David Giertz Says Financial Advisors are Failing by Not Talking to Their Clients About Social Security

According to David Giertz, a former president of one of the biggest insurance providers in the country, a majority of financial advisors are failing to discuss social security with their clients. When financial advisors do not include a discussion about social security retirement benefits as a part of their advice, it may be detrimental to both the clients and the advisors.

A research institute conducted a survey of consumers who were either already retired or within 10 years of reaching retirement age. The researchers found that a majority of the respondents said that their financial advisors did not talk to them about social security, and four out of five reported that they would switch advisors if their advisors did not discuss social security as a part of their retirement planning process.

Why do financial advisors avoid talking about social security?

Giertz attributes this failure on the part of financial advisors to the complexity of the social security program. He points out that the handbook for the program contains 2,700 rules, and he believes that many advisors find it too overwhelming to try to digest all of those rules. He reports that financial advisors should not avoid learning all that they can about social security, however. Instead, they should incorporate the program into their discussions with their clients for a couple of reasons.

Why advisors should discuss social security with their clients

The Nationwide survey reveals that many people will move on to new advisors if theirs do not talk about social security benefits to them. This means that learning about and discussing social security with clients is important to advisors so that they can retain more of them. From the consumer perspective, social security retirement benefits may account for up to 40 percent of the income that they may have during retirement. Finally, people who start drawing their retirement benefits too early may lose as much as $300,000 over their retirement years in lost benefits. Given the importance of social security to the ability of people to retire comfortably, it is imperative that financial advisors become comfortable with the program's rules so that they can discuss it with their clients during the retirement planning process.

But those aren't the only things plaguing most before retirement. David also warns of these common issues many will find, before they're able to enjoy their twilight years.

Healthcare Costs

Retirement age is a significant element in evaluating an individual’s health needs. According to Consolidated Omnibus Budget Reconciliation Act (COBRA), employees and their families have the chance to access health coverage after change in employment status irrespective of the cause. The policy applies to all companies offering group health plans to at least twenty workers. In this case, employees retiring below the age of 65 may still be covered by the employer. However, healthcare prices will significantly escalate when your employer stops paying premiums.

Individuals retiring at 65 or later are automatically covered by Medicare. Nevertheless, it is crucial to subsidize this with a health savings account or any other source dedicated to healthcare. According to David Giertz, Medicare does not cover all the costs. Individuals aged 65 years and above need additional and specialized care that increases insurance costs. Hearing aids, Vison care, and nursing home care are some of the crucial healthcare needs for seniors that miss on the Medicare package. In a recent report by the Employee Benefit Research Institute, a senior couple needs at least $370,000 in addition to Medicare to guarantee their healthcare in retirement.

Although the Obamacare offers subsidies on healthcare coverage, individuals that don’t qualify for income-based subsidies will still pay more. Therefore, a personal health savings account is crucial irrespective of the healthcare coverage subscriptions.

Social Security

Ordinarily, retirement means claim of social security benefits. While it should not be the case, social security is a major source of retirement income for most Americans. Although it is crucial to claim the benefits as a right, you should know when to file your claim. Age is crucial. If you are thinking of retiring in 2018 thus claiming social security benefits, you should check whether you have attained full retirement age.

Claiming the retirement benefits before attaining 65 years is considered early hence lower pay. Usually, such an individual’s social security benefits are reduced by 5/9 of 1% monthly up to 36 months and 5/12 of 1% monthly over 36 months early. By contrast, benefits increase up to the age of 70. Evidently, claiming social security benefits before full retirement age is giving up a significant amount income. Thus, Mr. Giertz’ advises on waiting until 70 for substantial returns.


Life expectancy is consistently growing thus the need to increase savings for retirement. Statistics indicate a higher percentage of pre-retirees in the United States have insufficient savings for their future. Life can be miserable after retirement when your pockets dry up. As such, it is crucial to do the math before retiring. According to David Giertz, one needs to figure out if they are ready to retire by estimating the level of income the existing savings can produce. The income should be enough to sustain a desired lifestyle. Here are some tips:
The 4% rule is widely used as a savings rule. According to the theory, withdrawing 4% of your retirement savings in the first year and subsequently increasing withdrawals for inflation guarantees financial stability. While the rule is functional in a standard environment, there is a higher chance that you will be broke in a low rate market. Therefore, you should consider starting with a lower rate, for instance 3%.

Besides, annuities guarantee a regular income. Although annuities may initially have high fees, there are specific types that suit retirement plans. A deferred fixed annuity, for instance, gives you the opportunity to choose a date that monthly payment will commence. To ensure you have regular income, you should research on a reliable insurer and check how much income your current savings can produce on purchase of annuity.

Also, consider using the IRS Required Minimum Distribution (RMD) tables. The tables state a specific amount that an individual should withdraw from tax-advantaged retirement account every year. The withdrawal amount increases with age. The calculations are also based on average life expectancies. Although the 4% rule is widely used, the Center of retirement Research (CRR) recommends use of IRS tables. According to experts, the IRS RMD tables are more responsive to changes in the market as compared to the 4% rule.


Retirement does not exempt you from paying taxes. Unless your money is in Roth IRA, withdrawing from your retirement accounts attracts tax just like any other income. Depending on the amount of social security benefits you receive, the federal government and the state taxes at least 50%. As such, it is crucial to calculate the level of tax and how it affects your budget. If there is high tax liability, which affects your desired freedom and comfortability during retirement, it is not yet time to retire.

Retirement disconnects an individual with society. Disconnection leads to loneliness, which is a recipe for depression hence dire health complications. Therefore, it is important to plan your time and how you will maintain social connections. Staying connected with the community helps in achieving your retirement goals. If you think 2018 is your year of retire basing on the above tips, strive to make wise financial decisions to avoid getting broke in future.

About David Giertz

With more than 30 years of progressively responsible experience in the financial services industry, David Giertz is uniquely qualified to give investment advice . He has focused his career on using innovative strategies to help build growth and profits. As the president of the sales and distribution division of Nationwide Financial, Giertz was able to grow the division's profits from $11 billion to $17.8 billion, exceeding expectations.

During his tenure as the leader of the Financial Institutions Bank channel, Giertz spoke about growing its revenues from $1.5 billion to $8 billion. Before joining Nationwide in 1999, Giertz worked for 10 years at Citigroup, where he began as a financial advisor and progressed first to the area director and then ultimately to the executive vice president of sales. Giertz holds a Bachelor of Science from Millikin University and an Executive Master of Business Administration from the University of Miami. Giertz is a certified FINRA broker and works in the Dublin, Ohio office of Nationwide Life Insurance Company.

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