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. That a lot of things change, that you have a different season of life, and that whole idea of finishing well comes in with the idea that, wow, I need to finish well with God.
You know, that would be more fruit than you can possibly imagine. And it's really cool that as we enter into this season, I've heard lots of people talk about that my spiritual life becomes a great deal greater than my physical life. And you see that I've certainly experienced it with using the time and pursuing God with the opportunities I've been given. And I can tell you that it's amazing how God blesses that and how much fun I'm having because in his presence is fullness of joy. That's what he talks about. And when you have a chance to be in his presence more and more, guess what? You get more joy.
And talking about finishing well, I mean, there's the idea. So what a neat thing. We are in a new season, and part of that is your Social Security statement, right, Hans?
Well, it is. I mean, this is – so if you're in pre-retirement, you haven't started your Social Security yet, a lot of people, that's who's listening to the show. And it's that time of year, your Social Security statement was just updated in the end of January, beginning of February.
They put in – if you worked last year, they put in last year's earnings, and the numbers are going to be larger than they were on the statements you ran before. So it's a good time of year to go to ssa.gov, open an account if you don't already have one, go on there, get your Social Security statement, download it, and look at it. And it's something – if you come to us for financial planning, we're going to ask you to do that and send it to us along with a whole bunch of other documents so that we can give you advice as to what you ought to do.
So today's show is really cornered around just that statement and getting it down, looking at it, and we're going to give you a couple of examples. But before we do that, I want to just go through and hit some highlights about the Social Security program as they apply to people. Number one is if you're short of full retirement or short of 70 and you haven't taken Social Security yet, I want you to understand that every month is an opportunity for you to either take it or delay another month. So you've got – if you're 63 and you're counting and you could take it next month or you could take it two months from now, six months from now, and every month you delay, you get a little bit more.
And so a lot of you already know this, but just understand that it's every month 12 times a year for eight years. I think that's 96 different times, different dates that you could apply for Social Security and you get a different amount. Now, your statement is going to highlight what you get at 62, what you get at full retirement, which is 67 for most people.
Some people it's a little short of that, 66 in eight months, 66 in 10 months. But it's going to give you the amount at your full retirement and then it's going to give you the amount at age 70. So in some of the examples, we're going to go over two Social Security statements.
And then the YouTube video about this subject that you can find at Cardinal Advisors on YouTube, there's actually some mockup statements behind there of these examples. So a couple of other points is you need to have at least 10 years of work or 40 quarters to be eligible to get a Social Security check. And that affects some people where one spouse didn't work really kind of like their whole life other than maybe a little bit when they were a teenager or something. But that spouse is going to be able to claim on their spouse's benefit.
And that was something that you brought out in the video that I really, I don't think I'd ever heard that before. That was new information that you need 10 years of earnings to qualify for Social Security. Yet if you're married, fortunately you would have a spousal support when your spouse turns to full retirement age or whenever he takes his Social Security. But the other thing that you pointed out, I had no idea that you got to have 10 years of earnings in order to start Medicare, which I know is a little off the subject. So my question was, what does somebody do as far as Medicare if they don't have 10 years of earnings? They're being married wouldn't matter, would it? Yeah, it does. They're being married.
It gets a little complicated because the other spouse, which hopefully is older, needs to apply for Social Security and Medicare in order to qualify the spouse to get Medicare, okay? Okay, I understand. But that's the important thing to know. I mean, I did not know that.
Yeah. I mean, there's all kinds of little quirks and things inside of Social Security that we deal with it all the time. And, you know, you go to the Social Security Administration and you start them with those questions. They're just good luck.
So, you know, I'm into us and we kind of go through those. Tom is a real expert on Social Security just because he's helped so many people and looked into so many situations and he remembers them. So, I mean, we got one which was the next bullet is that if you're divorced and you're going to claim on your ex-spouse, you can actually, I used to think that you had to wait till your ex-spouse files for Social Security, then you can claim your spousal benefits.
But that's not correct. If you're divorced and I have a client that this is helping right now, she's divorced and her husband, her ex-husband has not filed for Social Security yet, she wants to and she can file for half of his benefit before he even files just by proving that she's divorced. So, but there's all kinds of little quirks and I've got them on the bulletins, but let's jump into the examples because that's what people really want to listen to is we got two examples today that we're going to go over and I'm going to get started on the first one and then you just kind of jump in when it's time to go to the break, Ravi.
Okay. So the first one is this guy Cal and Cal was born in July 1960 and Cal, when he met us, he had already made the decision to retire in like May of this year, which is coming up pretty soon. And, you know, we're meeting him in like January and he had made this decision and he is 64 and five months in May. And so he had been watching a lot of our videos, he wanted to delay Social Security, he wanted to do some Roth conversions, wanted to do a lot.
And, you know, I'm making notes of all this and thinking, you know, he's all for it, he's been watching a lot of the videos, he's all ready to go. Then he told me that what he wants, he's single, is five grand a month to live off of after taxes. And then, you know, I'm the one that's got to put inflation on that. I mean, it's fine to say that now, but, you know, when you're 80 years old, five grand a month is not probably going to buy you what five grand a month buys you now.
So we got to think about increase in that over time. And so, you know, I just looked at his whole thing. His Social Security benefit right now at 64 and five months, which is a little over two years early for before full retirement is $2,745 bucks a month. And so his initial inclination was to delay to get a larger check. And I'm saying, well, you can't afford to delay because he's got $575,000 in financial assets, 400 grand in his retirement savings pre-tax, and he's got 175 grand in savings that he's already paid taxes on. And he was just thinking he's going to live off that $175,000 and not paying any taxes.
He just had all kinds of stuff figured out. And when I showed him the downside of all that, so this is what we did for him is we're going to start Social Security now, get the $2,745 a month. And then we took $325,000 of his $575,000 and we put it in an annuity that's going to guarantee him $2,400 a month for life. And that's for life. I mean, he could live to be 95.
He's going to be getting those $2,400 checks every month until he dies. Okay? Darrell Bock Yeah. Okay. Who wouldn't want that?
David Morgan Yeah. And so that's enough money. His taxes, his income taxes in the next few years are going to be $300 a month. So he gets $5,300 in gross, deducts $300 of tax withholding, got his $5,000, he lives happily ever after. And he's got $275,000 left, $150,000 left, mostly in already paid tax money to build out his inflation plan.
Now, I mean, that's got to do a few things in addition to that. But he's talked about getting a part-time job. And if he does that, that would be wonderful. He's got to keep his income below $23,000, his work income. But he's just thinking about a part-time job at Home Depot or something like that. And that'll really take a lot of heat off of this plan because he can just save all of that money.
Darrell Bock Yeah. But that's one of the real critical aspects of starting your Social Security early is keeping your income above a certain level. If that's what works best for you, but wow, if you start your Social Security and you're still working, it can cost you a fortune, right?
David Morgan Yeah. So now we've started the Social Security based upon him retiring. But I warned him about that.
If they call you back to work or they get around in July or August and promise you a bunch of money to come back in there and go to work, you got a mess on your hands. But what we're going to do then is we'll do a Social Security do-over. We'll pay the money back. I don't want to get into all that today. We solved his problem, enabled him to retire, didn't use up all his savings. He's a happy camper.
Darrell Bock Wow. Perfect timing because it's about that time. We're going to remind everybody that this show is brought to you by Cardinal Guide, cardinalguide.com, and there you're going to find the Seven Worries tab, and today's tab is obviously Social Security. Or maybe not, but it's Social Security, and when you click on that tab you're going to see a wonderful video with all sorts of show notes and information along these same lines. It's all there at cardinalguide.com as well as Hans' book, Complete Cardinal Guide for Planning for and Living in Retirement, and the contact Hans or Tom Page. You go to cardinalguide.com.
Amazing stuff. We'll be right back with a whole lot more of 2025, your Social Security statement. What to know? Investment Advisory Services offered through Brookstone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.
Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with Certified Financial Planner Hans Scheil, and today's show is your Social Security statement 2025.
What to know? It's out there. You've got to go to socialsecurity.gov.
Is that it, Hans, to get your statement? It's ssa.gov. It is. It's ssa.gov. Really? Yeah.
I bet if you type socialsecurity.gov, it'd probably take you to the same place. That must be what I've always done. But I didn't know there was an easier way to do it. Well, that's good to know right off the bat. You've got to get your statement. While you're looking at it, it will help you understand what we're talking about, right, Hans?
It will. And we're going to ask you to do that and get a fresh one if you hire us to do your financial planning, your retirement planning for you. Because we want to look at the current numbers on both you and your spouse if you're married. And if you go to the, you know, if this subject interests you with the Social Security statement, if you go to the YouTube channel under Cardinal Advisors, ORS Advisors, and you look up your Social Security statement, what to know, this video is one of the most recently released ones. And you can find under the show notes, which you can click on our website, and the Social Security statement for Cal will be there. And you can see where we pulled all these numbers from and compare it to your own. And then this part of the hour, we're going to talk about Harry and Helen, and Harry's an MD, and their Social Security, both of their Social Security statements are up there, and we can tell you about the Social Security planning we did for them.
Okay? So, Harry was born in July 1958. Like I said, he's an MD, he's still working. And Harry, we recommended to him that he's going to delay until age 70. So his Social Security at full retirement, which is just about right now, for him, $3,884. He was going to take it simply because he thought that, you know, he can take it now, and not have to give any of it back because of it's still working, because he's at 66 and eight months. But we convinced him to wait until 70, where he's going to get $5,022 a month.
And you say, so that's a whole other show where we can justify that. And he's going to be in a better tax situation with Social Security at 70 anyhow, and he doesn't need the money now. So, now his wife, Helen, Helen does not have a really long working history. She worked a little bit before they had kids, but ever since then, she has not worked outside the home. And so her full retirement age benefit at 66 and 10 months, because she was born in October of 59, is $850 a month. And so, over the long haul, Helen is going to apply for the spousal benefit against Harry's income, and she's going to get a check of about $1,900 a month, $2,000 a month. But she has to wait for it until she's age 70 to get that $1,900, $2,000 a month, with 50% of Harry's full retirement benefit.
And she really doesn't want to wait that long, and there's no reason for her to, because when she turns 66 and 10 months, or essentially 67, Harry's only going to be 68. So she can file for her own benefit of $850 a month, collect that for about two years. That's 20 grand over two years, so it's significant.
And then, once Harry files, she can go in and apply for the spousal benefit of $1,900 to $2,000 a month. Does that make sense? Wow. Yeah. That's great sense.
And extra money, obviously. That's really, really cool. Because— Well, yeah. And so, with Harry, it took a little convincing, because he's, you know, he said most of my relatives, you know, the men didn't make it to 80, and a lot of them died at 75 or 73. And, you know, I explained something to him. I said, look, you, by waiting till you're 70, you know, sure, you're giving up three years of checks at $3,884 a month. So that's, you know, that's 120 grand, more than that, about 130 grand that you're foregoing to get 60 grand a year at $5,022 a month. And so, it's going to take you a long time to make up that $3,884 a month that you didn't get for a little over three years.
And— But it's worth it. Because if you die at 75, like you say you're going to, it's going to leave Helen with only your checks. Because Helen's will go away, because it's a smaller check, and then Helen will get for the rest of her life $5,022 a month, which, if she lives another 15 years past you, now all of a sudden it's like a life insurance policy where she's got a more significant check than she otherwise would have had if you took it at full retirement. That made sense to him. Oh, it does. And also, you know, it helps understand the earlier example with Cal, he didn't have a wife to consider in starting his Social Security early, because he didn't have a spousal benefit that would have been, but that is one thing, for sure, enters into the equation for anybody whose wife is going to be dependent on their Social Security.
Well, yeah. And so, the other piece of it is, Harry, if he started his Social Security check now, he's going to pay taxes, income taxes, on 85% of it, or 15% will be tax-free, but, you know, he's in really high tax rates being an MD, and, you know, so he's going to give back a lot of that Social Security and taxes, and we're going to plan his income after 70 in such a way that he's not in such a high tax bracket, because they don't need that much money to live. And he's going to have Roth IRAs to draw from and non-qualified savings, so once I showed him the taxes and the life insurance benefit essentially for her, he was all in.
And then once we showed her that she's going to get a small check now that's going to get bigger in about two years after she gets that, when Harry files, and then if she outlives him or Harry outlives her, either one of them is going to finish with a $5,000 a month check plus inflation. So it was pretty simple to convince them to follow our strategy. Yeah, well I would think, because, you know, it's so cool to just watch, you know, the different sources of income coming together, you know, the tax planning around it, it's all, it's wonderful.
And it gets back to that, again, from my standpoint, one of the most important decisions you'll make in this season is when to start that and why to start it, and one size clearly does not fit all. Well, no, it doesn't. And we're doing a lot of Roth conversions for them and have been for years because they've got quite a sizable IRA, and they don't really have a huge income goal because like a lot of people that have resources, they don't spend it all. They just saved it. And then when they get into retirement, they don't really have to save money anymore. Then it becomes about trying to reduce the taxes, get them the income they need, and then it becomes about planning for the survivor because we don't want, you know, if Helen outlives Harry by a number of years, we don't want her to have to deal with high income tax rates of a single person. We don't want her to have to deal with reduced Social Security. It's going to be reduced enough with her check-stopping.
And we don't want some complicated investment plan that she has to follow without Harry behind it. So a lot of other stuff going on besides Social Security, but that's the Social Security piece of their financial plan. Right.
Right. And so when it comes to this whole idea, we gave those examples to show from my standpoint that you got, you know, some folks that may need to start their Social Security when they didn't think they needed to start it in order to make the whole thing work. And in my case, it worked that way. You know, I have to take my own personal example was, you know, all of a sudden both my daughters decided to get married in the same year. And I was about, I don't know, 16 months away from 70 or whatever it was, you know, not terribly long. But it just turned out that although I definitely planned on waiting till I was 70, it made all sorts of sense for me to be able to not go into debt with these weddings and be able to use that extra Social Security money per month to help me get there. And, you know, I will add for anybody who's doing, you know, if you totally sell your wife on the idea of, boy, you're going to get this spousal benefit. And if we wait to 70, that all of a sudden it took a lot of explaining, Hans, to share why we're going to start it. If you recall me, you called me first about this and I was the one that said, now you got to start your Social Security.
That's right. It was it was you that did it. And then and then it also I volunteered because I told you I'm a fiduciary and I told you this is compromising her ultimate check if she outlives you.
And there's a pretty good chance that's going to happen. Do you want to tell her or you want me to tell her? It was me. And she still reminds me of it, by the way, every once in a while. But, you know, beautiful weddings.
It was wonderful. I really feel like we made the right decision, but just be a little careful about going. This is what we're going to do for sure, because life comes at you in lots of different ways. And it's pretty beautiful when you have the contact Hans page to say, oh, look, look what's happened.
Let me call Hans, because there's nothing like having a wonderful counselor as Jesus is. But again, there's some with flesh on around here, too, that we can call. Yeah. Well, you know, just keep in mind when we do these financial plans, you know, if you're 65 and we're doing this, we're going to lay out from now till 90 or 95.
And it starts to get real fuzzy 10 years out. Well, it's a great time to remind you that this show is brought to you by Cardinal Guide, cardinalguide.com. And there you're going to find the Seven Worries tab.
Today we've been talking about Social Security. Of course, there's a wonderful video, show notes, all that stuff on that. And Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement. There's a place on the website to just go access that. And of course, to contact Hans and Tom Page, which is just invaluable information right there. It's all there at cardinalguide.com. And so great show, Hans.
Thank you, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.
Any statements or opinions are subject to change without notice. Investments involve risk and unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation.
Finishing Whale is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.
Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. We hope you enjoyed Finishing Whale, 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' 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, or to get Hans' book, go to CardinalGuide.com. If you have a question, comment, or suggestion for future shows, click on the Finishing Whale radio show on the website and send us a word. Once again, that's CardinalGuide.com. CardinalGuide.com. This is the Truth Network.
