Financial Literacy

Social Security Education Lays Groundwork for Effective Retirement Planning

Social Security isn’t going to go broke by the time you reach age eligibility.

That notion is just one of many myths creating insecurity among working investors who not only want – but need – to use the government program as a base upon which to place other retirement funding.

The fear-mongering that leaves clients questioning the legitimacy of including Social Security benefits in retirement planning is often despised by professionals within the financial planning industry. Rumors that the United States Social Security Administration (SSA) will run out of monetary resources within the next couple decades are fueled by speculative reports from mainstream media that grasp on to a fact here and there, but provide little long-term perspective.

It is a thorn in the side of financial planners attempting to teach clients strategies for maximizing benefits derived from their working years marked with regular contributions to the system. The misinformation leaves planners holding a mess of statistics and “what-if” scenarios weighed down with a client’s panicky emotions creating more concern than ability to identify which concerns deserve attention and which ones should be left to the wayside.

“People have a lot of questions when it comes to how Social Security will work in their plan,” said Barbara Traylor Smith, CEO of Retirement Outfitters, LLC, based in Grand Junction, Colorado. “Some do not want to fully count on it; some cannot wait for it to begin.”

It is the leading reason her practice offers a non-stop calendar of classes and seminars aimed at educating current and prospective clients regarding the workings of the SSA. She wants her clients to have facts – and not myths or rumors – as guidance in their respective decision-making.

The leading myth: There won’t be any money left in the system by the time a client reaches age eligibility.

It is true that payments most likely will drop. Economic forecasters specializing in analyzing population trends and impact on the Social Security system expect that between 2033 and 2037 the monthly check for a SSA recipient will be 25 percent less than what it would be if the current payout formula was maintained.

It is an important factor to plug into any retirement planning scenario since according to the SSA, 50 percent or more of an elderly person’s income comes from that monthly Social Security check.

According to the Administration, that monthly check equals 90 percent of income for 22 percent of married elderly, and 47 percent of unmarried elderly.

Maximizing the amount of a retirement that can be funded via Social Security is a useful tool, Smith said. But the end game of employing that tool shouldn’t necessarily be focused solely on balance sheets and column tallies.

Instead, Smith wants her clients to think about its impact on their lives.

“Financial planning is not so much about the money as it is about your life,” Smith said. “It is about answering the question: How do we create a financial plan based on your goals? What is that you want to do in retirement? What is it that brings meaning and purpose to your life? What is your passion?”

Smith said answering those questions and identifying those things will then provide the framework for a financial plan in terms of investing and spending.
“Those are the pieces to start with,” she said.

From there, a client is able to more accurately determine if current resources are sufficient to provide the structure to support their dreams, hopes and goals as they reach age 70 and beyond.
“They have to be able to ask themselves and answer for themselves what their expense and income will potentially look like at those ages.”

Smith enjoys guiding clients through this type of deep, self-analysis.

It is significantly different from the work that started her career after graduating college with an accounting degree. She was doing taxes and audits and noticed that many clients had not engaged in even the beginning elements of retirement planning. About ten years into her career, Smith began to ask herself what she could do to help clients prepare for the time when work would end.

“I found this industry called financial services,” she said. “And I found my calling. It has been a wonderful adventure for me. I get to sit eye-to-eye, belly-to-belly with people and help them carve out their retirement plan.”

Her goals for client interaction are to cut through the financial jargon that only an advisor understands anyway. Her goals for client education are to show clients – not only through simulations, but also via their own long-term personal experience – the impact that early and consistent contributions to their retirement funding can and will have on the end result.

“They may not understand the meaning behind all of the numbers,” Smith said. “And that is okay. That is what I am here for. We all have different talents. If you were to ask me to teach fifth grade English, I would not be very good at that. But what I can do for a client is work diligently on their behalf to honor the current consumer-driven demand dictating that their financial well-being is safeguarded by the professionals helping them manage their money.”

Learn more about Barbara Traylor Smith and Retirement Outfitters, LLC, online at


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