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's show is Your husband or your wife dies in What is your Social Security check going to look like? You may know that in that circumstance, you're going to drop down to one.
Social Security check, and you may also know that you are going to be whoever the surviving spouse is will be filing jointly. And so, you know, the Bible has it the two became one flesh, but then one walks alone. And part of finishing well is. You know, how does God help you to... to plan for that or like Boaz planned for Root, to have some Plenty of wheat along the side, you know, and what are some different strategies based on what your situation may be?
But, you know, just like when you walk into the mall and you need to know where you're at, you know, this is where you are. And this, you know, as far as seeing those strategies. And so, what a great topic for a show, Hans. Yeah, and so let's start off. with the situation we deal with all the time.
which is both of you are on Social Security, the husband, the wife, You're collecting two checks. And then one of you dies. It's pretty simple. the smaller check stops. The survivor lives on with the larger check.
It's just that simple.
So, for those of you that are beyond. You're both getting checks, you're a couple. Um You know, my Social Security check There's going to be well over 4,000 a month. approaching five thousand a month. My wife's Social Security Jack is going to be like $2,000 a month.
And so We're going to have quite a bit of Social Security coming in while we're both around. When one of us dies, and it doesn't matter which one, per check stops. The survivor lives on. with the larger check.
So more than likely it's going to be me passing away first. Her check's going to stop. She's going to live on with my check.
So we don't need a 30-minute radio show. to tell you about that. But what we need the radio show for is the planning that what if one of you dies before you're both getting Social Security checks.
Okay, what is the survivor left with? That's what this show is about.
So Um In the video, we have a graph on the board. You might want to take a look at that video. Um if you you know, want to get some details of this in the show notes, but So it starts over on the left, and you're in one of two situations. Is the deceased. has not filed for benefits yet.
which would be like my wife and me. Neither one of us has filed yet. We're getting close, but Um so the deceased did not file for benefits. The other situation is the deceased did file for benefits.
So Because it's two different ways.
So, we're going to start with the did not file for benefits.
So, if I passed away. Right now And I hadn't filed for benefits. Then I got one of two situations as I that I either died before full retirement age or I died after full retirement age. And in my case, it would be I died After for retirement age. Because I hit that about a year and a half ago.
So Now I'm You know, I just died. I'm past my full retirement age. And so my wife. will be eligible for A check. based upon my benefit, it says deceased benefit if they would have filed on the day of death.
So if I died like next week, whatever benefit I would have been eligible for filing next week. That's what my wife's benefit will be based on. And that will be adjusted. for the survivors filing age.
So that final check to the survivor is going to ultimately be based upon their age. when they file for it. Am I making sense, Robbie? Absolutely. Exactly.
Okay. Yeah. The other situation is The deceased hasn't filed for benefits. which would be like what I was describing, okay? But this person died before full retirement age.
So this would be like you had a 60. two-year-old man. who didn't file for benefits, he died.
Okay. Yeah. he uh his his spouse, his wife, She would. Be eligible. for a check based on the deceased full retirement age benefit.
So in other words Even though he died at 62, they're going to use his age 67 benefit. But they're going to adjust that for her age.
So if she is 58. She's going to get nothing right away. She's not eligible, but let's say she was 61. He was 62 when he died. Neither one of them had filed.
She's they're going to use his age 67 benefit. But they're going to adjust it. to the fact that she's only 61. right now.
So she's going to get a check. If she wants it now, But it's going to be reduced because she's filing at 61 instead of waiting till she's 67.
Okay. Yep. Absolutely. Now, she would also have the option. Say she's still working or they had a lot of life insurance or they had sufficient life insurance.
She may say, look, I don't want to take that reduced benefit at 61. And specifically, I'm still working. They're going to take take some of it back because I exceeded the amount.
So I'm just gonna wait Until I'm To take it, I'm going to work six more years. And then it'll be a bigger benefit. And then they won't take any of it. I'm just going to wait six years for it.
So you've got lots of options. I'm just trying to explain. kind of what the deal is when you first call up And you're asking me, like, what am I going to get for Social Security? Or when we're doing planning, Yes, and you you're you're just wondering like, hey, you I mean, I had this friend that died and um or her husband died and then she She didn't get anything.
Well, I'm telling you why. Because she was too young. Because they're going to base your survivor's Social Security benefit on the fact that you where you are, where your age is relative to full retirement age. Right. You know, when she gets old enough to her full retirement age, she will get it.
And you know, that's part of the advantage b of waiting, as you talked about, because you know, that what it once it starts paying out, it's going to pay out that amount for the rest of your life. And if you wait, it can be a huge difference in income, right? Oh, absolutely. PM So there's a benefit to waiting. There's also some things that like we're back on that 61-year-old lady whose 62-year husband.
Just died. She can actually Take his benefit. If she wasn't working, and if she had a Pretty substantial benefit on her own. Maybe she worked until 55 and retired. Seven years ago, so she was just in in the absence of him dying, going to take her benefit at some point.
She could file for is As a widow, and then she could restrict the application. of her own and let hers grow all the way to seventy. And then at age 70, she could flip them.
Okay. And there's people at the Social Security office that will tell you you can't do that. As we've We've actually had people where we've told them that. Or they've heard it from somebody, and then they've gone down and they asked the Social Security people about that, and they said, No, Yeah, the fact is you can. And Tom is an expert at this.
And there's some There there's a way.
So i w w we have a widow that I met through the radio show here, Robbie. Um she actually came over to see me. And when she came over to see me at the station there, She wasn't a widow yet. Um She was divorced. And we were trying to work things out.
with their own benefit. In the middle of the financial planning, Her ex-husband died. And So once she found out about that Tom went over there and he was able to file for Her benefit based upon his Social Security and being a widow. She was already about 65. And then she filed a restricted application on her benefit.
And so she's now in the middle of collecting Here's For the next She's about sixty eight. When she gets to be seventy, her benefit has been increasing. Just because she didn't take it all the way to 70 and she's going to flip them. And it's going to mean about an extra $1,000 a month, sir. which is going to be very well needed.
Yeah. I mean, that's th that is, again, one of the advantages to you know, getting somebody to help you with some of these decisions when it comes especially to these choices that will affect you for the rest of your life. And once you've made it, you're there. Yeah. The end.
This is all part of the retirement planning that we do. We start with Social Security. And sometimes we have a widow that's coming to us. Again, wanting us to try to you know, plan out the rest of their life. And so we're going to be starting with The reason they're coming to us is because he just passed away.
Yeah. She she wants everybody to do a financial plan. that now has her living single. Yeah. Um we're going to start with Social Security, try to get the best filing, but you know This really sc screams out for life insurance.
This show is brought to you by Cardinal Guide and CardinalGuide.com.
So if you go to CardinalGuide.com, you're going to see there are the seven worries tabs. And actually, the very first one, because as Hans said, they plan everything around Social Security. Not because it's necessarily the biggest issue, it's just that it's something that's kind of the table to set. everything upon is is it's a you know it's a sure thing that that's what's going to be happening. And so it's the number one tab on the Seven Worries tabs.
And when you click on that tab, you're going to find an amazing amount of show notes on this particular show, on what happens to You know, your wife's or husband's social security check when they pass away because he's got this chart that he's talking about, which is extremely helpful to look at. And it's all there in the show notes under Social Security at the Seven Worries tabs. Of course, there you'll also find at cardinalguy.com, you'll find Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, and of course, the ever-famous Contact Hans or Tom Page. Like in this situation where this lady needed some extra help. You know, her ex-husband was passed away.
There's some very interesting things that can happen along those lines. It's all there at cardinalguide.com. We'll come back. We'll be talking about a lot more of your husband or your wife dies. What is your sole security check.
We'll be right back. 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.
Well welcome back to Finishing Well with Certified Financial Planner Hans Scheil and today's show is your husband or wife dies. What is your social security check, Hans?
Okay, so First part of the show, we talked about the top of the chart. which was the deceased. hadn't started their Social Security check yet.
So and then what's going to happen to the spouse? We walked through the scenarios with that.
Now we're going to do over. What's there for the spouse when the deceased has started their Social Security check?
Okay, and so You know, it's going to be. Two situations. It's going to be either they filed before full retirement age. Are they filed on or after retirement age?
So let's talk about filed before.
So let's say along they came along, they were 62 years old. and they took their reduced benefit Uh this person did. And they collected it, let's say, for a year. Um And it was quite a bit smaller than it would have been if they waited, but Whatever, they took it. And then they passed away.
Now They meet this criteria for that.
Now what does the spouse get? And what it's going to say is the spouse is going to receive the higher. the actual benefit the deceased was receiving, Or eighty two point five percent of the deceased for retirement age benefit. Adjusted for the survivor's filing age. Boy, that's a mouthful.
So What they're going to do is they're going to they're going to look at this person There's sixty three that just died. But we're not doing this for them. We're doing this for Is let's say 62 year old wife who is now a widow. And he filed for it at 62.
So she's going to first of all to determine the benefit for her We're going to look at his actual benefit. or 82.5%. of what his full retirement age benefits.
So I can tell you with this guy, The 82.5%. is going to be better for him. Like, I'll just throw some numbers up there. Is if he got 2,000 a month. At age 62, He would have probably gotten about $3,500 a month.
Had he waited till But he didn't make it there. And he passed away.
So now she's sitting here, and they're going to use one of two numbers. They're either going to use the. $2,000 a month that he's getting. Or he was getting or they're going to take $3,500 times 82.5%. And that's going to be the higher number.
It's going to be.
somewhere in the low threes. That's going to be the base benefit they're working at. But then they're going to need to adjust that. for the survivors filing age.
So she wants it now. She's going to get a big reduction because she's only 62.
So if she wants to wait. Say she's still working or they got some life insurance money. She may decide to wait. Till 67 to get that full 3,200 bucks off of him. Or not.
She may have a good benefit on her own. Um So, I mean, each individual situation is different, but this is just how the Social Security people do it.
Okay. Now the other situation is the guy did file for benefits. and he filed on or after his full retirement age.
So now we've got a person. who just died. And they filed exactly on their full retirement age, which is sixty seven now, but This guy went on it a few years ago. It might have been 66 or something. And now he's just died.
He has He he's his she's going to be eligible for The benefit amount the deceased was receiving at death adjusted for the survivor's filing age.
So it's just like I told you at the beginning of the show. Yeah. You're up there in years, you're collecting both checks. you're past full retirement age, And he's got the big check, she's got the small check. He dies, her check goes away, She gets his check.
It's just that simple.
The only way all of this gets complicated is when you're before full retirement age. Either the person that died Or the person that's going to file for the check. Makes sense? Oh, absolutely. But the other place it gets a bit complicated from my standpoint, or the thing I think about with my own wife.
is now she is going to be filing separately. It's not that she's now just dealing with one check. But her finances completely change in that Um you know, she's she's got a different filing with the IRS, which increases her tax and her s you know, possible need for A greater income, right? Oh yeah. I mean, because that's not even talked about on this show, but the Social Security tech.
It's just the base income. If that's all you got. And those are the people I work with a lot. I mean, they're not even thinking about taxes. And frankly, if they don't have much other money then they're not going to owe taxes on their Social Security check.
Okay. But with most people, we got Social Security, and then we've got another little nest egg. And we got to make that nest egg last the rest of our life. But we're going to supplement it. And if that nest egg has some size to it, Yeah.
or you are still working And you got You know, job income from a job or whatever, you've got substantial income.
Now you're going to Have to pay taxes on that other income, plus, you're going to pay taxes on your Social Security driven by that. other income. Um it's again a need People need life insurance. I mean it just Um I mean You know, I have life insurance. That's going to compensate either one of us.
When that first one dies, the Social Security check is going to go down. I mean, no matter what, no matter whether that happens at 65 or 85. there's a loss there. And then what you're bringing up are the taxes The tax rates are going to be higher on a widow. or a filing single than they were on the married couple.
Yeah, it's sad, but it's true. I mean, it seems like me.
Well, it just is. And you know, they're giving you the bigger check, but then they're you know, they're they're taking away your your filing status. And so, you know, that's just part of the planning that you know, comes into the whole situation. I think part of the reason you guys Take a look at Social Security first.
Well, we do, and let's talk about another situation that's sad: is that, you know, I have. a lady coming to me. She's in her fifties. Um or late 40s, you know, 50s. And she Her husband just died.
And they were kind of some of these live-in-to-paycheck to paycheck people. They didn't really have much savings. Um Maybe he had a little bit in his 401k. Um or not. Um And she's wondering, okay, he just died.
How much Social Security am I going to get? And the answer to that is nothing. because you're not Social Security for retirement age benefit. I mean, you're not, you're, you know. The earliest a widow can get anything is 60.
And now A widow that has children under 18. can collect on the children. But then that's going to stop when they reach 18.
So let's just assume this example. this person, 'cause we get these people calling us all the time or writing in off our videos. You know, I'm desperate. I What can I get from Social Security? And the answer to that is nothing.
I mean, Social Security is not going to do anything for you till you're sixty.
Now Yeah. the event of divorce or when you became a widow at fifty two, If you're going to file against that. Person The spouse who died You can't do remarriage before sixty.
So in other words, if this this lady is going to wait till 60. to collect the survivor's benefit based on him passing away She's got to be single. It's she can't be remarried. At sixty, you know, if she marries some other person, then she loses the eligibility for that survivor's bill. Is that clear?
It's clear, but that in itself is sad. Unfortunately, in s situations where people waited to get married simply for that very reason. Oh, sure. Yeah, I g I run into them all the time. Yeah.
Yeah, i the thing is is I don't really bring this up, but this is why people need They carry life insurance, even term life insurance. You know, if you're in this situation. Yeah. your spouse and you Mm. You don't have a lot in savings.
Yeah. you you you know, you need to consider that if one of you should suddenly die, Um and there's a loss of income. Life insurance sends tax-free money in there. Um at the very least to close this gap till you get to Social Security.
So But that doesn't do any good to tell her that. But There isn't much I can do for these people. Um when they call us with this. Um And then You know, then we get the people That Now they are 60. For their 61, and we can get into some pretty fancy planning if they didn't remarry.
So they're eligible. But then we've got to make sure, do they really want to file this at 60 because they're going to suffer a loss from doing that? that lasts the rest of their life. Most of them are going to. But there's some ways.
To file. to collect off your deceased spouse As long as you're still single. And Put your check. you know, on hold or on a restricted application. Which social security might tell you you can't do this, but I'm telling you you can in certain circumstances.
And then let your check. grow until seventy. While you're collecting off of your deceased spouse. And then you flip them at 70. and you get your larger check, it's just been accumulating behind the scenes.
You know, it's r it's really something. Yeah, I mean in for such a time as this, for that situation It does allow them. Uh to to um But they wouldn't they need to wait till they were sixty two? No, because The the And the Social Security. Oh, you're right.
You're right. I see. A spouse Remarry Either from a divorce Or If it's a divorce and he's still alive, you can't collect at 60. You got to wait till at least 62.
Well, unfortunately, once again, we've run out of time before we ran out of show. But I want to remind you that the show is brought to you by CardinalGuide.com, where you're going to find a seven worries tab. The first one is Social Security. Amazing show notes and graph there on this show. And then, of course, Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement.
And the wonderful Contact Hans and Tom Page. Great show, Hans. Thanks. A great show, 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 of 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. Once again, that's CardinalGuide.com.
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