Social Security Maximization For 2022

Hi, this is Roy Jones with ManTalk Radio Podcast. Our mission is to break down the walls of race and denomination. Your chosen Truth Radio Broadcast will be starting in just a few seconds.

Thank you. security, Medicare, IRAs, long-term care, life insurance, investments, and taxes. Now, let's get started with Finishing Well. Finishing Well is a general discussion and education of the issues facing retirees. CardinalGuide.com, Cardinal Advisors, and Hahn-Shile CFP sell insurance.

This show does not offer investment products or investment advice. Oh, welcome to Finishing Well, a certified financial planner, Hahn-Shile, and how fun it is to be back with my friend today after my brief struggle with COVID, but it is great to be back. And so today's show is Social Security Maximization for 2022.

How fun is that? Hans had been reading Romans and had seen the John Maxwell commentary on it, and he brought it to my attention. And so we're going to talk about that in a minute. I just want to read the passage first. Romans 13, one through seven says, Let every soul be subject to the governing authorities, for there is no authority except from God, and authorities that exist are appointed by God. Therefore, whoever resists authority resists the ordinance of God, and those who resist will bring judgment on themselves. For rulers are not a terror to good works, but to evil.

Do you want to be unafraid of the authority? Do what is good, and you will have praise from the same. For he is God's minister to you for good. But if you do evil, be afraid, for he does not bear the sword in vain, for he is God's minister and avenger to execute wrath on him who practices evil. Therefore, you must be subject not only to wrath, but also for conscience sake. For because of this, you also pay taxes, and for they are God's ministers attending continually to this very thing.

Render therefore, all their due, taxes to whom taxes are due, customs to who customs fear, whom fear and honor to whom honor. And so with that idea, when we think about this social security, and I know that, you know, for me personally, before I met Hans, the whole idea just bothered me. And I can assure you, my kids, when they got their first paycheck, didn't realize how much money came out, they're just bothered by what's going on here. But as we get through this show, I think you'll see that what has been instituted is really for so much good, because unfortunately, the church hasn't stepped up and helped all the widows and orphans that desperately need money.

And every single day, I hate to think how many millions of people are being supported by this social security program that so many opposed. But it's just, it's an amazing thing, right Hans? But absolutely, yes. And then where our role in this, in my role, specifically, is to help people understand it first, and then next to help them make good decisions about how they manage it, and how they plan for it, so that they can get the most benefit out, back out of it. That's what they pay their taxes for. Exactly. And, you know, what a benefit it really, really is. Because, as you talk about all the time, this is like the base level heartline of when you begin the financial plan, we need to run these statements. And we need to get going, right?

We do. And I think that what I'm reading in Romans is that it's just saying, listen, it's saying to me personally, don't resist government. Don't be afraid of government.

Pay your taxes. And these leaders were appointed by God. And you may not like or agree with everything they're doing.

And, you know, nobody says they're perfect. But this is just a system that we're all subject to. It's under God. And so I just personally, I need to lose all that stuff and just try to make this work, not only for my own benefit, but for everybody's benefit. So it's always good.

Oh, yeah. I agree wholeheartedly that it, as you embrace it, and you go, okay, well, this is what I've got. And I'm not in government to make these decisions.

But it is the system. And to maximize it and look at the tax advantages and essentially the advantages for my family and really the security that it gives me that my wife's going to be taken care of even through an income standpoint when I'm gone. Sure. So the reason we're talking about it today is the new earnings numbers or the 2021 earnings numbers got posted, at least for the people that aren't self-employed. I mean, if you're self-employed, you're probably going to have to wait until later in the year. But if you're under a W-2, which is most of us, and you're still working, the 2020-21 earnings went up. And so I bring down my statement every year and take a look at it and take a look at the changes of it right after this happens.

And, you know, my understanding is you did the same, Robbie. Oh, absolutely. And it gets pretty exciting after you begin to understand the ramifications of what happens as you come into these last years of putting income in.

Well, yeah. And so you and I have similar situations where our spouse's earnings history is such that both of our spouses, mine more than yours, is going to be filing for 50% of my full retirement benefit when she gets there. And then I'm going to be delaying until 70% so that we get the maximum check that we can. And then furthermore, I'm currently earning a nice income. And so even getting it before 70%, I'm going to have to pay a bunch of taxes on the benefit I would get.

So for a bunch of reasons that we've talked too many times, I'm delaying until the latest possible date. And then my wife is going to file based upon me at her full retirement age. And so the bottom line on that, and we did the YouTube video on that, we've got almost $6,000 a month in the projections that'll be coming to us every month after 70. And for two reasons I put on the video, we're probably going to get a lot more than that because number one, we just had a 5.9% cost of living increase that everybody got that's on Social Security.

And that's baked into these projections. Now, what I don't think is baked into these projections is the Social Security increase that's going to go on. I'm only 63, so that's going to go on every year for the six years so that by the time we actually get there, it's going to be more than this for Social Security. And then the second reason is, I'm going to work six more years, if Lord willing, that I'm going to be doing that. I'm going to have more contributions. So I anticipate that we're going to get substantially more than the $6,000 a month.

But if all it was was $6,000 a month, that's a pretty good chunk of change to look at getting every month for the rest of your life, especially if you live into your 80s and 90s. That's pretty awesome. Yeah, I was shocked the first time I realized what was actually in that statement. And I was so glad that you were my goad to tell me, go print this thing. And take a look at it and realize what's going to happen for Tammy.

And I was in a similar situation, which really surprised me that in my case, when I looked at the two of them, it's like over $5,500 if I wait for 70. But like your client said to you yesterday, which I think is hilarious, I too am planning on dying in the saddle. That was so funny. I asked him when he's going to retire. The guy's 70.

And I can just tell that he's going strong, got a great attitude. And I was telling him, you're my hero, because that's what I plan. He said, yeah.

He said, my retirement age, I'm going to die in the saddle. So the thing of it is, is I had no idea what the benefit would be to wait till I'm 70, right? Because there's no sense in paying taxes on this other stuff. But it's also like creating an annuity for yourself to continue to hold off on filing for it, because it's in there. Like, I like the word you use, it bakes in there, right? It keeps on growing. And the statement shows you exactly what it's going to do. Well, yeah. And then that's the first part of it.

The next part of it is, what am I going to have in addition to that? And I'm going to have the benefit of all the savings that I've done in retirement savings for my whole life, okay? And if I had not saved much, and I just had some unforeseen circumstances, whatever, if I just got to 70, and I hadn't saved much, and I had to live on that, I'm not going to pay any taxes on that $6,000 a month.

They're very, very little. Because the way taxes are calculated on Social Security, it's not on the Social Security itself, it's by the amount of the other income that you have, okay? The formula is driven mostly by income that comes from other sources other than Social Security. So the people that have only the Social Security check, at least they don't pay any income taxes. Right. So when you think about that $6,000 of income, I mean, it's like what you'd have to earn to be like that would be more like $8,000 or $9,000, right?

Yeah, at least. And especially when you're paying Social Security taxes, and unemployment taxes, and you're contributing to a 401k, you'd probably more like 10 grand if you compare it to your weekly paycheck. So this thing all by itself is a pretty substantial amount of money relative to what you've been making. And then now the problem becomes, if I start pulling a bunch of money to live in addition to that out of my other retirement accounts, or I wait till minimum distributions, and then I have to pull out an amount, I'm not only going to have to pay taxes on that money in my 70s, it's going to drive taxes on my Social Security.

That makes sense? Right, which is one of the critical things that really we talk about all the time. If you have an IRA or a 401k that you haven't paid taxes on, this is an opportunity for some really what I consider to be fun financial planning, right? I mean, here we've got all these assets. I mean, let's look at how we can maximize both our Social Security and our IRAs. Well, and so one simple way to solve that problem with the tax deferred money, or going to pay tax later when you hit minimum distributions, if you can live off your Social Security, which a lot of seniors that are getting two checks do just fine, you know, a married couple, you can give away your minimum distribution every year through a QCD. And you can give it to the Lord and give it to the kingdom. And so there's lots of ways to work all this stuff around, but it's just the linchpin is Social Security. That's why we're talking about it today.

So we've got a break coming up. But we want to remind you that the show is brought to you by cardinalguide.com. Wonderful video that was just done on maximizing Social Security is there at Cardinal Advisors at YouTube, their YouTube channel. You can just look for Cardinal Advisors on YouTube or go to cardinalguide.com for Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement. And of course, you can always email Hans and contact him there at Cardinal Guide. So we come back more on how to maximize your Social Security.

We'll be right back. Welcome back to Finishing Well with certified financial planner Hans Scheil. Today's show maximizing Social Security for 2022. We got a new statement, Hans, and it's important people go get that thing.

Well, it is. And so if you do not have a My Social Security account, I would suggest you go open one today. And you go to SSA.gov. And you just sign up for one.

And you got to get a user ID and a security code. And I want you to be careful. Don't rush through this. You people that rush through it and give quick answers, because what they're going to do in the identity verification, they're only going to do it one time. Social Security is going to run your credit report only to get some personal information on you. And then they're going to give you a little quiz, like some bank you had a loan or some car you owned or things they could pull out of there. And if you fail that quiz a couple of times, they're going to lock you out of here. So my only warning is don't do this in a hurry. Just sit down. And if you don't know a question, stop and think about it or ask your spouse or try to think back. Because once they lock you out, now you're going to have to call them.

And I don't want to wish that on anybody. But if you have a Social Security account, then you need to go run your statement along about the beginning of February every year, because that's when they've added last year's earnings. Now, if you're already collecting your Social Security, then you don't really need to do this. But it still would help you to listen to the whole show, because we have some stuff to tell you. And I can just tell you from my experiences, it actually, you know, it's kind of encouraging to do it once you get through it. But I'm with you that the questions that those security questions they ask you are tricky.

But when you think about the time invested in getting those questions right versus calling them and staying on hold, we're going to invest the time with getting the questions right. I hate to even think what that would be. Because I know... And so what I want to plug in here is the first thing the Social Security check does is it gives you a check every month. And it gives your spouse a check every month if you're married, or the two of them into the household, you know, and that checks coming in for you to live and buy groceries and just generally that's an income after retirement. Nobody ever planned for this to be your only income. But if it works out that way, they don't really tell you this on the Social Security statement, but you're not going to pay much taxes if all you got Social Security, or even if all you got Social Security in a little bit.

So that's a good thing. I mean, we don't want to tax people that are living on a, you know, what is a minimum income. So for the rest of us, when we have other income, once we're collecting Social Security, you know, you think about where is that other income come from if we're not working. It comes from either a pension, which we don't really have much control over. We can do the math, but a pension is a pension. Most people don't have those much anymore. And what most people have is an IRA or a 401k.

Many people with big balances in them. And that's a big tax problem or that's, you know, it's a good problem to have, but a lot of people just postpone taking any money out of it until they get older, and then they're going to get minimum distributions. And where I want to tie that back to Social Security, the way you pay taxes on your Social Security, it's from a formula that is mostly driven by your income other than Social Security. So in other words, if you pull out $20,000 a year out of your IRA to live, and then you, you know, that gets added to half your Social Security, and they come out with a formula, and that makes some of your Social Security taxable. If you pull out $70,000 a year to live out of your IRA, or you're getting it from pensions or something, you're going to pay tax on most of your Social Security. So what we want to do, if we got somebody in your 50s or 60s, is we want to start converting a lot of that pre-tax money that you're going to be living off of to supplement your Social Security.

We want to start converting that to a Roth or some other tax-free source, like a cash value of a life insurance policy. So that's another show another day, but there's plenty of planning strategies around Social Security, and I just kind of wanted to get them out there. And I do YouTubes on these.

There's several YouTube programs that I have up on the YouTube channel that go over all this stuff, and even specifically what we're talking about today. Yeah, and I also feel like, Hans, I should mention, like I just had a friend yesterday at a meeting I was at that was turning 62, and I looked at him and I said, you're not fixing to file for your Social Security, are you? He goes, well, I was thinking about it. I said, oh, dude, man, you're working, you know, and I spent just a little time with him, and he quickly saw the light because so many people just think, well, I can, you know, I need to get while the getting's good, but oh, what a difference it makes if you hang on at least till full retirement age because he, you know, at 62, you know what happens? You lock in this lower amount, plus you're paying taxes on all that stuff, right? And then if you make more than 19,000 a year from a job, you're going to give some of it back. Do not file for Social Security early while you're still working without calling me and running the decision by me.

I'm just going to tell you that, and it really brings you into the, brings us into the story that I have about a client that I've been dealing with for a couple of years, but the story specifically yesterday. This lady retired a bit before she turned 65. She's like 65 and a half, excuse me, before she turned full retirement age, 66 and a half.

She's like 65 and like three or four months, and so she just retired the end of last year. This is her first year of retirement, and she's got some 401k money, and so we decided to live off of that because she's going to go get a part-time job, and she's going to keep the part-time job making less than 19,000 a year, and she's going to keep it into retirement. So we just decided not to file for Social Security early because, and we're just going to live off of for this year, deductions from her, what was her 401k. She's now got it on an IRA.

She rolled it over into an IRA under our management, and we're just sending her a check every month, and so, and I found out during this whole process that her ex-husband, he died. You know, and God rest his soul, he's, she's now eligible as a widow, even though she wasn't married to him when he died because she had been married to him, and she had not remarried. She's eligible for his benefit. So the people at Social Security told her that she can't file for both of them.

She can't double dip, and his benefit would be, I think, $1,900 a month, and her benefit would be $1,600 a month, but she could, she'd really be better off waiting, just like I had told her, till full retirement age, and then filing for either his benefit or her benefit. So in other words, she wasn't going to get any benefit out of the fact of her ex-husband's Social Security. Well, then I ran all this by Tom, and Tom's been helping her with the IRA roll, or the 401k roll over, and all that kind of stuff, and Tom said, now wait a minute, she can file for Social Security against her deceased husband's, and get his full benefit, now at 65 and a half, and she can collect that, and then she can not take her benefit, and then her benefit is going to continue to roll up. So then we, we called her back yesterday, or the day before, and we just said, wait a minute, time out, we got another strategy for you, and she, then she started telling us, she started kind of disagreeing with us, that's not what the people at Social Security told me, and blah, blah, blah, blah, blah, blah. So then Tom got out the code from the Social Security, he gets out the book, read it to her. Anyhow, she's coming over, we're going to help her do this online, and the point of the whole story is that she, as a widow, gets benefits that other people, that married people aren't, where they're both still living, aren't eligible for, and then that's going to allow us to not take the distributions out of the IRA for this whole year, which is going to leave more money, because this is not a wealthy lady, I mean she, she's very concerned, that's why she's going to back to work part-time, so that she doesn't have to draw down her retirement account, because she's thinking she's going to get very old, and she's going to need that money. So it's just kind of a happy story, where we're able to, we're knowing the rules, point her in a way, and we're projecting her Social Security check on her own record is going to grow to 2,400 bucks a month by the time she's 70. That's the frosting on the cake, and then she'll just switch it over to that. Yeah, that's the part that surprised me.

How cool is that? So yeah, she can continue to get the widow benefit, but the other just keeps growing. Well it does, and it has to be filed in a certain way.

Don't people go start arguing with the people of Social Security? You know, Hans told me, you know, I mean this is a special situation that's there for widows, and there's a benefit for widowers where the other person had an earning, and then they're deceased, and the lady's in her 60s. Tom has another client exactly like this, and that's why he's so adamant about it. And it's really, I mean it's just, this is one of the people that came into me and just said, I don't know why I was listening to your show, but I just picked up on it. And you know, when those people come in, I can tell you why, is God just connected us. Just like he connected me with the Truth Network and you, and now just, I don't know why Tom kind of thought of this out of nowhere when we had all resolved ourselves to the fact we weren't going to get any benefit out of that. But you know, it's just God at work here. He's just lining things up.

And it works the other way too, that God had you for me. Because I mean, oh my goodness, when my dad was going through all that stuff two years ago, and to have Hans Schleil, your friend, talking to you. I mean, what an opportunity it has been really to be one of your clients. I mean, it's really, really, really helpful.

And actually, in my opinion, really fun. Dr. Gerry Breshears Well yeah, and most advisors, it's been my experience, don't know the details about Social Security. They know the high level stuff. They know the basics that we kind of go over and that are in my book and on a lot of my channels. But we know the stuff, the deep down in the roots exception kind of stuff. And we didn't learn that in a book somewhere. We learned that by practicing. I mean, you just help enough people with their overall financial planning and these strategies and people come to us with problems.

This lady has a real problem with income and living in retirement and having to retire early because of her health and a lot of things. And this is just, God solved a problem here. Dr. Darrell Bock Yeah, it's so cool. But it really gets to that first basic that I believe you mentioned. You know, if you have not gone and set up your account, do that today and get going. You know, take a look at what's going to be happening for you. Dr. Gerry Breshears And tell your friend Robbie to call me, the guy that's 62, or turning 62, because I'll goad him. I'll make it clear that he doesn't go sign up for it.

Okay. Dr. Darrell Bock Okay, I will do that. So we thank you so much for listening today to Finishing Well. As always, we want to remind you that you can go to cardinalguide.com and get Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement. It has all these subjects in it. It's great background information as you're making these kind of decisions, as well as their YouTube channel, Cardinal Advisors, where he'll have an episode on maximizing your social security right there. And it's really cool. He's got these charts shows all the numbers on it.

And it's definitely worth watching. Once again, I'm so thankful for you, Hans, and the chance to be back today. Dr. Gerry Breshears That's great. Thank you.

And God bless you. Dr. Darrell Bock Finishing Well is a general discussion and education of the issues facing retirees. Cardinalguide.com, Cardinal Advisors, and Hans Shile, CFP, sell insurance.

This show does not offer investment products or investment advice. We hope you enjoyed Finishing Well, brought to you by cardinalguide.com. Visit cardinalguide.com for free downloads of this show or previous shows on topics such as social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Hans' best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement, and the workbook. Once again, for dozens of free resources, past shows, or to get Hans' book, go to cardinalguide.com. If you have a question, comment, or suggestion for future shows, click on The Finishing Well radio show on the website and send us a word. Once again, that's cardinalguide.com. Cardinalguide.com. This is the Truth Network.