Getting the Most Out of Social Security with Alyson Dorosky and Jeff Quigley

Jack Sharry: Everyone, welcome to WealthTech on Deck. Thanks for joining us. Each week, I have the privilege of speaking with industry leaders about issues that move our industry forward around financial advice, wealth and asset management, retirement insurance and annuities technology. Our guests are working on strategies to help advisors, investors, participants, and firms enjoy better financial outcomes all around the confluence of digital and human advice. Today we are speaking with my colleagues Jeff Quigley and Alyson Dorosky. Jeff heads up LifeYield’s relationship management efforts and works with our enterprise clients. And Alyson is our head of social security support. We’re going to discuss a variety of interesting developments in our industry around the innovative work we see our clients doing, as well as announcements and changes in social security. So Jeff and Alyson, welcome back to WealthTech on Deck.

Alyson Dorosky: Nice to be back.

Jeff Quigley: Great to be back, Jack.

Jack Sharry: Jeff, I’ll start with you with the recent announcement of LifeYield partnering with Franklin Templeton and Advisor Engine and the innovative planning tool they’ve developed called goals optimization engine, they have taken a very interesting approach for an asset manager in particular, to develop a planning tool like go and then also develop the ability for advisors to implement what the plan recommends. And I think down the road what defined contribution participants can do so fill us in.

Jeff Quigley: Yeah, so as you both on the phone know, Franklin Templeton has been a longtime client of ours. Since I think about 2014, our social security tool was actually built in conjunction and based on some feedback and a partnership with Franklin. So we go back a long way. And over the last couple years, we’ve been working about working on expanding that relationship significantly. So what we are working on currently, and what we’ve planned going forward is heavy integration into their goals optimization engine. As you reference Jack, the goals optimization engine, it’s a planning engine designed to facilitate goals based planning at scale. For advisors, it is built to be called by other tools and user interfaces. So for instance, you referenced advisor engine, they will build a front end to house the logic and to house the analysis of the goals optimization engine. And what that does is it provides more flexibility for these tools, and gives the users a more familiar more native experience. To your point check, you know, the goals based planning typically, it’s great to have the plan, it is great to have that data with clients. But in many cases, it’s difficult to implement that advice. That’s the bridge, or that’s the area in which the goals optimization is looking. And with advisor engine looking to help advisors, we will provide a lot of the tax the tax engine, the tax logic behind the goals optimization engine. So there’ll be calling the LifeYield engine for things like asset location, tax, more withdrawals, household rebalancing, and even using our security API as well. So in essence, Franklin Templeton is showing their commitment to empowering advisors through this enhancement, and we’re excited to be a part of you know, what I think is going to be groundbreaking in the industry.

Jack Sharry: Yeah, so for those that might not be familiar, we throw these terms around, like planning and implementation, like it’s done with a magic wand. And as we will know, it’s not. So maybe if you go just a little bit deeper, Jeff. So essentially, what goes optimization engine does, it’s a planning tool, it’s a goals based planning tool. But they really made the bridge from the plan to the implementation where there were taxes, or the single biggest cost investors incurred. So you got to consider those. And asset location is vitally important, particularly in accumulation. And then when it comes to withdrawal, you’re talking about a text smart withdrawal engine, and then also a social security, which we already have done with Franklin Templeton for a long time, but that’ll be incorporated in so that it’s not only tax smart withdrawal, but includes an optimized Social Security withdrawal scheme. So if you make sure I got all that, right, I’m pretty sure I did. But when he just sort of connect those dots, because that’s, it sounds like it sounds easy, which we know it’s not. And it’s also frankly, as you mentioned, groundbreaking, it’s just not being done elsewhere.

Jeff Quigley: Yeah. So in a perfect world, you know, maybe from the advisors point of view, and they log in to their advisor Engine platform, right, and they want to run a financial plan. So, you know, all the data presumably, is sitting with advisor engine, so that data gets packaged and sets to go for go to run their analysis. At that same time that go engine is calling the LifeYield engine for things you know, like you’ve referenced in accumulation for things like asset location, and then we’re sending results back to go which then package backup to send to advisor engine. And the advisor in that case now has a list of recommendations, whether it’s, you know, here are the portfolios and here’s how the client should be invested. and not just based on their risk tolerance, but also based on the tax component, right, what investments sold and what accounts, the adviser mentioned, we’ll have a plan laid out for the advisor there, if they want a source of withdrawal, again, looking across all the accounts, being able to determine what to sell in order to create that withdrawal, or to raise that cash in the most tax efficient way, paying attention to asset location, Target, etc. And once we’re done with this, the goal would be to kind of have that easy button that everybody’s after, to say, Okay, here’s how the client should be allocated. Because the goal is optimization engine uses something called dynamic programming, and simply stated that the allocation could change over time, based on circumstances, it’s not static. So feasibly, if the advisor logged into advisor engine who wants to make a change wants to do rebalance, they press that easy button, and away they go. And that’s really, when we say bridge the gap between planning and implementation. That’s really what we’re what we’re trying to help them accomplish.

Jack Sharry: Terrific. So, Jeff, to continue and want to get you into this Alyson, we’re going to talk a little bit about Social Security. So as we all know, LifeYield works with more than 100,000 advisors on software that helps advisors provide guidance, and how to file for Social Security and how much more money they can enjoy when they maximize their benefits on Social Security. Alyson, you work with advisors on social security strategies every day, and you’re our expert on the 2700 or so rules on Social Security, you seem to know all of them, I’ll ask you about some of the recent changes and the impact on Social Security and the impact they have. And we’ll get to that in a moment. But before we get into Jeff, you shared some statistics the other day, which kind of blew me away. So when he talked about the impact our Social Security Plus tool has had in enhancing retirement income, our retirement income outcomes for advisors and their clients that we work with. So fill us in.

Jeff Quigley: Each quarter, we pull our aggregate statistics from all of our enterprise clients, for instance, how many cases were run, you know, what it was based on the output? How much income from the social security administration did we identify, and how much added income and some other statistics, so through the first three quarters of 2022, across our enterprise relationships, you know, our clients have run just shy of 50,000 reports, big number, and over that period of time. So the way we look at it, and not to get too much into the weeds, but we analyze two scenarios, we always generate a optimal filing strategy. And what that means is that we’re going to look into maximize security income over individual or a couple’s lifetime, what’s going to produce the most income. And we compare that versus what we call custom. And that’s how a client comes into the office and says, Hey, you know, I read somewhere that we should file that 65, you know, or maybe I want to, you know, I feel like I need to take it at 62, because I want to get it all. So we compare those two strategies. And the statistics bear out that people don’t know the factors that determine their benefits. So we do that compare and contrast, we highlight the difference between how someone came in to the office versus what’s optimal. And the difference over those 50,000 cases that I referenced, it’s about $9 billion. So we’ve identified $9 billion in potential security income, it’s about 170 $580,000, a household. So just tremendous value that advisors and firms can bring to their clients through a discussion that everyone needs to have. It’s not unique. It’s not, you know, super detailed conversation. It’s, hey, you haven’t you’ve said it 100 times check, maybe more. You know, the first question, people asked us how and when do I file for security? We’ve created an easy way for people to do that.

Jack Sharry: And the rest of what I’ve said repeatedly is the second question is what do I do with my rollover, which is why advisors love. The tool identifies 125 180 grant of benefit for their clients, clients like that a lot. And they say, Well, now you did so much for you there. What do you do by rollover, but you’ve heard that before I wanted to share one more time. So Alyson, we’ll move on to you here. We’ve seen some interesting news coming out of Social Security, especially the noose around the significant increase in the cost of living adjustment. So what’s up? Was that mean? And I bet you’re fielding a lot of calls, explaining what it means and why it’s important.

Alyson Dorosky: Yeah, absolutely. COLA is a hot topic every year, I find that it’s especially because it’s not guaranteed. So in the years that it is announced that it is granted, in the years that it’s big, like it has been in the past two years, it’s exciting, especially in the social security world for people like myself and to look at what that’s going to mean for benefits for people that are looking to file people that have already filed and people that will file in the future. So anyone who is looking at their Social Security statement, you’re gonna see your amounts, the projections and estimates in today’s dollars. So I find that cola is very important. I think it’s a hot topic to talk about always, especially at this time of year, but I find that for advisors using software like life field or working with clients on Social Security just starting off with looking at the calculations in today’s dollars is the most beneficial, the most impactful, because it’s what they’re going to see that’s mirrored on their Social Security statement. But COLA is applied later. So the way that we use it in our tool is exactly how the Social Security Administration would approach the calculations as well. So it’s done as a additional step, but the additional layer on top, and what I would do is how the SSA calculates it, which is applying it to your primary insurance amount. So that’s the amount that somebody’s entitled to, when they reach their full retirement age. Now, the amount that they may get may be less because if they file early, they take a reduction for filing, or it could be larger for collecting and accruing delayed retirement credits. But they’ll take the amount that you get your PI or your F Ra. And in the years that you turn 62, when you’re begin your entitlement to Social Security benefits, until the year that you’re filed, they average out the COLAs that were announced, if they’re granted because it’s not guaranteed, they average them out. And then that gets applied to your pie once you go to file. Now what that means is, in years, it hasn’t been this high, this is the highest it’s been since 1981. So 8.7% is a really big impact. And I think that it’s a topic that’s going to be continued to be hot, I think until at least the holiday season is over. And you see those benefit payments and COLAs been applied?

Jack Sharry: And what are you finding from the advisors? Because you maybe talk a little bit how you work with advisors each day and support them in their discussions with clients. What are you hearing from the advisors, and then I, you also read a column for retirement weekly, which it goes direct to consumers, just advising them on the various nuances around the security administration. So maybe explain all that for listeners?

Alyson Dorosky: Yeah, absolutely. So I work with Jeff, we work with supporting some of our enterprise clients. So it’s really started to build my repertoire. They’re kind of seeing those niche cases that you might not see on the day to day just running general cases. And we’ve gotten to see some of the darker corners of Social Security. And I found that there’s two topics, aside from COLA that are pretty consistent, divorced benefits and survivor benefits. People want to know how you qualify, what’s going to go into the criteria with the SSA for those types of benefits, and how that’s going to impact them, their clients, their ex spouses, they’re just like, when they go to file, it’s looking at each unique case. And that’s why being able to write a column for retirement daily. And for FA mag has been really helpful because I’ve gotten to get a lot of great responses. And I’ve found that it’s pretty overwhelming. A lot of people find a lot of misconceptions and a great deal of confusion around survivor benefits and around divorce benefits for if you’re an independently entitled divorced spouse, how that timer works for two years after the date of divorce. It’s a lot of confusion. And I think that using a tool like LifeYield is always super impactful, but looking at how it’s their unique, but it’s very applicable to the masses. Because there’s a great deal of people that everybody’s going to wonder about survivor benefits at some point in their life. What’s that gonna mean for their spouse? What’s it gonna mean for themselves, if you’re divorced, if you’re still married, or any type of applicable marital status for survivor benefits, you’re going to wonder about how that’s going to affect you. That’s great. Looking at those I think are the most important. So that’s work, Jeff and I work the best together, I feel that we complement each other the best is I like to look at the filing instructions. So my certification is in claiming strategies for Social Security. So I like looking at all the possibilities that are out there all the alternatives, looking at the math that kind of goes into everything behind the scenes, and then Jeff steps in and takes it the next step further and helps advisors further that conversation for planning and taking it from Oh, no, what do I do when my husband dies? I’m only going to get a survivor benefit. I’m not going to get my own. Now what do I do with a half loss of income?

Jack Sharry: Sure, sure. So Jeff, we work with a lot of firms name brand firms like New York Life and Merrill and Personal Capital at Allianz and a whole bunch more. I’m not naming at the moment, but many more, you might want to add a few and there’s 100,000 or so advisors Is that represented by that list? What’s their response? I’m curious, how are they responding to cola? How are they responding to the kind of smarts, frankly, that our friend Allison brings to the equation? So talk about that and how it plays out in the marketplace with advisors, wholesalers, we work a lot of wholesaling groups, and ultimately, the consumer.

Jeff Quigley: Yes, just a clarifying statement, Alyson says we work well together. That’s only because she makes me look really good all the time. Because she is a soul security. She knows it all.

Jack Sharry: And we say that respectfully, right, Jeff?

Jeff Quigley: It’s the highest compliment. So advisors that reached out, that reached out to us without fail, are always pleased that they did, because of Alyson’s expertise. So she handles that, those nuanced cases, the you know, what do we do when How come? It’s, you know, how can we have this output, she makes it easy and clear for them to understand it’s a load off of the advisors plate, right. So for those, you know, however, many percent of those fringe cases, you know, she can handle that, the rest of it just comes through the ease of use of our of our tool, it’s, you’ve referenced those 2700 rules, we kind of bottle those up and make it almost, you know, foolproof, so that, you know, even it’s so easy, even I can do it, right. That’s how we look at it. So we need to talk about looking for reasons to engage like nationwide puts out a survey every year, and consumer confidence and investor competence is down. People need to be you need to communicate with your clients, and what a great place to start. So security is not invasive, everybody gets it, you don’t have to ask somebody how much they make. You don’t have to ask them so much how they have saved, you just have to say, hey, tell me, you know, answer me these five questions. And I can bring value to you in a matter of minutes. And that’s why I think the tool is so successful. We just got off a call Martin, our head of product, Martin, and I just got off a call with Personal Capital. And they gave us a ton of great feedback. And it’s almost like you don’t want to do too much to the tool. Because it is so beautifully easy and beautifully simple to use, and easy to get to that value prop. So advisors 9.9 times out of 10 are just thrilled either with the support they get from Alyson or just from the results that tool provides. And then additionally, you know, the client will say, hey, you know, this advisor was able to help me with security seem really knowledgeable. Maybe they can help us with their retirement income. That’s kind of when that transition happens and where our value continues to shine.

Jack Sharry: Yeah, just a comment there. If I may, one of the things that we find we started the social security tool, I want to say it’s 12, maybe 13 years ago is Franklin Templeton was actually the first firm we made it available to and they’ve used it very, very well for many years, as have many other firms. And what we find, by the way, with all firms who work with it’s a high percentage of utilization, largely for the fact that we average about 175,000 hours of benefits. So that’s free money that an advisor or a wholesaler can working with an advisor can show a client. But the whole idea is we kind of help people answer that first question we mentioned earlier, and more importantly, begins the process of setting up for retirement income. And I’d love for you to comment on that Elson, because a lot of times you’re answering that initial question like how do I file and what we’re finding increasingly and goes a good example of work. We’re doing Franklin Templeton, an advisor engine, it starts the process of still scary I’m talking about starts the process of thinking, Well, how do I maximize my retirement income? Often the firt? One of the early questions is what do I do with my rollover? And what do I do with my taxable accounts? And how do I have them work together, and that’s down the road, it’s not going to be ready day one. But pretty soon, you’ll be able to look at all those various factors and then maximize your income. So if you would else and talk a little bit about your day to day when you’re talking with advisors, what do you find? I think you’ve shared this with me enough to know that they kind of come into it just confused by the whole thing. And so you help organize the thinking around it gives me answers. But then what comes of that? Where does that go? Where does that?

Alyson Dorosky: Yeah, I can go anywhere. Honestly, I think that’s the best part about working LifeYield is it can go anywhere from I reach out to the advisor, they have a question. So I’ll reach out and get the information that I need to run the case, the tool, because I always use the tool, I may be an expert, but my first line of defense is always running that case for the tool. I want to make sure that my initial assumptions are correct. And then taking their report and I kind of backpedal from there. So if the advisor is confused about a benefit estimate, I’ll do the hand calculations and sit down with the calculator and a pencil and a pen and kind of do it all manually and take a deep dive through the same calculations that the SSA would use and then reach back out. The advisor will discuss any questions they have. And then from there, we can go and include the client and continue the discussion and sometimes we go all the way to Whoo, I’ll help them find out the Social Security Administration. help them figure out any questions they have on their application. Because it is a very, very detailed application, there are a ton of questions. And it is extremely overwhelming for clients. So I found that being able to step in at any point throughout that process with an advisor or a client has been really helpful. And it’s really taking that planning to the next step. It’s not just, you know, we run the report, we sit back and they do their own thing. It’s, we’re there along the way. And we get to learn more as we go talk to you.

Jack Sharry: And I love this part where you are often, not often, perhaps, but you certainly have spent plenty of time on the phone with a client and advisor and the Social Security Administration, educating the Social Security Administration on their rules, is that not the case?

Alyson Dorosky: It’s pretty often, I have seen a lot of different levels of misinformation, miscommunication, they use a rulebook, it’s just as if it was a, you know, salesperson with a script, they only know as much as they know, they don’t have to really dive into the 2700 rules like I do, and they probably don’t love it as much as I do. Like, I would love to see that playbook. That’s probably the dream. getting my hands on a copy of that.

Jack Sharry: I love your geekiness Alyson. It’s contagious, it almost makes me want to be one, but not quite enough.

Alyson Dorosky: Only when it comes to social security or Disney but almost.

Jack Sharry: That’s fun. I love it. So Jeff, you work with our many clients firm level, they in turn with their wholesalers, their advisors, however, they’re organized as a business. Where do you see this all going? It seems like we just figured, well, we must have told everybody in the universe about how to file for Social Security, but they keep coming back. And there’s more and more people that are seem to be catching on. So fill us in, and we seem to be growing in terms of people embracing this as an opportunity to help clients not give unnecessary money away.

Jeff Quigley: It’s a natural and easy conversation to have, we’ve got a wholesaler out in the Pacific Northwest that every meeting he gets with advisors, he leads with a template, a boilerplate email that talks about security and how to get access to it. And why they should do it. It doesn’t require too much work for an adviser to engage a client on Social Security, you know, where I see it going is I see a continued need for this kind of guidance. Because the statistics and the surveys still show us that people are uneducated, or not educated enough when it comes to how to file for Social Security. So I don’t I don’t see a diminished need at all. If anything that need is growing, where I see us taking this thing is enhancing that next step, right. So we maximize those security outs. And I’ve seen this dozens of time, the client says oh my gosh, I can get $200,000 More from secure administration. And we say yeah, this is how you file she’s like, Okay, now what do I do? Right? So then we start talking about how do we bridge the gap from, you know, when I retired 64 to 71. So security is optimized to how do we protect a surviving spouse. And that’s when you either start to weave in a solution or aka product, right? That’s where firms will start to weave in their product solutions to meet a specific need. Or maybe it’s a firm like Personal Capital, who runs 1000s of these cases, and funnels that client directly into their planning process. So you’re using Social Security as a springboard to whatever conversation is going to be next for that advisor client, that advisor prospect. And, you know, I see us developing our income layers functionality to a point where we’re incorporating specific products to demonstrate value and to show how we’re meeting a specific need with a solution that’s been designed by one of our partners. So the sky’s the limit, I think, and we’ll continue to keep fighting the good fight, making sure our advisors get what they need.

Jack Sharry: Well, I know Alyson, certainly would love to spend the rest of our our time and then some talking about the wonders of Social Security’s 2700 rules. And Jeff, you would love to talk about the wonders of our fabulous clients. But our time grows short, as we look to wrap up from each of you because you really look at it from two different perspectives. But what are three key takeaways that Alyson if you’d kick it off? What are three key takeaways, as you think about security, where it is, where it’s going and what you do about it? Day in day out basis?

Alyson Dorosky: Yeah. So I think the key three takeaways would be COLA is always going to be a hot topic, especially this time of year, looking at survivor benefits is applicable for majority if not all clients that are in your firm with your practice. It’s definitely something that you should talk about early and often looking at all types of benefits that your client would be filing for. And I think the third would have to be the ability or the importance of using Social Security optimization software, and using one with support, being able to not just take the output and hand it over and be done. But working with a partner that can help you and answer questions along the way, at any point is just so valuable to an investor and a client and anyone that’s going to file for Social Security.

Jack Sharry: That’s great, Jeff, how about you? What are three key takeaways?

Jeff Quigley: I would say, keep your eye on the asset management industry. And as they, you know, as specific asset managers start to really embrace technology, to see what gets created to see how it evolves, is we’re learning firsthand, you know, Franklin Templeton is is definitely walking the walk. And I think there’s a lot more to come there. So keep your eye out on, on how asset managers are going to be leveraging technology to provide that value add for their advisors and their clients in turn, I would say also, you know, so the second point would be, don’t underestimate the value of a security conversation. I’ve heard too many times that my clients got a high net worth, you know, they don’t need, we don’t need to worry about that added Social Security income. And I’m thinking to myself, Well, how did the client get that high net worth, you know, they they’re conscious about what they do with their investments and how they spend. And you know, the other side of that is advisors will say, also securities too complicated? Well, we’ve taken that guesswork out. And then you know, just to piggyback with the third item to say, you know, leverage social security as a springboard to whatever kind of conversation you want to have, whether that’s leveraging, you know, high level conversation about retirement income using income players, or whether you’re diving into a full financial plan. So use it as a value add springboard into whatever path you want to take with that prospect or that client going forward.

Jack Sharry: Terrific. Terrific. So it’s been a great conversation. I love talking to you guys love the enthusiasm. And as you know, as we do each time on our show, I’d love to ask the question, What’s something you do outside of work that you’re excited or passionate about, that people might find interesting or surprising? Alyson, how about you?

Alyson Dorosky: So for this episode, we will go with another one. As we know, I’m a security expert, but also a Disney expert with some legitimate expertise in that area. I had the privilege of working in Disney World in Florida. I was there for almost two years back in 2013. And that’s where my husband and I met. I at the time was a hostess at Hollywood Studios. And my husband Ryan was a lifeguard.

Jack Sharry: Oh, wow. Cool. That I didn’t know that. I knew you love Disney. But I didn’t know that connection. So Jeff, how about you? What’s something interesting or surprising that you’re particularly passionate about?

Jeff Quigley: Well, that’s surprising to the two of you, but I will say that that I bleed pinstripes. So I’m an avid avid Yankee fan, much to our demise, this recent postseason. We take things very seriously in this house. It is mandatory watching when the bombers are playing.

Jack Sharry: Gotcha. Gotcha. I’m gonna have one little side note if I may. One of my favorite stories among the various people I work with and have worked with over my career people like Allison Allison started with us into the administrative roles kind of an entry level starting position, didn’t know anything about anything of our business. I don’t think their expertise in Social Security is self taught and self generated. So I find that particularly impressive, I love me a good bootstrap story. And Alyson is all that she taught herself. Not 2700 but 20 699 of the of the rules of Social Security and loves it has a great passion for it. The advisors love working with her the firm’s we work with love working with her. So kudos to my friend Allison for making it happen. So she did that all on her own.

Jeff Quigley: So we’re very proud of our team couldn’t do without you.

Jack Sharry: So I want to thank you both. It’s been a great conversation. I look forward to our next for our audience. If you’ve enjoyed our podcast, please rate review, subscribe, and share what we’re doing here at both tech on deck. We are available wherever you get your podcasts. Thanks again, Jeff and Alyson, it’s been a great pleasure. I look forward to the next time.

Jeff Quigley: Thanks, Jack.