Social Security

take action to solve them. The first one was the idea of Social Security being potentially in trouble. He thinks that this is not a major problem, that with some relatively minor changes--he suggested raising the retirement age, changing the way the cost of living adjustments are made, and also increasing the cap of which you pay Social Security taxes--would solve it without a lot of pain. He thinks that's an important part of retirement. It needs to be shored up.

Let's also talk about the implications of the current low-yield environment for Social Security , and why you think very low yields make deferring Social Security an even smarter move than ever. It was before, but you think it's even more so right now. Fahlund: Even more so right now, because if you know the yields on bonds, and you compare that to the formulas for Social Security , every year you delay taking your Social Security , that initial benefit goes up 7% to 8%. So that's a formula. It's not something that's dependent on the markets. You know right now that that's what you'd get. So take advantage of what you know and capitalize on it. Benz: You have also noted, though, that in other market environments, specifically down market environments, even though maybe your intention was to delay receipt of Social Security as long as possible, in some cases it might actually make sense to speed up that date a little bit. Fahlund: It

size of those withdrawals and maintain your budget? Accelerate the payment of Social Security . If you're married, maybe accelerate the payments from one person's Social Security . Benz: Chris, it's always great to hear your insights. Thank you so much for taking the time to be here. Fahlund: It's

the matter is, for example, if needy people could go to their Social Security account and withdraw money whenever they needed it, then they wouldn't have any retirement capital at all. So, that's what needs to

that they don't address the fact that most of us will receive Social Security in retirement. Let's talk about that issue? Bogle: I've had this idea, and it's a simple silly idea like all of mine,

it isn't all of your assets. Most of us at least have Social Security , and some have good pensions, good meaning that the company will endure and continue to pay it, and other sources of income. So, it shouldn't be taken in isolation; you should look at your whole financial picture. What that means is, to give you the typical example, if you want to look at the value of your Social Security , the capitalized value of that future stream of payments, which is a great future stream of payments, Christine ... Benz: Absolutely… Bogle: Probably as good as you can get. It's pretty high and is adjusted for the cost of living… Benz: It's guaranteed. Bogle: … and the issuer is, I assume, in spite of what Standard & Poor's might say, money good. So it's a terrific plan. If you capitalize that stream of future payments, most people's Social Security is going to be worth $300,000 or $400,000, let's say $300,000 for an average investor. So, if he has $300,000, which is a lot of money in this market for families in those circumstances, if you have $300,000 all in equity funds, even equity-index funds, and $300,000 in Social Security , you are already at 50-50, fixed income over here, and variable income over here. So, the variable side, you should take account