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November 14, 2020 8:30 am
Hans and Robby discuss what exactly full retirement age means for your Social Security benefit.
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Enjoy it and please share around all your friends. Thanks for listening. Thanks for choosing the truth podcast network. This is the Truth Network welcome to finishing well brought to you by Cardinal guy.com certified financial planner Lonza Schild, best-selling author and financial planner helping families finish well for over 40 years on finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRA, long-term care, life insurance and investments and taxes. Now let's get started with finishing well welcome to finishing well with certified financial planner on Schild. Today's show really interesting 96 decisions 96 decisions is a lot of decisions for Social Security and specifically for when you're going to start your Social Security payments which is really a fun topic because I think were all excited about it. Money that we've been investing ever since were located in similar cases, and I was thinking about this biblically ponds that the kind of reminded me of the sudden this number 96 is that Abraham was a phenomenal negotiator and if you think back to the story of and on the three men showed up there there there saying should we destructive. Should we destroy Sodom and Gomorrah actually tell Abraham that this is what do they decide to do that and then Abraham inattentive freaks out because his nephew not locked. Nuno successfully hangs out sin's rather just saying, my Lord, would you save me no Sodom because lots there in his life and he's got a couple dollars that is now it goes down the heat he negotiates with God, which is just beautiful like this phone. I love the system likes what kind of thing he would do that will guide you.
You would instruct destroy Sodom for 96 not actually set 100 people, righteous men (God was now know by Monday that it is the things that sit there and that Abraham was like wall not defending God but how about, 75, and he works his way down like any good negation, no door against attendance and and and you see how that works out in when you look at this life skill from a cartilage point of view. I had a chance to negotiate with a lot of people over the years. Sure, and some had fun and some of them all day that you know and I want to startle you know what you do with your little kids because they are born to negotiate. If you don't think your kids are going to negotiate. Just recall any time that they wanted to stay up late and that was like five moment unite would they would come down 30 minutes 2015 and I there negotiating because the other trying to find out where the common birth the birth line sure and and and from the time they are born that they find your lines and they have ways of knowing how far they can push you in my mouth that I get the look or the voice whatever that may be what you love to know I well I'm hoping heaven is instant replay so I can watch this interaction with Abraham since I was getting close to the line you know it was a giving of the look at it and says I thought about this 96 decisions conflict.
I love this. There really are and it was a huge misunderstanding on my part, but you are in a way your negotiating with the federal government legally on how you can work out your Social Security and and it really is in fact really fun as I been planned.
Now, since I was 62 well and so we had difficulty getting some of these points like full retirement age, which were good, really try to get to that today so that what my hope is that every listener that is not on Social Security yet or the even the ones that are giving advice to people that are younger than them, which people tend to do that they would understand, like what is full retirement age for them. What is that mean and what are the different dates when they could start the Social Security well at me and it just on the surface doesn't appear that complicated but it was really the Mackenzie who works with me and she's behind-the-scenes on everything does all my writing and she took over our writing and she also runs the Facebook thing and she reads all the comments on the website and she came up with a few suggestions for shows, and she said people just don't get this dictate.
They don't know what is the retirement age around Social Security. So trying to simplify this is much as I can and if you use me for an example I turned 62 in July. Just this past summer so I was eligible to start Social Security in July 2020. I also could've waited one month and I could've started in August started in September, October, every single month between July 2020 and July 20 28.
Every single first of the month or whatever day of the month you can get your check you have an opportunity to start your Social Security check. So in effect you have 96 decisions between now and 70. Once you make the decision to start. It will then you don't have to worry about the rest of the decisions, but I just wanted to get this point across is you have the right as and your spouse has the right is there separate from you. If you're married to start their own Social Security check either on their record or on your record individually. Each of you have the right 96 times start Social Security check.
And each one of those have all kinds of ramifications right as you begin to to see that that if you know, I assumed that it was totally ignorant. A couple years ago that you know it was either you took it 62 out of this little bitty amount that ended up that way the rest your life or you took it at full retirement age fraud. I guess FRA flooring and and okay that was so II really assume there are three decisions you could take it at 62 for determining negative FRA which is 66 and two months from someday. More 1955 like me or you could take it at 70 so there were three but in fact there's 96 and with each one of those months and it keeps going. I'm just going out thing. If I remember from line.
Had I started it last summer when I was just exactly 62. It would've been just a little more than $2000 a month and then if I took it.
Then I get a check for 2000 possible bit and then it would go up. I think the grays this year's will be 1% this coming year. When there's a little inflation in there but ignoring inflation is 2000 month for the rest of my life so that the one point that I want to make is if you wait till your 70 what you've missed out on all those $2000 checks between 62 and 70 to get a larger check, but I could started it 62 if I wait till say 65. I think that number was like 3000 month if I wait till my full retirement age, which that's what a lot of the shows about today my full retirement age. Born in 1958 is 66 and eight months.
How's that for confusion. I know yours, born in 1955 right is 66 and two months so you can go up on our website and see a chart of all the but you really don't need to dig a deep into this because if you order your own Social Security statement which I may have you do or help you do it if you come do some planning with me to plan this out for you but if you just do it on your own. It says right on your Social Security statement. What is your full retirement mindset 66 and eight months and elaborate on it gives you 96 different payouts that shows you what is going to be if you go this month that you that, but there's a great big long column of numbers and it that show you. I think it just shows you 62 if it's in front of you.
If you if you would now like I'm 62. In summary, month, and show me if you starting next week instead of 62 as pastor and this can show full retirement age and this can show 70 so it gives you the three numbers but in any case will create all those other numbers for you and you connect, we can actually if we have if I have those three numbers I can create the other 93 of them, just because I know the factors often that depending upon how many months you view either delayed but I don't want to confuse people with all that I just want you to be clear that you got 96 different dates starting at age 62 and ending in 870 and so where every month that you way you can get a little more so those two dates matter. 62 and 70 and then full retirement age, what's that all about. It is really what the ship was to show all about wealth. We have a lot of folks that mistakenly assume that full retirement age is still 65 and it was from 1933. Up until a little past.
1990. It was when you reach 65.
You get your formatting your Social Security check. If you turn 65.
During those years, but back in the 80s.
They passed a Social Security reform deal where it delayed retirement or full retirement age change slowly over a number of years from 65 to 67 and ending got to 67 Isa -66 and eight months.
Actually, people born in 1960 and after it 67 people born between 19 57 166 and eight months. You were born 1955 to 66 and two months, so depending on the year. Year of birth, there is this midpoint is not exactly the midpoint, but there's this date is called full retirement age, you need to know what that is for a number of reasons. So what I'd like people to get walking away from this as we get we can take as early as 62. We can take it every month thereafter. The longer we wait, the more it is but were still taken in early if we take it before. In my case 66 and eight months full retirement age for some ramifications of taking an early decide you're getting less then you reach full retirement age, you can still not take it and then you can delay it and then you could take it any month after full retirement age all the way up to 70 every month you wait to get more doubt were to talk on the other side of the show about one of the ramifications of taken an early and one of the benefits of taking it later. Past full retirement age and billing. The benefit of taking it right at full retirement age right and there's all sorts of revocations that are really really helpful to think through not just you but you got your spouse and all those things enter into the equation. As we can learn more about the 96 decision Social Security courses all describe the Hans book the complete cargo guide to planning for and living in retirement and Hans kinda uses your Social Security payments as part of a baseline to begin the plan of how to live, finish well yeah and so this is kind of critical thing and and and there's lots of neat fun things about it when you when you when you begin to research is that when we come back. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care.
Just go to cargo guide.com and contact to schedule a live recording of finishing well, your church, Sunday school, civic group contact time that Cardinal guide.com that's Cardinal guide.com welcome back to finishing well, a certified financial planner Hans Schild. Today's show 96 decisions on when to start your Social Security payments and and really, really fun stuff from my perspective like this is good to be anything you can I have this extra income, but there's a lot of you know information that needs to go to the computer to figure out how to plan as well. Not just for you because actually my case a lot of the reason I'm a start mine when I started Constance because my wife is six Sigma significantly younger than me and and and so this enters into the planning thing from it sure does because were assume that you make it to 70 you start your Social Security then she's gonna start her spousal benefit so you can be getting a pretty significant check every month going into your 70s.
Let's say around five grand a month or maybe a little bit more if all the projections are right and you take five grand a month which would probably be 36 3700 of that is going to yours and the other 13 1400 1500 is going to come from her and so what we talked about if you when you pass away, assuming you pass away before she does what's going to happen is her check is going to go away because it's a smaller check and then she's going to get your check for the rest of her life and by waiting till 70 that's a big deal to her.
So she's going to have a nice survivor pension essentially test new machines. She would say seven years younger than me. I can say she's eight years younger than me and it's that you know men don't attend live as long so yet all that into the equation of this could be significant. I mean, you looked at it, we know we looked at all the numbers needed for a long time and you could go it 80 years something and she's still 70 something 772 and then she lives into her mid 90s.
She's getting 23 years of very enhanced check in by the way, if you're gone, she's can need and and so by waiting till 70 were just gonna make these numbers up. Let's assume that your check was 3700 a month by maximizing it.
Waiting till 70.
Had you taken it at full retirement age, which for you is going to be about a year from now let's just say it was 2900 a month okay that's $800 a month that you've effectively given up for three years or four years going on for years but the yes so you lost those income checks. But what she did is you gained 800 a month for the rest of your life which could be a long time and then after you die. Consider she could live a lot longer so you can just gonna do the math here. We have a computer that does all this that would be the ideal thing for you to take to take is is is you is your Social Security is to delay till 70 you're gonna work anyhow. And that's another critical factor to when people decide to start it as if you're working in a year I get taxed right mean now now she had the same kind of work history and income history as you do, then, that really wouldn't be a factor, even if she was close because it was just say that you did take it that 66 and so many months and and and then your your Social Security was 2900 a month but then she waited till then and she got like 2700 or whatever was she isn't gonna gain that much in Social Security payments by you predeceasing her. So this is really effective. It's in my situation as well as it, you know, my wife was many years beyond me. She's going to have the benefit of that enhance the security check. So I think we've made that point in so full retirement age.
Like we said for you was 66 and two months for me is 66 and eight months for some of you that are younger than Robbie and me. It's gonna be 67 and for folks that are maybe a little bit older. It was probably 66 was your full retirement age and that's it so so what is full retirement age matter.
And in food matters for the show because a lot of people think that it's still 65 and it's not what happens at 65 is Medicare eligibility and were talking to a lot of people at Medicare eligibility to talk to them about Medicare consulting and so consequently they think that it's like time to start your Social Security, then dollar planning in their head around all of that thinking about retiring and were dealing with a different date so that's one thing I want to get out of the show. It's it's a date different than 65. Depending on your birth year and you go on the website.
Our website and look it up and find out exactly what your full retirement age. So what is it matter. What matters for that is knowing when it is and when you're full Social Security check will start but it matters for a whole lot more than that if you start your Social Security check since early 60 tubeless assays started 64.
You started years now. We're basically an early Social Security surety file, so you'd be collecting less than you normally would get probably about 2500 bucks a month or something there about if I stay consistent with my example which is $30,000 year. That's no small amount of change so there are people say I want now is something the government can be here whenever I want to now I've paid and see started when you set a whole bunch of stuff and motion number one as you lock your Social Security and at a lower amount. Rest your life, but the ramifications of starting it before full retirement age is now. If you have service income like income from a job in that service income is more than $18,000 a year and you are collecting Social Security before full retirement age, which is this example then all your income above $18,000 a year, you're required to give some your Social Security back to us like you've collected it but you gotta give some of it back and then the amount that you don't give back. You can have to pay taxes on a pretty high rates because your other income that you're earning drives that. So there's really a couple of three negative ramifications. All that being said is if you need the money.
You are retired, you're not going make more and $18,000 a year. Go take out I want to make it sound like that's a bad thing.
There's plenty of people that started before full retirement age.
I just want to know the ramifications of essentially if I'm understanding what you're saying.
If my full retirement age is 66 and two months and I'm working then if I file for my Social Security at my full retirement age of 66 and two months. I still have to pay tax. Let's pay state tax we learn that the last show yet. I have to pay federal income tax based on my tax rate on both my income and muscle security correct.
However, I won't have the payback feature correct this plenty of people are still working beyond full retirement age, then elect to collect her Social Security check. And my advice to them is to pay the taxes out of that and then save you know is you don't want start to Social Security check.
And then just bought Ron borrow money on it or something. So if you taken it shorter.
70 you're still working with your past full retirement age and that's what you want to do going take it but then pay the taxes and then save the money.
So then by the time you get to 70 when you could have delayed and got a bigger check, at least you'll have a savings account of some substance to then use for your retirement presumably don't really need it then because you're still working. Some people if they start the income they're just going to find a way to blot so I saw this is safe you do that, fine. Let's have a plan for will render with the money or just spend some of this described me I figure out a way to blow this just makes it island in the beautiful thing that I would bring out on that issue. Enough you share your your real financial information with somebody, you know, it's really nice to share with some male icons where you don't feel ashamed. Like I mean, yeah, that's my habit, I am sure answer. If you go into that talk on somebody that has wisdom. They see this in the end this and they are helping you without judgment. You know what I'm saying and and so when you're picking a fiduciary or someone to help you with these you know it's really really good to have somebody that I believe it is is trusting God with your situation with you in prayer and also that you really sense that this person that was just the heat is not here to judge. He's here to help you and he realizes that most people yet on the right here. We've got flaws just we all do. Believe me, I do know when it comes to money we we just try to make good decisions and good preparation. There's even some ways to do that you can do tax withholding from your Social Security and have them withhold more than the tax that Joe and then you won't have the money in your checking account span and then you get a big refund then maybe you just say that because it comes the all at once it is put that straight into the savings account.
If you still working you make it past full retirement age and you want to start your Social Security check, then go ahead and do it. I just like to see you save some or all the money after tax.
Now the ideal situation would be to just delay your Social Security to your done working and then get a larger check, so thought same for everybody and we do, that's a part of our financial plans is to set out to sum up, not so much teach you all this like were doing on the radio's teacher to you for you is just to listen to all your preferences which are needs are in your financial plan, which are taxed situation and help you make a good decision of which of the 96 months from the start this thing for you and your spouse and then follow up and actually do that and there's even an angle.
If I recall correctly to know whether or not your spouses on you know some type of insurance. Besides, your insurance, your health insurance and never getting in the Medicare so put that off to the Medicare so it's hard to talk about Medicare without talking about Social Security and it's hard to talk about Social Security that talk about Medicare because there are run by the same people and they have, that's all part of the equation and and and again part of the reason why think it's really good, you know, tax is one of the seven worries which are there in conscious book complete cargo guide to planning for living retirement and and as you can see there's a synergy right to all these long-term care taxes. You know all these things fit together in a pretty sweet little package.
If you're doing the plan and say put those altogether. In his book, which began the whole section on taxes as they are, but you get the whole book. All you have to do is go to cargo guide.com and email Hans and enhance into the book, or you can find it in Amazon. This is what sets, not even law libraries. You can find it on loan from library to so easy it's cardinal guide.com course all sorts information waste contact and have them come and do something custom-made for your situation with you and your spouse, you know, and in the physical situation all the stuff to print figures into the plan and as you can tell if you didn't notice on the site.
Hans loves this nominee will have a good time working with you to figure out the best way to maximize your resources so you can finish well. Thanks you. We hope you enjoyed finishing well brought you by cardinal guide.com visit cardinal guide.com for free downloads of the show or previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as ponds 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 to get Hans book go to cardinal guide.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 cardinal guide.com cardinal guide.com this is the Truth Network