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Social Security Annuity Defined

Finishing Well / Hans Scheil
The Truth Network Radio
May 2, 2020 8:30 am

Social Security Annuity Defined

Finishing Well / Hans Scheil

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May 2, 2020 8:30 am

An annuity is equal or increased payments over a period of time. Social Security is a lifetime annuity for you. Hans and Robby explain what this means, how to use it, and what you might want to consider for your other income.  

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!

You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at  

Finishing Well
Hans Scheil
Rob West and Steve Moore
Finishing Well
Hans Scheil
Rob West and Steve Moore
Rob West and Steve Moore
Finishing Well
Hans Scheil

You're listening to the Truth Network and Welcome to finishing well brought to you by Cardinal God Certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well over 40 years on 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 welcome to finishing well today show as my brain going round and round and the idea of Social Security is an annuity kinda how that is defined but from a spiritual standpoint, it was Robbie thinking about it is what it was financial everlasting life looked at and the idea of annuity. There because it's got a mind blowing that when you think about what Moses said to him, and I just saw him teach me to number my days but when it comes to an annuity right this is a lot different than life insurance. Were you counting your days here.

It seems like the longer you live the more. Keep praying will yeah so what we want to do today is we want to talk to you and teach you something more.

As we do every seven weeks about Social Security and we want to teach us something about annuities as well and so Social Security is an annuity known annuity is defined as a series of equal or increasing payments over a period of time in a life annuity, the period of defined time is defined as your life so you you have to have an insurance company or the federal government ensuring this you can imagine, if you just had a person says I'm a send you a thousand bucks a month, send it to you every day for the rest your life will first of all you have to make sure they live as long as you live in the me just you think about that that's out, that's a promise that just an ordinary institution really even a bank can't just promise you to send your check every month for the rest your life but an insurance company can certainly do that in the government can and the government doesn't do that in the dark and they don't just make these promises without pre-funding is that there's $3 trillion sitting in the trust fund the Social Security trust fund. Did you know that I did I would've guessed 2.1, skip $3 trillion in it.

It is, that's the thing that they're projecting that's going to be drier run out of money by 2035 and incidentally the next or talk about Social Security. The next time we talk about it seven weeks from now the Social Security trustees report will be out and I will have fully assessed that it will be talking about the health of the Social Security trust fund, but for our purposes on the show today is there's enough money there to fund it into the future that when you start your Social Security check. It's a life annuity you can get a check every month as long as you're alive and it is pretty cool when you think about, you know, everlasting life that Jesus is collect our own personal life annuity that you know he's given me making deposits into your life for eternity and the good news is right. He's given up of an aside, I thought about it when you're defining it that your it's important that they later let the person that promising. This is gonna live longer than you. In this case Got that covered right well into the insurance company has that covered when you purchase a private annuity is there giving you a guarantee that as long as you're alive. You start the annuity payments.

One of those can be in the mail or directly deposited in your checking account every month as long as you're alive every year, and in some cases that's as long as either you or your spouse is alive, so there there are annuities that are written to cover two lives in our joint and survivor annuity so what I want to do today is I want you to take a look at Social Security, perhaps in a different way and to see it as an annuity payment that you cannot let Jack and and he said something that I thought was really remarkable and in need of before the show we are talking that financial products of the United States of America.

You know there isn't any such thing is really good or bad that there has to do with which fits a particular situation where some situations in annuity is exactly the answer to make sure you never outlive your money where other situations, life insurance or or IRAs or other things are the best financial product for that particular situation.

But what government set up under. Obviously, Roosevelt was this idea Social Security which gave us something for Americans to where we knew right that they would not outlive their money will yeah this is it's assured a minimum standard of living for people when they're older and retired is unfortunate. Things happen to them.

Or maybe just things of their own making.

They just spent all their money or they blew it or they lost it or whatever they've just gone a person things happen and they got a check every month in by the way, for those people to don't need it is if we didn't have Social Security somehow organ be providing for those people's that's what we do here in America and so it it it's it is. It's a good thing as our really what what I was referring to. We're getting ready for the show was just the demonizing of certain financial products and you can listen plenty of people in the media just trash and Social Security just saying it's a bad system is run on money it's going broken some little bit of truth in everything in every story but just as a whole is not a bad thing.

Okay, it's a good thing, as are annuities you could read and hear the annuities are bad and annuities of this and all the sin done is that you have a financial product for the right person.

It's the right thing is they get a guaranteed check every month is like Social Security check to supplement it's just need a combination of all these things and making them work too good in the end is really what you what my job is to help you put together a plan so all these things work for you now what I want to do today is just teach you about Social Security so once your check starts you going to get that check for the rest your life and if you're married and you get into checks in your household then when the first one he dies the smaller check is going to go away. So in other words, you know you suspect your Social Security might go on longer than your life. If your spouse is earning a smaller Social Security check because your spouse is going to than get on your check with their checks. So it's you know it's an income that can outlive when I see these people on TV that are celebrating their hundred and third birthday and I really think a man if you started that at 65. Did you been collected for 38 years and you're still collecting the menu look even begin a check next month so at the same time, there's people. The diet 61 and they never collected time.

So that's the government's job in the Social Security Administration's job is to balance all that overall population of people so you have some people to collect way more than they paid in and you have people to collect a lot less than one of things that in my experience firsthand about Social Security that is a bit of an understanding that I think people would be helpful to know is that when that person does die, the account that the monies being deposited into what would just take the example I know because I lived at my dad okay and had a main checking account were most of his money resided as far as his cash money. No, but he had lots of investments but as far as his cash money which you need in order to handle funeral expenses were in that main checking account. Well, as soon as the bank found out he had passed on. They glommed onto that account. It was it was frozen because the Social Security had to be because Social Security made the next on deposit after he passed away, which means that they had to get their money back, before anybody else got anywhere and all that took paperwork in time and literally almost immediately that bank account was frozen for 45 days meeting that while you're doing your financial planning to think about that what so security does happen at the end of the of the deal is if if you died on 2 March and that money was already on the way your your checking account or whatever It is that monies being deposited to be frozen and so you need to figure out how to have assets for the people that are gonna need money at right that moment kosher is for life insurance comes so you know what I want you to get out of this is far Social Security is it is an annuity payment is really a deferred annuity because you're paying into this and your employer's pain and since you were the first time you have job and when you get your Social Security earnings report.

Some people get real nostalgic about that because I can look all the way back and they can see that when you when they were 16. They had a year were they made $4200 or whatever there was money sent in an account is 1/4 and you know you been paying the end from 16 to 6566 60 sums of people right up to 70 you can started as early as 62 but if you started at 62. You can have a much smaller check and you going to get that much smaller check for the rest your life so you flip that to the positive. If you can afford a way to 70 and you can work longer live on some other assets. Then you can have a much larger check. I was looking at mine might my stick is almost $4000 a month if I work till 70 and wait till 72 collect and it still can go up right based on still can go up to me and probably will sell out all all that would probably be in bigger number. By the time I get to 70 is the point is is that I may only live till just say 80 and United say why you waited all those years you only collected 10 years but you know my spouse, my wife, she is probably in outlive me by a whole lot of years and she's gonna keep on getting a check for the rest of her life and so you you had all that up. That's what an annuity is assisted guaranteed payment that you know is coming in every month in what I wanted to teach you about annuities is it says right on your Social Security statement that Social Security is intended to provide an average of 40% of your preretirement income. So come back with a talk a bit about that and how you make up for the phone while you are no nine retirement. That's not right. 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 IRA Social Security care and long-term care. Just go to cargo and contact Tom to schedule a live recording of finishing well at your church Christian or civic group contact Tom Cardinal that's Cardinal welcome back to finishing well, a certified financial planner Hans Shah Allen today Social Security annuity define sort of like financial everlasting life. We talked about that but but Hans you want to get into not only more learning on Social Security but some stories of how this works out in people's lives.

It really you know you can't help but see the blessing of will you an instance of the points I want to make your Social Security and will get on the stories is that so let's say the Social Security is 40% of your preretirement income can II would like to think that if you wait till 70th. Maybe higher than 40%. Just because you have a kick up but let's go with 40% there's an opportunity to make that 40% tax-free case you do proper planning.

You couldn't earn and make your whole Social Security tax check tax-free and so if you could come up with another 20 to 30% of your pre-retirement income sources Take as an example me. Let's let's let's assume that my Social Security check is $4000 a month and that's 40% of $10,000 a month so if you could say that that's how much I need to live my $10,000 a month I pay at least 3000 month in taxes. I don't really have that much money to spend I have more like 6500 a month spent and if I'm able to make my Social Security check tax-free so there's 4000.

All I need is another 2500 bucks a month and I'm live in the same lifestyle. If I can make that 2500 bucks a month tax-free. So in other words, the income that you're receiving in retirement. If you're doing it from Social Security Roth IRAs in loans from your cash value life insurance or withdrawals from your savings.

That's not in an IRA just from CD or or in any yeah another it.

I was think about it, get out annuity that was paying out $2500 a month.

Yet, which is mostly tax-free. You can make a little income still be in the tax-free sure so so when you get to retirement and you're collecting Social Security. Not only do you want your check to be as big as it can be and you want to know that and you want to know is, an annuity is never going to run out. Then you want to have the rest of your income.

You'd like that you like to Social Security to be tax-free.

And then if the other income be set up as tax-free or close to tax-free you neck I need as much money to net the same amount. And that's a sweet and then you're also going to want to make sure that other money can ever run out. If you live to 100 or something that you're still got money in the way to do that is with a private annuity which you there's a way in retirement that if you plan properly you can get your tax bill almost down to nothing.

Depending upon your standard of living okay. If you have a very high standard of living than you must have a lot of money and a lot of resources you have to pay some taxes but we can still help you to reduce that to as little as a convict so we want to talk a little bit about stories so stories of clients when we ran the last show there was a lady who was one of the stood up with my wife and our wedding.

They went to grade school together and my wife and this lady both turned 60 this past year so's best birthday and I hadn't really thought too much about that and she happened to be listening to our show. She just got laid off from her job.

She's fallen on that hardship and she was told my wife about that. And then when she's listening to the show at home or the recording on Facebook. She's she called up and she asked my wife a question can I get Social Security are John say that if you're a widow that you could started as early as 60 and so Rhonda didn't know that.

She said you could have talked John so she handed the phone to me, in which, by the way, for those who don't know John and Hans are the same person. John is my nickname with people that are in Hans's family call him John.

So that event where that came from.

That's a nickname.

If your name was Hans Eckardt Schild, you would had a nickname to you in second grade. That was a hard one to explain. So I was John Enea so I was able to talk through the bit I said in seems to me like you going to be able to earn on your work. Her husband passed away.

I knew him very dear friend of mine in 1997 he passed away in his own plane and he had a heart attack and his friend who was flying with them but managed to get the plane onto the ground with with no flying experience.

You do not work. The radio but in any case, he survived.

My friend passed away and at 47 years old, so I wasn't sure, what record anyhow. She went through all the hoops. As I advised her. She's getting a check start and I think this month 1800 and like $50 a month and just the point I want to make what an annuity that is for the rest of her life and that comes a very good time. She's fallen a lot of hard times lately and she had just lost her job and she's now able to earn up to $19,000 a year of other income besides the Social Security and not paying taxes on Social Security so you know I'm guided earn all that and she's got a part-time job and she's really not paying any taxes now and she's looking upon an income that she can get by the wonderful story if it it it it said it, you know, because I really in my own you know if I can if I can think back to my self-care.

18 months ago and the whole idea of Social Security and and this was not up positive. In my mind it was like, oh, the government's chlorella in ally five I bought into probably had a lot of those urban legends and and or no essentially lies about Social Security and I did not even begin to see the value of it and and then I took your advice as did several other listeners and just printed out my so security statement.

I want all my goodness, look here. Look at what this thing is like oh my goodness. When you add this together with my wife Social Security check in my so security check and in middle all that's involved in that.

Like this. It's pretty promising and and and gives you a sense of like, to be okay so then then what we need to plan for is the rest of going mean another story comes to mind in this gentleman's in my book. We talk to Dr. about them before. Is been a client now for about five years and he had Artie made up his mind to delay Social Security to 70 various student guy in the elector all the numbers and just if you'd made that decision. He also just retired, knew he had enough money to live on of other resources and he was really focused on making a return on that money that he had saved in his IRA and all I can stuff and he was going with this national brokerage firm before he met us that the one that's out there that says I hate annuities okay and then propose that he put all his money in blue-chip stocks and he had told us the same thing he told them as he needed about $70,000 a year to live.

He just pulled that number out of a hat is I think he was making about 80 or 90 before he came and asked to see just pulled out a number and and really thought through a lot of things and so by the time we did all the planning for him.

We realize that he was eligible if he would've file now for a second Social Security check on his son because his son was still in high school and would be for another couple years and by the time we put all that together we had about $57,000 a year in Social Security benefits that he could file for now. At like 68, and that would give us and would go for at least two years. So they gave us two years to not take anything out of his IRA him and give us a couple years is a long time. If we can grow is money for that long, and not make any withdrawals in, you know. Then we got talking more and in anyhow so we put them in some annuities because he wasn't real happy in retirement looking at possible losses in the stock market, but just the point of the whole thing is is that the Social Security is the foundation of all your retirement planning and just it just is.

And it's now coming from Social Security. It's supposed to be about 40% of your pre-retirement income doesn't mean yours is can be exactly that and the important thing is is an annuity you you cannot outlive and if you plan smart tax wise, you don't need to come up with the other 60% on your investments.

Visit we can come up with 20 to 30% and you can keep the same lifestyle just by lowering or eliminating contract which provides for no other estate planning and even long-term care which is obviously part of finishing well and something that really is on the horizon. As you begin to take that that turn kosher. We a lot more to think about than just Social Security and your other income you get all seven words you really are.

Our job is to try to balance all of this stuff and help you make good decisions in all the areas and when you make one decision in one area affects the other sex.

And so it's a it's it's it's it's really like but the plates in the air spanning to make it all work. But that is what is what we do for 11, when it does in narrative.

It's it's an amazing thing it really is you look forward to finishing well and let you know I think back, a lot of times to let me know how that Michelle was entitled and I and and and I think about how beautiful it is that that we have the ultimate annuity as we look into our future like oh my goodness, you have a person that is providing the deposits is way way way is it is everlasting life himself and and we will live on forever and as we begin the invest in the kingdom we have now we get to know reap those benefits and the ultimate bank account right here at your listing to finishing well, a certified financial planner Hans Schild today show a course of Social Security annuity defined and you can find it at the seven worries Tabet Cardinal don't forget the guide. After Cardinal and you know there you've got these seven worries that the monsters describe the course would not talk about want you to worry wanted plan for the things that there is no work right so the cheese worries are typically out there before we get on the scene. What are ideas we don't want you to worry that the stuff we want to help you make good planning decisions so that you don't have to worry about. You can enjoy your grandchildren.

I know this tests hidden under a bushel, right where it's actually been brought out in the open where the light can get to it and and you can begin to bring some some light into it. It's it's their Cardinal it to get the book, the complete cargo guide to planning for living retirement all you do is just go to the website mass for the all that stuff is all resources. We want you to have so we was just grateful that you spent your time with us today. Thanks for listening. You we hope you enjoyed finishing well brought you by Cardinal visit Cardinal. for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as constant 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 when you get Hans book go to Cardinal do 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 Cardinal

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