Social Security Claiming Strategy

This is the Truth Network. Um 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, IRAID, long-term care, life insurance, investments, and taxes.

Now, let's get started with Finishing Well. Welcome to Finishing Well with certified financial planner Hans Scheil. And today is an amazing show. It's a security, social security claiming strategy. Again, that social security claiming strategy.

In other words, we're going to talk about when to file and those kind of things. You may know that in this day and age, it's just a whole different world than it was 20 years ago. Not only have some of the Laws changed, and certainly inflation has affected things to a great deal, but people. You know, they aren't retiring like they used to, and people are working longer than they used to. And when you think about it, from a biblical standpoint, Moses did that because he finished strong.

He finished well at 120, right? And it even says in the Bible in Deuteronomy 34 that his eye was not dim, nor his vigor abated. And so Moses never really retired from his purpose. He just transitioned his role. And so we really don't ever retire from our calling.

We reassign our strength. And the beautiful thing of sitting down and actually looking at these opportunities. With claiming your Social Security, especially in the case where you have spouse, spousal benefits to go along in deciding. You know, since one or the other of us is still going to work, you know, what would be the ideal to do that? Or, you know, in some cases, that they both.

Both the couple want to cease working, and there's strategies for that as well. And so, this is an amazing thing.

However, I would be remiss if I didn't point out that my old friend Miss Beck, who worked really, really hard at 104 when she passed away, I remember it well, she told me, Robbie, you know, Once you're in script in the war, you don't get out until the war is over, according to Ecclesiastes. And so we're off to go. There, Hans? Yeah.

Well, I intend to keep Keep on fighting. I'm sixty-seven and Um still working and you know I just And I encourage every retirement is a misnomer. I mean, it's just that people think you just. You work all these years and then it just comes to a stop. And then, you know, what we're talking about today is Social Security.

Yeah.

You need a claiming strategy, especially if you're married. I mean, you just you just do. And the so Cure the claiming strategy needs to be based upon Um your needs. Of course.

So if you need the Social Security My strategy for you is take it. I mean if you're if you're If the money is needed to support the household, We're going to take it. And we kind of took that. place with you, Robbie, as we initially had you on a weight for the rest of your life. or wait till you're 70 to take your Social Security and maybe we'll go through the reasons why we're going to do that, but then current needs.

came into play and You, um, you know, we both talked about it, and you decided to take your social security, still delayed. but a little before you reach seventy. Yeah.

You know, what my sense is that you can respond to that a little bit is that. The reason we were trying to wait till 70 was we wanted to make your benefit as big as it possibly could be. Because when you die, before your w and your wife lives on, which is A pretty high probability with you because she's so much younger. Um and she's a woman 'cause they tend to live longer. You really want to get that Social Security to the age 70 benefit, and I'm in the same place myself at 67.

I want to wait till I'm 70.

So that I get that benefit as high as it possibly can be.

So when I die, my wife lives on with the largest checks she can get. Yeah, am I correct about that for you, Robbie? Oh, absolutely. I mean, originally that was my strategy and and shortly after I turned sixty eight, I'm thinking three months. is when we had this discussion, my second daughter And my one daughter got married, and I mean, excuse me, she got engaged in July of that year.

In December, Um That year, my other daughter got engaged. And so, in my 68th year, it was obvious I was going to pay for two weddings. And they're not inexpensive. And so, we talked about what different strategies would be. And it just, when we did the math on all of it, it just seemed to really make sense for me at that point in time because there wasn't that gigantic difference between 68 and 70.

In taking it when I did, and it really did work out really, really well for us. We're really glad. And at the same time, you know, we've been able to save since the weddings some of that money to. you know, offset that difference in income, right? And which is, you know, a big part of the strategy.

Well, it is. You know, I just want to stress this, as we talk about financial planning strategies, But, you know, we we Just because we start with one strategy, like with you back at 65, we're going to delay Social Security until 70. I mean, that's where you got pretty quick once you met me. And then we're sticking with that, but then something arises, situations change, we can rethink this. We took it to 68.

You took it at 68.

Now, what I want to tell Our listeners out there is There was a point, I think it was 66 and a half. Where you reached full retirement age, and a lot of people. think that if you take your Social Security and you're still working, that you have to give part of it back. And that is true when you're under full retirement age. But at your age.

you were 68, so you were well past um full retirement age. And so even though you're still working and earning a good income, you were able to collect your Social Security and have both of them and not have to give any of it back. Exactly right. Yeah, exactly. It is a completely different thing if you take it before full retirement age and there's all sorts of restrictions.

you know, and how much you can make before You have to consider giving it back, all those things like that. None of that happens after. Your full retirement age?

However, you know, you will pay a certain amount of tax. on that Social Security to go with your income.

However, President Trump made that a little bit easier too in the last election. I mean in the last in the big beautiful bill, which we've done shows on that as well.

Well, sure.

So the volume and we haven't even talked about your wife yet.

Okay. Like, and we're going to get over the example in today's. Video But if we just take you.

So now your wife, she's eligible. You have a large benefit because you did real well over your whole lifetime. And um sh she doesn't have a large benefit on her own. Um she's just got kind of a regular or a smallish regular. About a foot.

And so when she reaches full retirement age, which will be sixty seven for her, She will be eligible for 50%. of your full retirement age check. That's a mouthful. Yeah, it is. She's not going to get.

fifty percent of your sixty eight year old check. She's going to get 50%. of your sixty-six and a half year old check.

Okay. So if somebody waits till 70. their spouse doesn't benefit too. How does that sound? that's an easier way to understand it.

So if you wait past full retirement to get your own check. And your spouse is going to come in there for the 50% deal, they only get 50%. of what you would have gotten at your full retirement age. They don't get that of the delayed age.

So We don't need to get down into the weeds, into the details too much, but. Um Just explaining when you have couples And you have different amounts of earnings, which a lot of couples you do. One is the higher earner, one is the lower earner. Um not always though.

Sometimes you got too high earning Spouses and their benefits are still related. But not so much. But when you have a high earner In a low earner spouse, then you gotta really have a spiffy strategy. Um you gotta think about all this stuff before you act. Yeah, absolutely.

And that was the case with Tammy and I, because she's the one that really worked hard because she raised the kids and all that stuff at home. You know, I got to go out and work however you want to put that. But nonetheless, her income you know, wasn't that so that that her social security benefit isn't that much.

However, once she does reach full retirement age, um, that fifty percent of of mine is a substantial amount higher than than her regular benefit would be. And so it it really is something To do some planning around, and it becomes. You know, pretty significant when you add the two checks together, that you can see that a strategy here really makes all kinds of sense. Because, as you guys did, the video, which by the way, is at cardinalguy.com under the social security tab. You know, you guys saw it through some things that when you when you have these two rather large checks that that That when you're leaving some of that on the table, it changes the equation.

And so, all the more reason I would suggest you listen to the show today because there's a lot to learn.

Well, there is. In our example, we're going to go about in the second part of the show. We're going to talk about Harry. who who's an M D and Har Harry Is It's going to turn 68 this summer.

So he he He's he had a decided to delay till 70. still working, still practicing. Doesn't need the money. wants to get the larger benefit. Um so that his wife Helen If she lives longer than him is going to have that biggest possible check.

Yeah.

Um then Helen Is turning full retirement age herself, and she's got a smaller benefit.

So we're going to talk about all of that. and talk about something we're rethinking in their strategy because they They joined us about a year ago. Um And we're going to tell you where we were a year ago and what we're considering doing now or this summer.

Well, this would be a good point to point out that This is this show is brought to you by Cardinal Guide, CardinalGuide.com, and at CardinalGuide.com, you're going to find that there's the seven worries tabs. Today's worry is Social Security, and if you go to that tab, you're going to find a video, wonderful show notes, and these examples all written out so that you can see them and see a board that explains a lot of the options and things, as well as, oh my goodness, so many, so many. Shows that are on this idea of Social Security and these strategies. And of course, it's all in Hans's book: The Complete Cardinal Guide to Planning for and Living in Retirement and the workbook that goes along with that. And again, to make it easy, especially when it's you and your wife and you got a lot of numbers involved, they've got software to help you with this strategy.

And again, you just call one, you know, you can go with that, contact Hans and Tom Page there at cardinalguide.com and get the strategy custom-made for your situation. We'll be right back with a whole lot more on Social Security claiming strategy. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM. a registered investment advisor. BCM and Cardinal Advisors are independent of each other.

Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well as Certified Financial Planner Hans Scheil. And today's show is a Social Security claiming strategy. And of course, this is not a one-size-fits-all, so the beautiful thing is everybody's got.

A different one that's right for them, right? We do. And so the example today is Harry. who's a doctor and Harry has earned the maximum earnings with Social Security and Harry elected to delay his his social security he's Turn in 68 this summer. Um he's gonna be And that'll be two more years, or about two and a quarter years, till age 70.

So Harry's. going to forego his Social Security check and has been foregoing it. To wait until age 70, and his benefit is estimated to be. over $5,000 a month, $5,176 a month.

Okay, and that's quite and his rationale. is number one, he doesn't need the money now because he's still practicing. He's beyond full retirement. Um so he doesn't have to worry about collecting the Social Security and paying taxes on it. And but his main reason for delaying was thinking that if he goes first Helen, his wife, who's about a year younger, is going to live on with a check for 5,176 a month.

Inflation adjusted for the rest of her life.

So it's kind of like some built-in life insurance.

Now I mean, and not necessarily. Helen is gonna uh live on past Harry or Harry's gonna die first. It could be the reverse. Um Helen goes first. But Either way, the couple is going to go from two Social Security checks down to one social security check.

When the first one dies. And so we want to make that one Social Security check that we go down to as big as we possibly can.

So there's all the reasons that Go ahead. No, I was just going to say that is one of the areas that's easy to get confused, and certainly I stayed there for a long time. Is that. Your wife will get exactly half In other words, when she files for her Social Security at her full retirement age, which in Tammy's case is 67, when she files for that, she will get half. of what my what my full retirement age check is.

However, That's not the same as when it goes to one check. And at that point in time, that's why we were talking about this strategy being to hold out for the larger earner to wait as long as possible because that one check will be you know based on how long you waited. That's not going to be dependent on your full retirement age. And that often that that's. That's where there's a little complication, but I was hoping that.

made it easier. Yeah, it does. Full retirement age benefit was $3,993 a month.

Well let's call it $4,000.

So if he'd have taken it about a year ago. he would have gotten 4,000 a month and he would have collected checks Uh up until now, I mean, you know, uh And and he he he he would keep on collecting that $4,000 a month, but he elected not to take the $4,000 a month. He's gonna wait. till seventy and take the five thousand one hundred and seventy six a month. Which doesn't really sound like a lot of money.

But when you run the numbers to it, if it were you were just looking at Harry, he would need to live to about eighty.

So Be ahead of the game by taking the 5176. Wait till 70, take the 5176. and you make up for lost ground and the crossover point is somewhere 78, 79, 80. But we don't really use that to make decisions so much. Because there's a pretty good chance, even if he died at like 80, that Helen's still going to be alive.

and she's going to live on with that big check.

So it's all the more reason to wait till 70. Um But now we're rethinking this decision a little bit because Helen is reaching full retirement.

Okay, and Helen's Full retirement age benefit. is going to be $874 a month.

Okay, 'cause Helen took care of the kids and just because he did well. She wasn't having to having to work and She did all the work at home. And um You know, so she's she gets 874 bucks a month of her on her own deal. And she's going to file for that. That's been the plan all along, that she's going to start getting that.

And she's going to collect. at 874 a month about two years. Because in two years Harry will turn seventy and he'll file for his $51.76 a month. And then Helen will be eligible for half of Harry's full retirement age benefit, which would be $2,000 a month.

Okay. I mean So 2,000 a month is a whole heck of a lot more than 874.

Okay. Now when we start looking at this What we're saying is is that Are we sure that Helen doesn't want to go for the half of the four thousand or the two thousand a month, a fifty percent benefit based upon Harry this summer at full retirement. I mean, maybe. And but I'm going to tell you what has to happen is Harry has got to file for his Social Security. In order for Helen to be able to get the 50% spousal benefit.

So What Harry's considering doing is rethinking his strategy at right at 68. Kind of like Robbie did. He's thinking about saying, okay, I'll take the $42.98. A month.

Now we'll call it 4300. Two years before seventy, And then I'm doing this to enable Helen to get $2,000 a month instead of $874 a month. Does that make sense? Oh yeah, I I get it completely. And I was shocked to actually Um You know, when you started to add it together, that in the example that you gave there, That literally it was like $120,000 that they would leave on the table by waiting.

However, like you said, at some point in time you know, if it's just her getting the benefit you know, it it would be critical to her living on and the lifestyle that she's used to.

Well, yeah, I mean, it's not cut and dried, whatever. That number. They will be $130,000 a head. By Harry filing at 68. Which is short when he wanted to, and then Helen being able to file for the spousal benefit.

And then they're going to collect that extra money for 24 months. It's $130,000. And then I deducted the tax, I calculated the income tax. on that $130 is about thirty-five grand. they're gonna have to pay in tax, so they're gonna have after taxes.

$94,000,699 of after-tax money that they're ahead. Yeah.

What they could do is buy an annuity. that would make up for that smaller check for the rest of their lives.

Okay. Um I mean, you can do a lot with $94,000. But you can't do much more than close in that gap, and then there's inflation considerations.

So, this is not a real cut and dry thing. It just, I saw it as an opportunity. where we got one client that we're talking to about this strategy because Helen is going to file for the $874 at least. Um She is Doing that, and so we looked at the whole thing, we laid this out, I thought it'd be a great. way to illustrate how important timing of filing and spousal benefits and all that kind of stuff.

Um So that's what we've done here.

Well, you know, uh and that leads me to another question as I watch the video that uh I was hoping I would remember to ask you.

So. If she f you know, and again, with you know, Helen in this case, Um If she were to file for her spousal benefit or excuse me, if she was just to file for Social Security because she's got a regular you know, she had a an income, you know, even though she too was a homemaker. But if she filed for Social Security, like you said, it would be eight hundred and I think you said seventy some odd dollars. Yeah.

However, her husband has not yet filed. And so at at the point that he does file, Then at At that point, she'll begin to get half of what his full retirement age was. would have been right And which is 4,000 divided by 2 is 2000.

So that part confused me a little bit. Like, in other words, she's going to be, Social Security is going to send her 800, 800, 800, and say six months later. You know, her husband files. And does Social Security automatically know, oh?

Now we need to up her thing or do you have to she she she needs to file she may even need to show up with a marriage certificate Um Many times Social Security already knows this. because of the joint tax return. But I wouldn't count on it.

So she's going to need to contact Social Security and upgrade her benefit. And they're really going to send her Two checks. They're going to send her one check. For 874, and another check for eleven hundred and twenty six bucks.

So she's going to get two checks. I mean it'll all be combined into one check. But if you look in the Social Security system, she'll get her own benefit. And then the extra to bring her up to 50%. of his on the spousal benefit.

Um but you can't get that upgrade until Harry actually files. Yeah, that was a point. I'm glad you You brought that back up because I was It sounded like what was happening, but I just wanted to make sure I was right.

So And I've heard you talk before about people who use that strategy where they The person that was getting the smaller amount, it doesn't really matter as much. When they file, Because once their husband files, it goes up to that half point. regardless of when they started their check, right? Correct. Yeah.

But it does matter because if Helen would have filed early And we have some spouses that want to do that. I mean, Helen's sitting here, and Harry's got all this high finance going on, everything's about him. She knows she worked.

Some back in her twenties. Uh before she got all in the You know, she's a doctor's wife. And so, you know, we're sitting there doing the financial planning. I mean, she all of a sudden sees that she could get a check. for like 750 bucks a month at 65 that is recognizing Her work.

I mean, there's some. People that want to take that. I mean, yeah, let's sign up for that. But had she done that. She would now get Panelized whenever she's going for that spousal benefit.

there would be some sort of a knockdown in there. Um which is too complicated to explain. At this point, we want to remind you that the show is brought to you by Cardinal Guide, CardinalGuide.com. And at CardinalGuide.com, you're going to find all sorts of answers to questions you might have about the show we talked about today, especially under the Social Security tab, which is what we've been talking about today. And if you go to that tab, you're going to find a video with a board that explains all these things and show notes.

It's wonderful. And of course, there you'll also find Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement, along with a workbook that goes with that. And of course, the ever-present contact Hans or Tom Page. Make it easy. Just have them kick the numbers in for you.

So thank you, Hans. Great show. That's great, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.

Any statements or opinions are subject to change without notice. Investments involve risk, and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.

Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstrone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. 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 Han's 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 Han's 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.

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