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April 10, 2021 8:30 am
Hans and Robby go over the Social Security benefits for widows and widowers, and how these benefits might fall short in retirement.
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This is the Truth Network welcome to finishing well brought to you by Cardinal guy, certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well for over 40 years finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well well today show on finishing well on because there is a lot of new material that I really excited that I think spring health today show is calling Social Security surviving spouse are actually surviving spouse's consent to be the man of the woman as it is the case may be, and this benefits that are in this that really is. I've been talking to Hans. No, I just found out about, but it's clear biblically just in the Old Testament alone. There's 105 times that God brings up widows and orphans. I'm telling you is near and dear to his heart that we take care of widows and orphans and it's very much in that culture. It was a tough tough situation because the man passed away in that day you know there was no way for woman laid they weren't laborers they could get black get work it in all forms or whatever and so, like Naomi in and Ruth and the buckaroos you know they had to got on the edge of the field and clean and it was up to the acculturated take care the widows and orphans and so it's very very near and dear to God's heart, so I'm hoping that even though you may not yourself be a widow or an orphan or surviving spouse that through some of the material that you hear about today or you know that you might help somebody that is even younger that you did not know about these ticklish benefits through Social Security but also as we think about wow at some point in time my spouse for know if I pass away first is going to be the surviving spouse and one of I done the plan to make sure that that that you know I'm leaving the best legacy possible with my own set up in realizing did you tell me 105 places in the Bible and the old just the Old Testament is the Old Testament widows and orphans are mentioned much. It's amazing yet it is our calling is the calling of the church to take care of the widows and orphans and the Social Security system is taking care of the widows and orphans to the extent that they're able.
It certainly doesn't take care of this really well but it takes your widows and orphans and people that at least historically were two older workers to six or you know intended to be a retirement benefit and it is that you know I just you want to get people fired up about Social Security and people get fired up about the subject. Even off of our shower there just saying that I can have enough money here there this are there that are it's not funded or government spending all the money on something else. You know the reason I get so fired up about is is just so important.
There's $3 trillion in about the Social Security trust fund, there is money pouring in their every day from current workers and so it's here. You could say it's bad off, but it's it's well-off if you really sit down and look at it and it needs some adjustments made. So what were talking about today is really went widow benefits surviving spouse benefits as your spouse dies what what is Social Security can pay you sort of the safety net is there and something just in our discussions and preparing for the show that Robbie wanted me to bring up was just the benefit if your spouse dies is in your under 60 Year Way under 60 and you have young children at home here, to be entitled to collect the Social Security benefit based on your dispute. Deceased spouse's earnings history and the number of children that you have in your bill to collect that they're going to be able to collect in there and send it to you.
The surviving spouse until those kids reach like 18 graduate from high school somewhere I don't know the exact rules because I don't deal with it day by day, but it just about stated to you correctly, so I probably need to look it up for you rely on that, but there's a benefit and in the example we have a lady whose it is a friend of ours. My wife and I who she stood up with us in our wedding, and she is exactly my wife's HQ. She went to grade school with her and high school and their 61 issue. They had just turned 60. So this is been a little over a year ago and they she lost her husband, probably 25 years ago and says she's just been making do kids grown up and she mentioned that she got a Social Security benefit till her youngest son reached like 18 and then it stopped, and she had got anything from Social Security and she really was just kinda negative thinking that she's really is getting be entitled to much did she listen to the show on Facebook told my wife and she's*my wife or my entitled to a benefit at 60 because we both just turned 62 hours today you have talked to Jenna hanging around so I talked to her and now she was just telling me she was tell me all the rules how this won't work and that will work in. I got her to get an appointment was Social Security good and there talk to him. Look up her husband's all record.
She's getting 1800 bucks a month. Now that's the discounted amount. She was 60 and maybe a little bit 16 a few months and she would've gotten more if she waited till she was 67 or 66 in 10 months or whatever full retirement age based on her age she can afford way and this was a real blessing.
So what I want to tell the widows out there are widowers or the surviving spouse's is if you don't have young children. There's nothing for you now if you like 53 or 45 no young children. There's nothing for you now and the earliest you can start getting a benefit based on your deceased spouse is age 60, but introduced its reduced because it would be the full benefit at age 67, so I would just guess that her benefit of 1800 a month. Had she waited.
Maybe would've gotten a size 26, 2700 so most widows when they have an option in the qualify they take it. Now there's another qualification it had.
She remarried after the death of the first husband, and she remarried before 60 she wouldn't be able to file against his record okay but she qualified on that and so you know the answer to all that is having proper life insurance in force in my now if you're to work and people and you don't have any children.
I guess if one of you dies, the other one is going to be able to just gonna go back to living like they were beforehand with you know, maybe no life insurance wishes you bring kids into the mix.
I mean life insurance is become so necessary and is so sad, so many people are uninsured are not properly insured today. I think some of that has to do is nobodies that people are not celibate anymore like I did 34 years ago when a case just tell you what I just became a grandfather for the first time back in February and well my daughter-in-law was pregnant back in the end of last year. I talked to them.
I said if I buy 1/4 of $1 million.
With term insurance for both of you and I pay the premium for the first year you go along with this at all course, that's great. So we did all at they had to have take a physical preserved. They just had to go through whatever they had to go through and my sons. 33.
His wife is 31. During good health. It was $330 a year for him and like to 90 a year for her and that premium is guaranteed for 30 years now quarter of a million age I just tell you that if one of them dies. They don't see that, and I don't see that, but if it happened you know that court is a million boxes can make a huge difference and 60s a long time away from her.
Now granted, she would get something from Social Security for their one son that they have, but is certainly not enough to replace his income or vice versa. These can be more of a pickle she's gone she is with him, but either way, I mean life insurance is really what Social Security is trying to replace the defective people didn't have that, or you need both, but talking about widows, you are eligible for a benefit start at 60 and you're gonna be better. Waiting till 67 if you want to get the most benefit so again if you have proper life insurance and assess force. Maybe you'll be able to to make that choice at 60 and so instead of having to take pride which brings us to the other partner show which is those of us who you know are at the stage where were 6263 and 59 I guess and beginning the planning process of okay this picture changing and if if my spouse survives right as I began to budget this and think about it.
Let's see if I pass away. Tammy is still going to have.
You know the whole property tax at talking to go down because Rob is dead enough.
She's our power bill. I can imagine it's going to go down much, because in other words, I look at her budget. There isn't much that goes down because all of a sudden I'm out of the picture so we have to and in working to lose 160 security check it. The point were both there right okay what are we gonna do to make up for this income loss and so there's lots of financial instruments. We can do that with the one skin got life insurance, annuity will speak to speak into that sure righteousness to planning issues and you know you you can discover this today because as I've talked to Social Security and I showed you that by waiting and all the things you're doing with your kinda doing now you're really not there yet. When you're actually waiting for his average full retirement age but you got this whole picture put together for Tammy were she's going to have a nice Social Security check to see there's longer than you can, but would you also learn is if you die in the next several years. The next few years. Whatever you want to add up. She's going to number one she's have to wait till she 60 to start getting that check number two if she takes it at 60 which you might have to she's gonna get a whole lot less than she would've gotten there. She took it at 67 so you just identified that and think out your life insurance and something happened to you she's going to get a nice paycheck for life insurance and then she doesn't proper planning.
She's gonna be hell to say I don't need to take that Social Security and 60 because I can live off of this I can let it build or maybe she will take me will just and then she'll have that plus the life insurance for for her whole life and that plus a Social Security check so you know it's just a planning issue and so you're in that zone were a lot of our clients that are incoming you got life insurance you got Social Security check in the future, but it could be raised to the president of one of you guy's unit has a Linda Valentine got a whole lot to show that still left there.
We got a gun, or break again. Don't forget, this is certified financial planner homicidal. His book the complete cardinal guide to planning for a living in retirement is available in cardinal guide.com will be right back. As you see we got a whole lot more to talk about 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 Hahn's expertise and qualified charitable contributions veterans aid and attendance and IRA Social Security care and long-term care.
Just go to cardinal guide.com and contact Tom to schedule a live recording of finishing well your church, civic group, contact Tom to cardinal guide.com that's cardinal guide.com welcome back to finishing well is certified financial planner homicidal is always kinda brought to you by his book, the complete cardinal guide to planning for and living in retirement. There email@example.com when we left our hero Ponzi was wrong with it because I get to see his heart like oh my goodness. So many of his clients find themselves here were just losing one of our Social Security checks went with this is a place income. We believe we've got to figure out how we gonna go from here and how we got plans about that's the big is that so by listening to the show getting tuned into our work in the work we do with so many people, many of them in the 60s, few in their 50s.
A lot of the mid-seventies doing makeup people just say oh my, I didn't do add this and then I think they're too old for those that are not, but the Social Security were people of learned about Social Security in the start to understand it and what they understand real well. As they got two checks from one for her and one for him. But there really for both of them.
They run their household income and then they start learning that we don't have to pay much tax and money if we don't have a lot of other income. So then they differ and they just kinda marching along living off the Social Security checks and because of their after-tax money. There is no tax on it makes the checks feel a whole lot bigger than they are relative theirs, living on one of those people passes away, the household goes from two checks to one check. The simplest way to understand this is person rampant first person of a married couple. The guys the smaller check stops just explain this to incoming client the other day I said you know your Social Security check. About 25 hers is about 15. It's gonna be about 1500 so you can have about 4000 bucks a month so scared and you just going to march right along it's can increase with inflation and is pretty nice.
Then when one of you dies, it doesn't matter which one per $1500 check is in stock so if she dies first will. It's obvious the universe can stop you'll just get your if you die first hers is going to stop because she's going to get yours and hers goes away so that's something you really need to plan for. It's pretty shocking to have a $1500, but many times is tax-free reduction in income. I NS you were explain absent. I think it is heard you say that because I'm not being tax on my Social Security right you're holding on. Perhaps IRA money that sitting in their and you're not taking that because it makes her so security feel like it's more money but in reality, wow there sits if you got an IRA sitting there by doing some distributions in the life insurance you really are a run on the board because it not only reducing your income tax.
Obviously, you know, but went because life insurance will pay out tax-free, not only for your surviving spouse, but for your kids if you both end up going together and all I hear that my wife always tells me we are by the question. We have allowed people sent non-IRA sent non-IRA money because they can live well on functions.
Think they're winning the game. And maybe there they just take the minimum distribution then they also face this to 1500 boxes of what has been tax-free money disappears and then you got all those years where they could've been taken more on other IRA. So for no tax. They could've just been depositing in his mouth like you said by licensor to take a lot of relationships to make up for this, and maybe don't have to make up for all of it in life insurance is tax-free to so now it when I was thing about it I was like wow probably. If you took a distribution, a life insurance policy that would cover an income of say below 12 $1500 a month would be what my $250,000.
Micah 4 pretty good. The time so you're talking about.
The benefit is 250,000 right and so that comes tax-free.
And then it's invested in something like an annuity and shoot out an income to bring a guest. Okay, so you knife you were using the IRA money you know just just distributing it into while you both let me just you guys make a distribution for the taxes on the distribution.
But if you not taken much of distributions. There may not be much tax right before know.
Again, we just go play the numbers, but even if there was tax you just pay it and then you buy the life insurance and then you can create this big sum of money we don't even need to solve the next problem instrument have 2500 a month, and otherwise not survive exit out hundred you have a check for 40 million bucks. That will solve that and then some that may depend upon your health and your needs and how you invest that. But yeah we can work it that way were just replacing that 15 box mile point is that people they don't think of this, they don't really think of of like what life is going to be life when they live on is the one person's computer with a lot less income and a lot less tax breaks, so there's just there's a need for pool of money now is a lot of ways. Life insurance is one way to make up for so we really want to get what were talking about on the show here is were really talking about whether the widow benefits the surviving spouse benefits like the mean of Social Security and when you're under 60, they must, but to wait for prompts when you reach 60 and your spouse and start Social Security check the and you didn't have a much larger large errors, smaller benefit sure there's a benefit there were you can collect on your deceased spouse benefit, but when you both make it up to Social Security and you got the checks going in your own in your 70s.
Now it's the reversal life insurance because money is going to go away when one of you dies instead of money, answered and you said you let this slip out that it made my mind jump on it. You said at the end and you had some big tech tax benefits. In other words, as long as Tammy's around. I get the flat file jointly which means my income can be a lot higher before I have considered the situation so wow while you are still showing related standard deduction desire.
Standard deduction for a couple over 65 zone 26. Bring these give tax deductions without doing anything form they come in lieu of your other deductions, but in one year. When you're a single over 65. That number is like 14,000 yeah and that's what I point out like if there was a time to be making the distribution right you you got 10 grand difference absolutely is well both of you are alive, and then where you put it well you can put it into a lot of things you could do a Roth conversion.
If you young enough and you have reached minimum distributions. If you reach minimum distributions you could you could take just the minimum. And you could buy life insurance with that you could take more than the minimum you could buy up a very high performing cash value whole life insurance that would actually accumulate a savings account. So if you both make it into your 80s, then there'd be a cash value available that you could. We are both alive, you both got the checks coming in, but now you got a bunch year savings moved over into this life insurance and now you're kinda making it. You can start borrowing from that tax-free and living off of every there's there's all kinds of things we can do that what's what's driving the underlying system is Social Security benefits that your currently getting to love right and now striking dislike your sin in the beginning of the show when you're 30 is pretty easy to buy life pretty inexpensive. Well if if you make these plans when you're 50 or 60 and it beat 70 or 80, but sure better to make and when you're elite, then not make him at all and find yourself in 85 you know where you were you not eat wheat end up with a spouse that that isn't able to know I just be able to meet their needs at the cell by housework and I've I've got my good friend and in and you actually helped her many times and helping a lot right now but so after spouse died. Unfortunately, no life insurance in a she's left for this house and how I keep up the house you know when I got one so certain Social Security check coming in and at the end of the day. Will you know it didn't. She end up getting a reverse mortgage which we knew was in the best financial plan in the world but it was it kept her don't washer and you know this is why we have more and more people in their 60s that are retiring, planning for retirement retired their buying $100,000 life insurance each and you know if they live both of you live a good long life, then that money is just going to go to their kids tax-free. But if one of them goes early in the other one lives on Urbino early could be in their 70s sometime. You know, just 100 grand, you pay some final expenses and nearly got 80 or 85 left tax-free money that sitting there that you can draw from without pay in taxes that can get you through a bit of a pinch near privileges budget that we can budget that right now your IRA and distorts distributions right your 60 summer right after you retire sweet but the ice underneath it goes okay. You know, and we're hoping I know that every week as we get a chance to record here.
I get to think through G how my planning for this situation now for that situation to finish well is finishing well means you know leaving financial heritage for not just Tammy but my kids and all that's going on there. So again, how you do that well you know we do, we just keep learn what God gives us to go to Cardinal guide.com get the book, the complete cardinal guide to planning for and living in retirement, which is if you email Hans I'm sure he will send it to you free, but we are so grateful for the listing we have so much fun doing the show so much fun we run out of time every week and we finance thank you Hans.
We hope you enjoyed finishing well brought you by Cardinal guide.com visit Cardinal.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 cons 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.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