This is the Truth Network. Welcome to Finishing Well, brought to you by CardinalGuide.com, with certified financial planner Hans Shile, best-selling author and financial planner, helping families finish well for over forty 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. Welcome to Finishing Well with Certified Financial Planner Hans Shile, and today's show is how do Social Security spouse benefits work? And actually, I got to tell you, of all the different things we get a chance to talk to on Finishing Well, I found this one. I have found this one.
One of the most wonderful things that God has provided for families, in that this is a team household issue when it comes to Social Security, and I don't know that most people think about that. And most videos that you would see, or people looking at, like when do I file for my Social Security?
Well, wait a minute, wait a minute, wait a minute. This is a team thing, and and and the team. It takes into considerations both parties, the husband and the wife, and so in Acts chapter eighteen we meet a duo by the name of Priscilla and Aquila, and I couldn't recommend it to anybody enough that they read the story of this couple that we meet in Acts chapter eighteen verse two. That they're going to help Paul make tents. In other words, their abilities as tent makers, both of them, they're working as a team to help support Paul.
Well. You know, talk about doing something for the kingdom of God is to help support the Apostle Paul. Fascinatingly, they go to Syria with him, and then they begin to, if you read in in chapter verse twenty six, they begin to disciple Apollos. But the point that that the Bible is making here is that their effect on the kingdom. Is a team effort, and it's a household, and it's the household of God.
And you know, God is all about unity. He is all about unity. And and the idea, I think, of what we're showing here in today's episode is when it comes to determining what you're going to do with your social security, this has to do With both of you, and in some cases, actually, as we'll find out today, it may be that one of you has deceased. It still has to do with both of you. It may be that you are divorced and somebody is deceased.
It still has to do with both of you. God, from God's perspective, you know what man has put together, let no man put asunder. Especially when it comes to social security.
So Hans, we'll go into that. Yeah. Most you know when we get into the worry of Social Security and Social Security planning, the spousal benefits are the most misunderstood. I mean, most people come to us with a pretty good idea about their own Social Security. I mean, in other words, or an opinion.
Let's put it that way. Maybe what what what they've come up with is not going to be the best for them, but. They've got an opinion. They they know that they could file at sixty two, and they know that the longer they wait, the more they're going to get. And then they could file at sixty five or sixty seven, and then they're going to get more than they would have at sixty two.
And they know that they have the option to wait till seventy, and then they're going to get the most that they could possibly get. And whether that's a good idea or not, people are full of opinions. We meet them right when it's you know it's like time to retire or it's a couple years out and we're planning for it, and so the first thing we need to do when we meet somebody is we we need to find out what their plan is if they never met us. I want to flush out everything, all their belief system, first of all because I want to give them what they want, but secondly I got to realize what I'm up against if I'm going to. Show them something different than they otherwise thought they were going to do, but again, in that area, that's just dealing with the individual.
Now, when we go to a couple, I've got to figure out what's going to be the best for both in the couple because these people are operating as a household, and you know, we there may be some reason to delay the mister's benefit. Longer for the benefit of the misses, and without even knowing it, that just that's what we're going to go over today.
So it's pretty easy to get people into the subject when they're both married.
Okay, so so so now we're going to look at your. At the woman's social security and look at her statement. We're going to look at the man's social security and his statement, and again, pretty easy to just get them get their attention because they're going to live off the two checks once they're retired.
Okay, where what I want to do right here in the beginning of the show is if you're currently married, which I just went over. If your husband is deceased, or your wife is deceased, the survivor of a marriage, but you're not, you're now single, you're eligible for benefits off your spouse's Social Security statement. If you're divorced, same thing. You're as, it's a different benefit. If you're divorced and not remarried.
So I guess when just about everybody listening has either been married or they are married, and so we got to spend.
Now, if you've been single your whole life, then I guess I wonder kind of like why are you listening to the show? But you know, again, if you're single your whole life, we still there's something here for you. Is if you're going to advise a friend.
So it's spousal benefits, and I just want to get it clear that if you're married or you've been married and you're now single, there's a pretty good chance that you're eligible for some benefit off of your spouse's Social Security statement, either now.
Well, your ex-spouse is still alive. Or later, when your ex-spouse dies, you may be able to go back and claim a larger check. That making sense to you, Rob? Oh, it makes perfect sense. And and what I even noticed this morning, because as I was watching the video that we'll talk about more in the episode, it talked about these.
Benefits, and so I went to my Social Security right to look at it on my own. And when I did, you know, it showed spousal benefits.
So I was hoping when I clicked on the button that it was going to show me how much my wife would get, you know, when she reaches full retirement age. Instead, it showed me what my spousal benefit was. I went. What I get a spousal? I had no idea.
Like what? And and and so I clicked on the little thing, and it said, "Yeah, upon the death of your spouse, you're gonna you know receive in my case a check for two hundred forty four dollars." I, you know, I didn't know that. I, you know. That was news to me, but even you know.
So I would highly recommend to everybody that they familiarize themselves with my Social Security because obviously there's stuff there that I wasn't aware of, and you know we talk about this stuff every you know, sure weeks.
Well, and you know the issue, like in your situation, is you are at full retirement. You're beyond full retirement, and you're collecting your check. Your spouse. Is not at full retirement yet, and you've elected to wait until she reaches full retirement age, and then when when she gets there, she's eligible for fifty percent of your full retirement age. Right.
So that's a mouthful. Because you didn't take your Social Security at full retirement, and a lot of this is for people have a lot of people that waited past full retirement, like you did, think that their spouse is going to get fifty percent of their check. They're not. Your spouse is going to get fifty percent of your full retirement age benefit when your spouse reaches full retirement age herself. Again, the stuff is a little bit complicated, but again, you and I have been over that.
Let's talk about some examples. Let's get into the first one here before the break. I just think of a lady that we call on the show Myrtle. We give people different names because we obviously don't want talking about people's personal stuff. But when we met Myrtle, she was single.
And been divorced for many years, and supporting her son. He's in his thirties now, but supporting her son, raising her on a pretty small paycheck, and making things, getting things by. She was ready with the planning to retire and take her fifteen hundred dollar a month social security check. Right at sixty-five, because she just said, "I can't work past sixty-five. I can't wait till sixty-seven.
I need to retire." And even though I'm going to get less, we were just planning around the fifteen hundred bucks a month. And as we approached this date, we found out that her ex-husband passed away. She found out that he passed away, and so sad for him. But she now, instead of being eligible for fifty percent of his benefit, which would have been less than hers, as she was really eligible for nothing, now she's eligible for a hundred percent of his benefit, which was just about fifteen hundred bucks, as the survivor benefit, survivor as a spouse.
So, what she did. And she had Tom help her with this. She filled out a restricted application because Social Security, in fact, she called Social Security and they told her she couldn't do this. But we, you know, Tom helped her through it, and we met her in person over in our Greensboro office. And Tom, she got into her Social Security account, and Tom told her what to type, and they sat there, and so they filed.
Her application for benefits, based on the spouse sole survivor, fifteen hundred bucks a month, and they filed a restricted application on her benefit.
So her benefit is now increasing because she's waiting at seventy. She's going to flip them. She's going to say now I don't want his benefit anymore. I want my own benefit, and it will have had five years to increase to over two thousand a month.
So it's about time for us to take a break. Oh, it absolutely is. It's a good time to remind you that this show is brought to you by Cardinal Guide, CardinalGuide dot com. And if you go to CardinalGuide dot com, you are going to find the Seven Worryes tab. And obviously, today's worry is about Social Security.
It's the number one tab, easy to find. If you click on that, you are going to find a beautiful show, wonderful show, with show notes, which really helps because these things. Are kind of out there, and in the way that they come together, but they come together so beautifully. And it's in this video there at the Social Security tab at CardinalGuide.com, as well as Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement, and a workbook that goes through that. And actually, when I read that book the first time, is when I first saw, wow, I really need to think about this for my wife.
And we're going to get into that, you know, a little bit. And then, of course, the contact Hans and Tom page, which. Recommend it this enough that really for them they can put you and your spouse in their software and figure out the ideal time in your circumstances for you guys to to both file for your Social Security. And so when we come back, we're going to hear a whole lot more on how does Social Security spouse benefits work. 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 with Certified Financial Planner Hans Shile. And today's show is how do Social Security spouse benefits work?
And boy, this is a whole wonderful, wonderful episode, Hans. Yeah. So we were talking about Myrtle before the break. Let's finish her up. I mean, this is a lady that was, you know, had had an income of like thirty six thousand dollars a year that she's been living off of.
Working in a dentist office, and they don't pay very much. I mean, just and so she, you know, three thousand a month. And by the time you put a little bit in the four hundred one k, and you pay social security taxes, you're not bringing home of three thousand a month. You're probably lucky to bring home two thousand a month. That's what she's really been living off of two thousand a month, and she's got a little bit of money saved.
Not a lot of money saved. This is where we really—I get a lot of dissatisfaction out of helping people like her that are living really close like that. And she, you know, she she she needed to retire, and just because of her eyes, and and she she needed to get, she needed to see that she has that two thousand a month. After taxes, and the great thing about what we set up for her, with fifteen hundred of it being social security, and the other other five hundred coming out of her investments, she's not going to pay any taxes.
So, so she's going to have the whole two thousand a month is going to be hers to keep, which is equivalent to the three thousand a month she was earning gross. And she could still keep some of her assets intact, so she's not broke. She's not out of money, but she's not even poor. But she's she's she's got a little bit of asset. She owns her house.
It's a small little house, and she just wants to have some peace that she's can go on. And and we we really are taking a minimum amount out. Of her retirement account, but she's got this fifteen hundred a month from Social Security. She just needs another five hundred a month, which is real easy to take out. The taxes are going to be almost nothing, and then when she's seventy, which isn't going to be too far from now, this is back a couple of years.
When she turns seventy, her Social Security check by itself, because of this, taking it on the deceased husband. And then allowing hers to grow to age seventy is going to put her income at like two thousand a month.
So if we keep taking five hundred bucks out of her retirement account, she's going to get a raise, etc. And we've been deferring the retirement accounts because we've got to look at inflation. But anyhow, we were able to help her a lot with Social Security, and him passing away was very timely because. It just it worked out well with the Social Security file.
So, the next one I want to jump to is Joe and Alice. This is again another complicated one, but Alice is four years older than Joe.
Okay, and they even told me the story how she was working in a construction company, and she was the kind of the lady that ran things there, and he was. Almost eighteen, applying for a job. I'm not sure he was truthful about his age. And then she hired him at eighteen, and then she hired him at seventeen. I think, thinking he was eighteen.
And I get all this stuff out of people like forty years later. Yeah. Anyhow, he's four years younger, so he was still working when we met them. He was sixty-one. She was sixty-five, and she bought Medicare from us, and she went ahead and filed for her Social Security.
It was three hundred bucks a month. I remember. She thought, "Well, why not?" I mean, just that's all I'm going to get because she didn't work very long after they got married, and so she had a very slim work history, and they just relied on him, and so there's three hundred dollars a month for Social Security.
Well, then they hired us to do a retirement plan because this guy had almost a million dollars in a four hundred one k. He didn't have very high pay, but he had just saved in the four hundred one k, and then they invested it, and it just had grown. And so now they had he's wanting to retire, still at sixty one, almost sixty two, and. They say we got this nine hundred thousand bucks. We can't get any social security other than her three hundred bucks a month.
How can we make this nine hundred thousand last for our entire retirement? And I said, "Well, I had to think about that one a little bit because we got risk. We're going to have to reduce the risk and start draining out cash flow and guarantee things." But I put my thinking cap on, and I said. If we can get him to sixty-two when he files at sixty-two, which you don't hear me that often, recommending people file at sixty-two, but he's the larger earner, he has to be filed in order for her to get the fifty percent spousal benefit. He has to file, and the great thing is because she's four years older.
She's getting fifty percent of what his full retirement check would have been, which is like two thousand dollars. I mean, his his excuse me, it it it his full benefit. Yeah, wait a minute. Anyhow, his benefit is two thousand dollars at sixty two. Her benefit is going to be more than fifty percent of two thousand dollars because she's sixty-six now.
Anyhow, long story short, what we had to do is we had to do a do-over on her three hundred bucks a month because she had filed within the last year.
So we got her to write to Social Security do a reversal of the benefit or a withdrawal of application. She had to pay all the three hundred bucks a month back, no interest, and then wait for him to file at sixty-two. And now I've got three thousand four hundred twenty-five dollars a month coming in for this couple for the rest of their lives, and I got that to work with. And now I have to take a lot less out of the retirement account to get them. Right, and you know, here is the beauty of that: is that you know, again, it just shows you how the household works.
That you know, for some of us, like me. Like you talked about, Tammy doesn't get half of what my actual Social Security check is because I get more than my full retirement age benefit that I would have gotten if I'd filed at exactly full retirement age. I get more than that, so Tammy doesn't get half of my check. But she what she will get when we file will be half of my full retirement age check. But in this case, it worked the opposite way.
Because when he filed at sixty two, he's not getting his full retirement, but she gets half of his full retirement, which means exactly right that that you know that she like got a whole lot more, and when you combine that with his two thousand, like you said, it it came to thirty five hundred. I mean, it was genius the the way that it worked out. That like you said, we went from. Thirty-six hundred dollars of social security to forty-two thousand dollars worth of social security. Just waiting six months until he got to sixty-two.
Now we got that forty-two thousand to work with, and we can just add a little bit to it, and then we're not going to pay much tax on it. And we made the whole retirement plan.
So, right, and the last example is just people at the higher end of the spectrum. Tom and Chelsea, which we talked about them before, Tom was waiting till seventy to get his fifty one hundred a month, but he got interrupted with Chelsea turning sixty six in ten months, and at her full retirement and applying for her eight hundred seventy four a month check, that didn't look near as attractive as a two thousand dollar check. Which was half of Tom's full retirement benefit, so Tom ended up filing at 68 and getting 4,300 a month. Combining it with Chelsea getting two getting 2,000 a month, so they've got 6,300 a month coming in as long as both of them are alive, and then they've still got a high benefit for the survivor.
So. I kind of rushed through that one, but we're well. It's it's it's it's fascinating compared to the one we just talked about. This has the opposite effect, but still beautifully, it is a combined income between the two that his wife, like Tammy, and you know, raised the kids. Right, or my, you know, like my wife, if you take take that example, you know, she didn't work at the time that the kids were growing up, and so she paid very, very little into Social Security in her lifetime, and so her benefit would be really, really small.
So, at the point in time, you know, since I've already filed, when she reaches full retirement age, she can file, but she gets, like we talked about, half of my full retirement check. The gigantic part. And part of the reason why we waited so long for me to file is that after I am deceased, here is the real spousal benefit. After I am gone, she will get my full check, the check that I am now receiving. You know, the smaller check goes away; you keep the larger check, and so therein lies another part of the strategy that we haven't talked about thus far to me, which is in the case.
Of all these folks, that when the other spouse dies, now the household that goes to one check, but that one check will be the largest check, and that's part of the equation of when to file for the couple individually is to maximize that, right? Yeah, and in this couple's case, they don't need the money, but she's staring at an eight hundred and seventy-four dollar a month check, which is which is based upon. A small and short work history, and once she learned that if Tom would file, and that she her eight hundred and seventy-four dollar check would go to two thousand dollars, I mean, we pretty much all bets were off. I mean, it's just she's that's eleven hundred bucks a month, twelve hundred bucks a month of new money, and all we got to do is get sixty-eight year old Tom to file. And sure, he's given up something by he's not waiting till seventy anymore.
So he's given up nine hundred bucks a month for life. It's it's not nothing, but when you put the whole thing together, it kept Chelsea happy, and that that that that's what we're doing.
So yeah, it's a little more, you know, and I I think it's worth talking about, and I think it's really helpful to. Contact Hans and them, and we got to, you know, close the show out. And again, you get that at CardinalGuy dot com, as well as you know, if you go there, you're going to see the very first worry is Social Security. You click on that, you'll see a beautiful video exactly on the things that we're talking about right now. Show notes, and you know, a board that you can see the details of these examples.
It's it's a wonderful episode. You definitely need to watch that, and of course. Hans's book, The Complete Cardinal Guide to Planning, Foreign Living, and Retirement, which has amazing information on what we talked about in today's show. And so, again, you can find all that, especially the contact Hans and Tom page at CardinalGuide.com. Great show, Hans.
Thank you. God bless you. The opinions expressed by Hans Schyle 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.
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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.
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