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December 29, 2018 8:30 am
The second letter in Hebrew alphabet, Bet, means household. Jesus was born in Bethlehem, which translates to “house of bread”. In this new year, is our household going to be a house of bread, are we going to be able to provide for our families?
Social Security is the first part of providing in retirement. Social Security spousal benefits are particularly interesting as many people do not know that they are leaving money on the table. If you do not set them up right, you might slice the bread a little thin.
Hans and Robby first talk about divorced couples. Many people do not know that as long as you were married for 10 years, you can collect off your ex-spouse's record, as long as you were not remarried before age 60. Really, Hans stresses that there are many steps you can take to make your Social Security check as large as it can be, you just have to plan for it.
Another situation Hans sees a lot is a couple where one spouse dies in their 70’s, while the other lives for 10-20 more years. This causes an extreme loss of income when the deceased spouse’s Social Security check goes away. Hans discusses how he prepares clients for this.
Lastly, Robby and Hans discuss the world’s largest annuity, which is Social Security and how it relates to the three legged stool!
Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on CardinalGuide.com for free!
You can contact Hans and Cardinal by emailing email@example.com or calling 919-535-8261. Learn more at CardinalGuide.com.
Welcome to finishing well brought you by Cardinal guy, certified financial planner belongs agile, best-selling author and financial planners helping families finish well for over 40 years of 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. Finishing well, well, as we start off the year 2019 here on finishing well you know we just I have this kind of thought of. Happy new year honey and there's a reason you know we are here with certified financial planner, hot showers workers were headed into 2019. I couldn't help but think that you know coming off of Christmas. One of the things that I really just a thought about and thought about this Christmas is Jesus was born in Bethlehem and yet you may know that in the Hebrew alphabet. It starts with Alice, but the second letter is that an that bet means household.
So Jesus was born in Beth let him meaning bread so he was born in bet means household house of bread set.
Oh, that you know as we look at moving in the 2019 is our household going to be a house of bread. Are we going to be able to supply for our families.
You know, as Jesus was born know in the house of bread and that understanding Social Security benefits spousal benefits.
There's a whole bunch of rules and stuff in here that really and I can kind of sliced bread will thin if not careful. Well, me so the thing that I've been looking at on my account lately is I'm because I included my own personal Social Security statement my book and then I have been there that my wife is going to file as a spouse collecting on my earnings record it doesn't come from my money. So this can be additional money, but she's gonna earn more at half of my full Social Security than she would on her own Social Security because she spent the majority of our career raising our children, keeping up her household and he that my my some exact same boat exactly the same thing that when I teach reach full retirement age or know she will be getting a significant amount more and from my spousal support. Have you want to put that than she would if she was just on her own since Kurt so there's some rules with that when I cannot bore you with a bunch of details today because we don't do that them and you can get them in my books and download them and then you can ultimately meet with me if you chose.
We can talk on the phone to look at your particular situation. So there's a lot of rules for Social Security were your going to determine no first whether it's can be better for the lesser earning spouse to collect on their own record or to collect the spousal benefit of that the higher earning spouse then you've got divorces where you have a person that's been married to another person for 10 or more years and then they are able to collect as a spouse as well right so that you know that that wasn't big wow to me when I first heard about it earlier, is that if you know you're divorced and and you had us high earning spouse that if you were married for 10 years. When you get to the point where you can retire your entitled to half of their value don't remarry before 60 K so you can remarry after 60 but given those rules and that doesn't preclude their current spouse from collecting either and the money doesn't come out of their money so you can have no doctor big box that's making 3000 a month in Social Security or 4000 a month and then you can have his current spouse collecting half that were 1500 a month. You can also have his divorced spouse providing she didn't remarry collecting another 1500 a month there both collecting and guess what, when he dies so we can all biblical on sale if he had seven wives, yet they would've written Social Security settle differently if we sell at the same marriage or is Bob's so a lot of rules around the stuff, but really not here today to teach you all the spousal rules, so suffice it to say that if you're married couple and you going to retirement you can get two checks from the government. One of them is the primary earner, the other one is the next primary earner or the spousal primarily two checks coming in those checks, at least in my case are going to be really larger than I thought they were. I really sat down and looked at it and I think you found the same thing exactly that. Wow that's going to be a sizable amount of income between the two incoming checks that again a skin of know this a lot of red in that house. So there's a lot of planning things that we can do to make those checks as big as they can be for the longest period of time, which is defined by your life and the spouse since it so that's a planning issue and we need to do that and determine that first overdoing financial planning retirement planning process. The basis of your retirement and then we look at your other retirement funds in sources of income and we build on top of the Social Security so what I want to stay on today is not so much starting those checks living often for a while and which we both done is we've looked okay. Most folks are planning and retirement when they're in their 60s and their planning.
They both see the possibility that they're going to live both of them into their 80s, late 80s maybe even 90s and they're gonna gonna die golden hands or a little bit like George and Barbara.
George just passed away and Barbara died pretty much knew that was coming with Barbara, passed away several months ago I me that you see that a lot, but they don't look at, which happens a lot, is one of them dies in their 70s and then the other one lives. Another 20 years.
That's a real possibility. Probability for a lot of folks that I'm sitting down with in their 60s and having lived through that with clients in experiencing that justice, extreme loss of income at the death of the first spouse. I've course and get a plan for that make people aware of that. I when I dislike my own situation right there on the study that if I waited till I was 70. Before began to collect my so security that would be $3300 or something like that that I would be getting every month. My wife would get half of of the 2850, I think, which is my full retirement which is again about 1500.
So now suddenly got pretty close to $5000 coming into the household and plus whatever income we have.
But you know there's $5000 coming in every month but then all of a sudden I'm 10 years old and not 10 but seven years old and Tammy and I pass away first, which is likely, and now oh wow, things change radically.
You go from around $5000 a month and she's going to be getting the larger of the two checks to 2800 and it's almost cut in half.
Yeah NCN even in situations where you're not doing the spouse thing.
It's actually worse where you've got two earners for the whole time we a lot of couples come in and now it's really common were they both have good earnings records or they both have Kennametal earnings records, but when you add them together to bring a check and then there close each other but they don't realize that's all wonderful. When the first one passes away, the other will the smaller of the two checks is going to go away death and that's that's the simplest way to understand this is you going to retirement married couple got two checks coming in and when the first one of you passes and we don't know whether we only God knows whether that's going to be the man or the woman we can gasp it doesn't really matter. One of you. If they go before the other and the other has to live a long time. The smaller of the two checks is guilty of the household income and that's pretty drastic in these days and time it's it's usually drastic of all of a sudden the elders over $2000 come out of your household income are used to living that way and there we get back to the topic of in a happy birthday honey it's it's like oh my goodness, you passed away and with that I had no concept that all the sudden this much.
My income was going to change and and are there ways to plan well I guess you're probably see were headed with this with what I may tell you is if you think maybe was taking in a circle and confusion a little bit numb and apologize for that.
This is very complicated and there's little funny rules and things that come in in so this one of the reasons I wrote a book about it in simple and plain English and a little plug for my book here. It's called the complete cardinal guide to planning for living in retirement.
You can get it on Amazon.
You can also if you go to our website. Cardinal guide.com you can go there and you can go on the seven worries tab and you can go through and tag Social Security you can take your Medicare supplement long-term care investment income taxes all the different seven worries and then you can find the individual chapters of the book and the workbook you can download free and so you could see them this afternoon or this morning. If you go in there and find him and download him or you can go down to the messaging center and you can send me a message at your listen to the show. I'll be glad to send you a copy of his book. No charge as well if you just give me your email address will will email one digital copy would like to get you the information. This is complicated. There's things you can do from a planning perspective so that we can't prevent bad things from you can't prevent bad things from happening to you, but we can certainly prepare for them so that the you don't suffer as much of the surviving spouse does not suffer as much financially pride which is the title so finishing well worse with certified financial planner Hans Schild today show were talking about in a happy new year honey 2019 and and the house of bread and and it's fascinating to me. You know, just begin with that the Social Security is that lucrative and and and that you could be looking at bringing in that much money in retirement.
You know, without IRAs and these other things. I mean, here comes at a substantial amount of money $5000 a month yeah possibly tax-free. And so you know we got a lot to talk about on the other side of the break that's coming up but we want to urge again Cardinal guide.com you can find out all about the book of as we said email Hans and that he will send out a copy of that when we come back more on happy birthday honey read finishing well 2019. We hope you are enjoying finishing well brought you by Cardinal guide.com is a Cardinal guide.com for free downloads of previous shows, including episodes about Social Security and Medicare, IRAs, long-term care, life insurance, investments and taxes as well as Hans best-selling book, the complete cardinal guide to planning for and living in retirement.
Plus the accompanying workbook. If you want to follow along with today's topic download free PDF Cardinal guide.com by going to the seven worries tab of today's show topic, just scroll down to useful documents once again for free resources shows going to get Hans book the complete cardinal guide to planning for and living in retirement or the workbook go to Cardinal guide.com you have a question, comment or suggestion for future shows. Click on finishing well radio show and send us a word. Once again that's Cardinal guide.com Cardinal guide.com now finishing well brought by Cardinal guide.com welcome back to finishing well today show a happy new year honey work were talking about. Well, sort of coming off of Christmas Bethlehem the house of bread and that that's really cool how so security numbers on a bread that's a possibility of becoming in your house, but your kinda describing that inside of our house. We not that not only do we have bread but there's this three-legged stool that kinda keeps us going. I've been taught that since my first financial planning class back in the 70s and 80s right up to the modern day, you know, the three-legged stool of retirement. It's got Social Security which is always there as long as you're alive got pensions, which used to be there for a lot of people.
Now there only there for some people they been replaced a lot with 401(k)s and defined contribution type savings, retirement savings account but she got pensions as a second leg and then the third leg is personal savings and Social Security was never intended to be your only source of retirement.
I will tell you what I learned in my practice is there's a lot of married couples drawn two checks they maybe have the potential of other income to get this big fat retirement savings account just taken the minimums from that. So if they ever needed more than their Social Security. They could certainly we can create an income of that they talk to me about that but a lot of them live off their Social Security and if they do it tax wise.
Again, no income tax to pay. So it's really a net check they don't have any debts, so the date date they just creates are living and they allowed seniors are to live pretty frugally and so they just says a lot of people that have ended up that of the three-legged stool there just standing on one leg of it, and I guess he could say there standing on the other leg or one of the other legs, the personal savings, but they're not really drawing it down and you know that's another show were were talking about IRAs so you on the show were really talking about the fact and celebrating the fact that married couples to Social Security checks they become pretty significant with inflation. So it's a good thing if you both lived to be up in your 80s or 90s just can keep that going on its inflation-adjusted with the problem. We've been talking about today and we really want to highlight is is that that first-person we don't know if it's this one or that one but one of them passes away in their 70s writing 80 and then the other one lives for 10 years or more up into their 80s or 90s and this is a lot of people out there not completely taken out. The other leg of the stool, but you're going down half a just immigrate a really yes if you been living off it and count on it paying the bills cost almost as much for one to live is to, you know, one of the really fascinating things in this discussion for me because I'd heard the term annuity. I couldn't begin to tell you what it meant, but as you explained a few minutes ago. When you begin to understand annuities that you really are going to see that wow your life every American citizen's life is gonna be hugely improved because of an annuity had the you know, probably the world's largest annuity is so scared, or definitely is in every American that works as it so if if we just took you as an example, and you have a combined income of over 5000 a month just on a projection starting at 70 and then if you and your spouse live on up in your 90s together. She'll still be in her 80s and then you pass away.
That's going to go down but it won't be that big of a problem is if you live up under 90s. She's going to have so many years it will be a problem but nothing like if you passed away. You know in your mid-70s and then she lives into her 90s.
It could be like 25 years.
She's living off of that smaller Social Security check. So what is really good on the front end of retirement potentially can create a real problem on the back end of your time, but the idea that that you know where else are you going to get a deal where you pay money into something but then it pays out in big huge chunks like this forever, and other words as long as I live. I have an income coming from Social Security and that in fact is what an annuity is, and that's an uncertain period of time.
All of this right only known by God, but you'd think that the Social Security Administration and the government knows about because they're guaranteeing the full faith of the government that they're going to pay this payment for you and your spouse together for the rest your life and they got a certain amount of money set aside it doesn't have tag Robbie Gilmore on there but some degree it does you know and I'm just guessing, seven, 800 900,000 that they got set aside right now.
That's going to grow some and then it's also going to have money paid in by you is your not 70th before you start collecting NASA kinda check the change you need to be able to pay out on something like that with a couple of healthy people 70 and six) Sanders annuities were set up in in that idea that you would have an income coming forever will yeah and so we we probably have a probably week we have 100 different annuity writing insurance companies at our disposal and in each one of those companies has 5 to 10 different products different combinations and so you know we have a way through all those choices to come up with something where we could replace that pension leg of the stool or that's six of those of you without a pension. If you do have that personal savings are that retirement savings but you just looking at a chunk of money and investing it in.
You'd prefer something a little more guaranteed like Social Security, we can take part of that and create a retirement income were now you have an insurance company guaranteeing to pay you and your spouse a certain amount of money by the month for the rest of both your lives. We can sit out in his go take a hike among the you know a just just is and it's a it's it's a great diversification of bond. So when we taken this from an investment perspective and were looking at people bonds have really in the most recent past. Poor yields and so when were put in a conservative money, which we need to do with retirement folks annuities sometimes can offer some of the same benefits with a better interest in a better payout semantic apportioning your money. Maybe the bond portion of it.
The safe portion and put it into an annuity that's going to come with some guarantees of income for the rest your life and if you're just turning anyone of what the world was think of finishing well, a certified financial planner Hans Schild and Chris everything or talk about today is in his book the complete cardinal guide to planning for living in retirement, which is available at his website under the seven worries tab you can download a PDF of the very chapter talk about so security today or just go to the messaging you know. Contact us portion contact Hans and asked for the book give me your email will send out a digital copy app so you can send me your address and I'll send you the paper book can have something tangible that it and soak me out that other leg of the stills we would certainly talk about the Social Security and from a personal savings standpoint, a lot of folks are doing what they could do on that leg because there taken minimum distributions on the environment will yeah and so so you think about it is, is that what's going on in the last 30 years 40 years as we used to have pensions you work at a company stay there a lot of years and have many years. He stayed there 2025 3035 and you get a check for the rest your life on by the Fed pension fund. A lot of that has shifted to where now people don't work for companies for 2034 years and more.
Some do but a lot of them there and be five years here and then over there and maybe then self-employed and back working there.
So these define contribution plans where instead of instead of agreeing to pay you a pension payment at the end of your work to put aside a certain amount of money or matching you put it aside.
It has tax benefits, and so you have a lot of America. This is really most of the cash that they have.
If they have it it sit in an IRA or 401(k) and then his people approach retirement and approach age 70. A lot of them just don't want to spend any because they're just think I gotta pay taxes. Well that's okay but the government can get their money. If you hoard that money just play the minimum distribution game. The government is going to get that money when you die, I mean leave it to your spouse and your rollover than I can get him sooner or later asking to go to the next generation in their and have big huge tax bill pay and so what I'm suggesting and advocating for a lot of folks is that we take a piece of that and we get smart about it. Now we start living off it in retirement and we use that to create an income whether that's through investments rather reinvest that and get it more and more conservative as you get older that I have over folks and not worry about the stock market, much less their very wealthy were working at work were gonna pull off without an income, or we do go to something like an annuity and maybe we don't draw income now but we have a plan and the insurance company. You can turn on an income that you can outlive that that right which is in O'Connell Renaissance.*Non-income that you can outlive but it's kinda cool to know that you can create that it had to bring balance as I think about your three-legged stool. It's it like so many other things in life is is trying to find balance in your household writer and and know that you know you're ready for these things. Not only that, but when unite your wife wakes up in 2030 or whatever she's not, my goodness don't have my checks on what am I gonna do you know that's that's got wrenching up is night. I find it funny in the press were those people. I hate annuities uses guy out there that is run ads on that and there's any people in the press that really get down in these things that they're rip off and everybody in America has at least one annuity is an accumulation deferred annuity investor in retirement and then it's an annuity and the payout phase, they can outlive it, they can't spend that they can't blow it the end.
I'm conservative in my leanings, but I don't agree with the people that we ought to give her by Social Security accounts let them invest money in there and do better than government as I just I just watched what people do as a mass and I just don't think that's pretty out and so it's it's an amazingly cool thing is you know since I began understand would talk Russell spurted the day that number one every month since I turned 62, 363. Ever since I turned 63. My memories going out every month. I got it covered every single month.
My my amount that I would be getting is going to go up clear time 70 and in and so every month that I forgo taking it. It goes up so that becomes an interesting planning thing to say okay Robbie and my situation with my wife and my family and her situation when is it ideal for me. You know to call that end and and when I've rethought that even as of today, when we are sitting around lunch and so go. This is part of the reason why would you know many think, you know, planner, many advisors, you know plans succeed and and have somebody like you and your corners is a wonderful thing. I hate the shows over against. We kind of know saved the best for last. And I guess Fritz can have to carry that over the next week.
Yeah just line I got offices in Charlotte, Greensboro, in our home offices in Durham and we work with people all of the United States on the phone a lot of our customers. We never meet shortly.
You folks in North Carolina if you didn't want to meet us face-to-face will be glad to sit and chat with Sarah next week show, you know, as we are sitting there. Just today I watched a nylons and I were talking about. Wow, if I took this a little bit early. When I got the full retirement age, and I took that money and began to do some planning with it that my wife would clearly you know really begun to change when I pass away. Okay, so where will we come back next week stay to wear your life. Your husband might be gone are I want to know about the good thing so thank you for listening today to finish.
We hope you enjoyed finishing well brought you by Cardinal guy.com is a 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 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 to get Hahn's book go to Cardinal guy.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