Taking Social Security But Still Working with Eddie Holland

What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice.

To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. These days, more workers are opting to stay on the job after signing up for Social Security. Hi, I'm Rob West. The percentage of Americans over 65 who are still working has doubled since 1980. Of course, many of them are also getting Social Security benefits. Eddie Holland is here to provide details on how working affects the monthly benefit check. And then we'll take your calls at 800-525-7000. That's 800-525-7000.

This is Faith and Finance, biblical wisdom for your financial decisions. Well we have Eddie Holland back with us today. He's a senior private wealth advisor and partner of Blue Trust in Greenville, South Carolina. He's also our go-to guy for Social Security. Eddie great to have you back. Thanks for having me, Rob.

Eddie let's dive in. We're talking about what happens to Social Security benefits if you start them but continue working and earning a paycheck. Now a lot of that depends on whether you've reached full retirement age, right?

That is correct, Rob. If someone is drawing Social Security while still working and they are younger than full retirement age, they may be subject to an earnings test. That earnings test is going to be based on the income that they make while working for that job or while they're self-employed. If they're younger than full retirement age, that earnings test is applied on a yearly basis.

The 2024 income limit is $22,320 for anyone under full retirement age. If you're making higher than that income, the reduction is $1 for every $2 over that limit. Now if you reach full retirement age in the year that you're still working, then that threshold goes up. It actually goes up to $59,520.

The reduction actually goes down as well. It's now $1 for every $3 over that threshold. And then once you reach full retirement age, the month in which you reach it, there's no earnings limit going forward. So there's really three types of earnings limits. It's under full retirement age, the year you reach full retirement age, and then the earnings limit goes away once you reach full retirement age. But it's important to understand that anytime you have a reduction in benefits because you've earned more than the limit, you will eventually get that back in the form of a higher check, which is different than a permanent reduction for taking Social Security early, right? That is right. I said it better myself, Rob. All right.

Very good. Now, how does continuing to work affect your benefits after reaching full retirement age? Well, as I stated earlier, it's no longer reduced. So your benefits are no longer reduced.

So you're not subject to the earnings test. However, you may increase your Social Security benefit by boosting what's known as the high 35. Social Security bases your Social Security benefits off of the highest 35 years of your earnings history. If your current earnings will replace one of those high 35 the following year, the Social Security administration will give you credit for that new income, which may incrementally increase your monthly benefit.

Yeah, that's a big deal. All right. Let's talk about tax implications, Eddie, for continuing to work after receiving Social Security benefits. So tell us how those benefits are taxed at the federal level.

That's right, Rob. And you said the correct word, federal. So we'll talk only federal income tax. That's based on what the IRS defines as combined income, which is adjusted gross income plus tax exempt interest plus 50 percent of Social Security benefits.

As you would imagine, this is a complicated subject, so I'll stay a high level. Essentially, if you make under twenty five thousand as a single taxpayer or under thirty two thousand as a married filing joint, none of your Social Security benefits are taxed. If you make over thirty four thousand as a single taxpayer or over forty four thousand as a married filing joint, up to eighty five percent may be taxable.

It can vary anywhere from zero up to eighty five percent, depending on combined income, Rob. All right. A lot of folks don't understand that. Why after paying all these years into Social Security, am I still paying Social Security tax? It's just the way the system works. So it's important to know that going into it.

All right, Eddie, we've got about 30 seconds. Give us one idea on how to reduce taxes on Social Security benefits before we wrap up. Rob, this is going to be for your listeners age 70 and a half or older. There's something called a QCD, a qualified charitable distribution. People that are taking money out of an IRA can take distributions, have it designated directly to a charity, and that would avoid income tax.

Nice way to potentially reduce tax ability for those ages 70 and a half or older. Yeah, I love it. A qualified charitable distribution is one of my favorite tools anywhere out of time today. But you're always a big help. Thanks for stopping by. My pleasure, Rob.

That's Eddie Holland, senior private wealth adviser and partner of Blue Trust in Greenville, South Carolina. You can learn more at BlueTrust.com. Your calls are next.

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This institution is not federally insured. Great to have you with us today on faith and finance. It's time to take your calls and questions here in just a moment. That number 800-525-7000.

Again, that's 800-525-7000. Whenever is on your mind today, we'd love to hear from you, talk about it, encourage you and point you back to God's word so you can make a decision in light of biblical truth. The Lord has a lot to say about this topic, the 2500 or 2300, I should say, verses in God's word that deal with some element of money and possessions.

That's a lot, right? Is it because God needs our money? No, it all belongs to him. It's really about what he wants for us, in my view, not what he wants from us. And so we need to understand those big ideas and themes found in scripture, the idea that God owns it all and we have a stewardship responsibility, not just of our time and our talents, but our treasure, the resources that he's entrusted to us alongside the other things we steward, like relationships and truth, God's word. And so as we lean into that and realize this is an important calling, we will stand to give an account someday for how we've managed God's money. Well, we want to help you get that right to help you live according to a biblical worldview. But we realize there's very practical decisions and choices you have in your financial life. And now's your time to get in on the conversation 800-525-7000.

You can call right now. Let's see in the news today in light of so many scams affecting seniors today, one of which continues to be a problem among seniors. And it's the Medicare marketing misrepresentation.

I know it's a long name. Let me explain. The caller usually claims to be from Medicare and offers expanded benefits by answering a few questions and giving consent. However, behind that friendly quote, Medicare employee is actually an insurance agent looking to make a sale. Now, this, of course, violates Medicare rules, but it unfortunately happens more often than it should. A 2022 Senate Finance Committee report revealed that frequent instances of agents was occurring and they were changing seniors health plans without their informed consent. While Medicare is a federal program, brokers and agents help seniors navigate the complex enrollment process.

However, since they aren't compensated for each person they enroll, some may be tempted to put profits over the best interests of seniors. And these brokers are subject to oversight, but violations do occur and the consequences can be significant. Brokers often don't realize what's happening until weeks later when they find themselves facing higher costs or having to switch doctors and facilities. So it's important to know that Medicare employees never make unsolicited calls to seniors about their benefits.

Likewise, brokers and agents are not allowed to make unsolicited calls or leave flyers at home unless they've requested an appointment. So if you're unsure about a call, hang up and reach out to Medicare directly. If you think you or a loved one has been a victim of misrepresentation, just contact your state's senior Medicare patrol to report the fraud. That's a national resource center that provides valuable resources to help protect you and your loved ones from deceptive practices. Medicare is, of course, a lifeline for millions of seniors, but the system can be confusing. So be cautious, ask questions, never give out personal information over the phone to someone you don't know. You know what? By staying vigilant, you can protect yourself from fraud and ensure you get the coverage that's right for you.

Listen, this is going to come in all shapes and sizes. So it could come by email, it could come by a phone call, it could be somebody saying they're from the IRS or somebody that says you won sweepstakes. I mean, it could be any type of scam. The key is it always comes down to don't give information over the computer, over the phone to people that contact you. If they're legitimate, they shouldn't be asking for that unless you requested the information. So hang up, call someone directly, find the direct channel to contact that vendor that claim they're from and don't respond to somebody who's reaching out to you no matter what form of communication it is. So hopefully that's helpful to you today.

I know this is increasingly becoming difficult for folks, especially seniors who can get confused about these things, especially when technology is involved. So if that's you, just be vigilant. And if you have somebody in your life who needs you to walk alongside them, just keep them up to date on the latest scam so they can spot these sooner rather than later. All right, let's dive into those phone calls today. Whatever is on your mind financially, you can call right now, 800-525-7000. Let's begin in Ohio today. Melody, you'll be our first caller. Go ahead. Thank you for taking my call.

I'm calling because my husband died and I received insurance death benefits and my sister also and I received insurance death benefits. Are they subject to tithing or is it less expensive? What is the question? Yeah. Yeah, I appreciate that. You know, New Testament giving is really, I think the hallmark of that New Testament giving, even though we're no longer under the law of Moses, would be giving that's proportionate. And I think that's where a tithe as a guideline comes in. It's freely giving, so not under compulsion. It's giving cheerfully. It's also giving sacrificially, as evidenced by Jesus' remarks about the most famous giver in the New Testament.

We don't know her name. She was a poor widow who gave out of her poverty. So I think as we think about our giving, we should do it in that regard. And I think, again, using the principle of the tithe a tenth off of our increase is certainly in line with that.

I don't think that's a finishing point. I think it's a beginning point, but it's certainly a great place to begin. Now, when we apply the principle of the tithe, we do look at what is our increase. And I would say life insurance proceeds would be an increase. I mean, that's a gracious gift from the Lord. It's unfortunately, it comes via someone's passing, but I would say it is an increase. But ultimately, what you give out of that melody, I think is between you and the Lord.

It's not a matter of checking a box. I think it's an overflow of your worship to Him and your gratitude to Him for His provision. But I would say if we're looking at whether it is an increase, I would say it is. Perhaps insurance proceeds that might be an exception to that, just in terms of the definition of increase, would be when you get, let's say, you're made whole for maybe a loss.

So a good example would be a homeowner's policy where you had a loss because of some damage or something that happened to the home or a car, and you get insurance payout against that. That's really not an increase. You're just being made whole for a loss you experienced. But I would say in this case, with life insurance proceeds, because there's not a direct financial loss there, you would say, I would put it in the increase category. But again, I think that's ultimately between you and the Lord as to where you're at financially and what you want to do by way of your giving. Does that make sense?

Yes, it does. Thank you. I do tithe on my income, and so yes, I appreciate that. I did tithe on my husband, but I appreciate that because I wasn't sure. Thank you.

Absolutely. Well, I appreciate your generous heart, Melody, and we appreciate you checking with us today on the program. Before we head into our break, let me remind you, you know, as we look at God's Word and think about our role as managers of God's money, we can pull principles out of Scripture that are practical, but they're also timeless. For instance, the big ideas that we want to communicate is first that God would be your ultimate treasure. But then as we get into money management, we want to spend less than we earn because that's the key to every financial success.

We want to avoid the use of debt because debt mortgage is the future. We want to set long-term goals because the longer term your perspective, the better your financial decision today. We want to have margin to fund those goals that God has given us, and we want to give generously because giving breaks the grip of money over our lives. Well, I hope what we're sharing today is an encouragement to you, and above all else, I hope it draws you into a more intimate relationship with the Lord.

We're going to take more phone calls just around the corner, but first this break, we'll be right back. Are you looking for a financial professional who aligns with your biblical values? United Kingdom advisors are trusted financial, legal, or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice. You can find a local CKA professional in your area by going to faithbuy.com and clicking Find a CKA. Every day we hear life-changing stories from listeners just like you who see money and possessions as tools to invite more people into God's kingdom. Instead of chasing wealth, you've chosen to embrace God as your source of love and provision. At Faithfi, we're passionate about meeting people where they live and work through our national radio program, app, resources, and website to influence widespread positive change in our culture.

Please consider becoming a monthly partner at faithfi.com slash give. Thanks for joining us today on faith and finance. Taking your calls and questions today, 800-525-7000 again, that's 800-525-7000 anything financial in play today. Call right now. Let's head back to the phones to North Carolina.

Hi Carson. Thanks for calling. Go ahead. Thanks for having me. I wanted to say first that I appreciate everything that you do. You articulate so well and just proceed with grace so well with your guests, so I just appreciate that.

Well, thank you. My question is, I'm a single mom and I am trying to buy a house hopefully for myself and my daughter and just prepare for our future. I make about $45,000 a year. I'm a chaplain and I also though have to take care of my mom pretty heavily with her finances, like help pay her rent and things like that. It just seems like she cannot get ahead and it just can be frustrating and I'm praying and asking the Lord for guidance and just for him to provide for her finances, but it really seems like things are not running up and I'm just worried about our future, myself and my daughter because I want to prepare us and I want to prepare her. And so, do you have any suggestions as to how I can help my mom because she's not very good with finances. She does work full time, but it's just not enough. Yeah. Yeah, I get that and I appreciate that you've got a lot on your plate as a single mom and then with your own mom on top of that and trying to help financially, I can imagine that that is just a lot and there's probably more month than money in most cases and that can be challenging.

So let's talk about your mom's situation first because obviously it sounds like if you weren't having to help there, that you would be able to live within your means. Is that right? Yes. Yes. Okay.

Yeah. So in terms of your mom, what is her income source at this point? She works full time. I don't know how much she makes, but it's not, it's like $12 an hour, so it's not great, but it's just enough to get her by a little bit.

Sure. And is there any opportunity that you see to dial back her expenses? I mean, could she get into a smaller place? Could you all co-habitate? Could you move in together? I mean, are there other opportunities you think that could bring her overall expenses down and help to right size that budget?

Yeah. I have thought about all that. My mom and I actually used to live together and it's just not something that I want right now with my daughter. I, her and I are very different and so that's not an option and the Lord has made that clear as well. And the Lord has actually really provided for me and my daughter because I'm living with my uncle right now.

He's given me an opportunity to stay with him. He just built a house, so I don't have rent or any payment, so God has provided so much in that area, but I don't want to live like that for long. And so, but as a mom, yeah, I was thinking about getting her into a lesser expensive place. She pays about a thousand a month right now and that is honestly like for now for a one bedroom, you know? Oh, sure. Yeah. I mean, that's in fact, that's kind of low.

The average right now is for a one bedroom is up around $1,400, you know, just with expenses up the way they are. Yeah, I totally get it and really challenging. You know, here's what I would be willing to do if you think this would help is get a Christian financial counselor involved and we would be happy to pay for it here at Faithfi. Do you think she'd be willing to work with somebody who's a believer, who's been trained as a certified Christian financial counselor that would be willing to kind of get into the numbers and the budget and help her maybe bring a fresh perspective on ways she might be able to bring her spending in line with her income? Yeah, I'm definitely willing to give it a try. Okay.

Yeah. Because I think that's kind of where we need to start because if we could figure out how to get your mom's budget to line up, then, you know, that would take some of the pressure off you and allow you to redirect that money to savings because I agree this is a unique opportunity that you have right now while you're living in your uncle's place to be able to put some money aside so that you can eventually buy something perhaps a couple of years down the road. But I think getting your mom situated is obviously a key piece of that. So let's do this, Carson. I'm going to have you hold the line.

We're going to get your information. We'll get one of our certified Christian financial counselors in touch with you. You can make that handoff to your mom in whatever way you feel is appropriate. Again, we'll cover the cost on that so there won't be any expense to you or your mom.

And let's just see what the Lord does as we try to roll up our sleeves and kind of get these budgets right-sized. Okay? Sounds great. Thank you so much, Rob. That sounds good. All right, Carson.

You're very welcome. Thanks for calling today and keep us posted on this. Let's go to Virginia. Hi, Ellie. Go ahead. Hey, Rob.

Thanks so much for taking my call. Sure. My husband and I have looked into Christian Credit Union. I believe you've talked about them before. But we noticed that they are not FDIC insured and wondered if that was a concern at all.

You know, it's not. And we love Christian Community Credit Union. You know, more and more believers like you, Ellie, and your husband are concerned about who their banking and financial partners are and whether they're aligned with their values as believers. You point out a good distinction here, and that is that Christian Community Credit Union is not insured by the NCUA, which is kind of the FDIC equivalent for credit unions. But they are insured by American Share Insurance, which is private.

Now, they're 50 years old, which is only four years younger than the NCUA. It covers the same $250,000 per account, but it is per account. It's not per tax ID.

No holder of ASI insured accounts has ever lost a dime. And they actually, at CCCU, have chosen to go this route because it gives them the freedom to lend to churches and ministries, which is key to their mission as a credit union. It's actually a bit more robust, even than the federal deposit insurance. For example, and this doesn't apply to you, but a ministry with a million dollars in working capital could put it into four accounts and get each of those insured up to $250,000. They also require them to maintain higher deposit ratios than NCUA, which just gives them greater resources and liquidity if they were ever in a time of trouble. So I think it's perfectly appropriate. If you're concerned about being insured by a non-federal agency, I mean, I think it's important to remember that your house isn't insured by a federal government entity. It's a private company, and private insurance companies have been around a lot longer than federal insurance corporations.

They go back to the 1700s. So I would say I have comfort with this personally, and hopefully those are just a few things to consider as you and your husband make the decision that's best for you. Is that helpful though? It is. Thank you so much. We can figure that that may be the case, but just wanted to check back before we made any definite decision.

Absolutely. For those folks who are out there interested in learning more, you can go to JoinChristianCommunity.com. JoinChristianCommunity.com, a wonderful partner that is really focused on serving God's people, but also taking a portion of their profits as a credit union and getting that to work in God's economy and funding some really incredible mission work around the globe and even here domestically. So, Ellie, Lord bless you and your husband. Thanks for being on the program today. We appreciate your call. It was a great question. God bless you.

Thank you. That's going to do it for us today. A big thanks to my team today, Jim Henry, Devin Patrick, Robert Youngblood, and everybody here at Faithfi. If you want to support our work, go to Faithfi.com and click Give, and we'll see you tomorrow. Bye-bye. Faith and Finance is provided by Faithfi and listeners like you.