MY Social Security

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This is the Truth Network. 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, 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 Scheil. Today's show is My Social Security, which, when you think about My Social Security, that happens to be the name of their website too.

Oh yeah. But we're really going to talk about My, I mean, Robbie Dilmore, Social Security, and the statement that you get every year. And especially if you, you know, log into My Social Security, they'll print out this beautiful form that shows you, you know, how much you would get if you took Social Security now, if you're over 62.

Looks the same as what they used to send you in the mail. Right. And all sorts of different things that we're going to go over. But I was thinking that, you know, how cool would it be if you got a statement from God every year that said, you know, My Rewards, you know, based on the amount of, you know, praying you die or whatever, you know, this many people you led to God.

However, all that worked. But, you know, the beauty of really, you know, My real Social Security, the one that God gives us, some people call that blessed assurance. Right. And the thing of it is, is actually, although I don't get a statement every year, which I would really enjoy, in a way, God gives me a statement every year, like how your faith grows.

And the more you understand about how much God loves and how much gives you, how much God gives you way more than you ever dreamed, you know, in just your present life, and you know, his, you're his son, and you know, his, you're his heir, and you know, you literally get to sit in his throne with him. The statement's pretty large. So far, you've told me there's golf courses there. There are beautiful ones.

There's dogs just like my little alley there. Yeah. All these people that you love when you were here on earth, but other people that you never got a chance to meet, right? Oh, yeah. So the statement's pretty amazing. But you know, to kind of get to that, certainly, you know, I hope if you don't have that kind of blessed assurance, that you'll get in there and study the Bible more this year. And I bet your statement next year will be much better.

Because it's just an understanding more of what God has, how much he loves, and those kind of things. But when we get to this statement, Hans, you had me print this off today, which is the third time we've done it. And I can just tell you that it's a lot of fun to print this off, because every year I've done it, it's grown. It's fabulous.

Yeah, it is. And I'm just kind of blown away that, you know, that here I am, you know, thinking I'm not really, you know, whatever I was going to get, I was going to get. But like I said, here I am 65, and it's more than when I was 64, and it's more than when I was 63. And so here we go.

When I get the new book finished, my updated one will be in there. And I ran mine the day before you ran yours. And what we're asking all of you to do is if you get nothing more out of today's episode, if you're listening in the car when you get back home, and you do not have a My Social Security account, that you would go to ssa.gov, socialsecurityadministration.gov, ssa.gov, and you would, there's just a button right there that says My Social Security. And you would hit sign in, or log in, or request to log in, or whatever. Sign up.

Sign up. And then what I want to caution you a little bit is sometimes people have a little trouble with this. Because Social Security is going to verify your identity before they allow you to just put in your Social Security number, and you don't get into all your stuff. Because you can actually make changes. So some people get tripped up. In fact, a lot of people get tripped up where they ask you former addresses you lived at, or bank accounts you owned, or credit cards you had, or loans, where your mortgage is, mortgages.

And they kind of get tripped up, or they get shut down, or they don't understand it. And I would just say, let's just finish the job. So if you got to walk away from it, or go get your son, or grandson, or granddaughter, or somebody, this would be a good thing to get done. And then from then on, you got an account open. As long as you know what your username and password is, or you have it hidden away somewhere, you can go in and do this regularly. And I say that because if you come into us for financial planning, where we do it over the phone, we're doing a lot of that, especially in the quarantine, but we've been doing a lot of that, where one of many things that we're going to ask you for is for you to go in.

We can't do this for you. And it's going to give this statement that we're going to be using today for today's show on Robbie with him as the example. It's going to give you this, and you need to do it on both spouses if you're coming in to see us. And so that would be something you could be ready for. And if anybody wants to run it off, and you want to just give me a call, and you maybe want to talk about your statement a little bit, I'll be happy to talk to you. You send me an email, send me a text, call me on the phone, and perhaps I could walk through yours and explain it to you just like we're doing Robbie's today, okay? Believe me, you'll be glad you did. Cool. So, you know, when we go and we look at page one, you know, it's always a good thing to start the class on page one, okay?

It says February 9th, 2021, so that's about as fresh as it could be. And, you know, it has a statement on here that says, Social Security benefits are not intended to be your only source of income when you retire. On average, Social Security will replace about 40% of your annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably when you retire. So, just the government never intended this to be your whole retirement, but 40% is pretty significant. And then for the people that are relying on it totally, that just haven't saved, or some unfortunate things that have happened, they're really getting more than 40% because they're not going to owe any taxes on this Social Security check.

So, you know, it's more like 60 or 65 or 70% of their pre-retirement income because they got no taxes because they got no other income to create taxes. You know, I don't know if that makes you feel any better if you don't have much savings. But, you know, we want to help you even if that's your situation. There's a lot of things we can do for people that have very little or no savings.

And there's moves that we can make and things we can do, and we want to help you. So, it's really when you get to the second statement, second page. Let's not go too fast here because right on the very top of the first page is the first thing that grabs my attention every time is what it says is your payment would be $2,880 a month at full retirement age, which in my case, because of my age, is, right, 66 in two months. That's full retirement age for you.

And you are now? 65 in maybe four months or five months. So, you're like eight or nine months away from... Right, that $2,880 if I were to take it, and that's a decision that we're going to talk about during the show. But the cool thing, the thing that I think is absolutely beautiful is that when you first had me run this, right, it was $2,600 and something at full retirement. And last year, it was $2,700 and something. And so, this year, it's $2,800 and something. And so, it immediately tells me, wow, because back when I owned the car dealership, I had some really good years. And I was putting in the max that you could put into Social Security, so I just assumed that I was going to be ka-ching as far as I could get.

But no, not the case at all. It takes your 35 highest years and their highest years relative to the Social Security maximum. You're filling in some years, year after year after year, at your current income. I'm doing the same thing. Mine's going up a little bit every year.

And the at 70 amount, which we're going to get to in a sec, that goes up even more. So, it's a beautiful thing. It is. So, now we can get past page one.

But I was so excited about page one, I was like, man, look at this. This thing's growing. Okay, so we get to your estimated benefits.

And it just repeats again what we just said. It's 66 in two months, $2,880 a month. So, let's talk about that for a minute. When you get to be 66 in two months, do you want to take that?

No, I don't. And why is that? Because I can see that a few lines below that is if I wait, right, till I'm 70, I get $3,782 a month, which is critical to me more so because my wife is so much younger than me. And I know, and I know as a spousal benefit, you know, that if I were to die after she's turned 66, et cetera, that she would be getting that for the rest of her life because she's going to only get one social security check after I die. Right. And that's a pretty nice check for a widow. And it's better than $2,880. $3,782 is better than $2,880.

Right. So, at this point in time, you know, as you get older, your years tend to fly by. So, at 66 in two months, all I have to wait is three years and 10 months. And I will be, you know, it grows from $2,880 to $3,782. So… So, that would be one reason that you don't, well, actually two reasons.

But one reason you wouldn't want to take it, which is about a year from now at 66 in two months, is you wouldn't want to take it because by not taking it, it's going to be more later. Absolutely. And then it'll stay more the rest of your life. And you're anticipating a long life. Well, especially my wife, being seven years younger than me. Well, both.

Yeah. And then the second reason is you want to run up your widow's benefit, essentially, which is you want to get that as high as it could be because she's younger than you. And that's going to be the only check that she has. So, there would be a couple reasons to not take it.

I could think of a third one. And that would be you're still going to be working at 66 in two months. So, you're going to pay a lot of taxes on that Social Security of 2880 a month because the taxes are driven by the amount of your other income. So, because you have other income that's significant, you would then pay a lot of taxes on that.

And then you're going to pay even more taxes on your Social Security that you're taking earlier. So, there's three reasons you don't want to do it. But so, what would be a reason you would want to take it at that age?

Are there any? Are those people who think, you know, I want to get it while the getting's good, that I don't want to leave any money on the table in case I die, but in my case... Yeah, that's mitigated. That's mitigated. But that could be a reason. The other reason would possibly be if I wanted to retire or I got laid off or, you know, some catastrophe happened where I needed the extra money. Yeah, that's a very good reason and that happens to people. So, just because we plan something doesn't mean we need to do exactly.

We're going to, when it actually comes time, we're going to make decisions at that time. I could think of another reason. What if you just had same job, same everything, no catastrophe, or maybe the catastrophe was outside of you and you just, you needed additional money by the month to take care of some need for your children or yourselves or just something. I mean, something could come along where this would be a source where you could be getting money where you weren't getting it before. And you also, if you were one of those people that said, I want to get mine well before it runs out, you also could take and take it in and then save the difference.

So, we're going to visit more of that. Yeah, plus there would be, you know, maybe an IRA or something, but we got to go to a break. Remember, this is brought to you by cardinalguide.com where you can get Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement.

When we come back, a lot more of my social security. Darrell Bock 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 by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, social security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday school, Christian, or civic group. Contact Hans at cardinalguide.com.

That's cardinalguide.com. Darrell Bock Welcome back to Finishing Well with certified financial planner, Hans Scheil. Today's show is my, literally my, social security, which I got from my social security.com, which is we talked about at the beginning of the show. Hans, this is something really is a really big part of planning for what you are going to do with your social security. Hans Scheil These are the base numbers. I mean, so if you're right at retirement, this becomes easy because you're just looking at these things.

You're a little ways away from retirement. And it's just, it's giving me the base numbers. And if you end up hiring me to do a financial plan, this is a critical part of it.

And this is the base of it. And then we haven't even talked about your spouse. We're going to get into that a little bit. But when we're sitting down with a couple, we need to see both of these and we're going to give them our advice and say, this is the date that we think you ought to start your social security. So where we were is we were talking about reasons. We came up with really three reasons that you might want to start the 2880 a month at 66 and two months a year from now. And one of those is you just need or want the money. Another one was that you just think that social security is going to run out or something and you want to get yours. Well, the getting's good. And I don't remember what the third one was. So you, you had a catastrophe in your family. Okay.

You had a catastrophe. And then I was adding in that what if you had just a desire at that age to start saving some money and you just said, you know, you wanted to get it just because you can. We have a lot of people like this. So then you pay the taxes, maybe your taxes are 880 bucks a month and you net 2000 and you put that in the bank for four years. And you know, you're going to have a hundred thousand dollars in the bank when you're 70. And so you could go down that argument and you would just, you know, some people say a bird in the hand is better than two in the bush and whatever.

I mean, I could think of a lot of reasons that you would want to start it. Although I don't think any of them apply to you unless something would change. You're going to wait and you're going to delay. There's no space here between the 2880 at 66 and two months and 3782 a month at 70. And the thing that you've learned and I want to get our, you could start it every month in between. I mean, you could start it at 66 and seven months. You could start it at 67 and three months. You could start at 68. You can't do half months.

I mean, you could start any month between, you know, next year and four years later, essentially. And so it's kind of, some people end up doing that is they don't take it at 66 and two months, but they take it at 68 or something. Some people wait all the way to 70. Yeah. It goes higher every month.

And so you're banking. But it stops going higher at 70. Once it gets to be 70, you got to take it.

Okay. I mean, they're going to send it to you. You still got to sign up for it. But in any case now, so I asked all those questions of why would you want to take it at 66 and two months. It also has a benefit down here at 65. Your payment would be about 2720. So that's just saying if you started it next month or like now or whatever, would there be any reason you'd want to do that?

In my case, absolutely not. I'd be giving back a bunch of it. Well, that's, I mean, we'll get to that. So we could think of the reasons you wouldn't want to do it. And that's the main one is that if you're under full retirement, which for you is a little over 66, if you take your check before you reach full retirement and then you make more than $19,200 a year, which is what you make more than that, you got to just essentially give it back.

So anybody that's still working and making more than $19,200 a year, you definitely don't want to start your social security. And that's why they point this out so much. Yeah. Cause it's a double whammy.

Right. Number one, you've now locked it at the lower number for the rest of your life. And that, that, you know, your spouse will benefit for the rest of your life. You locked all that in at the lower number and then you're giving it back on top of that. Like, you know, it's even a triple whammy because then you're paying taxes on it, whatever you don't give back right.

At a high rate because of your other income. So it really, what you can get out of this is you don't want to start your check before full retirement, unless you absolutely have to, unless you're really actually retired. There are situations.

So I don't want to make that like, it's a bad thing. I'm just saying that don't even look at that number and just know that there for security. The earliest you would want to do this is full retirement, which for you is 66 and two months. And so they got a bunch of other numbers that if you passed away, what your spouse would be eligible for and your spouse caring for a child. If you had children, if the children were under it. So there's family benefits involved here.

We're not going to spend a lot of time on those today. What I want to talk about next are spousal benefits. Okay.

Because what you do matters for your spouse no matter what. And then there's an extent it matters a lot for your spouse based upon if your spouse is going to be getting spousal benefits while you're still alive. Okay.

So that's kind of a mouthful. And we have the greatest interest of people reading my stuff in these spousal benefits because it's like they read about and they get a handle over this stuff and then the spousal benefits just throw them over the top. So let's talk about, so your spouse is much younger than you and she has her own earnings record and she can collect on her own earnings record and she's doing that now.

Okay. And so she's not going to be in a position to file against your benefit until she herself is 67. And at 67, well actually she could do it before then, but she's not going to want to do that. So at 67, she'll qualify for 50% of your age 66 and two months benefit or the 2880 a month, which is your full retirement benefit. When she's 67, she can start getting half of yours.

Right. Now, if she'd had a big income, it would be whatever she earned. But in our case, since she was the stay-at-home mom, many of those years, right, half of mine is way bigger than she would be getting.

It's the same boat in my household. The difference being my wife is just one year younger than me. You know, there's some scenario where I'll be filing for social security at like 68, just so she can get half of mine and I'm going to run the number. I won't kind of worry about that.

Maybe, maybe not. We may wait until I'm 70 and then she'll start getting it at 69. But in any case, the spousal benefit, this is real confusing for people. First of all, it's based on her full retirement age, not yours.

Whatever she's going to get off of your record is going to be based upon her age, not yours. Then the amount that it's calculated from is going to be based on the amount at your full retirement age. So you're not gaining anything by waiting to take social security or delaying to improve her benefit while you're alive.

Yeah, with the big caveat, while you're alive, it's completely different after I'm gone. You are doing a lot for her benefit after you're gone, assuming you go first. So now if you had an ex-spouse, she would sit in the same place as Tammy if she was married to you for 10 years or more and she didn't remarry before she was 60, then she would be entitled to collect half of your full retirement age benefit, 2880, when she is at full retirement age. If she wanted to collect it sooner, like 62 or three or something, then she'd get less. But she could still collect it sooner. But you could have two spouses collecting off of the same record. I had a dude in the beginning of doing this with two ex-wives and a current wife, and then he died.

All my exes live in Texas, you know, the George Strait song. But that doesn't cost anybody but the Social Security Administration money. I mean, she's entitled to her benefit because she was married to you when you were working. Your current spouse is entitled because she is married to you. And then when you die, both of those women would receive your full delayed Social Security because they both collected. And they'd give up theirs to get that. Once again, if mine was higher than what theirs was, what they're earning, and just to be clear in case anybody got confused, I don't have a wife. I was married to her for 10 years.

It qualifies for this. We just want to make that real clear. We're on a Christian radio show here. We don't want to be airing dirty laundry that doesn't exist. Well, I just wouldn't want somebody to come up to Tammy and go, wait, what about Robbie's other wife?

He was married to her. That part's a little bit. That was just a for instance.

We should have used the straw man. Yeah, that's okay. Okay. Now, that's not as bad as what I'm going to do now.

Because we're going to kill you. So pretend this was some other dude for a minute. But if you died now, and Tammy is not yet 60, then she's not going to get any benefit out of Social Security till she's 60.

Which is the case, yeah. She is 60. No, Tammy's not 60. She's not 60. Okay, so she's not 60.

No, Tammy's not 60. So if you passed away and the benefit, if you die before full retirement, that it would be based on is the 2880. Even though the benefit you never collected and they never paid you, that's the number. And then if she at 60 applied for a widow's benefit, even if you died before she was 60, she would have the option of receiving a percentage of that 2880 for the rest of her life. Or she could delay, and then the more she delays towards 67, her full retirement age, the more she'd get. But the penalty for taking that at 60 or 61 or 62 is not as severe as other penalties. So it's there, but it's not.

Let's just leave it at that. Most women that are eligible for it take it at 60. Now, yeah, so the spousal benefits and the surviving spouse are just a big factor for everybody. And this goes without saying that if your spouse has their own earnings history that is substantial, then they're going to rely on that. And if they go, yeah, I mean, it's just they're going to rely on that until one of you dies. And then if yours is more than theirs, then they're going to have to give up theirs and take yours. Right. And that's why it's just not a cookie cutter approach to determine this.

And it's really wonderful to know Hans and know that you can go to cardinalguide.com, not only by his book, which is really, really inexpensive, or you can just ask him for it if you go to cardinalguide.com. But also, you know, why not give him a call and say, here's my situation. What do you think? Because, you know, clearly this has long-term ramifications. And as I've had a chance to visit with so many friends that are my age, oh, it's scary how many people took the bait and took it when they're giving it back, and they locked in their other, and it just makes me cringe because they didn't get any real— And they're usually real defensive about that.

I mean, they're like really right about their logic of whatever it is they did. And again, it's a matter of prayer and good counsel and all those kind of things. So cardinalguide.com. Thank you, Hans.

Great time. Thank you. 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 Hans' bestselling 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 Hans' 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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