You know, and I think it's kind of like the old, you know, the invisible. money and then invisible fees and invisible expenses that we're talking about. A lot of times people just get the low-hanging fruit. They understand the low-hanging fruit aspect of anything regarding the money or retirement or Social Security. And they just look at the major points. But if you dig in deeper and make sure you claim at the right time and delay at the right time and for your circumstances and take taxes into consideration, you're going to just polish up and maximize your returns as much as humanly possible.

And I think it's, again, that number you just, you mentioned a couple different times. There's 500 plus variables. Let's wrap up with this, Jack. Talk a little bit about how it's critical to have professional planning guidance from someone like yourself to help ask the right questions and consider all of these things and then present a nice, clear plan for someone so that they get the most out of their security. Well, I think the simplest way to explain that is that a professional will have access to proprietary programs that are much smarter than they are, just as I have access to things that are much smarter than I am. So it's very common that I will enter information based on what Social Security is telling somebody and enter the secondary information. into it that I learned from people, you know, the ages and everything else, married, not married.

And you'll find that there'll be results that come out that seem to have a factor that is not normal. And then you can dig into it as a professional and understand, all right, this is somebody that has a very unique circumstance that has a unique variable. that's going to affect their benefit. And you'll at least understand that. But there are some very good proprietary programs that the algorithms do have the entire wealth of what is in whatever the Social Security regulations are. And I don't know how many pages it is. It's probably 30-some thousand.

But there are good programs that incorporate everything into them. Yeah. You know, that's really great that you've got software and programs. and checklist because it's like when you look at the example of the military or the airline pilots, they've got that pre-flight checklist and in-flight and post-flight. We want to check before, during, and after. So having those kind of checks and balances are super, super helpful. So let's wrap up with this, Jack.

If someone is interested in having you walk them through the process to plan ahead or to check their options, what's the best way that they can reach. out and connect with you. Well, they can always contact me at my email, and that is Jack, A-A-C-K at fourth-quarter advisors.com. and that's be spelled out, F-O-U-R-T-H-Q-U-A-R-T-E-R-A-B-I-S-O-R-A-D-V-I-S-O-R-S-O-R-S-O-R-S-O-R-N. And it's really because we're focused on the fourth quarter of people's lives.

We have a website, fourth-quarter-advisors.com that has videos and other reference and material that can be refreshing of many of things we're talking about here. And I will even give you my cell number, and that would be 203-507, 3826. They can contact us that way also. Great. Thank you so much, Jack. I appreciate you coming back on today. Glad to be here. It's been a pleasure to talk about this. 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,

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