Social Security Dilemma

Nandita Das Financial Planning

““If I wait to claim the benefit and die before or soon after I make the claim, I will have shortchanged myself. But if I claim early and live a long life, I will also have shortchanged myself because my benefits will be permanently reduced.”

Having dinner table conversations, I often hear “I am not going to live long, my Indian genes will help me reduce ‘superannuation risk”.

Me: “Real planning indeed! Did not have time planning my life as I was busy planning life for my children. But now, that I am done with that part of my life, I feel I have the crystal ball and can perfectly predict how long I am going to live. Good prediction indeed with a high statistically insignificant success rate.  

Spouse: “Oh, you and your academic pinwheel of statistical significance. My engineering background in protection and reliability vouches for only two probabilities: 100 % or 0% success. There is no gray area and my analytical brain has told me that it is 100%, at least for my case. I know ‘exactly’ how long I am going to live or at least know for sure that I won’t be alive that long to break-even as per  your social security calculation.

Me: “Hold on, Do I hear an inkling of doubt in your voice, honey?

Spouse: “No way! Do not try to persuade me to believe in your statistical lingo and the new thing that are raving about. What was that again? – ‘Client Psychology, Behavioral Finance’. The fact is you professionals do not use the fancy variables we engineers have doing a crisscross in our brains. If only you could understand me, I mean my brain dear.

Me:  What are you accusing me of now? Is it business as usual? Why not we talk to a neutral party- a professional who does this for a living? Shall we?

Spouse: Ha, now you have my attention. Let me brood over it and I will come up with a date.

Me: Dear, I have your schedule with me. You see, I do still love you and I do pay attention to your life. Yes, it does get busy in our professional life and we lose track of our personal life and fail to plan on what is important for us.  So, shall we take an appointment for next week Wednesday? I see you are off on that day.

Spouse: Sounds good! You got my attention.

I sigh in relief, for one of the few times in our relationship do I hear just statements. I wish I could frame it in my mind and replay it at my own free will. But for now, let me not lose track of what is important. At least, one person needs to take charge of personal finance.