Latest / HPK Provident Advisors: The Weekly Bull / Your Social Security Could Be Worth Over a Million Dollars

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Your Social Security Could Be Worth Over a Million Dollars · HPK Provident Advisors: The Weekly Bull

• 0:19
  SPEAKER_00: How do we have all these people?
• 1:41
  SPEAKER_00: Hello, everyone.
• 1:42
  SPEAKER_00: Welcome to our webinar series, First of Many.
• 1:45
  SPEAKER_00: We're hoping to do these on a monthly basis, but this is one that's very exciting.
• 1:50
  SPEAKER_00: I'm very excited to learn some information about social security from one of our own partners, Brian Peluso, who is uh, I definitely call him an expert on the subject.
• 2:01
  SPEAKER_00: So today, Brian's going to be talking about the secrets to maximizing your social security, something that I'm sure everybody wants to learn about.
• 2:11
  SPEAKER_00: Um here.
• 2:15
  SPEAKER_00: Uh, Brian has done countless seminars to educate advisors around the country about the topic of social security.
• 2:24
  SPEAKER_00: Now, correct me if I'm wrong, but there's a lot of information out there on the subject, some accurate, some not.
• 2:31
  SPEAKER_00: But you're gonna kind of dive into uh what is true and the pros and cons of waiting versus taking it now, right?
• 2:40
  SPEAKER_02: Well, all of the above, Mike, um, I, you know, there absolutely is a lot of uh misinformation about Social Security.
• 2:48
  SPEAKER_02: And I I have said often that if you get uh five people in a room talking about uh one, you know, throw out one question about Social Security, you're gonna come away with about seven different answers, and none of them are gonna be correct.
• 3:01
  SPEAKER_02: So there is a ton of uh misinformation, and and Mike, you're you're correct.
• 3:06
  SPEAKER_02: And in my career, I uh you know, I think it's been uh it's been about 15 years where I started out as kind of a student of Social Security, and then I was a teacher of Social Security talking to other advisors about how the program works and how to really integrate it into their financial planning.
• 3:22
  SPEAKER_02: And now, of course, as one of the partners at HBK Provenant Advisors, um, I work with our clients to make sure that they are maximizing their benefits, that they understand how the program works, and that they are, uh, as I mentioned earlier, integrating that properly into a financial plan.
• 3:40
  SPEAKER_00: Um, what is it about the topic that made you so fascinated by it that you really wanted to dive 100% into it and learn everything about the system?
• 3:50
  SPEAKER_02: Yeah, well, what I uh what I would like to say to you is that I woke up one day and said, hey, this is really important.
• 3:56
  SPEAKER_02: There's a lot of money involved, um, and I should really learn this.
• 4:00
  SPEAKER_02: It's it's terribly misunderstood.
• 4:02
  SPEAKER_02: What actually happened was uh in my old career, financial advisors, financial planners were my clients.
• 4:08
  SPEAKER_02: I was working for an asset management company, and uh a group of those advisors said, Hey, will you give us a presentation?
• 4:14
  SPEAKER_02: Uh, you know, we've got to fill some time in this calendar that we put together where we're just trying to learn some things.
• 4:19
  SPEAKER_02: And so you pick a topic, doesn't matter what it is, just make it educational.
• 4:23
  SPEAKER_02: And I looked at all these really complicated topics.
• 4:25
  SPEAKER_02: I came across Social Security.
• 4:26
  SPEAKER_02: I said, Well, how hard could that be?
• 4:28
  SPEAKER_02: Stood up in front of 40 advisors, uh, regurgitated everything that I had learned from the slides uh of a presentation somebody gave to me.
• 4:37
  SPEAKER_02: And then at that time, I made the worst uh mistake of my professional career and said, Hey, are there any questions?
• 4:43
  SPEAKER_02: And I stood in front of 40 advisors for the next half hour saying or so, saying things like, Great question, let me get back to you.
• 4:51
  SPEAKER_02: I think that rule had changed.
• 4:53
  SPEAKER_02: Let me look into it.
• 4:54
  SPEAKER_02: It was terribly embarrassing.
• 4:56
  SPEAKER_02: And I walked away from that meeting and said, That will never happen to me again.
• 4:59
  SPEAKER_02: But then I got then I got really fascinated about the program, how it works, its history, and but most importantly, what people don't know, what they don't really understand, what uh they're misinformed most often about, and then how to actually make that part of a financial plan.
• 5:16
  SPEAKER_02: You know, Social Security is not a very simple take it now, take it later decision, as we're gonna see here in a few minutes.
• 5:22
  SPEAKER_02: It it really does um uh a good acclaiming strategy, when and how much should I take, and those types of things.
• 5:33
  SPEAKER_02: Um, you really've got to look at many, many different aspects of your life, not just do I want the money now, I want it later.
• 5:39
  SPEAKER_02: So uh I became fascinated in that, and I'm just you know thrilled to be able to share uh some of this information.
• 5:46
  SPEAKER_00: And well, we are so lucky to have you as a resource to all of our clients.
• 5:51
  SPEAKER_00: Um, we do offer financial services, financial planning, wealth management.
• 5:55
  SPEAKER_00: So this is just the added value that Brian provides and really helps our clients to maximize the benefit that they've worked so hard over their careers putting money into.
• 6:06
  SPEAKER_02: Well, and they have put a lot of money into it.
• 6:08
  SPEAKER_02: So let me go ahead and get right in here.
• 6:09
  SPEAKER_02: And Mike, if you know, if you come across things you want me to clarify, uh certainly let me know.
• 6:15
  SPEAKER_02: And I I should tell you, there are I think the last count, there's about 2,900 rules in Social Security.
• 6:23
  SPEAKER_00: And you're gonna you're gonna cover them all tonight, right?
• 6:25
  SPEAKER_02: Well, I figured about 2,700 uh the last count.
• 6:29
  SPEAKER_02: It's actually you know, some people would say it's more complicated than uh um than the tax code.
• 6:35
  SPEAKER_02: And you know, what we're gonna find as you can see here, it's really difficult to get this information.
• 6:39
  SPEAKER_02: It's uh it's difficult to get it, uh, it's difficult to get an appointment with the Social Security Administration.
• 6:46
  SPEAKER_02: And then when you do, the information can often be uh misleading.
• 6:50
  SPEAKER_02: There's a lot of great people uh in the Social Security Administration, but if they don't know a lot about you, um, then it's gonna be very difficult for them to tell you what to do.
• 7:02
  SPEAKER_02: As a matter of fact, one of the rules of Social Security is that they don't give specific guidance or advice.
• 7:07
  SPEAKER_02: They can talk to you about how the program works, but if you say to them, hey, what should I do?
• 7:12
  SPEAKER_02: That's where their responsibility ends.
• 7:14
  SPEAKER_02: And I certainly understand why that is.
• 7:17
  SPEAKER_02: Uh, but oftentimes they speak in their own lingo, and there is a lingo to Social Security, and it gets a little bit confusing.
• 7:23
  SPEAKER_02: So, really, what I want to do here is simplify it and talk to you about kind of the core components.
• 7:30
  SPEAKER_02: And the core components of these are the things that everybody wants to hear about.
• 7:33
  SPEAKER_02: You know, it could it be a significant part of your retirement income?
• 7:36
  SPEAKER_02: It certainly could.
• 7:38
  SPEAKER_02: Uh, but is it gonna be there for me?
• 7:40
  SPEAKER_02: I'm gonna tackle that one early in our discussion because that is uh what I hear most from people.
• 7:46
  SPEAKER_02: Say, hey, great.
• 7:47
  SPEAKER_02: I understand, Brian, you're gonna help me to maximize my social security, but it's probably going away anyway.
• 7:52
  SPEAKER_02: So I'd prefer to get a couple checks, you know, at least a couple checks before it goes away.
• 7:56
  SPEAKER_02: I'm actually gonna debunk that pretty quickly.
• 7:59
  SPEAKER_00: Uh I would love some reassurance on that topic because I don't have a lot of faith myself.
• 8:04
  SPEAKER_02: All right, we'll talk about how much you can expect, the different ages.
• 8:07
  SPEAKER_02: You know, a lot of these things I'll blow right through because they're things that you're probably, if you're listening to this right now, you've probably done some of your own research and you've probably come across some of this.
• 8:16
  SPEAKER_02: But I'm gonna show you why those individual pieces, like how old can I, you know, when can I collect?
• 8:21
  SPEAKER_02: And what uh, you know, how are the reductions done?
• 8:24
  SPEAKER_02: How do I get more or less spousal benefits, survivor benefits, and that kind of thing?
• 8:28
  SPEAKER_02: I'll talk about the most common mistakes, which uh the number one most common mistake for sure um is uh spout or survivor benefits.
• 8:38
  SPEAKER_02: Um, if you're eligible on somebody's record and they have passed away.
• 8:41
  SPEAKER_02: Uh and then the divorce situations, also uh a lot of confusion there.
• 8:44
  SPEAKER_02: And then we'll talk about the reductions because there are additional reductions above and beyond.
• 8:48
  SPEAKER_02: If I take it early, I get less.
• 8:55
  SPEAKER_02: Yeah, well, there could, well, you could bring that up again because there could be taxation.
• 8:59
  SPEAKER_02: Uh most likely will be taxation uh of the benefits.
• 9:03
  SPEAKER_02: Uh and then there are possible reductions if you claim early, uh prior to your full retirement age, which we'll talk about.
• 9:11
  SPEAKER_02: And uh and you continue to work.
• 9:13
  SPEAKER_02: So there's additional reductions there.
• 9:15
  SPEAKER_02: All right, here are the basics.
• 9:16
  SPEAKER_02: Uh a lot of people say to me, okay, you know, just summarize this for me.
• 9:21
  SPEAKER_02: Uh, what do I need to know about Social Security?
• 9:24
  SPEAKER_02: And here are kind of the uh hard and fast rules.
• 9:27
  SPEAKER_02: One, if you're eligible for a benefit and you need it to pay bills, go take that benefit.
• 9:32
  unknown: Right?
• 9:33
  SPEAKER_02: If you need it to keep the lights on, you need to keep food on the table and you're eligible for a benefit.
• 9:38
  SPEAKER_02: A lot of these things about maximizing and delaying and whatnot are not going to be applicable.
• 9:42
  SPEAKER_02: If you need the money and you have it available to you, go take it.
• 9:46
  SPEAKER_02: Uh, seek to maximize the highest benefit in your household.
• 9:50
  SPEAKER_02: So you could have several different benefits that are available in your household.
• 9:54
  SPEAKER_02: If either you're a married couple, one spouse has a higher benefit, the other uh has a Social Security benefit, but it's a little bit lower.
• 10:02
  SPEAKER_02: Often what I am doing, what we're doing for our clients, is saying, okay, let's look at that higher benefit and let's see how we can get to that to be the most before you claim it.
• 10:12
  SPEAKER_02: So if you have multiple benefits into your household, seek to maximize the highest one.
• 10:17
  SPEAKER_02: I'm going to talk to you about how to do that.
• 10:19
  SPEAKER_02: Uh, consider delaying as long as possible.
• 10:22
  SPEAKER_02: Many of you know that the longer you wait to collect your benefit, the higher it is through time.
• 10:26
  SPEAKER_02: And we'll go get into those details.
• 10:28
  SPEAKER_02: And then the last one is avoid continuing to work if you claim benefits prior to your full retirement age, because there is an income reduction.
• 10:38
  SPEAKER_02: So if you claim benefits, say it's 62, your full retirement age is 67, and you continue to work, they might start taking some of that money back.
• 10:46
  SPEAKER_02: Uh, so those are the hard and fast rules.
• 10:47
  SPEAKER_02: If you need the money, take it.
• 10:49
  SPEAKER_02: Um, maximize the highest benefit in the household, consider delaying as long as possible.
• 10:54
  SPEAKER_02: If none of those are applicable to you, then the rest is going to be super interesting.
• 10:58
  SPEAKER_02: Because we're going to get uh right into the details.
• 11:00
  SPEAKER_02: All right.
• 11:01
  SPEAKER_02: Could it be a significant part of your retirement income?
• 11:05
  SPEAKER_02: Most people will say to me, my biggest asset in retirement is my house.
• 11:10
  SPEAKER_02: Maybe it's a vacation home, uh, it is my retirement from work.
• 11:14
  SPEAKER_02: However, let's take a look at an example.
• 11:18
  SPEAKER_02: Now, if somebody has a uh Social Security benefit that is$2,100, that is actually slightly higher than the average check in the United States.
• 11:29
  SPEAKER_02: The average check in the United States, if you look at all retirement, survivor, uh, disability benefits, um, if you're looking at dependent benefits, children may be eligible for Social Security.
• 11:41
  SPEAKER_02: Going to talk about that too.
• 11:43
  SPEAKER_02: If you look at every check that's going out there, the average check is actually around 1,900.
• 11:48
  SPEAKER_02: Uh, that doesn't mean that's what you're gonna get.
• 11:50
  SPEAKER_02: That's what just, you know, you take everybody that's collecting some sort of check, and on average it's about 1,900.
• 11:56
  SPEAKER_02: But let's say you have a check that you're collecting a check of$2,100 per month.
• 12:02
  SPEAKER_02: Now, I'm gonna add a basic cost of living adjustment.
• 12:05
  SPEAKER_02: So in this example, I'm only assuming that you're gonna get 2% in a cost of living adjustment throughout these time frames I'm about to show you.
• 12:13
  SPEAKER_02: So you start out with$2,100, you get a 2% per year cost of living adjustment.
• 12:18
  SPEAKER_02: A lot of debate on the cost of living adjustment about its viability and what the calculation should be.
• 12:24
  SPEAKER_00: Historically fluctuated quite a bit over the years.
• 12:27
  SPEAKER_00: I'm gonna give you a little quiz here.
• 12:28
  SPEAKER_02: Yeah.
• 12:29
  SPEAKER_00: Are you ready for it?
• 12:30
  SPEAKER_02: Well, I don't know, I'll tell you.
• 12:32
  SPEAKER_00: What year was the highest cost of living adjustment?
• 12:37
  SPEAKER_00: And can you guess what it is?
• 12:39
  SPEAKER_02: Well, the cost of living adjustment is uh it's not exactly, but it's uh based on inflation, generally based on inflation.
• 12:48
  SPEAKER_02: Again, Social Security uses a unique inflation factor for that.
• 12:52
  SPEAKER_02: So it would have had to have been really near a very high inflation period, which would have been the early 80s.
• 12:58
  SPEAKER_02: So I'm gonna say 8080 or 81.
• 13:02
  SPEAKER_00: Okay, that's a great guess.
• 13:06
  SPEAKER_00: It is 1980.
• 13:08
  SPEAKER_00: And can you guess what that figure was?
• 13:10
  SPEAKER_02: Well, inflation there was uh 13.
• 13:14
  SPEAKER_02: I'm gonna guess 13.
• 13:15
  SPEAKER_02: Pretty close, 14.3.
• 13:17
  SPEAKER_02: So they got in 1980, you got a 14.3 cost of living adjustment, your social security.
• 13:23
  SPEAKER_02: Yeah, your mortgage was 17 at that point.
• 13:26
  SPEAKER_02: That's true.
• 13:28
  SPEAKER_00: All right, on the flip side, there was three years where we actually had a 0% uh change in the cost of living of adjustment.
• 13:37
  SPEAKER_00: Um, two of those years were consecutive years.
• 13:41
  SPEAKER_02: Any guess when those were um I seem to recall after the 08 financial crisis that there was a lot of social.
• 13:52
  SPEAKER_02: I remember talking to folks uh in a way back.
• 13:55
  SPEAKER_02: Uh, this was terrible.
• 13:56
  SPEAKER_02: The market went down, my social security isn't going up.
• 13:59
  SPEAKER_02: This was terrible.
• 14:00
  SPEAKER_02: So it was right around 08, right?
• 14:01
  SPEAKER_00: Yep, it was 09 and 2010.
• 14:05
  SPEAKER_00: Okay.
• 14:06
  SPEAKER_00: And then we had one additional after that in 2015.
• 14:10
  SPEAKER_02: All right, so those were zero.
• 14:11
  SPEAKER_02: You got no increase.
• 14:12
  SPEAKER_02: Essentially, the government's saying to you, the Social Security Administration is saying, hey, there's no inflation, don't worry about it.
• 14:17
  SPEAKER_02: We don't have to increase your check.
• 14:18
  SPEAKER_00: Yeah, and it remained low for a few years and then started rashing it up um with the inflation that we saw in 2022.
• 14:26
  SPEAKER_00: You spike back up to a high of 8.7.
• 14:29
  SPEAKER_00: So yeah.
• 14:30
  SPEAKER_02: And I've got those right here.
• 14:31
  SPEAKER_02: So that's part of the, but the assumption in this is you start out with 2,100 bucks a month, you get a 2% cost of living adjuster on average, right below that, where you see the stars, 21, it was 5.9, 22, 8.7, 23, it was 3.24.
• 14:46
  SPEAKER_02: Most recent cost of living adjustment, 2.5.
• 14:48
  SPEAKER_02: They'll announce the next one uh next month, usually comes out in October.
• 14:53
  SPEAKER_02: So, but I said 2%.
• 14:54
  SPEAKER_02: But here's the point: if you take$2,100, remember I said most people, so well, biggest pot of assets in my life when I retire is going to be my house and it's gonna be my retirement plan from work.
• 15:05
  SPEAKER_02: Um, and if you add my pension.
• 15:07
  SPEAKER_02: However, if you take$2,100 a month, 2% inflation, over 15 years, you will have collected$435,000,$700.
• 15:17
  SPEAKER_02: Uh, over 25 years, Social Security is$807,000 coming into your household.
• 15:24
  SPEAKER_02: It's not that difficult, especially for married couples, to have more than$2,100 a month coming into Social Security.
• 15:32
  SPEAKER_02: But if you collect over 30 years, you will have collected from the system about a million dollars with a 2% average uh cost of living adjustment.
• 15:40
  SPEAKER_02: The point being is this this gets to be significant money.
• 15:44
  SPEAKER_02: Uh for example, if your benefit at full retirement age, your max benefit at the age of 67, uh, everybody born 1960 and later, your full retirement age is 67.
• 15:57
  SPEAKER_02: If it's$3,000 and you collect at 62, you're getting 2,100 bucks.
• 16:03
  SPEAKER_02: So that's an actual example.
• 16:05
  SPEAKER_02: If you collect at 62, it is quite possible that you lived in 92.
• 16:10
  SPEAKER_02: And this theoretical example becomes a little bit more realistic for many people.
• 16:16
  SPEAKER_02: So the point being is it's a pretty significant part of uh can be a very significant part of uh your retirement income picture.
• 16:24
  SPEAKER_02: Now, here is what gets all the press.
• 16:26
  SPEAKER_02: Uh, this is right from the 2025 annual report of Social Security, and essentially what it says, if you look right there, it says in 2034, everybody's only going to get 80%, 81% actually, of their benefit.
• 16:41
  SPEAKER_02: This is what you see in the press all the time.
• 16:44
  SPEAKER_02: That's right.
• 16:45
  SPEAKER_02: That's right.
• 16:45
  SPEAKER_02: However, let me clarify this: you see this all the time.
• 16:48
  SPEAKER_02: As a matter of fact, I saw an article just the other day from a very reputable uh financial magazine that said, in just eight or nine years from now, you are gonna get a 20% haircut in your Social Security check.
• 17:04
  SPEAKER_02: I don't believe that to be true.
• 17:06
  SPEAKER_02: I don't think that will be the solution.
• 17:08
  SPEAKER_02: I do not think they're gonna come to retirees who are their voting base.
• 17:11
  SPEAKER_02: I don't care what side of the aisle you're on, the retirees are the voting base and say, hey, you know what?
• 17:16
  SPEAKER_02: System's got a problem.
• 17:18
  SPEAKER_02: We're just gonna cut your check by 20%.
• 17:20
  SPEAKER_02: There will be reductions.
• 17:22
  SPEAKER_02: I personally do not think it will be for people about to collect Social Security or who are currently collecting Social Security, but that's what gets all the press.
• 17:31
  SPEAKER_02: So here's where I'm gonna debunk this.
• 17:33
  SPEAKER_02: This is, remember, I just mentioned every April, except in the COVID year, every April, uh, the Social Security Administration comes out with their annual report with all of these projections.
• 17:46
  SPEAKER_02: If you look at the lower left-hand side, right below the Eagle, you're gonna see this is April 1st of 1982.
• 17:54
  SPEAKER_02: So go back in your Sherman Peabody Wayback Machine to April 1st of 1982.
• 17:58
  SPEAKER_02: The Reagan administration is in.
• 18:00
  SPEAKER_02: We just got out of uh inflation.
• 18:02
  SPEAKER_02: And then, of course, we were talking about the inflation back in the early 80s, 70, 13, 14 percent, and that kind of thing.
• 18:09
  SPEAKER_02: In night in April 1st of 1982, the administration said this without corrective legislative action in the very near future, the old age and survivors insurance trust fund will be unable to make benefit payments on time beginning no later than July of 1983.
• 18:31
  SPEAKER_00: This one sounds like that sounds a lot like the headlines today, Brian.
• 18:35
  SPEAKER_02: Well, but you know, you think about it.
• 18:37
  SPEAKER_02: In April of 82, they said the system is bust 15 months from now.
• 18:42
  SPEAKER_02: Now they're talking about a possible reduction eight or nine years from now.
• 18:46
  SPEAKER_02: What happened?
• 18:48
  SPEAKER_02: What happened in 82 and 83?
• 18:50
  SPEAKER_02: Social Security did not miss a payment.
• 18:53
  SPEAKER_02: Social Security has never missed a payment.
• 18:55
  SPEAKER_02: There have been adjustments along the way that I'm going to talk about.
• 18:58
  SPEAKER_02: However, if you are running to the Social Security office as soon as you're eligible for a benefit because you think it's going bust, think about the people in 1982.
• 19:10
  SPEAKER_02: And April 1st of 82, if I had read this, I probably wouldn't have around and said, wait a minute, they got 15 months to figure this out?
• 19:16
  SPEAKER_02: There is no way.
• 19:18
  SPEAKER_02: And they absolutely did.
• 19:21
  SPEAKER_02: Why?
• 19:22
  SPEAKER_02: Because the voter base are the people collecting or about to collect Social Security, and there's no politician on either side of the aisle that wants to touch this political third rail and go to their constituents and say, I've got to call, I've got to cut the promise, the promise of Social Security, I've got to cut it because they're cutting their own job at that moment.
• 19:42
  SPEAKER_02: So, of all of the things that they're going to figure out and have figured out in history, I think they're going to figure this one out.
• 19:48
  SPEAKER_00: So even though the life expectancy is about 20 years older now, and the amount of workers versus retirees taking benefits is increasingly going down, it's nothing we have to worry about.
• 20:02
  SPEAKER_02: Well, I think Congress needs to worry about it.
• 20:05
  SPEAKER_02: We have less people paying into the system per PE, and people are living longer.
• 20:10
  SPEAKER_02: But the math around Social Security is relatively easy.
• 20:13
  SPEAKER_02: Where do the adjustments need to be done?
• 20:16
  SPEAKER_02: There are small adjustments.
• 20:18
  SPEAKER_02: However, those small adjustments are going to make groups of people very unhappy.
• 20:23
  SPEAKER_02: So mathematically, it's relatively easy.
• 20:25
  SPEAKER_02: Politically, super difficult because somebody's not going to be happy.
• 20:29
  SPEAKER_00: What's your best guess of what they'll end up doing in the long run?
• 20:33
  SPEAKER_02: Just delaying the uh my best guess is they're going to increase how much we pay into the system.
• 20:39
  SPEAKER_02: It's called FICA, Federal Insurance Contribution Act.
• 20:42
  SPEAKER_02: You pay 6.2% of your wages up to 176,100 right now.
• 20:46
  SPEAKER_02: Uh, they could increase that amount.
• 20:48
  SPEAKER_02: That hasn't gone up since the early 90s.
• 20:50
  SPEAKER_02: What government tax hasn't gone up in 35 years?
• 20:54
  SPEAKER_02: Uh so it's been the since the early 90s when FICA went up uh 6.2.
• 20:59
  SPEAKER_02: So if you increase that a little bit, uh you increase that wage base rate.
• 21:03
  SPEAKER_02: Again, this year you only pay FICA up to 176,100.
• 21:06
  SPEAKER_02: You increase that, expand that out a little bit.
• 21:09
  SPEAKER_02: Um, and then basically, you know, they're they're always talking about our life expectancy is longer.
• 21:14
  SPEAKER_02: Um, you know, the original retirement age was 65, then it became 66, and then it was graduated up to 67.
• 21:20
  SPEAKER_02: So just those adjustments, right?
• 21:22
  SPEAKER_02: You're kind of just adjusting the dials there.
• 21:25
  SPEAKER_02: You could we could save Social Security until we're long gone, we'll let you know, we'll kick that can down the road and let somebody else deal with it.
• 21:31
  SPEAKER_02: So that's my best guess.
• 21:32
  SPEAKER_02: All right.
• 21:33
  SPEAKER_02: So um, all right.
• 21:35
  SPEAKER_02: Here are the common reform proposals.
• 21:37
  SPEAKER_02: Uh yeah.
• 21:40
  SPEAKER_02: So um right now you pay 6.2% up to 176,100.
• 21:44
  SPEAKER_02: That's indexed every year.
• 21:46
  SPEAKER_02: So that goes up a little bit.
• 21:47
  SPEAKER_02: You know, if they expand that to 200,000, 250,000 and really boost it up, you're gonna get a lot more money.
• 21:53
  SPEAKER_02: Increase the 6.2, um, increase the full retirement age, reduce future benefits of all recipients.
• 22:00
  SPEAKER_02: I don't see that as happening.
• 22:01
  SPEAKER_02: It's being bantered around.
• 22:02
  SPEAKER_02: Reduce benefits for higher earners.
• 22:04
  SPEAKER_02: I also don't see that that's gonna happen.
• 22:07
  SPEAKER_02: That's kind of built into the system in a sneaky way that I'll show you later.
• 22:11
  SPEAKER_02: Um ultimately, what I think is going to happen is Mike, who's the largest generation of Americans in in the country right now?
• 22:21
  SPEAKER_02: Um baby boomers.
• 22:24
  SPEAKER_02: Incorrect.
• 22:25
  SPEAKER_02: It's actually the millennials.
• 22:28
  SPEAKER_02: Uh so the millennials, just on the number of people in that generation, are a larger population than the baby boomers.
• 22:37
  SPEAKER_02: But Mike, who's who are the voters?
• 22:41
  SPEAKER_02: Baby boomers.
• 22:42
  SPEAKER_02: Well, it's the baby boomers, primarily, primarily that millennials are getting super involved as they should.
• 22:48
  SPEAKER_02: But the core of the voters are the baby boomers, they're the ones collecting social security.
• 22:53
  SPEAKER_02: Who's not paying attention to Social Security?
• 22:55
  SPEAKER_02: Who does not know who Uncle FICA is or what percent he takes out of the paycheck?
• 22:59
  SPEAKER_02: It's the millennials.
• 23:01
  SPEAKER_02: So, what happened in the early 90s when they were increasing the FICA percentage?
• 23:07
  SPEAKER_02: That's when the baby boomers were in their peak earning years.
• 23:10
  SPEAKER_02: Nobody was really paying attention, that they were paying a little bit more into Social Security.
• 23:16
  SPEAKER_02: Long way of saying, I think what could possibly happen is they're going to sneak up on the millennials with an increased FICA because they're not really paying attention.
• 23:25
  SPEAKER_02: Many of them aren't paying attention to that, don't understand the implications of so if you take FICA from 6.2 to 6.3, 6.4, gradually increase it before they really start looking at what their social security benefit was.
• 23:36
  SPEAKER_02: Uh, as the baby boomers are completely leaving the uh workforce, baby boomers won't be as affected by it.
• 23:42
  SPEAKER_02: Millennials are a larger population.
• 23:45
  SPEAKER_02: There you go.
• 23:46
  SPEAKER_02: I just saved Social Security.
• 23:47
  SPEAKER_02: Uh Brian.
• 23:48
  SPEAKER_02: Well, hey, thanks.
• 23:49
  SPEAKER_02: You know, all right, that's one of the secrets.
• 23:51
  SPEAKER_02: All right, so those are the common reform uh proposals.
• 23:53
  SPEAKER_02: Let's talk about the program itself.
• 23:56
  SPEAKER_02: All right, so remember I had talked earlier about um what you need to know, what you need to consider uh when you think about when uh to claim social security.
• 24:08
  SPEAKER_02: One is your work history.
• 24:09
  SPEAKER_02: How long have you worked?
• 24:10
  SPEAKER_02: How robust were your earnings, uh, your current age, uh, your spousal situation, married, unmarried, divorced, widowed, all of those are very important.
• 24:20
  SPEAKER_02: Do you have children that might be eligible?
• 24:22
  SPEAKER_02: Yes, some children are eligible for Social Security.
• 24:25
  SPEAKER_02: When would you like to retire?
• 24:27
  SPEAKER_02: When would you like to move on from the workforce?
• 24:30
  SPEAKER_02: Uh, what is your tax situation?
• 24:31
  SPEAKER_02: Tax implications of Social Security.
• 24:33
  SPEAKER_02: What is your health situation?
• 24:35
  SPEAKER_02: I assure you, anybody that comes to me and says, I'm 62 years old, I have very good reason I'm not gonna believe uh live beyond 65.
• 24:42
  SPEAKER_02: My answer is, yeah, go ahead and take Social Security, absolutely.
• 24:45
  SPEAKER_02: So health comes into there.
• 24:47
  SPEAKER_02: So you really need to look at this holistically.
• 24:49
  SPEAKER_02: Most people do the uh the crossover conveyor, well, if I collected 62, I got to live to be 76 to get the same amount.
• 24:57
  SPEAKER_02: If I waited till 67, right, they do that kind of um, you know, at what age do I have to live to?
• 25:04
  SPEAKER_02: That is the very basic.
• 25:06
  SPEAKER_02: You really need to look at all of these different components if you're gonna make the right decision for you.
• 25:13
  SPEAKER_02: Uh, by the way, be I speak of the right decision for you.
• 25:16
  SPEAKER_02: If you live in a neighborhood uh where everybody works for the same company and it's like a planned neighborhood, and everybody around you has the same house, they have the same white picket fence, they have the same job, you've been working the same amount of time, everybody is married and has 2.3 kids, everybody has two cars in the driveway.
• 25:33
  SPEAKER_02: You look around your neighborhood, every one of those people should make a different decision about Social Security, even though everybody looks the same because of these factors age, spousal situation, you know, um, taxes, health, all these other things.
• 25:49
  SPEAKER_02: Okay.
• 25:50
  SPEAKER_02: So that's what you should uh look at.
• 25:51
  SPEAKER_02: Oh, the yeah, I don't want to skip past that.
• 25:53
  SPEAKER_02: Most of these decisions are irreversible.
• 25:57
  SPEAKER_02: So once you jump into the warm waters of collecting your social security, it's very difficult to back out of that.
• 26:05
  SPEAKER_02: Uh, there are ways to do it, I will mention it, but for the most part, it is safest to assume that your social security decision when you're claiming and what you're gonna get at that time is irreversible.
• 26:17
  SPEAKER_02: That's the safest way to do it.
• 26:18
  SPEAKER_02: I'm gonna show you one of the secrets uh here in a little bit.
• 26:22
  SPEAKER_02: Uh, but you can uh potentially, potentially you can get out, but just assume.
• 26:27
  SPEAKER_02: All right, so here's how they calculate uh the benefit.
• 26:31
  SPEAKER_02: This is right off of the website.
• 26:32
  SPEAKER_02: I'm gonna give you a brief description of what we're looking at here.
• 26:35
  SPEAKER_02: Number one, you need 35 years of income.
• 26:40
  SPEAKER_00: So if you're what happens if you only work for 30?
• 26:44
  SPEAKER_02: You work for 30, they're gonna they need 35 years.
• 26:46
  SPEAKER_02: So they're gonna put in 35 years of your earnings history and five zeros.
• 26:52
  SPEAKER_02: Okay.
• 26:53
  SPEAKER_02: So they will always use 35 years.
• 26:55
  SPEAKER_02: If you've had a great career, you work 15 years, I don't need to work any longer, then your social security calculation is gonna have 15 years of numbers and 20 years of zeros because you weren't paying into the system.
• 27:09
  SPEAKER_00: Okay.
• 27:09
  SPEAKER_02: It's got to be 35 years.
• 27:11
  SPEAKER_02: So they use the highest 35 years.
• 27:13
  SPEAKER_02: So if you work for 40 years, they're gonna use the highest.
• 27:16
  SPEAKER_02: They index that for inflation.
• 27:18
  SPEAKER_02: I'm gonna show you a really complicated example of that.
• 27:21
  SPEAKER_02: Um, but I'm only gonna show it to you quickly.
• 27:25
  SPEAKER_02: Uh, but the essence of it is what you made in 1992, obviously it doesn't have as much buying power as what you would need to make in 2025.
• 27:37
  SPEAKER_02: So, what Social Security does is they index the 1992 number, and that's how they uh that's what they add into your 35 years.
• 27:45
  SPEAKER_02: Right at the bottom, the primary insurance amount, PIA is what I'm gonna call it.
• 27:49
  SPEAKER_02: Remember that PIA, it's the most important number in all of Social Security.
• 27:53
  SPEAKER_02: Your primary insurance amount, I'm gonna show you how it's calculated, it is the number that you get at your full retirement age.
• 28:01
  SPEAKER_02: If you were born in 1960 or later, your full retirement age is 67.
• 28:05
  SPEAKER_02: That number that they show you, this is what you will get at the age of 67, is your primary insurance amount.
• 28:12
  SPEAKER_02: Everything is based on that calculator, on that single number.
• 28:16
  SPEAKER_02: So that is a very, very important number.
• 28:19
  SPEAKER_02: If you give me your primary insurance amount and your birth year, I could pretty much calculate everything else you uh need.
• 28:24
  SPEAKER_02: What would I get at 62?
• 28:25
  SPEAKER_02: What will my spouse get?
• 28:27
  SPEAKER_02: What will I get if I delay?
• 28:28
  SPEAKER_02: What will my spouse get if I pass away?
• 28:31
  SPEAKER_02: What will my children get if I have children that are eligible?
• 28:34
  SPEAKER_02: Primary insurance amount is the basis for all the calculations in Social Security.
• 28:38
  SPEAKER_02: How do they come up with it?
• 28:39
  SPEAKER_02: Highest 35 years index for inflation, right at the bottom.
• 28:42
  SPEAKER_02: The first nine, you get 90% of the first$1,226.
• 28:47
  SPEAKER_02: You get 32% of the one uh$1,226 up to$7391.
• 28:53
  SPEAKER_02: You get 15% of your average indexed monthly earnings above$73.91.
• 29:00
  SPEAKER_02: That is the gory details of how they calculate it.
• 29:04
  SPEAKER_02: So if you see your social security statement, I'm going to show you a copy of it.
• 29:07
  SPEAKER_02: Uh, not yours, I'm not going to show anybody's, it's a sample.
• 29:10
  SPEAKER_02: Uh, but if you see your social security statement, you find out what your uh uh full retirement age is, and then that number right beside it is the primary insurance amount.
• 29:19
  SPEAKER_02: That's how they come up with it.
• 29:21
  SPEAKER_02: As you can see in this calculation, why do they do this?
• 29:26
  SPEAKER_02: They do this because higher earners get a lower percentage.
• 29:33
  SPEAKER_02: Social Security for high earners replaces a very low percentage of their average monthly earnings.
• 29:41
  SPEAKER_02: If you're in the lower 10% of earners in the United States, Social Security will replace more than half of your average monthly earnings.
• 29:49
  SPEAKER_02: If you're in the top 10%, it will replace a very small percentage of your average monthly earnings.
• 29:55
  SPEAKER_02: High earners, do they get a bigger check?
• 29:57
  SPEAKER_02: They do.
• 29:58
  SPEAKER_02: They've put more into the system.
• 29:59
  SPEAKER_02: Lower Earners, do they get a smaller check?
• 30:01
  SPEAKER_02: Yes.
• 30:02
  SPEAKER_02: But as a percentage of their average monthly earnings throughout their lifetime, higher earners get a much lower percentage.
• 30:09
  SPEAKER_02: Earlier, I had venture two.
• 30:11
  SPEAKER_02: I'm not sure if they're going to go after the higher earners and reduce their benefits.
• 30:15
  SPEAKER_02: Effectively, their benefits are reduced here on a percentage basis.
• 30:19
  SPEAKER_02: All right, too much detail on that.
• 30:21
  SPEAKER_02: Here's how the indexing works.
• 30:22
  SPEAKER_02: Look in the upper left-hand side.
• 30:24
  SPEAKER_02: Essentially, what it says in 1985, if you made$15,000 and you were born in 1963,$15,729, they are actually putting$62,291 into your Social Security 35-year calculation.
• 30:41
  SPEAKER_02: What they're saying is if you made$15,729 in 1985, you would need$62,291 to make up for the same amount.
• 30:53
  SPEAKER_02: So these are uh indexed for inflation.
• 30:56
  SPEAKER_02: And here is the Social Security statement.
• 30:59
  SPEAKER_02: So this is what they look like now.
• 31:01
  SPEAKER_02: Right in the middle of the left-hand side, this is where it's gonna say where what your full retirement age is.
• 31:06
  SPEAKER_02: And for Wanda worker here, her full retirement age is the age of 67.
• 31:12
  SPEAKER_02: Right there on the right hand side on that little bar chart, at the age of 67, Wanda's gonna get$2,119.
• 31:21
  SPEAKER_02: That is her primary insurance amount.
• 31:24
  SPEAKER_02: Now, Mike, you had mentioned earlier that you pay a lot into the system.
• 31:28
  SPEAKER_02: And I'm gonna show you where you can see how much has gone into the system so you can do your own break-even analysis.
• 31:34
  SPEAKER_02: Well, this is how much was put into the system on my behalf.
• 31:38
  SPEAKER_02: Um, and then this is how much I want to get out of it.
• 31:41
  SPEAKER_02: By the way, there's no bucket for Wanda worker here.
• 31:44
  SPEAKER_02: There's no individual buckets.
• 31:45
  SPEAKER_02: It says we're we put this aside for Wanda Worker, and when she's ready to retire, we're gonna dip from that bucket.
• 31:51
  SPEAKER_02: It's a big pool of money.
• 31:52
  SPEAKER_02: They're just keeping records on how much they owe Wanda Worker.
• 31:56
  SPEAKER_02: So, one of the things I want to mention to you, kind of reframe um how to think about Social Security.
• 32:04
  SPEAKER_02: I've already mentioned to you the most important number is called your primary insurance amount.
• 32:10
  SPEAKER_02: The actual technical government term for the system is the old age survivor disability insurance program.
• 32:19
  SPEAKER_02: Uh, you pay into Social Security through FICA, Federal Insurance Contribution Act.
• 32:27
  SPEAKER_02: There's one common word in there is insurance.
• 32:30
  SPEAKER_02: Social Security is designed kind of, not completely, big differences.
• 32:35
  SPEAKER_02: It is designed similar to an insurance program.
• 32:39
  SPEAKER_02: You pay premiums throughout your life, and they're forced premiums.
• 32:42
  SPEAKER_02: Most insurance, you don't have to pay the premiums.
• 32:45
  SPEAKER_02: Uh, but through, you know, through your work, if you don't pay FICA your 6.2, then it could come drag you away.
• 32:51
  SPEAKER_02: But um you pay premiums, forced premiums through your paycheck, and then there is an expected benefit.
• 32:59
  SPEAKER_02: This is not a government handout program.
• 33:02
  SPEAKER_02: There's very few ways in Social Security, in spite of the press, there's very few ways to say I didn't put a nickel into this system and I want them to send me a bunch of money.
• 33:12
  SPEAKER_02: It just doesn't work that way.
• 33:13
  SPEAKER_02: How much money goes into the system?
• 33:15
  SPEAKER_02: This is the second page of uh your social security statement.
• 33:19
  SPEAKER_02: On the lower left-hand side, this is for Wanda worker.
• 33:22
  SPEAKER_02: Um, you can see that she has paid in$75,000 roughly from her wages into the Social Security system.
• 33:32
  SPEAKER_02: Her employer, you pay as a worker 6.2.
• 33:36
  SPEAKER_02: Your employer pays 6.2.
• 33:38
  SPEAKER_02: If you're self-employed, you pay the whole 12.4.
• 33:41
  SPEAKER_02: So this is how much has gone into the system.
• 33:44
  SPEAKER_02: It's kind of an entertaining place to look.
• 33:47
  SPEAKER_02: Uh, but the main thing you want to see is on that front page.
• 33:50
  SPEAKER_02: All right, what are the full retirement ages?
• 33:52
  SPEAKER_02: I had mentioned this earlier.
• 33:53
  SPEAKER_02: Uh, it's it's it had been graduated.
• 33:56
  SPEAKER_02: I'm gonna use examples of everybody on this call was born in 1960 or later.
• 34:00
  SPEAKER_02: So your full retirement age, when you get 100% of your primary insurance amount, is the age of 67.
• 34:06
  SPEAKER_02: Here are the numbers behind it.
• 34:09
  SPEAKER_02: What are all these reductions that they're talking about?
• 34:12
  SPEAKER_02: Start at the bottom.
• 34:15
  SPEAKER_02: So if you start at the bottom, at the age of 62, now this says reduced, but from the age of 62, if you wait till the age of 64, your benefit is increasing by 0.42% per month or 5% per year.
• 34:36
  SPEAKER_02: Once you reach the age of 64 or three years prior to your own full retirement age, then it starts to increase.
• 34:44
  SPEAKER_02: This is assuming you have not collected yet, but it starts to increase by 0.56% per month.
• 34:51
  SPEAKER_02: This is where the calculation comes from.
• 34:53
  SPEAKER_02: It says, well, if I can't take it at 63, take it at 64, take it at 66.
• 34:58
  SPEAKER_02: This is how it's done.
• 34:59
  SPEAKER_02: So they take your full retirement age, they to go to three years prior to your full retirement age, and then that gap right there, that's along the top of the screen, they're reducing your benefit if you collect early by 0.56.
• 35:13
  SPEAKER_02: Once you get to three years prior to full retirement age, the age of 64 in my example, they reduce it 0.42% per month.
• 35:21
  SPEAKER_02: So if you really wanted to put together a quick spreadsheet, this is how you would do it.
• 35:25
  SPEAKER_02: Say, well, if I collect at 63 in eight months, what am I gonna get?
• 35:29
  SPEAKER_02: This is how they do it.
• 35:31
  SPEAKER_02: However, out of the goodness of their hearts, Congress, well, you can debate whether that was true or not.
• 35:38
  SPEAKER_02: Congress said, Whoa, whoa, whoa, whoa, whoa, whoa, Brian, if you wait to collect after your full retirement age, I'm gonna give you a bonus.
• 35:46
  SPEAKER_02: If I don't have to pay you, I'm Congress, I'm Social Security Administration.
• 35:50
  SPEAKER_02: If I don't have to pay you at your full retirement age, I'm gonna go ahead and give you a bonus.
• 35:54
  SPEAKER_02: Here's how the bonus works if you collect beyond your full retirement age, this is much simpler.
• 36:01
  SPEAKER_02: You get an additional 0.67% for every month you wait to collect beyond your full retirement age up to the age of 70.
• 36:11
  SPEAKER_02: That's 8% per year.
• 36:13
  SPEAKER_02: Now, from a financial planning perspective, one way to look at this Social Security is, of course, a lot of people say, Hey, I don't know if I'm gonna live to 70.
• 36:21
  SPEAKER_02: I want to go get my money.
• 36:23
  SPEAKER_02: However, uh, Mike, let's say a um folks come into us and they say, Of course, Mike manages the money for us here, he's our portfolio manager, very bright fellow, chartered financial analyst.
• 36:38
  SPEAKER_02: Mike, if somebody comes into our office and says, Hey, tell me exactly what the market's gonna do from my age of 67 today until the age of 70, and I want a specific number, Mike.
• 36:49
  SPEAKER_02: Can you do that?
• 36:51
  SPEAKER_00: Well, no, I'm just kidding.
• 36:53
  SPEAKER_00: If markets are very hard to predict over that time period.
• 36:56
  SPEAKER_02: Exactly.
• 36:57
  SPEAKER_00: Without that time horizon, it's a little easier, but but you're still working on averages, right?
• 37:02
  SPEAKER_00: Absolutely.
• 37:03
  SPEAKER_02: I could tell you exactly what's happening with your social security every month.
• 37:09
  SPEAKER_02: If you're 62 years old and you wait till 64, you wait till 67, you wait till 70, I know exactly what's happening with your social security.
• 37:17
  SPEAKER_02: It's not guaranteed, it is a law, they can change the laws, but from a financial planning perspective, you do have variable.
• 37:26
  SPEAKER_02: I think we can have this pot of money grow at X percent, but we still have to make some estimates, some guesstimates on that.
• 37:33
  SPEAKER_02: When you look at Social Security, it is a known number.
• 37:38
  SPEAKER_00: You know, however, just like we don't know exactly where the stock market's gonna be, we also don't know exactly when you're gonna die.
• 37:45
  SPEAKER_02: Well, well, that's a big thing.
• 37:47
  SPEAKER_02: Hey, the other right.
• 37:48
  SPEAKER_02: So if you tell me your you know your current age, your primary insurance amount, and the exact hour you're gonna die, I will I will nail the recommendation on exactly to the minute when to collect Social Security, but you do have that other factor in there.
• 38:03
  SPEAKER_02: Uh that's very well said, Mike.
• 38:05
  SPEAKER_02: So that's how that works.
• 38:06
  SPEAKER_02: So what are the reductions?
• 38:07
  SPEAKER_02: Well, as I told you on the left-hand guy, the middle column, if you collect at uh 67, you get 100% of your number.
• 38:14
  SPEAKER_02: That's your primary insurance amount.
• 38:16
  SPEAKER_02: Uh, your spouse ends up getting 50% of that number.
• 38:20
  SPEAKER_02: If you collect at 66, you get 93.3.
• 38:24
  SPEAKER_02: Spousal numbers are on the right.
• 38:25
  SPEAKER_02: If you collect at 64, you get 80% of your number.
• 38:28
  SPEAKER_02: If you collect at 62, you only get 70% of your number.
• 38:32
  SPEAKER_02: Remember earlier I said, hey, if your number's 3,000, here's my$2,100 a month example.
• 38:38
  SPEAKER_02: Where did I come up with that?
• 38:39
  SPEAKER_02: Well, if your number is 3,000 at 67, at 62, you're going to get 70% of that or 2,100.
• 38:46
  SPEAKER_02: Many of you have talked to people that said, well, it's not that bad of a reduction because I'll get 75% of my number if I collect early.
• 38:54
  SPEAKER_02: No, that's no longer true.
• 38:57
  SPEAKER_02: That was for people who their full retirement age was 66, which was years ago.
• 39:02
  SPEAKER_02: So if your full retirement age was 66 years old, then yeah, at 62, you get 75% of your number.
• 39:09
  SPEAKER_02: But now there's five years between 62 and full retirement age instead of four years.
• 39:14
  SPEAKER_02: So for those of you turning 62 soon that have heard I will get 75% of my number uh when I collect Social Security, it's actually going to be 70% of your number because that retirement age has increased.
• 39:28
  SPEAKER_02: You go back to my number, uh, my earlier numbers, they're reducing it from full retirement age down to 62.
• 39:34
  SPEAKER_02: So that's the way it is.
• 39:35
  SPEAKER_02: Spousal benefits, I will talk about in a little bit.
• 39:37
  SPEAKER_02: All right.
• 39:38
  SPEAKER_00: Are you gonna get into divorce at all?
• 39:40
  SPEAKER_02: Oh, gosh.
• 39:41
  SPEAKER_02: Yeah.
• 39:41
  SPEAKER_02: Okay, I have a question about that.
• 39:43
  SPEAKER_02: Yeah, I'll get into the divorce scenarios.
• 39:45
  SPEAKER_02: Uh, I hope I uh, you know, I my current trajectory is I don't personally get into divorce, but I will get into the numbers around social security.
• 39:53
  SPEAKER_02: All right, so at 67, you get 100% of your number, right?
• 39:57
  SPEAKER_02: Does your spouse get additional benefits?
• 40:00
  SPEAKER_02: No, they do not.
• 40:01
  SPEAKER_02: At 68, you get 108% of your number.
• 40:05
  SPEAKER_02: This is your um uh delayed retirement credit, DRC is what they call it.
• 40:11
  SPEAKER_02: It's simple interest.
• 40:12
  SPEAKER_02: 69, you get 116 of your number.
• 40:16
  SPEAKER_02: At 70, you get 124% of your number.
• 40:19
  SPEAKER_02: So if your full retirement age is 67, you wait till 70, take your 67 number, primary insurance amount, multiply it by 1.24.
• 40:27
  SPEAKER_02: That will be the number that you would get at 70.
• 40:29
  SPEAKER_02: Here's a question, Mike.
• 40:31
  SPEAKER_02: Well, heck, I'm getting 8% per year.
• 40:32
  SPEAKER_02: I got longevity on my side, I don't need the money.
• 40:35
  SPEAKER_02: What do I get if I collect at 71?
• 40:38
  SPEAKER_02: Nothing.
• 40:39
  SPEAKER_02: Well, you'll get a benefit.
• 40:42
  SPEAKER_00: You won't get any increase.
• 40:43
  SPEAKER_02: You won't get any increase.
• 40:45
  SPEAKER_02: This actually happened to me at a seminar in Buffalo, New York.
• 40:47
  SPEAKER_02: Gentleman came up to me and said, Brian, that was very helpful.
• 40:49
  SPEAKER_02: It was really interesting.
• 40:50
  SPEAKER_02: Guess what?
• 40:50
  SPEAKER_02: I'm 73 years old.
• 40:52
  SPEAKER_02: I still haven't collected.
• 40:53
  SPEAKER_02: Guess how much I'm gonna get?
• 40:55
  SPEAKER_02: And I said, Sir, I know exactly how much you're gonna get.
• 40:58
  SPEAKER_02: You're gonna get what you could have gotten at the age of 70, and it hasn't increased since then.
• 41:05
  SPEAKER_02: So uh long story long on that, there is no reason anywhere that anybody should collect their social security after the age of 70.
• 41:14
  SPEAKER_02: There's a lot of reasons to wait until then, but no reason to wait till after then.
• 41:18
  SPEAKER_02: All righty.
• 41:19
  SPEAKER_02: So uh here's what Social Security does.
• 41:23
  SPEAKER_02: First, they look at your primary insurance amount.
• 41:26
  SPEAKER_02: Remember, it's the most important number.
• 41:27
  SPEAKER_02: All the calculations are based on that.
• 41:29
  SPEAKER_02: They look at the primary insurance amount, and then they look at the age of the person who wants to collect.
• 41:35
  SPEAKER_02: Now, this is gonna be a key concept, and I want you to understand that.
• 41:39
  SPEAKER_02: For example, I have a social security benefit, my wife has a social security benefit.
• 41:46
  SPEAKER_02: If I go to collect, they're gonna look at my primary insurance amount and my age, and they're either gonna add number or money or they're gonna decrease number, depending on what that age is.
• 41:57
  SPEAKER_02: Now, in my scenario, if my wife collects on my number, because she's a spouse and she could do that, they're gonna look at my primary insurance amount number and her age.
• 42:11
  SPEAKER_02: Okay, so you look at the primary insurance amount, PIA number of the person you want to collect on, look at your age, not their age.
• 42:23
  SPEAKER_02: So, for example, I go into collect at 67, I get 100% of my primary insurance amount.
• 42:29
  SPEAKER_02: What you're going to see is that a spouse can get up to 50% of the primary insurance amount.
• 42:37
  SPEAKER_02: So let's say I walk in, I collect Social Security at the age of 67, I get 100% of my number.
• 42:41
  SPEAKER_02: Awesome.
• 42:42
  SPEAKER_02: Pam could get half of that number.
• 42:43
  SPEAKER_02: Let's say my full retirement benefit is 3,000, my spouse gets 1,500, right?
• 42:50
  SPEAKER_02: But let's say she's much younger than me.
• 42:52
  SPEAKER_02: She's 62.
• 42:53
  SPEAKER_02: They're going to look at my primary insurance amount because she wants to collect off my number.
• 42:58
  SPEAKER_02: They're going to look at half of that spousal benefit, 1,500.
• 43:01
  SPEAKER_02: Then they're going to look at her age and say, wait a minute, you are not full retirement age.
• 43:05
  SPEAKER_02: You're not your own full retirement age.
• 43:07
  SPEAKER_02: Brian already did his collecting.
• 43:09
  SPEAKER_02: You're not your full retirement age.
• 43:11
  SPEAKER_02: You could have gotten 1,500, but you're only 62.
• 43:14
  SPEAKER_02: We're going to reduce the 1,500.
• 43:17
  SPEAKER_02: So, key point there is they look at the primary insurance of the amount amount of the person you want to collect on, then they look at your age.
• 43:25
  SPEAKER_02: And that's how they do their calculations.
• 43:27
  SPEAKER_02: Okay.
• 43:29
  SPEAKER_02: All right.
• 43:29
  SPEAKER_02: So, in order to get spousal benefits, you got to be married for at least one year.
• 43:34
  SPEAKER_02: Spousal benefits are 50% of the primary insurance amount of the person you want to collect on.
• 43:40
  SPEAKER_02: It's reduced again if you collect prior full retirement age.
• 43:43
  SPEAKER_02: Uh, there are different factors for uh disability.
• 43:46
  SPEAKER_02: I won't get into those.
• 43:48
  SPEAKER_02: Um spousal benefits do not collect um delayed retirement credits.
• 43:55
  SPEAKER_02: Remember, if my number's 3,000, I wait till the age of 70, I get 124% of 3,000.
• 44:01
  SPEAKER_02: Mike, what does my wife get if I wait till 70?
• 44:05
  SPEAKER_02: She gets half of the original 3,000.
• 44:08
  SPEAKER_02: That's my primary insurance amount.
• 44:09
  SPEAKER_02: Spousal benefits do not get the delayed retirement credits.
• 44:12
  SPEAKER_02: Also, an important factor.
• 44:14
  SPEAKER_02: Some people say, hey, I'm gonna wait to collect my Social Security benefits.
• 44:17
  SPEAKER_02: Well, if your spouse isn't gonna collect their own benefits, they're gonna collect off of you.
• 44:21
  SPEAKER_02: They don't get anything until you start to collect.
• 44:26
  SPEAKER_02: Uh, so for the most part, uh that that was a little bit different with a couple nuances.
• 44:31
  SPEAKER_02: One of them, Mike, you said you were gonna ask a question about this situation.
• 44:35
  SPEAKER_02: But for the most part, the person that you want to collect on needs to have been collecting.
• 44:41
  SPEAKER_00: Okay, and I do have a question regarding this.
• 44:44
  SPEAKER_00: Say you started taking Social Security at 65, and your wife is 60 and you pass away.
• 44:51
  SPEAKER_00: Does she have any entitlement to that?
• 44:53
  SPEAKER_00: Yeah, ahead of starting retirement age.
• 44:55
  SPEAKER_02: Yes, absolutely.
• 44:57
  SPEAKER_02: Uh, survivor benefits can be collected as early as the age of 60.
• 45:01
  SPEAKER_02: Uh, retirement benefits uh can be collected uh as early as the age of 62.
• 45:08
  SPEAKER_02: Okay.
• 45:08
  SPEAKER_02: So a retirement benefit, if I'm living, uh I can collect it at 62.
• 45:12
  SPEAKER_02: If I want to collect on somebody that has passed away, general rule is the age of 50, or excuse me, 60.
• 45:19
  SPEAKER_02: Uh, if there's disability, it's possible that the person collecting on the deceased claimant, as Social Security calls people who take money get checks from them.
• 45:28
  SPEAKER_02: They call them claimants.
• 45:30
  SPEAKER_02: Uh, if you are disabled and the age of 50, um you could possibly collect a survivor benefit.
• 45:39
  SPEAKER_02: But uh for most of everybody, you can't get a retirement benefit on your own record or a spouse's record till you turn 62.
• 45:47
  SPEAKER_02: You can't get a survivor benefit until you turn the age of 60.
• 45:50
  SPEAKER_02: Uh, children, uh, this is uh for individuals who are eligible.
• 45:59
  SPEAKER_02: I want to talk about eligibility versus availability.
• 46:02
  SPEAKER_02: Um let me give you some examples on that.
• 46:05
  SPEAKER_02: I am eligible for Social Security.
• 46:07
  SPEAKER_02: Why?
• 46:08
  SPEAKER_02: Because I've paid enough into the system.
• 46:10
  SPEAKER_02: You really need basically, you need about 10 years of work history.
• 46:15
  SPEAKER_02: You they give you credits, it's about$1,810 is one credit.
• 46:20
  SPEAKER_02: You accrue four credits per year, you need 40 credits total, unnecessary details.
• 46:25
  SPEAKER_02: But effectively, you need to have work for about paid into the system.
• 46:28
  SPEAKER_02: You need to have paid into the system.
• 46:30
  SPEAKER_02: There are a lot of people who work on pay into the system, maybe whatever it is, under the table, whatever.
• 46:34
  SPEAKER_02: But you need to have paid into the system for about 10 years.
• 46:37
  SPEAKER_02: So I have done that.
• 46:39
  SPEAKER_02: So I am eligible for Social Security based on the fact I put money into the system.
• 46:44
  SPEAKER_02: Social Security is not available to me right now.
• 46:48
  SPEAKER_02: Well, if somebody is eligible, they've put enough money into the system, uh, but it's not available.
• 46:53
  SPEAKER_02: When does it become available?
• 46:55
  SPEAKER_02: Social Security becomes available in one of three events.
• 46:59
  SPEAKER_02: Age of 62, death, disability.
• 47:03
  SPEAKER_02: If somebody reaches the age of two, 62 and they are eligible for Social Security, they are it's now available to them.
• 47:10
  SPEAKER_02: They don't have tape, but it's available to them.
• 47:12
  SPEAKER_02: If somebody has paid into the system and they pass away, it's possible that now a Social Security benefit is available to somebody.
• 47:21
  SPEAKER_02: Uh, we'll talk about who those somebodies are.
• 47:24
  SPEAKER_02: Um, and then if you become disabled and you have paid enough into the system, you are eligible for Social Security, it becomes available.
• 47:32
  SPEAKER_02: So there's a big difference between when what you're eligible, which means you paid enough in, and when it's available.
• 47:38
  SPEAKER_02: Just think of available is death, disability, or the age of 62.
• 47:42
  SPEAKER_02: So for people that social security is available, they're either the age of 62, they have passed away, or they're disabled.
• 47:50
  SPEAKER_02: If there are children in the household, they could be eligible for Social Security.
• 47:55
  SPEAKER_02: If there is a caretaker of those, a spouse of those uh children, that person could also get Social Security on somebody who has Social Security that is available and they are collecting.
• 48:11
  SPEAKER_02: Let me give you the simplest example.
• 48:13
  SPEAKER_02: Let's say somebody is 67 years old.
• 48:17
  SPEAKER_02: Uh, spouse is 58 years old, and they have a 12-year-old and a 13-year-old.
• 48:22
  SPEAKER_02: If the 67-year-old collects, the spouse, even though that spouse is not the age of 62 yet, if they are the full-time caretaker of the 12 and 13-year-old children, they could possibly get a benefit.
• 48:36
  SPEAKER_02: It's a caretaker benefit.
• 48:38
  SPEAKER_02: The children are under the age of 16.
• 48:42
  SPEAKER_02: If the children are under the age of 16, which they are in my case, the caregiver gets benefits until the children turn 16.
• 48:51
  SPEAKER_02: The children themselves get benefits until they turn 18.
• 48:54
  SPEAKER_02: So I got a 67-year-old, they are eligible, Social Security is available, they begin to collect.
• 49:02
  SPEAKER_02: Spouse also begins to collect as a caretaker.
• 49:06
  SPEAKER_02: The children begin to collect because they are under the age of 16.
• 49:10
  SPEAKER_02: Once those children turn 16, the caretaker, the spouse in my example, no longer gets their caretaker benefit, but each of the children get benefits up until the age of 18.
• 49:21
  SPEAKER_02: And like a lot of uh rules with the government, that also depends on whether it's the age is 18.
• 49:29
  SPEAKER_02: But uh if they're married and living outside of the household, or it could go to 19 if they're full-time students, so there's nuances, just think of it.
• 49:38
  SPEAKER_02: If somebody is collecting Social Security and they have children uh that are either disabled or under the age of 18 in their household, those children could get social security benefits.
• 49:50
  SPEAKER_00: And this is getting a little complicated.
• 49:52
  SPEAKER_00: So I'm just gonna flash our website and phone number on in case you have any specific questions for Brian.
• 49:58
  SPEAKER_02: Yeah, so I'm you know, I'm really gonna start speeding through this.
• 50:01
  SPEAKER_02: We're gonna do the speed rounds on this because there's a lot of in here.
• 50:04
  SPEAKER_02: Here's what I want you to know about spousal benefits.
• 50:05
  SPEAKER_02: They are reduced at a faster pace than uh retirement benefits.
• 50:11
  SPEAKER_02: So remember what I said if you have a full retirement benefit at the age of 67 of$3,000 at the age of 62, it's reduced by 30%, right?
• 50:21
  SPEAKER_02: Uh, you get 2,100.
• 50:23
  SPEAKER_02: However, a spousal benefit, if a spouse collects on spousal benefits at the age of 62, their spousal benefit is reduced by 35%, not 30%.
• 50:36
  SPEAKER_02: So just know that if you are planning on collecting spousal benefits or if you're helping your spouse calculate what their number is, anybody that collects on a primary insurance amount as a spouse, there is a more aggressive reduction rate.
• 50:52
  SPEAKER_02: So if somebody said, okay, spouse, you know, full retirement age number, primary insurance is 3,000, spouse gets 1,500, but they want to collect that 1,500 at 62.
• 51:02
  SPEAKER_02: You got to reduce it by 35%, not 30%.
• 51:06
  SPEAKER_02: That's one of the little things you got to know.
• 51:08
  SPEAKER_02: Uh, the other thing about Social Security, you don't get anything out of the system that you don't ask for.
• 51:12
  SPEAKER_02: Social Security is not in the business of sending you a birthday card when you turn 62 and say, hey, welcome to the program.
• 51:18
  SPEAKER_02: In this awesome, stop down and see us.
• 51:20
  SPEAKER_02: They're certainly not in the business of when you turn 70 and saying, hey, you turn 70.
• 51:24
  SPEAKER_02: I don't know why you haven't collected yet.
• 51:26
  SPEAKER_02: You could come get the money.
• 51:28
  SPEAKER_02: Um, if there are multiple benefits that you can collect, you need to proactively understand what is available to you when it is available to you, and then you got to go ask for it.
• 51:40
  SPEAKER_02: That's very important.
• 51:41
  SPEAKER_02: Do not expect Social Security, it's not their job, quite honestly, to say, oh, hey, by the way, you can switch over to a different benefit.
• 51:49
  SPEAKER_02: Or now's a good time for you to collect.
• 51:51
  SPEAKER_02: So you gotta know what your numbers are, you gotta know when it's prime when it's the best time for you to collect, and then you gotta proactively go get it.
• 52:00
  SPEAKER_02: All right, common mistakes.
• 52:01
  SPEAKER_02: All right, Mike, here is the uh uh divorce.
• 52:05
  SPEAKER_02: Uh so I'll go through the divorce and then you ask your question.
• 52:07
  SPEAKER_02: First of all, the marriage has to have lasted 10 years or longer.
• 52:10
  SPEAKER_02: If you want to collect on your uh spouse that you've divorced some from, you've got to be unmarried.
• 52:17
  SPEAKER_02: Um now remember earlier I said if you want to collect on somebody else's number, they have to be collecting.
• 52:24
  SPEAKER_02: They have to be dead, disabled, the age of 62, and collecting.
• 52:28
  SPEAKER_02: Not so, not so in the divorce case.
• 52:33
  SPEAKER_02: So if you're married 10 years or longer, you've been doing now, you're divorced, you're now unmarried.
• 52:39
  SPEAKER_02: When you turn 62, you can begin collecting on your ex-spouse as long as Social Security is available to them.
• 52:50
  SPEAKER_02: They do not need to be collecting a benefit.
• 52:52
  SPEAKER_02: I can't tell you how many times I have told you that, hey, uh, or I've been told, I'm sorry, I'm not told how many times I've been told, oh, I didn't want to collect because my ex-spouse doesn't need social security.
• 53:03
  SPEAKER_02: They haven't collected yet, so I can't get anything.
• 53:06
  SPEAKER_02: Not true.
• 53:07
  SPEAKER_02: As long as it is available to them, they don't have to be collecting.
• 53:11
  SPEAKER_02: Remember, availability, debt, uh, they're uh dead, disabled, or the age of 62.
• 53:17
  SPEAKER_02: As long as they meet that criteria, and you, as the divorced spouse, are at least the age of 62, you can begin collecting the spouse benefit on that ex-spouse.
• 53:29
  SPEAKER_00: Here's my question, Brian.
• 53:30
  SPEAKER_02: Oh boy.
• 53:32
  SPEAKER_00: No, it's not bad.
• 53:34
  SPEAKER_00: So I get divorced and I start taking my wife's half of her social security.
• 53:40
  SPEAKER_00: My ex-souse.
• 53:41
  SPEAKER_02: Yes, yes.
• 53:42
  SPEAKER_00: What what happened?
• 53:43
  SPEAKER_00: It says that you have to be unmarried.
• 53:46
  SPEAKER_02: That's right.
• 53:46
  SPEAKER_00: What happens if I get married then?
• 53:48
  SPEAKER_00: Remarried.
• 53:49
  SPEAKER_02: If you get married, then you flip over to the new spouse's benefits.
• 53:52
  SPEAKER_00: So I can't continue on the old spouses.
• 53:55
  SPEAKER_02: No.
• 53:55
  SPEAKER_02: Okay.
• 53:56
  SPEAKER_02: Which is another important distinction.
• 53:58
  SPEAKER_02: Nobody ever gets two checks.
• 54:01
  SPEAKER_02: Right?
• 54:01
  SPEAKER_02: You can't get you can't collect multiple benefits.
• 54:04
  SPEAKER_02: Sometimes there are some people that can get a higher benefit in time.
• 54:07
  SPEAKER_02: It's pretty rare cases.
• 54:08
  SPEAKER_02: But there's some benefit that you know, people that can switch from one benefit to another and switch over to a higher benefit, but it's not going to be two checks.
• 54:17
  SPEAKER_02: So in that case, you're receiving a check on your ex-spouse.
• 54:20
  SPEAKER_02: That means you're at least 62 and your ex is either dead, disabled, or the age of 62.
• 54:25
  SPEAKER_02: You are collecting half of their primary insurance amount.
• 54:28
  SPEAKER_02: Remember, it doesn't matter what number they collect, they're going to do the calculation of your ex's primary insurance amount, their full retirement age number.
• 54:36
  SPEAKER_02: They're going to look at that number, they're going to figure out how old you are and start sending you a check.
• 54:40
  SPEAKER_02: Correct?
• 54:41
  SPEAKER_02: Yes.
• 54:42
  SPEAKER_02: Now you get remarried.
• 54:44
  SPEAKER_02: Social Security in the ex-spouse, there's going to be a well, except for this case.
• 54:52
  SPEAKER_02: But in general, what Social Security is going to say, wait a minute, you got a new spouse.
• 54:57
  SPEAKER_02: Ex-spouse's check goes away.
• 54:59
  SPEAKER_02: Now you begin collecting on current spouse.
• 55:04
  SPEAKER_02: That's right.
• 55:09
  SPEAKER_02: So um now, obviously, this is assuming, you know, the way Social Security looks at it, when you go to collect a benefit, they are going to one determine what benefit is the highest available to you.
• 55:26
  SPEAKER_02: So you go in and collect, say, hey, I want to get Social Security.
• 55:29
  SPEAKER_02: Well, a lot of us, our choice is well, is my own benefit from the money I put into the system higher?
• 55:34
  SPEAKER_02: Is my spouse's higher?
• 55:35
  SPEAKER_02: Is there a uh divorced spouse?
• 55:38
  SPEAKER_02: Is there a divorce spouse that has passed away?
• 55:40
  SPEAKER_02: Is there, you know, was I'm married to somebody that had passed away?
• 55:45
  SPEAKER_02: There can be multiple benefits for somebody that walks in and says, hey, I would like to collect.
• 55:49
  SPEAKER_02: First thing Social Security is gonna do is they are gonna figure out which benefit is the highest.
• 55:56
  SPEAKER_02: As a general rule, there's one exception to this, really.
• 55:59
  SPEAKER_02: As a general rule, they're gonna say, okay, Mike, well, I'm gonna look at your earnings history.
• 56:03
  SPEAKER_02: I'm gonna look at your ex's earnings history.
• 56:05
  SPEAKER_02: If your number is higher than half of theirs, we're gonna start giving you your number.
• 56:11
  SPEAKER_02: If half of their number is higher than your benefit, they're gonna start giving you half of that number, reduce it for age.
• 56:18
  SPEAKER_02: Okay.
• 56:18
  SPEAKER_02: Was that helpful?
• 56:19
  SPEAKER_00: Is that what you very much?
• 56:23
  SPEAKER_02: Uh, so that was the important part on the bottom right there.
• 56:26
  SPEAKER_02: Okay, this is the biggest mistake in all of Social Security because now this was back uh this was several years ago.
• 56:33
  SPEAKER_02: I'm trying to think this was oh, I don't remember the year, but this is a quote from Social Security.
• 56:41
  SPEAKER_02: It's one of the uh studies that they had done of their own system, and they determined that 80% of people eligible for a survivor benefit, 80% of people eligible for a survivor benefit.
• 56:54
  SPEAKER_02: So they were married to somebody that has passed away.
• 56:57
  SPEAKER_02: 80% of those people are receiving less than they deserved from Social Security.
• 57:02
  SPEAKER_02: And according to this report, it's because they got bad advice at Social Security.
• 57:07
  SPEAKER_02: So why is that?
• 57:09
  SPEAKER_02: Why is this mistake happening?
• 57:11
  SPEAKER_02: Well, you got to be married at least nine months.
• 57:14
  SPEAKER_02: Why they pick that?
• 57:15
  SPEAKER_02: I have no idea.
• 57:15
  SPEAKER_02: You got to be married for at least nine months to be eligible for a survivor benefit.
• 57:20
  SPEAKER_02: Survivor benefit, you can collect as early as the age of 60.
• 57:25
  SPEAKER_02: It's gonna be reduced significantly.
• 57:28
  SPEAKER_02: It's gonna be reduced down to 71.5% of what the deceased person's primary insurance amount was.
• 57:36
  SPEAKER_02: Uh, you get the higher of that reduced, that's 71%.
• 57:40
  SPEAKER_02: Um there is also a factor in there that they won't clip you by more than 82.5% of the uh primary insurance amount of the person who would pass away.
• 57:52
  SPEAKER_02: So, for example, if that person passes away, but they collected at the age of uh 62, uh, so they had a 30% reduction.
• 58:02
  SPEAKER_02: Social Security is gonna say, well, that probably wasn't a good idea that they uh reduced it that much.
• 58:09
  SPEAKER_02: So instead of giving you 70% of their number, that's what they collected at 62, and then they passed away.
• 58:14
  SPEAKER_02: They got 70% because they collected it early.
• 58:17
  SPEAKER_02: Uh, they're gonna say, you know what, they probably shouldn't have done that.
• 58:20
  SPEAKER_02: US survivor will look at 82.5% of their primary insurance amount.
• 58:25
  SPEAKER_02: That's what they're doing.
• 58:27
  SPEAKER_02: So here's one big planning topic.
• 58:30
  SPEAKER_02: Here's kind of one of the secrets.
• 58:31
  SPEAKER_02: Here's just let me simplify this survivor benefit stuff for you.
• 58:36
  SPEAKER_02: A survivor benefit is defined as what the person was actually collecting or could have been collecting.
• 58:47
  SPEAKER_02: I know that sounds very simple, but let me explain that to you.
• 58:51
  SPEAKER_02: Let's say my full retirement age is 67 and I go in and collect at 65.
• 58:57
  SPEAKER_02: If I collect at 65, that reduced amount, that 80%, um my spouse is eligible as a survivor benefit of that reduced amount.
• 59:11
  SPEAKER_02: It's because that's what I was actually collecting.
• 59:14
  SPEAKER_02: There's some nuances to this, as I just showed you, but simplify it.
• 59:19
  SPEAKER_02: Just think of if you start to collect Social Security early or whenever you start collecting, you are effectively locking in your survivor benefit.
• 59:28
  SPEAKER_02: Conversely, if I wait till 70 and I get 124% of my primary insurance amount, survivor benefit becomes the 124%.
• 59:39
  SPEAKER_02: As long as I'm alive, my spouse does not get those delayed retirement credits.
• 59:44
  SPEAKER_02: But if I collect at the age of 70, get 124% of my primary insurance amount and then pass away, my spouse gets the 124%.
• 59:55
  SPEAKER_02: So be very careful about when you say, hey, it doesn't matter, I'm going.
• 1:00:00
  SPEAKER_02: To collect.
• 1:00:01
  SPEAKER_02: That's just what I'm doing.
• 1:00:02
  SPEAKER_02: It's better to get one check than no checks at all.
• 1:00:05
  SPEAKER_02: Just think that you have effectively permanently reduced the survivor benefit for your spouse.
• 1:00:10
  SPEAKER_02: A very important planning topic.
• 1:00:12
  SPEAKER_02: The other thing about survivor benefits, again, you could collect uh as early as the age of 60 at that reduced amount.
• 1:00:21
  SPEAKER_02: Here's the other big secret: this is about the only place left in Social Security where somebody can switch from one benefit and then go to the next.
• 1:00:30
  SPEAKER_02: Social Security, the administration, many of the people in the local offices get this wrong.
• 1:00:36
  SPEAKER_02: What they say to you is, no, once you collect, you get whatever the highest, your benefit, their benefit, whatever's the highest you collect on that, you're done.
• 1:00:44
  SPEAKER_02: Move on.
• 1:00:44
  SPEAKER_02: Thank you.
• 1:00:45
  SPEAKER_02: That's not true if you're eligible for a survivor benefit.
• 1:00:48
  SPEAKER_02: If you are eligible for a survivor benefit, you can begin collecting benefits on your own record at the age of 62, because it's on your own record.
• 1:00:58
  SPEAKER_02: And then at a later point, switch over to your spouse's benefit, the survivor benefit.
• 1:01:05
  SPEAKER_02: This only works for survivors.
• 1:01:07
  SPEAKER_02: If you're eligible for a survivor benefit, if you're not, then this doesn't apply to you.
• 1:01:11
  SPEAKER_02: Conversely, think of it this way: let's say you are 62 years old, spouse passes away, you're eligible for a survivor benefit.
• 1:01:20
  SPEAKER_02: You can take the benefit that they were either actually collecting or could have been collecting at the age of 62.
• 1:01:27
  SPEAKER_02: You will take that at a reduced amount because you're only 62.
• 1:01:31
  SPEAKER_02: But you can let your own work history grow in the background, 0.42% per month, 0.56% per month, 0.67% per month percent after the age of 67.
• 1:01:46
  SPEAKER_02: So for somebody that is eligible for a survivor benefit, you could collect the survivor benefit early and then flip over to your own benefit at the age of 70.
• 1:01:58
  SPEAKER_02: Mike, you asked a question earlier.
• 1:01:59
  SPEAKER_02: What if somebody gets remarried with a survivor benefit?
• 1:02:03
  SPEAKER_02: If you are eligible for a survivor benefit, it's not available to you, but maybe by age.
• 1:02:09
  SPEAKER_02: If you get remarried after the age of 60, the survivor benefit stays with you.
• 1:02:16
  SPEAKER_02: If you get remarried prior to the age of 60, the survivor benefit is gone now.
• 1:02:21
  SPEAKER_02: So something happens, somebody passes away, I'm eligible for a survivor benefit.
• 1:02:26
  SPEAKER_02: I'm now the age of 60, and I get remarried.
• 1:02:29
  SPEAKER_02: I actually have three benefits now.
• 1:02:31
  SPEAKER_02: One is my deceased spouse's survivor benefit.
• 1:02:34
  SPEAKER_02: Two is my own benefit.
• 1:02:36
  SPEAKER_02: Three, I got remarried.
• 1:02:37
  SPEAKER_02: I have a spousal benefit potentially.
• 1:02:40
  SPEAKER_02: Very important distinction.
• 1:02:42
  SPEAKER_02: Do you want to talk about one of the secrets?
• 1:02:43
  SPEAKER_02: It's one of the most misunderstood.
• 1:02:45
  SPEAKER_02: That's why 80% of survivors are not getting the highest benefit possible.
• 1:02:50
  SPEAKER_02: Because when they walk in, they say, This is your benefit.
• 1:02:52
  SPEAKER_02: This is a survivor benefit, whichever is higher, just take that one, don't worry about it.
• 1:02:57
  SPEAKER_02: The rest are gone.
• 1:02:58
  SPEAKER_02: Not true for survivors.
• 1:02:59
  SPEAKER_02: If you're in that situation and you want to know if this is applicable to you, and then start to think about which benefit to collect first and then when to switch over to the other benefit, give us a call.
• 1:03:10
  SPEAKER_02: Very important planning topic.
• 1:03:12
  SPEAKER_02: Okay.
• 1:03:13
  SPEAKER_02: Uh this is um this is also applicable to the divorcees.
• 1:03:20
  SPEAKER_02: Let's say uh you're married 10 years or more, uh, you're divorced, haven't gotten remarried, you go and collect spousal benefits on your ex-spouse.
• 1:03:30
  SPEAKER_02: They're still living, they go and collect their benefit.
• 1:03:33
  SPEAKER_02: When they pass away, you can actually switch from a survivor benefit on them to or a spousal benefit on them, because you're both alive right now, but you're divorced, you go and you collect uh spousal benefit on that person that is still living, your ex, when they pass away, you can actually flip over to their survivor benefit because you were married 10 years or more, you met all of the qualifications.
• 1:03:57
  SPEAKER_02: Um, if you don't know that and you don't run into Social Security and say, hey, wait a minute, my ex passed away, and now I can collect on them on a survivor benefit instead of spousal benefit.
• 1:04:09
  SPEAKER_02: If you don't go to Social Security and say, it's time for me to flip over, I want the higher benefit, they're not going to send it to you.
• 1:04:15
  SPEAKER_02: So it's kind of all righty.
• 1:04:18
  SPEAKER_02: So here are the reductions.
• 1:04:19
  SPEAKER_02: I really got to start flying through this one.
• 1:04:22
  SPEAKER_02: All right.
• 1:04:23
  SPEAKER_02: So this is if you this is only for people that collect benefits, any type of benefit.
• 1:04:29
  SPEAKER_02: I don't care if it's disability, I don't care if it's survivor, spousal, whatever it is, your own benefit.
• 1:04:34
  SPEAKER_02: If you collect benefits prior to full retirement age, but you continue to work, they are going to reduce your benefits$1 for every$2 over$23,400.
• 1:04:45
  SPEAKER_02: $23,400 is W-2 income or self-employment net income.
• 1:04:50
  SPEAKER_02: Does not include dividends, interest, capital gains, all those other things.
• 1:04:54
  SPEAKER_02: This is purely employment income.
• 1:04:56
  SPEAKER_02: So if you collect prior to full retirement age and continue to work, it's quite possible that they're going to pull some of your benefits back.
• 1:05:04
  SPEAKER_00: So it also doesn't include passive income then.
• 1:05:07
  SPEAKER_00: No, it does not.
• 1:05:09
  SPEAKER_02: It does not.
• 1:05:09
  SPEAKER_02: That$23,400 is pretty much strictly uh the CPAs of the world are going to say, well, there's a few other things, but to simplify, it's a W-2 or self-employment net income.
• 1:05:19
  SPEAKER_02: Okay.
• 1:05:20
  SPEAKER_02: Is what the 234 is.
• 1:05:22
  SPEAKER_02: Now, a lot of people say to me, Oh, it just comes back to you.
• 1:05:25
  SPEAKER_02: No, it doesn't.
• 1:05:26
  SPEAKER_02: No, it doesn't.
• 1:05:27
  SPEAKER_02: I have heard that before.
• 1:05:28
  SPEAKER_02: Say, well, if they reduce my check now because I'm making money, when I reach full retirement age, uh, I can make whatever I want, no reduction.
• 1:05:35
  SPEAKER_02: Uh, they're just going to give it back to me.
• 1:05:36
  SPEAKER_02: They're gonna give me credits in my uh Social Security check at that point.
• 1:05:40
  SPEAKER_02: They don't.
• 1:05:41
  SPEAKER_02: What they do is they kind of do give you credits, they don't directly give you the money.
• 1:05:46
  SPEAKER_02: Uh, what they do is they assume the months that you were reduced because you were prior to full retirement age and you're making more than this income limit, 23,400.
• 1:05:57
  SPEAKER_02: They take those months and say, well, you were reduced for six months.
• 1:06:01
  SPEAKER_02: And so when you turn full retirement age, we'll assume that you waited to collect for six months.
• 1:06:07
  SPEAKER_02: So let's say you collected at 62 and you worked and it was reduced.
• 1:06:11
  SPEAKER_02: They effectively say the math is actually more complicated, but they effectively say, okay, we'll say you collected at 62 at six months.
• 1:06:19
  SPEAKER_02: Uh so they give it back to you slowly.
• 1:06:22
  SPEAKER_02: Effectively, what happened?
• 1:06:23
  SPEAKER_02: They give it back to you slowly throughout your lifetime.
• 1:06:25
  SPEAKER_02: They don't say, hey, now you're 67.
• 1:06:28
  SPEAKER_02: We had to reduce you a bunch when you were 62 and 63 because you were making too much money.
• 1:06:32
  SPEAKER_02: So here's all the money that we reduced, and here's a big check.
• 1:06:34
  SPEAKER_00: Not true.
• 1:06:35
  SPEAKER_00: It's not how so.
• 1:06:36
  SPEAKER_00: Does it ever make sense to work above that income threshold if you're taking social security?
• 1:06:42
  SPEAKER_02: Yeah, I mean, if you need to and you want to, um, yeah, I mean, I certainly wouldn't say to somebody, you know, let's say somebody retires at 62, then they get a big consulting job for a couple million bucks a year at 65.
• 1:06:56
  SPEAKER_02: I certainly wouldn't say, well, you know, you're gonna reduce your social security.
• 1:06:59
  SPEAKER_02: You can't take that multi-million dollar consulting gig.
• 1:07:02
  SPEAKER_02: Um, I try to avoid that.
• 1:07:05
  SPEAKER_02: Yeah, I would certainly try to now when you reach full retirement in the year you reach full retirement age, this is 2000.
• 1:07:11
  SPEAKER_02: Uh these both say 23.
• 1:07:14
  SPEAKER_02: Those are these are 25 numbers.
• 1:07:16
  SPEAKER_02: I apologize for that.
• 1:07:17
  SPEAKER_02: Yeah, there's a higher limit, so you can actually make more money uh in the uh when you uh reach full retirement age.
• 1:07:24
  SPEAKER_02: Okay.
• 1:07:25
  SPEAKER_02: Uh what I'm about to show you is directly from the Social Security website.
• 1:07:31
  SPEAKER_02: You will, this is their quote, you will pay tax on only 85% of your Social Security benefits based on internal revenue service rules.
• 1:07:41
  SPEAKER_02: So, what are the rules?
• 1:07:43
  SPEAKER_02: If you're an individual and you have combined income, which I'm gonna define for you, the combined income concept is actually different than adjusted, gross, modified, adjusted, gross, taxable, and and and total wages.
• 1:07:58
  SPEAKER_02: Combined income is a separate calculation.
• 1:08:00
  SPEAKER_02: So, but I'm gonna tell you what that is.
• 1:08:02
  SPEAKER_02: Combined income, if you're an individual filing it as an individual, and you make between 25 and excuse me, your combined income is between 25 and$34,000, up to 50% of your benefits could be considered taxable wages.
• 1:08:17
  SPEAKER_02: That doesn't mean it's a 50% tax on the benefits.
• 1:08:20
  SPEAKER_02: That means they're gonna take 50% of what you receive and just tax it as if it were like wages from work.
• 1:08:27
  SPEAKER_02: Uh, if you make over$34,000, excuse me, your combined income is over$34,000, up to 85% of those benefits would be considered um taxable.
• 1:08:37
  SPEAKER_02: Uh married filing jointly,$32,000 to$44,000 is your bracket.
• 1:08:42
  SPEAKER_02: In that range, up to 50% of the benefits being received into your household would be considered taxable.
• 1:08:48
  SPEAKER_02: Uh, if you're over$44,000, uh up to$85 of the benefits may be taxable.
• 1:08:55
  SPEAKER_02: Now, when I say, you know, let's say you got a$2,000 Social Security benefit, your spouse has$1,000, that's$3,000 a month just in Social Security coming into your household.
• 1:09:07
  SPEAKER_02: Um, and then let's say you got pension, maybe it's some um dividend income, maybe you guys get into something.
• 1:09:13
  SPEAKER_02: Is it terribly difficult for most people to get to these numbers?
• 1:09:18
  SPEAKER_02: No, it's not.
• 1:09:19
  SPEAKER_02: But some would say, My gosh, why are these numbers so low?
• 1:09:22
  SPEAKER_02: Why is the threshold at which I get taxed Social Security so low?
• 1:09:26
  SPEAKER_02: Uh, here's the reason because they're numbers from 1983.
• 1:09:29
  SPEAKER_02: 1983 was the last really major, major, major, major um Social Security tax reforms.
• 1:09:36
  SPEAKER_02: There's been adjustments along the way, huge changes in 1983 that were uh implemented over um uh many years.
• 1:09:44
  SPEAKER_02: These are 1983 numbers.
• 1:09:46
  SPEAKER_02: So in 1983, if you're uh married filing jointly and you have$44,000 a year coming into your household, um, and you're retired, that's a lot of money.
• 1:09:57
  SPEAKER_02: It's not an outrageous amount of money now.
• 1:10:00
  SPEAKER_02: So uh what is combined income?
• 1:10:02
  SPEAKER_02: Oh, yeah, if you if you're married filing separately, you probably pay taxes on everything.
• 1:10:06
  SPEAKER_02: Combined income is very simply your adjusted gross plus non-taxable interest.
• 1:10:10
  SPEAKER_02: So non-taxable interest would be things you receive from municipal bonds.
• 1:10:16
  SPEAKER_02: In fact, and half your social security benefits.
• 1:10:19
  SPEAKER_02: Very long way saying it's everything.
• 1:10:21
  SPEAKER_02: Combined income is pretty much everything that comes into your household.
• 1:10:25
  SPEAKER_02: So you take your adjusted gross, you add in municipal bond normally, tax-free interest, take half of the Social Security benefits coming into your household.
• 1:10:33
  SPEAKER_02: If you're over those numbers, then it could be taxable.
• 1:10:36
  SPEAKER_02: All right.
• 1:10:37
  SPEAKER_02: Um, so I'm gonna simplify in saying, you know, these are the people that, in my observation and the practice that we see that really should um uh take some time to understand the program, understand your situation.
• 1:10:52
  SPEAKER_02: Anyone who's turning 62, so uh don't just run in and and and collect because it may be going away.
• 1:10:59
  SPEAKER_02: Uh divorcees, divorcees, a ton of mistakes uh made on that for all the reasons I had mentioned.
• 1:11:04
  SPEAKER_02: I gotta wait till they collect, and you know, can I collect and those types of things.
• 1:11:08
  SPEAKER_02: Uh, and the biggest mistake that's happening by Social Security, by the administration's own admission.
• 1:11:13
  SPEAKER_02: Uh the biggest, most common mistake is uh with widowers or widowers.
• 1:11:16
  SPEAKER_02: If you fall in those, in any of those categories, um we'd be glad to help.
• 1:11:22
  SPEAKER_02: I'd be glad to walk you through how these things are applicable to you.
• 1:11:26
  SPEAKER_02: Because again, you get into a room with five people and you ask one question about Social Security, and some of them might be semi-knowledgeable about the program, you're gonna come away with seven different answers.
• 1:11:36
  SPEAKER_02: If you go into a Google search and say, how does this work?
• 1:11:39
  SPEAKER_02: I pretty much assure you that you will uh be more confused at the end of that exercise than before.
• 1:11:46
  SPEAKER_02: So uh you've got to make it very personal, very specific.
• 1:11:50
  SPEAKER_02: So if you want help on these things, uh we would certainly be glad to help.
• 1:11:54
  SPEAKER_02: On our website, HBK Provident, uh, you could either contact us on our website or you can call us, of course, but on our website, there's a way to contact us.
• 1:12:02
  SPEAKER_02: Say, hey, you know, can I set up some time?
• 1:12:05
  SPEAKER_02: You can actually set up uh some time on our uh calendar through the website as well.
• 1:12:11
  SPEAKER_02: All right, that's all I had.
• 1:12:13
  SPEAKER_02: Uh so I'm at I'm at 1244 of the 2900 rules.
• 1:12:19
  SPEAKER_02: So we're almost there.
• 1:12:21
  SPEAKER_00: I have no idea how many other that's it.
• 1:12:24
  SPEAKER_00: Let me just uh share where you can find how to contact us.
• 1:12:28
  SPEAKER_00: This is our website, www.hbkprovident.com.
• 1:12:32
  SPEAKER_00: If you go to you can schedule an appointment up the upper right, click proceed, and then uh just pick a time that Brian's available and he'd be happy to answer some questions.
• 1:12:42
  SPEAKER_02: Absolutely, Mike.
• 1:12:44
  SPEAKER_02: I appreciate your questions.
• 1:12:45
  SPEAKER_02: Uh, I appreciate the uh raucous applause that I received uh when I was introduced as well.
• 1:12:52
  SPEAKER_00: So hey, it wasn't me, it was the fan base.
• 1:12:55
  SPEAKER_00: You got a big following, Brian.
• 1:12:57
  SPEAKER_02: Well, I don't know about that.
• 1:12:59
  SPEAKER_02: It's about as quickly as I can do uh all of that detailed information.
• 1:13:02
  SPEAKER_02: Hey, thanks everybody for joining us.
• 1:13:04
  SPEAKER_02: And uh, you know, like I said, this is big money.
• 1:13:08
  SPEAKER_02: It could be really big money for you.
• 1:13:09
  SPEAKER_02: You put a lot of money into the system, you owe it to yourself uh to maximize the return on that.
• 1:13:15
  SPEAKER_02: Uh because there are family benefits involved, spouses, you owe it to them as well to get this right.
• 1:13:21
  SPEAKER_00: And Brian, are you are you gonna do this on a monthly basis, something regarding Social Security or financial planning, or just kind of every now and then throw out a seminar, webinar?
• 1:13:30
  SPEAKER_02: Yeah, you know, we're gonna do uh financial planning topics.
• 1:13:34
  SPEAKER_02: Again, this is woven into a financial planning.
• 1:13:36
  SPEAKER_02: And when we're looking at financial planning, of course, we're looking at cash flow and uh protection insurance strategies, retirement income, investment strategies, we're looking at tax minimization ideas, we're looking at estate planning ideas.
• 1:13:49
  SPEAKER_02: Um, if if you you know kind of think about a lot of the topics that we just talked about, for those folks who are about to retire, this Social Security thing weaves in through each of those, right?
• 1:14:01
  SPEAKER_02: Retirement income, other survivor benefits, so that's kind of an insurance plan.
• 1:14:06
  SPEAKER_02: You know, what's your retirement income?
• 1:14:07
  SPEAKER_02: What should my investments be doing?
• 1:14:09
  SPEAKER_02: Well, my social security is doing this, how do I minimize taxes?
• 1:14:13
  SPEAKER_02: You know, what are the estate potentially?
• 1:14:16
  SPEAKER_02: How does, you know, collecting Social Security?
• 1:14:18
  SPEAKER_02: So not necessarily just Social Security, but more on the general financial planning, kind of break down those pieces.
• 1:14:24
  SPEAKER_02: But you, as you might imagine, based on my description, that uh Social Security will be interwoven into each of those.
• 1:14:31
  SPEAKER_00: Yeah.
• 1:14:32
  SPEAKER_00: And then we also put out a lot of blog posts, some related to these topics, social security, financial planning, and some market content.
• 1:14:38
  SPEAKER_00: And then we don't get into as much detail on the financial planning on Fridays, but we do uh a live event on Facebook, LinkedIn, uh YouTube every Friday at 12:30.
• 1:14:49
  SPEAKER_00: A little more specific on the markets, but we do tie in some of those pertinent financial planning topics.
• 1:14:55
  SPEAKER_00: So make sure you tune into that.
• 1:14:57
  SPEAKER_00: Um thank you so much for educating us on Social Security.
• 1:15:01
  SPEAKER_00: I I know I learned a lot today, so I really appreciate it.
• 1:15:04
  SPEAKER_00: Um, Brian's a great resource, so feel free to reach out, whether via phone number or um the schedule meeting on our website.
• 1:15:12
  SPEAKER_00: Um, thanks everyone for joining.
• 1:15:14
  SPEAKER_00: Brian, do you have anything else you want to add?
• 1:15:16
  SPEAKER_02: No, thanks again and be safe.
• 1:15:18
  SPEAKER_00: Okay, take care.