Will Allen on SiriusXM: Cash Flow, Per Diem, and Social Security
Updated: Sep 9
Will Allen joined Dan Ronan on SiriusXM’s On the Move, Channel 142, on September 1 to talk about the financial challenges facing truck drivers and owner-operators. They discussed saving when income varies from month to month, spotting everyday expenses that add up, and how per diem can affect future Social Security benefits. The second segment focused on Social Security: the projected 2032 trust fund shortfall, how benefits are calculated, and why years with little or no reported earnings can mean a smaller retirement benefit.
Saving When Income Is Uneven
For truck drivers, income can vary quite a bit from month to month. When you don’t know what’s coming in, figuring out how much to save isn’t easy.
What we’ve found helpful is to start with a realistic amount you can put away even in a lean month. When you have a good month, save more to make up some ground. Set a target for the year, but give yourself room to adjust from month to month. Over time, you’ll get a better sense of what you can consistently save.
Where the Money Actually Goes
You don’t have to track every penny, but periodically sit down with your statements and see where the money is going. Pick a few places where you spend regularly and add up what you spent over the year. Something that seems inexpensive each day can look very different when you see the annual total.
Subscriptions are another good place to look. Most of us are paying for something we’ve stopped using or forgotten about. Go through those charges and cancel what you no longer use. You may find some savings without giving up anything you’ll miss.
The Per Diem Tradeoff
Start with your Social Security statement at ssa.gov. Look at the earnings reported for the years you received per diem. Qualifying per diem reimbursements under an accountable plan aren’t included in the earnings Social Security uses to calculate your benefit. That’s the tradeoff to understand: money you receive today may not count toward your retirement benefit.
Then look at whether you’re saving anything separately for retirement to help make up the difference. A Roth IRA may be an option if you’re eligible. If your budget is tight, start by looking for an amount you can consistently set aside, even if it’s small.
The Number Social Security Actually Uses
That same statement shows your earnings history year by year. Look for missing or unusually low earnings. Social Security bases your benefit on your highest 35 years of earnings, with earlier earnings generally adjusted for wage growth. If you have fewer than 35 years, zeros fill the remaining years in that average.
For owner-operators, business deductions can reduce the earnings reported to Social Security. A year you remember as a good one may count for less than you expect. Reviewing that history can help explain your benefit estimate and show whether another year or two of work could replace a zero or a lower-earning year.
Social Security’s Future: What Could Happen Before 2032
Dan also asked about the projected 2032 trust fund shortfall we discussed in our previous post. People hear that date and wonder whether Social Security will be there when they need it.
I think Congress will eventually make changes, but it may wait much longer than it should. Lawmakers waited until the last minute in 1983 to address a similar funding problem. That doesn’t guarantee they’ll act this time, but I don’t think doing nothing is the most likely outcome.
The longer Congress waits, the harder the choices become. You can’t control when lawmakers act. You can understand your own benefit, know how much you’ll depend on it, and keep building savings alongside it.
Could the Full Retirement Age Move Higher?
We discussed four possible changes in our previous post. Raising the full retirement age is one I think Congress will consider, particularly for younger workers who have more time to adjust. Speaking for myself, I’d be willing to wait longer if it helped strengthen the program.
But that’s easier for some people than others. Driving a truck is physically demanding, and working a few more years isn’t a simple answer for everyone.
If you’re close to retirement, I wouldn’t change your plans based on a proposal that hasn’t become law. I would look at how much of your retirement income will come from Social Security and what room you’d have to adjust if benefits or the rules change. Clips from On the Move with Dan Ronan, SiriusXM Channel 142. Used with permission.
Sentara Capital is a fee-only registered investment advisor based in Marietta, Georgia. This post reflects our views as of publication and is for general educational purposes. It is not personalized investment, tax, or legal advice or a recommendation to buy or sell any security. Individual circumstances vary, and tax rules and Social Security provisions may change.
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