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This is the Truth Network. Welcome to Finishing Well, brought to you by cardinalguide.com, with certified financial planner, Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in Finishing Well, including discussions on managing social security, Medicare, IRAs, long-term care, life insurance, investments, and taxes. Now let's get started with Finishing Well. So, Finishing Well is a general discussion and education of the issues facing retirees.

cardinalguide.com, Cardinal Advisors, and Hans Scheil CFP sell insurance. This show does not offer investment products or investment advice. I am looking forward to this episode of Finishing Well with certified financial planner Hans Scheil. Today's show is Social Security.

When do I take it? Obviously, the question that's on so many people's hearts, when they start to reach 58, 59, how do I figure this out? And so today's show is for you, but it is also for those who might be guiding others as you're reaching that age and that kind of thing. But as I was thinking about, this is interesting and not coincidental that God had had me working on the 13th Psalm. And if you look at the 13th Psalm, which is the Psalm of David, the very first line is, how long, how long, oh Lord, will you forget me? And then he says, forever, how long will you hide your face from me? And if you've ever been on a long trip with your kids, you know, it isn't long, right Hans? And they're going, how far do we, how long dad, how long, how long? And it's interesting how David goes there.

And really as I began to process where I think God had me going with the 13th Psalm, is what David is actually doing is something I should have been doing, which is putting God's role on God. I want all these things to happen under my control. I'm going to make it happen. It's going to happen right now because I need this to happen. But David's saying, no, he's asking dad, when are we going to get there?

Rather than, than pushing the throttle. And so in seeking good counsel and how and when do we take our social security and what are the factors? Hans, you have some great information that, and really got it boiled down to seven main talking points of things to consider in this decision. Well, yeah, I mean, people come into us in all kinds of places, but when it comes to social security, many of the clients on the way in the door, well, we're learning about them and they're preparing to hire us to help them make decisions.

This is one of them. Like when are we going to start social security? When is my spouse going to start social security and how much is it going to be? And how does it relate to everything else? And a lot of people come in and they, they kind of think they've already made this decision. Oh yeah, I'm not going to start my social security until 70 or another person says, oh, I'm starting at 62 or I already started at 62 and the reason is I think they're going to run out of money or something and I want to get, well the getting's good, well there's still money left. Or whatever the reason is, they're generally considering one of these seven factors. And so I just wanted to do a show where I said, these are all the things I'm thinking about, we're thinking about, Tom and I are thinking about when we got somebody that's coming in the door and they're going to hire us to put together a whole financial plan, these are the seven things. It's funny how we always end up in sevens but it just, because it would have been nine if I had nine to put down or it would have only been four if I didn't have five, six and seven. It's just so there's seven things, we'll go through those in a sec.

There isn't the eight thing which is they're going to run out of money. I don't see that on your list. Because we've done shows on that before that that just really isn't one of the considerations but these are real things to consider and to at least process.

Yeah and let me go through the list and you can go find the YouTube video under Cardinal Advisors or Hans Schile or you can find it through our website. I do a parallel video that's on YouTube and so anyhow this board is your age or the month and year that you're going to start it and there's some awareness here. There's 96 different dates for a person that's under 62 so you can choose from among 96 different dates. Now we're not going to look at all 96 of them and have you look at all 96 of them but I do that to just show a point. If you're under 62 starting with your 62nd birthday every month between there and 70 you could elect or elect not to take your Social Security. So there's a pretty wide range of dates you can choose. Right and it's not as some people you know when they're thinking about these windows on Medicare like it's only you know from October to you know September or you know October to November those kind of things have nothing to do with this. This is just this is that if you were born in you know where you're having your 62nd birthday let's just put it that way in September well then you can't start it before September but you can start it on September 1st you can start it on October 1st you can start it on November 1st you can start it on December 1st and now we're into the next year and so on and so forth 96 times that's the selection that's in front of you.

So I just I wanted to make that point and so let's go on then. In that point I think it's actually sort of an escape valve that I've thought of myself you know like okay well right now my decision you know based on the other factors that we'll talk about is to wait until I'm 70 because I'm working because of my wife's age and and a number of other factors but if all of a sudden boom you know there's this horrible accident you know my wife is no longer around not you know or and and I lose my job because I'm disabled and all of a sudden boom that that very month I can turn it back on if I need to. You can turn it on yeah absolutely and so then one of those 96 dates is actually your full retirement age FRA say well what's that for people that are younger than me you know let's just say 1960 and after that full retirement age is your age 67. So your 67th birthday is the one of those 96 dates that you reach full retirement age and that's where you get your full benefit and if you wait till then to start it any money you collect from Social Security you can still make as much money as you want from a job if you start it before full retirement age like at 64 or 65 or that sort of thing you are going to have to give some of it back if you're still working and earning a substantial income. You can go to socialsecurity.gov right and get your statement it'll tell you exactly here's here's your your month when you are at full retirement age. Yeah and it'll give you an amount too that's what you're going to get approximately at that at that point. So the third thing on the list is spousal benefits so your spouse enters into this equation because your spouse has 96 different dates too and your spouse is presumably a different age once in a while we get people that are exactly the same age but even if it's separated by a few months their track is a little bit different then we've got to figure out with the spouse does the spouse have his or her own earnings history significant or is the spouse going to file off of your benefit because it really matters when you file to kick in the spouse benefits and then if the spouse is going to get your check after you die if you die first then it really matters when you file and there's a whole bunch of stuff interconnected with the spouse connected with the spouse so we need in a married couple situation we need both social security statements and we need we've got 96 different dates here 96 different dates here and a lot of couples do start at the same time they're different ages but that's that's what we're doing in the planning so that's a big factor spouses. Now retirement date so this is a big misconception that people come in with a lot of people think that you start your social security the month after you retire and you can do that maybe their parents did that maybe their spouse did that you can do that and there's some logic in that so you're you're going to pick the one of the 96 dates that just happens to be the date after you retire because you stop one check you start another one I mean it makes sense the thing I want to point out it doesn't have to be that way you could start your check before you retire you could start the check after you retire and go without a social security check so you get more so what I want to say with retirement date it doesn't have to be that way you still have the choice of the 96 then you got needed and desired income so I mean look if you need the money you know my I'm going to help you get it I mean if you just need your social security check I don't care what age you are and you need it next month and we're going to just go get it that becomes the overriding factor there's many people that think they need it but they really desire it so they're they're you know they really don't need it and then when they sit down with me and they find out well yeah I need it but they've got money they've got money in an IRA so we could pull money of an equivalent amount of money every month out of the IRA or the 401k to live on and allow them to delay it for whatever reason to their benefit so there's alternatives even when people need it if there's another alternate source of money and need and desired then you've got this life expectancy thing and some people come in just convinced that they're not going to live very long so if they're 100 convinced to that and sure that well then sure started as soon as you can that's going to be more checks you're going to collect before you die unless you have a spouse and you're the bigger check because if you don't live very long but your spouse lives a long time they're going to be collecting your benefit for the rest of their life so there's a bunch of factors with life expectancy but that's a consideration and then you got other yearly taxable income so many people are just unaware of how social security is taxed and it's taxed based upon your other income social security by itself is not taxed there can be taxes if you have a high additional income so the extra money that you have or your primary money if that's high that comes back and then they tax your social security so we need to look at that we need to project that in the future and you have some control over that that's the one actually i i see people that are still working they don't consider the other factors they just want the money and they don't realize how badly that is going to be taxed not to mention the penalties for taking it early you know versus having hung on to it so this is a conversation well worth spending some time with because it there's a lot in fact hans you say that social security for you and your your spouse is the basis of the financial plan in other words this is the this is where we start from there before we begin to build the other things listen you know i'm going to prove that rich poor and everyone in between go ask somebody as i do often that's 82 and just do an intake form they're coming in as a new client we're going to ask them okay so what is your monthly income what's the first number they're going to give you their social security check and they can tell you all kind of things about it they can tell so you know you know some wealthy people that are 50 kind of poo poo social security they just say ah it's not going to be enough and i've got other plans they're all wonderful you you definitely thank god you have some other money and that we're going to put together a financial plan but you talk to somebody that's 82 and they've been collecting that thing for 15 20 years it's important to them even if they have a lot of other money so we got all sorts of examples and things to to talk about amongst these seven factors of when do i take my social security of course it's all based on hans's book the complete cardinal guide to planning for and living in retirement all available at cardinalguide.com we'll be right back hans and i would love to take our show on the road to your church sunday school christian or civic group here's a chance for you to advance the kingdom through financial resources by leveraging han's expertise in qualified charitable contributions veterans aid and attendance ira social security medicare and long-term care just go to cardinalguide.com and contact hans to schedule a live recording of finishing well at your church sunday school christian or civic group contact hans at cardinalguide.com that's cardinalguide.com welcome back to finishing well a certified financial planner han shile today's show social security when do i take it and the seven planning factors and again a quick review of those hans the 96 dates that you could elect there's 96 of them it's basically eight years from 62 to 70 and it's every month in between is what is your full retirement age which is 67 for a lot of people 66 in so many months spousal benefits so your spouse comes into this decision because they have a separate earnings record but they may be filing against yours or you may be filing against theirs retirement date when are you going to leave your job needed and desired income so do you need the money now or can you wait or do you desire the money and you just say man i'm taking and and and then life expectancy and how long do you think you're going to live you're going to live and i don't try to do a lot of predicting in this but people tend to do that when they're coming in is they've already made up their mind that this is how long i'm going to last and then what is your in retirement what is your other income besides your social security because that's how taxes are collected so i just came up with these seven things to our seven factors that we use when we're taking in a new client to to evaluate and as i said earlier many of the people that come to us they've already made up their mind or they already have a strategy hopefully they haven't done it yet and it's usually based on one of these seven and they haven't considered the other six so that's the first thing i'm doing with them is we we need to broaden the picture here and widen the decision making process so it works to your benefit right and there's a lot of information that a lot of people don't know especially you know along the lines of spousal benefits and along the lines of other taxes uh you know and in case in my case i had no clue you you could take it any month i thought you either took it but you know maybe once a year you had a window to take it but i didn't realize that any given month you could turn it on yeah as well so yeah you can and and so something that's come to me with all of this is that you could listen to four or five of our radio shows watch four or five of our youtube videos about social security then read my book then read the workbook and then go searching stuff on the internet and you you could pretty quickly and you you've done this you know as a lay person you you're pretty knowledgeable about social security so and many of our clients that come in is we educate them and help them make an educated decision that's not really that hard to do if you're us okay and so i'm pointing this out to clients is the the real benefit that we bring to people is social security doesn't sit in a box all by itself because not only are these seven things to consider but we got to consider when you're going to go on medicare we got to consider what your other income is going to be and how much you have in an ira how much you have in other money and what kind of income you're going to pull from that how bad are you going to need social security and how bad are you going to need it now and we're going to need to look at your estate planning and we're going to need to think about your spouse as a survivor and whether which check they're going to be relying on so you know we're in social security and we're talking about it and i don't think it's that hard to list seven things and kind of go through there and raise everyone's knowledge the real you know benefit that we feel like we bring to the equation is all of the chapters of my book and all of the items the seven worries that are on the website they're all mixed together like soup and then they play themselves out over the rest of your life and this gets real challenging when you make one decision here it affects five other decisions so that's what we do in financial planning right and so some examples where you've seen opportunities for people to to come in and yeah i mean we talked about this a few shows ago but i'm still working with these people the dude who's working is soon to be 61 and then which means in a year and a couple months he's going to be 62 and his wife is 65 and she already took her social security and she really took it it's very small and she took it early essentially because she's not working and to pay her medicare part b premium because it eats up about half of it and she's collected about six or seven checks five you know something like that and i'm going down to meet with these folks and his social security at 62 which will be a year and two months he takes it early is going to be 1900 and some dollars a month and so you say and she she kind of came back at me when i was talking about taking it early and she said well won't he get more if he waits i said yeah he'll get more if he waits that's not what i'm recommending here kind of took a few breaths and i said just hang with me here when he's 62 and files you're going to be 66 and at full retirement age yourself or 66 in four months or whatever she's going to be and her spousal social security on his record is going to be 1300 a month in a year and two months so what was she getting as she filed at 65 388 bucks a month so it goes from 300 almost a thousand dollars more a month she's good but she can't get that until he files that's why he's filing early because she's four years older and she gets it at the rate of full retirement age because she will be at full retirement age even when he's 62 she was like 21 or 22 and he worked in the company that she was the office manager for he was like 17 and he faked his age to 21 to get her to date him and she didn't find out into the dating that she was dating a 17 year old dude and then it was too late to stop it and by the time she married him at 18 she at least waited that long but anyhow that's the story from 40 years ago the love story and but in any case just there's all kinds of things so i showed him on that and it really showed him on that and it really affects their retirement plan because he is retiring early and it's going to be that much less money that we're going to have to pull out of the ira for them to live for several years which just leaves more for later i mean now now that they've looked at all these things they're they're all with it and she's actually going to have to pay social security back she's going to do a do-over she's going to give that money back it's only 388 a month for five months fifteen hundred dollars and you get almost that all back the first month that you yeah and you know where we're getting that money and the tax money is we're pulling it out of their large ira that we've just handled all the income streams on that he doesn't make that much money now it's going to almost be non-taxable so we're going to pull out enough money to pay the government back for her 388 check plus a little tax money probably just plus a little more to stick in a savings account because these people really don't have anything but ira money they got a lot of ira money but once they get on the tax plan that i've set up they can't be drawn a large amount of it out so to review to go back to these factors as we look at this example i'm sitting there going oh how cool because you have factor one which is the age month and year in other words there's 96 different choices that both he and she has so you know what's that 192 between yeah two different choices because there's two people involved it's huge yeah and then the full retirement age definitely comes into play with her because she's at full retirement age and no longer you know at the point that he begins to to go and then spousal benefits of course it's huge and in this particular case and then they're both in their retirement you know dates so you know you can so yeah and then they definitely need the income because i've put together a retirement plan these people have a huge ira that they've been very diligent in creating enabling them to retire early but we don't want to start drawing that down too much when he's 61 62 years old if we don't have to and the social security check is going to be there as that foundation then you got life expectancy i mean these people between the two of them i mean that's a really hard thing to calculate and then this other yearly taxable income we've we've got that mastered and they're playing these people are going to pay very little taxes and live on a nice tax-free income for the rest of their life okay right and so it's just a matter of taking those seven factors which all you know when you combine you know both people all of a sudden you see that there's a lot of things and and you know i think it also speaks to the fact of why make this decision on your own right because you don't know what you don't know right and and yeah you're hearing a lot from listening to the show and i but believe me you know why make a decision like this that that when you can get you know easy enough advice you just go to cardinalguide.com and email hans and say i'm looking at this why not you know because we're not we're talking about these things continue on for the rest of your life absolutely you know it's a big deal if it's 400 a month or whatever difference based on when you take this well 400 times 12 is 4800 times you know 10 years is 48 grand and make it 20 years or 30 years and you can see that this is this huge implications as far as this basic decision that seems so simple when you first come up with it you know you know what tom did in about 20 minutes for these people is he reverse engineered a tax return for about the next 10 years so he actually filled out a tax return and did all the calculations so that we could come up with the exact amount of money they could collect in addition to their social security check and still pay almost no taxes on their social security check and very little taxes on the other money and even put inflation in there and then created the timing of the start of the annuities and so our financial planning software is not even slick enough to do all that so tom just goes over to the side he can do all that in about 15 minutes it's just amazing yeah and so you know this is a it's actually kind of fun isn't it you know if you're sitting here you can't see hans's smile but but when he starts to see these plans come together i'm the guy on the a-team i remember used to say i love it when a plan comes together well i can tell you hans does well yeah i can see it on his face it's like man isn't that cool well god's at work here and just creating the shows the youtube we got all kinds of people calling in they've got several problems they come to us with and many times when they leave us or when they walk away from the first meeting we've added two or three four more problems that they didn't even know they had okay and then we've gotten on the road and we've gotten on the road to solving all of them or at least getting them in a better position sure that brings me a lot of joy it's cool to see how god works so again this is all brought to you by cardinalguide.com don't forget the guide after cardinal and hans's book the complete cardinal guide to planning for and living in retirement all there at cardinalguide.com as always we we've run out of time before we ran out of show thank you hans yeah thank you finishing well is a general discussion 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