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Full Retirement Age & Social Security Benefits · Money In Motion with Klaas Financial

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  Speaker 1: Niphone nines. They are open for you right now. If
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  Speaker 1: you have questions for our retirement planning professionals from Class
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  Speaker 1: Financial the website you can learn more. Let me actually
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  Speaker 1: I put out the idea that you can call in.
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  Speaker 1: I forgot to mention the phone numbers six oh eight
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  Speaker 1: three two one thirteen ten. That's six oh eight three
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  Speaker 1: two one thirteen ten. I was so excited though, to
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  Speaker 1: talk about the website colssfinancial dot com. That's coss Klaas
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  Speaker 1: It will be complementary to you again their number six
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  Speaker 1: oh eight four four two five six three seven. And
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  Speaker 1: if you'd like to join us this morning, all I
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  Speaker 1: get to do is give us call six oh eight
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  Speaker 1: three two one thirteen ten. That's six oh eight three
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  Speaker 1: two one thirteen ten. Joining us this week from Coss
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  Speaker 1: Financial is CJ. Closs and Eric Schwartz. Jay, how you
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  Speaker 1: doing this morning?
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  Speaker 2: I'm doing great, Sean. How are you?
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  Speaker 3: I'm doing really really good? And Eric, how have you been?
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  Speaker 4: I am doing great, Sean. It's a beautiful day and
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  Speaker 4: excited to talk about social security.
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  Speaker 1: It's going to be a great conversation. Yeah, it is
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  Speaker 1: a beautiful day as well.
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  Speaker 3: And as Eric.
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  Speaker 1: Mentioned, we are talking social security this morning, which is
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  Speaker 1: always a very very popular topic. Don't forget if you
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  Speaker 1: miss any part of today's program, you can always listen
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  Speaker 1: back at colssfinancial dot com. Really cool thing we do
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  Speaker 1: on the program each and every week is the Closs Quiz.
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  Speaker 1: Question the week your chance to win a fantastic prize.
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  Speaker 1: This week, our friends from Class Financially have provided a
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  Speaker 1: twenty five dollars gift card to Panera. Tell you a
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  Speaker 1: little bit later on the program how you could win
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  Speaker 1: that gift card, little tipto. It pays to pay attention
• 1:42
  Speaker 1: to the program. It's just about every show. The question
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  Speaker 1: answer come up during the program during Money in Motion
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  Speaker 1: with Coss Financial. And before we get to this week's
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  Speaker 1: topic in this week's conversation, let's actually take a look
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  Speaker 1: back Eric at last week's program get the question and
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  Speaker 1: answer there as well.
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  Speaker 4: Absolutely so thank you to our winner from last week,
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  Speaker 4: who was Linda from Sac City. Thank you to Linda
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  Speaker 4: and everybody for listening as always. And our question last
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  Speaker 4: week was true or false? More potential conflicts of interest
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  Speaker 4: arise when someone is selling you a product for a
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  Speaker 4: commission versus providing you with service for a fee, And
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  Speaker 4: the answer to that was true. So congratulations Linda.
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  Speaker 3: Nice work, Linda.
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  Speaker 1: I don't forget if you missed any part of last
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  Speaker 1: week's program or want to subscribe to the podcast to
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  Speaker 1: listen back to any show. Just that on over to
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  Speaker 1: class financial dot com again. Phone lines are open six
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  Speaker 1: to oh eight three two one thirteen ten. That's six
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  Speaker 1: h eight three two one thirteen ten. Gets you on
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  Speaker 1: the air with CJ Colas and Eric Schwartz, our retirement
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  Speaker 1: planning professionals from Class Financial. Of course, we talk about
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  Speaker 1: social security on the program, and I know a lot
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  Speaker 1: of folks I'm kind of assumed that the best move is,
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  Speaker 1: you know, of course, start collecting benefits asap, as soon
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  Speaker 1: as you can. But for those who are still working, CJ,
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  Speaker 1: what should they consider about about how their job might
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  Speaker 1: impact their benefits.
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  Speaker 2: Yeah, great question.
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  Speaker 5: So, since social Security can be complex, we do like
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  Speaker 5: to break it down into the key factors that impact
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  Speaker 5: your benefits and the best timing for you to start
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  Speaker 5: collecting collecting benefits. So one big question we'll tackle today
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  Speaker 5: is if you plan to work while drawing Social Security,
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  Speaker 5: how will that affect your benefits? But before we get
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  Speaker 5: into that, let's start with an even bigger picture kind
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  Speaker 5: of question, which is when should you begin taking your
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  Speaker 5: Social Security benefit? So step one is to just evaluate
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  Speaker 5: your overall income picture. This includes your retirement accounts like iras, pensions,
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  Speaker 5: after tax savings, things like that, any part time earnings
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  Speaker 5: you may have, and spousal income. Having a clear financial
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  Speaker 5: picture that will help you will help you decide when
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  Speaker 5: it makes the most sense to claim your Social Security benefit.
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  Speaker 5: Step two, then is to determine your full retirement age
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  Speaker 5: known as FR. Your FRA is when you qualify for
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  Speaker 5: your full on reduced benefit, which means you can both
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  Speaker 5: receive your full unreduced benefit and you can be working
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  Speaker 5: generating as much income as you want to and have
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  Speaker 5: no offset. More to come on that in a little bit,
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  Speaker 5: but knowing your FRA whatever that full retirement age is
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  Speaker 5: is critical because again it's your full unreduced Social Security benefit,
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  Speaker 5: and on top of that, you could be quote unquote
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  Speaker 5: double dipping, meaning still working and drawing Social Security and
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  Speaker 5: have no offset. Now you can find your full retirement
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  Speaker 5: age by logging into your individual account through www. Dot
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  Speaker 5: SSA dot gov. You have to establish a login to
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  Speaker 5: gain access to to your file, but you get the idea.
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  Speaker 5: You can go in there and see what is my
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  Speaker 5: full retirement age. Now, for those who don't want to
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  Speaker 5: do that work, we are going to make it easier
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  Speaker 5: for you, but you're just gonna have to pay attention. So,
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  Speaker 5: if you were born between nineteen forty three and nineteen.
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  Speaker 2: Fifty four, your FRA is sixty six.
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  Speaker 5: But let me rephrase that your FRA was sixty six,
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  Speaker 5: because anybody born within that window is already.
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  Speaker 2: Over sixty six.
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  Speaker 5: Okay, So if you're born between nineteen forty three and
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  Speaker 5: nineteen fifty four, your full retirement age was sixty six.
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  Speaker 5: If you were born between nineteen fifty five and nineteen
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  Speaker 5: fifty nine, your FRA is sixty six plus some number
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  Speaker 5: of months sixty six and two months, four months, six months.
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  Speaker 2: You get the idea.
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  Speaker 5: And then finally, if you were born in nineteen sixty
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  Speaker 5: or later. Like I'm raising my hand right now. You
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  Speaker 5: can't see me, but I'm raising my hand. Your full
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  Speaker 5: retirement age is sixty seven. So that's why we say
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  Speaker 5: you have to determine what your full retirement age is
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  Speaker 5: because it's not the same age for everybody. Now, you
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  Speaker 5: can claim benefits as early as sixty two. So because
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  Speaker 5: we talked about this full retirement age, but truth be told,
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  Speaker 5: people go, wait, I thought I could draw sole security
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  Speaker 5: at sixty two. You can, But remember what did I
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  Speaker 5: just tell you about your full retirement age. It is
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  Speaker 5: your full unreduced benefit at age, at your full retirement age.
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  Speaker 5: So if you draw at sixty two, it's pretty clear
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  Speaker 5: to say it must be some reduced benefit because I'm
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  Speaker 5: claiming early.
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  Speaker 2: And that's right.
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  Speaker 5: If your full retirement age is, say sixty six, and
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  Speaker 5: you claim at sixty two, you'll only receive seventy five
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  Speaker 5: percent of your full benefit full benefit meaning your full
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  Speaker 5: retirement age benefit. If you wait until age sixty five,
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  Speaker 5: you'll get ninety three point three percent of your full benefit.
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  Speaker 2: And here's the key.
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  Speaker 5: Once you start drawing early, it is a permanent reduction.
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  Speaker 2: You're not there.
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  Speaker 5: Now you can. There's some weird things you can do,
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  Speaker 5: like you know, paying it all back and then you know,
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  Speaker 5: and then basically reaccruing.
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  Speaker 2: But it's a nightmare. I'll just be frank with you.
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  Speaker 5: If you're gonna draw early, you're gonna permanently reduce your benefit.
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  Speaker 5: Now that's not to say that you'll get no increases,
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  Speaker 5: because do remember one you're on benefit, you can still
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  Speaker 5: get what are called cola's cost of living adjustments for
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  Speaker 5: inflation adjustments, but you're not going to ever go back
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  Speaker 5: to that like long term a crul of unreduced benefits,
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  Speaker 5: So just be cautious. These are irrevocable decisions generally, while
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  Speaker 5: there are some bailouts. If you draw early and decide
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  Speaker 5: you want to kind of reverse that decision, you can,
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  Speaker 5: but it is extremely painful to do so. Now, of course,
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  Speaker 5: the question is what happens youveclaimed Social Security before your
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  Speaker 5: full retirement age while still earning income.
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  Speaker 2: This is where we began the show.
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  Speaker 5: So if I draw it sixty two, sixty three, sixty four,
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  Speaker 5: this is before my full retirement age, and what if
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  Speaker 5: I'm still working?
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  Speaker 2: This is where it's really tricky.
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  Speaker 5: If you reach your full retirement age in twenty twenty five,
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  Speaker 5: the earnings limit is sixty two and sixty dollars before
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  Speaker 5: Social Security with holds benefits. They'll deduct one dollar for
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  Speaker 5: every three dollars earned over that limit, but only on
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  Speaker 5: earnings before your full retirement age month.
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  Speaker 2: Okay, so here's the.
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  Speaker 5: Key we're talking about twenty twenty five. So just think
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  Speaker 5: if I turn my full retirement age in twenty twenty five,
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  Speaker 5: and let's just say for you, that's sixty six and
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  Speaker 5: ten months, whatever it is, you have an earnings limit
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  Speaker 5: of sixty two, one hundred and sixty dollars before your
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  Speaker 5: full retirement age month. Now, if you're younger than full
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  Speaker 5: retirement age and working in twenty twenty five, so imagine I'm,
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  Speaker 5: you know, sixty three years old. So I'm not turning
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  Speaker 5: full retirement age in twenty twenty five. I'm sixty three
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  Speaker 5: years old, but I want to draw benefits in twenty
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  Speaker 5: twenty five, at sixty three years old, while still working,
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  Speaker 5: I have a working earnings limit of twenty three thousand,
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  Speaker 5: four hundred dollars, and again, Social Security will withhold one
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  Speaker 5: dollar of benefit for every two dollars earned above that amount.
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  Speaker 2: So what's going on here? Everybody like, what the heck?
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  Speaker 5: Well, social Security is trying to dissuade you from drawing
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  Speaker 5: earlier unless you really need it. Okay, they're trying to say, hey,
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  Speaker 5: your full unreduced benefit is at sixty six or sixty seven.
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  Speaker 2: Just wait right, but if.
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  Speaker 5: You want to draw early, you can. We just want
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  Speaker 5: to dissuade you in case you're double dipping, meaning still working.
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  Speaker 5: So if you're still working, they're just going to basically
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  Speaker 5: take some of that money away if it's over certain limits,
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  Speaker 5: and they'll push it out into the future. A lot
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  Speaker 5: of people go, oh, they're taking my money from me. No, no, no, no.
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  Speaker 5: Even when they even when they penalize you, so to speak,
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  Speaker 5: it's actually not a penalty. They're just pushing it out
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  Speaker 5: into the future when you get beyond your full retirement age.
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  Speaker 5: So our encouragement would be, if you are planning on
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  Speaker 5: drawing Social Security before your full retirement age and you
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  Speaker 5: plan to continue working, please please please talk to a
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  Speaker 5: good financial advisor, a good accountant, or talk to the
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  Speaker 5: Social Security administration themselves, because you're going to want to
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  Speaker 5: be super cautious.
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  Speaker 1: Talking this morning with a retirement planning professional CJ. Closs
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  Speaker 1: and Eric Schwartz. Of course, they come to us from
• 10:03
  Speaker 1: Class Financial. Their website class financial dot com. That's Klaasfinancial
• 10:08
  Speaker 1: dot com. And their telephone number six oh eight four
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  Speaker 1: four two five six three seven. No charge on the
• 10:13
  Speaker 1: initial get to know you appointment tech Loss Financial, It
• 10:15
  Speaker 1: will be complimentary for you again their number six oh
• 10:18
  Speaker 1: eight four four two five six three seven and c
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  Speaker 1: Gen Eric love questions. If you've got one loved you,
• 10:23
  Speaker 1: join us this morn on telphon number six oh eight
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  Speaker 1: three two one thirteen ten. That's six oh eight three
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  Speaker 1: two one thirteen ten. Get you right on the air
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  Speaker 1: with CJ. Closs and Eric Schwartz, and Eric I'll bring
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  Speaker 1: you in on this conversation. What about those folks who
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  Speaker 1: have already reached their full retirement age and they still
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  Speaker 1: want to work.
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  Speaker 4: Yeah, So the good news is once you hit your
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  Speaker 4: full retirement age, which CJ was just saying there somewhere
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  Speaker 4: between sixty six and sixty seven, there's no arning limit,
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  Speaker 4: so you can go you can go right back to
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  Speaker 4: work or continue working and earn as much as you
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  Speaker 4: would like and continue to collect your Social Security benefit.
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  Speaker 4: And if you if you can continue to work, your
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  Speaker 4: benefit may actually continue to grow if you click if
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  Speaker 4: you delay claiming, So again, like CJ said, you want
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  Speaker 4: to make sure you're thinking this through when you're deciding
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  Speaker 4: when to draw that benefit, and work with an advisor
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  Speaker 4: to help make that decision. If you wait until age
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  Speaker 4: seventy though, to start collecting, your benefit increases. Thanks to
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  Speaker 4: something we call delay retirement credits or drcs, Social Security
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  Speaker 4: increases your benefit by up to eight percent per year
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  Speaker 4: if you delay past your full retirement age up until
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  Speaker 4: age seventy. Now, once you get to seventy, there there's
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  Speaker 4: no further increase, so generally it makes sense to start
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  Speaker 4: collecting at that point, but you do get a larger
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  Speaker 4: benefit if you wait even beyond that full retirement age.
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  Speaker 1: Really exciting stuff if you if you're in that position,
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  Speaker 1: you know you talk about that eight percent, that's a
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  Speaker 1: nice that's a nice growth number if you can hold off.
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  Speaker 1: As we talked this morning with Eric Schwartz and CJ.
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  Speaker 1: Closs our retirement plan professionals from Class Financial, don't forget.
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  Speaker 1: If you've got a question, We've got a phone line
• 12:00
  Speaker 1: for you right now, love to have you join us.
• 12:02
  Speaker 1: Six oh eight three two one thirteen ten gets you
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  Speaker 1: on the air with CJ and Eric. Don't forget, of course,
• 12:07
  Speaker 1: about the website Cossfinancial dot com. That's Coss k l
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  Speaker 1: aa S Financial dot com and the tough number for
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  Speaker 1: the office right here in Madison six oh eight four
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  Speaker 1: four two five six three seven. What about taxes when
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  Speaker 1: it comes to social Security? We'll get the details on that.
• 12:21
  Speaker 1: Next has Money in Motion with Coss Financial continues right
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  Speaker 1: here thirteen ten WYB I talking with our retirement planning professionals, CJ.
• 12:29
  Speaker 1: Closs and Eric Schwartz. Of course they come to us
• 12:31
  Speaker 1: from Class Financial. The website it's Clossfinancial dot com. That's
• 12:35
  Speaker 1: Coss k l a a S Financial dot Com. They're
• 12:38
  Speaker 1: telephone number six oh eight four four two five six
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  Speaker 1: three seven talking this week about social security and Eric
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  Speaker 1: before the break, you got to talk about the fun
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  Speaker 1: stuff the d r cs.
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  Speaker 3: Let's talk let's talk.
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  Speaker 1: Taxes on this one, and I'll let you explain how
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  Speaker 1: this all works.
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  Speaker 4: Yeah. We always end up here, don't we, Sean.
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  Speaker 2: Yeah.
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  Speaker 4: So the short answer to the question we often get
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  Speaker 4: from clients, which is do my Social Security benefits actually
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  Speaker 4: get taxed? Is yes, they can be and we'll often
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  Speaker 4: hear people say, well, I thought that Social Security benefits
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  Speaker 4: weren't taxed, And the short answer to that is, well,
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  Speaker 4: at one point they weren't, but it's been a long
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  Speaker 4: time since they weren't taxed, and today you can expect
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  Speaker 4: to be taxed at the federal and even at the
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  Speaker 4: state level.
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  Speaker 3: So let's start with the federal level.
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  Speaker 4: That's that's kind of the first piece we'll bite off here.
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  Speaker 4: If you file as an individual and you have a
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  Speaker 4: combined income, so actually I want to stop there, combined income.
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  Speaker 4: I want to kind of define this for folks. The
• 13:43
  Speaker 4: Social Security Administration defines combined income as your adjusted gross
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  Speaker 4: income plus fifty percent of your Social Security benefits. There's
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  Speaker 4: a couple other things they'll add back in there, like
• 13:57
  Speaker 4: non taxable interest and a couple other idea, but the
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  Speaker 4: main things to think about are your adjusted growth income
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  Speaker 4: plus fifty percent of your Social Security income. So, if
• 14:07
  Speaker 4: you're filing as an individual and you have a combined
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  Speaker 4: income of twenty five thousand to thirty four thousand dollars
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  Speaker 4: in the year, up to fifty percent of your benefits
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  Speaker 4: may be taxable. Now, if you earn more than that
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  Speaker 4: thirty four thousand dollars, up to eighty five percent of
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  Speaker 4: that actually may be taxable. Now, if you file jointly
• 14:28
  Speaker 4: in your combined income which remember adjusted growth income plus
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  Speaker 4: fifty percent of Social Security benefits, If your combined income
• 14:35
  Speaker 4: is between thirty two thousand and forty four thousand, up
• 14:39
  Speaker 4: to fifty percent of your benefits may be taxable. Now
• 14:42
  Speaker 4: if you pay, or if your combined income is more
• 14:45
  Speaker 4: than forty four thousand dollars, then again you're up to
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  Speaker 4: eighty five percent of the benefit that may be taxable.
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  Speaker 4: The federal government will not tax more than eighty five
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  Speaker 4: percent of the Social Security benefits that you receive. Let's
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  Speaker 4: talk briefly here about state t taxes. Fortunately for our
• 15:02
  Speaker 4: listeners here in Wisconsin, the state of Wisconsin does not
• 15:05
  Speaker 4: tax Social Security benefits. But as of twenty twenty five,
• 15:11
  Speaker 4: here there are nine states remaining that do tax Social Security.
• 15:15
  Speaker 4: So I'm just going to go through those briefly. That
• 15:17
  Speaker 4: would be Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont,
• 15:27
  Speaker 4: and West Virginia. So those are again the nine states
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  Speaker 4: that currently tax Social Security. And a reminder to our
• 15:33
  Speaker 4: listeners here in the great state of Wisconsin. We do
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  Speaker 4: not currently tax social Security benefits. And keep in mind
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  Speaker 4: that list of nine states when you're thinking about where
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  Speaker 4: you may want to retire someday.
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  Speaker 1: Really good, really good advice there, and that's important to
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  Speaker 1: keep in mind as well, a lot of great information
• 15:51
  Speaker 1: from our retirement plan professionals, Eric Schwartz and CJ.
• 15:53
  Speaker 3: Class.
• 15:54
  Speaker 1: Of course, you can learn more online class financial dot com.
• 15:56
  Speaker 1: That's Class k l a as Financial dot com. They're
• 15:59
  Speaker 1: telephon number six oh eight four four two five six
• 16:02
  Speaker 1: three seven. No charge for that initial get to know
• 16:04
  Speaker 1: you appoinment tech Laws Financial. It will be complementary to
• 16:06
  Speaker 1: you again their office six oh eight four four two
• 16:09
  Speaker 1: five six three seven. So CJ, if someone is considering
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  Speaker 1: taking starting Social Security this year one, how do they apply?
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  Speaker 1: And I know you mentioned earlier cost of living? How
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  Speaker 1: does that impact benefits?
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  Speaker 2: Yeah, good questions, Sean.
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  Speaker 5: So the earliest you can apply, as we mentioned before,
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  Speaker 5: is at age sixty two, though again this won't be
• 16:31
  Speaker 5: your highest benefit.
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  Speaker 2: This is going to be a reduced benefit. You can
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  Speaker 2: apply online at www dot SSA dot gov. Establish a
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  Speaker 2: log in.
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  Speaker 5: You can actually put in routing information do withholdings all
• 16:43
  Speaker 5: of it.
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  Speaker 2: You can also call eight.
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  Speaker 5: Hundred seven seven two one two one three or visit
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  Speaker 5: a local social security office. Now, by the way, people
• 16:52
  Speaker 5: have heard nightmares about social security offices. Eric and I
• 16:55
  Speaker 5: would say, hey, just be smart about it. Look at
• 16:57
  Speaker 5: when they're busiest. You can actually go online and they'll
• 17:00
  Speaker 5: show you when they're going to be busiest. So just
• 17:02
  Speaker 5: go in earlier in the morning when you know you
• 17:04
  Speaker 5: have some time to spare, and it can be nice
• 17:07
  Speaker 5: to speak to a human being to get signed up
• 17:09
  Speaker 5: for social Security. Once you've done that, there's typically not
• 17:11
  Speaker 5: a lot of you know, back and forth involvement thereafter.
• 17:14
  Speaker 5: So again online, calling the phone number, or going to
• 17:17
  Speaker 5: a local social security office. And then another important factor
• 17:21
  Speaker 5: would be that you can apply up to four months
• 17:23
  Speaker 5: before you turn sixty two or three months before you
• 17:27
  Speaker 5: want your benefit to start. So again, four months before
• 17:31
  Speaker 5: you turn sixty two or three months before you want
• 17:33
  Speaker 5: your benefit to start. I like to just say call
• 17:35
  Speaker 5: it three months, just three months in advance of when
• 17:38
  Speaker 5: you're going to draw social Security, go in and try
• 17:40
  Speaker 5: to get signed up. I would also say, because whether
• 17:43
  Speaker 5: you're online or at an office, you say, hey, I'm
• 17:46
  Speaker 5: here three months early I did my due diligence, and
• 17:48
  Speaker 5: so I want it to begin, you know, November first
• 17:50
  Speaker 5: of twenty twenty five, and inevitably, you know, it's like
• 17:54
  Speaker 5: December first and you haven't gotten your first payment.
• 17:56
  Speaker 2: So here's what we typically say.
• 17:58
  Speaker 5: The first payment is all ways a little behind. Now,
• 18:01
  Speaker 5: if Socialecurity Administration is listening to me and you disagree
• 18:04
  Speaker 5: with me, I'm so sorry. This has just been my
• 18:06
  Speaker 5: lived experience with clients. But it doesn't matter. It's not
• 18:10
  Speaker 5: that they won't catch you up or double pay you
• 18:13
  Speaker 5: or make sure that you started on that date. It's
• 18:15
  Speaker 5: almost like just this big crank that takes a while
• 18:17
  Speaker 5: to get started. So do try to make sure you
• 18:20
  Speaker 5: sign up three months in advance and then be a
• 18:22
  Speaker 5: little bit flexible on that first payment because it can take,
• 18:25
  Speaker 5: you know, a month or so for that crank to
• 18:27
  Speaker 5: get going, and then once it's going, it's kind of
• 18:29
  Speaker 5: like a locomotive, it's hard to turn.
• 18:30
  Speaker 2: Off as well.
• 18:32
  Speaker 5: So anyways, just be aware of that. Now, if you're
• 18:35
  Speaker 5: sixty five, you can apply for Medicare and Social Security
• 18:40
  Speaker 5: at the same time. This gets a little confusing for
• 18:43
  Speaker 5: people because they're like, hey, I want to sign up
• 18:45
  Speaker 5: for socialecurity and then they I just retired and they
• 18:48
  Speaker 5: go and do this, and there's some medicare components that
• 18:51
  Speaker 5: they have to you know, watch out for. And then
• 18:54
  Speaker 5: we mentioned cost of living adjustments. And each October, the
• 18:58
  Speaker 5: Social Security Administration and announces the cost of living increase
• 19:02
  Speaker 5: for the following year. This adjustment's help. This adjustment helps
• 19:06
  Speaker 5: benefits keep up with inflation and applies to all Social
• 19:10
  Speaker 5: Security recipients starting in January. Let me just pause on this.
• 19:16
  Speaker 5: This is a huge point of confusion for people. They say,
• 19:20
  Speaker 5: wait a minute, I heard that if I wait, it
• 19:23
  Speaker 5: grows by six, seven, eight percent something like that. And
• 19:27
  Speaker 5: it's like, yeah, that's if you're not drawing, okay. And actually,
• 19:31
  Speaker 5: once you get beyond your full retirement age, Eric was
• 19:34
  Speaker 5: talking about it, it's a linear eight percent if you
• 19:38
  Speaker 5: wait after sixty two up to your full retirement retirement age.
• 19:43
  Speaker 5: For every year you wait, it's about a seven percent increase. Okay,
• 19:47
  Speaker 5: so seven percent increase, eight percent increase, So somewhere in
• 19:50
  Speaker 5: that neighborhood. For every year I wait to draw, I
• 19:53
  Speaker 5: get a significant benefit increase That is totally different than
• 19:59
  Speaker 5: if I I'm already drawing. If I'm drawing, I actually
• 20:03
  Speaker 5: still get future increases. It's that those increases are inflationary.
• 20:08
  Speaker 2: That's the key.
• 20:08
  Speaker 5: The increases are inflationary, meaning there may be no increase,
• 20:11
  Speaker 5: or it might be one percent or two percent or
• 20:13
  Speaker 5: seven percent. It depends on what inflation is doing. So
• 20:17
  Speaker 5: just recognize there is a difference between delaying your benefit
• 20:20
  Speaker 5: and getting an increase, which is a guaranteed higher increase
• 20:23
  Speaker 5: amount versus once you've started drawing and having an inflation adjustment.
• 20:28
  Speaker 5: So I hope that's helpful for people. But just remember
• 20:32
  Speaker 5: that there is a cost of living adjustment to keep
• 20:35
  Speaker 5: up your benefit with the cost of goods and services
• 20:39
  Speaker 5: as the increase in the future.
• 20:40
  Speaker 1: Can I ask you a quick question, c J, because I
• 20:41
  Speaker 1: know somebody's asking us, what if we have deflation, can
• 20:45
  Speaker 1: that cost of living go the other way?
• 20:47
  Speaker 2: Yeah? Good question.
• 20:48
  Speaker 5: I believe the answer is no. Eric, can you confirm
• 20:52
  Speaker 5: that we haven't ever had a deflationary decrease on Social Security?
• 20:55
  Speaker 2: Have we not?
• 20:57
  Speaker 4: That I'm aware of. I was going to say the
• 20:58
  Speaker 4: exact same thing.
• 21:00
  Speaker 5: Yeah, we could be wrong on that one, Sean. That's
• 21:02
  Speaker 5: the first time I've ever forgotten the question. So yeah,
• 21:05
  Speaker 5: I'm going to like after the show, I'm going to
• 21:07
  Speaker 5: be looking online at the history because that history is
• 21:09
  Speaker 5: publicly available. Sure, I just can't remember if there's ever
• 21:12
  Speaker 5: any deflation area, but I don't think so.
• 21:14
  Speaker 3: Okay, awesome, awesome, awesome. Anything else with the CJ. As
• 21:18
  Speaker 3: we talk with CJ.
• 21:19
  Speaker 1: Closs and Eric Schwartzer, retirement planning professionals from Class Financial
• 21:22
  Speaker 1: what about for folks who who haven't yet started collecting
• 21:26
  Speaker 1: their benefit and cola increase?
• 21:27
  Speaker 3: Any touched on it a little bit?
• 21:29
  Speaker 4: There?
• 21:29
  Speaker 3: What's that, pia there?
• 21:30
  Speaker 2: Yeah? Yeah, good question.
• 21:32
  Speaker 5: So again, if you haven't started collecting on your benefit,
• 21:35
  Speaker 5: you get these consistent increases. Those increases are fairly standard.
• 21:39
  Speaker 5: Between sixty two and your full retirement age. It's around
• 21:42
  Speaker 5: seven percent per year forevery year that you wait. But
• 21:44
  Speaker 5: then after you get beyond and by the way, you're
• 21:47
  Speaker 5: not going to find that number I just mentioned if
• 21:50
  Speaker 5: you go googling around, like wait, between.
• 21:51
  Speaker 2: Sixty two and full retirement.
• 21:52
  Speaker 5: Age, because the way Social Security defines that as they say, no, no, no,
• 21:56
  Speaker 5: no no, you're just going to get a reduction of
• 21:58
  Speaker 5: your full amount. Okay, so they call it your full
• 22:02
  Speaker 5: retirement age is your unreduced benefits. So if you draw early,
• 22:05
  Speaker 5: it's just a reduction. What I'm doing is I'm converting
• 22:08
  Speaker 5: that in the math and saying it's about seven ish
• 22:11
  Speaker 5: percent for every year that you wait. Now, once you
• 22:14
  Speaker 5: get to your unreduced benefit at full retirement age, then
• 22:17
  Speaker 5: it's a linear eight percent for every year you wait,
• 22:20
  Speaker 5: it's an eight percent increase. But here's the kicker, everybody.
• 22:24
  Speaker 5: If you're still working throughout all of this, and you're
• 22:26
  Speaker 5: adjusting up what's called kind of like income calculation or
• 22:32
  Speaker 5: your highest forty quarters or thirty five years of inflation
• 22:38
  Speaker 5: adjusted earnings, you can actually get more than a.
• 22:41
  Speaker 2: Seven or eight percent increase.
• 22:43
  Speaker 5: So a lot of math goes into this. You actually
• 22:45
  Speaker 5: need to understand the entire formula, the entire calculation to
• 22:48
  Speaker 5: see how it goes. But the biggest thing we want
• 22:50
  Speaker 5: people to realize is that if you draw sol security
• 22:53
  Speaker 5: benefits earlier, you are going to permanently reduce your benefit.
• 22:58
  Speaker 5: Which is why we often say caution. If you're gonna
• 23:02
  Speaker 5: do that, talk to a professional who can give you guidance.
• 23:04
  Speaker 3: Talking this morning with CJ.
• 23:06
  Speaker 1: Closs and Eric Schwartz, they are our retirement planning professionals
• 23:09
  Speaker 1: from Class Financial Online Costs Financial dot com. That's Coss
• 23:13
  Speaker 1: k l aa S Financial dot com. Great website to
• 23:16
  Speaker 1: learn more about COSS Financial, get to know the team,
• 23:18
  Speaker 1: also learn about their separate divisions. Great opportunity as well.
• 23:21
  Speaker 1: Listen back to this in previous shows podcasts. All online
• 23:24
  Speaker 1: also another option, of course, to submit a question in
• 23:27
  Speaker 1: the Money and Motion listener question corner. As a matter
• 23:29
  Speaker 1: of fact, we'll answer Andy's question and do the Class
• 23:31
  Speaker 1: Quiz question leak next. As Money in Motion with Coss
• 23:34
  Speaker 1: Financial continues right here on thirteen ten. Wiv A a
• 23:37
  Speaker 1: lot of great information in this week's program, as we
• 23:40
  Speaker 1: get every week from our friends at Class Financial. Don't
• 23:42
  Speaker 1: forget if you miss any part of the program, you
• 23:45
  Speaker 1: want to listen back or you want to share the show,
• 23:47
  Speaker 1: you can subscribe as well all online at COSS Financial
• 23:50
  Speaker 1: dot com. That's Coss k l a a s Financial
• 23:53
  Speaker 1: dot com to help it up for the office right
• 23:54
  Speaker 1: here in Madison six eight four four two five six
• 23:58
  Speaker 1: three seven. No charge for the initial gets to Know
• 24:00
  Speaker 1: You appointment tech Loss Financial. It will be complimentary to
• 24:02
  Speaker 1: you again their number six oh eight four four two
• 24:05
  Speaker 1: five six three seven. Many in Money in Motion Listener
• 24:10
  Speaker 1: Question corner and I am convinced CJ. When Malia came
• 24:13
  Speaker 1: up with both the class Quiz question the week and
• 24:15
  Speaker 1: the Money in Motion listener question corner.
• 24:17
  Speaker 3: She was trying to.
• 24:18
  Speaker 1: See how how well I can do with my with
• 24:21
  Speaker 1: my annunciation and pronunciations.
• 24:23
  Speaker 3: They are both kind of tongues.
• 24:25
  Speaker 1: Always our goal, always our goal. It's great stuff. We
• 24:28
  Speaker 1: got a great question this week as well, CJ. Andy
• 24:31
  Speaker 1: wrote in he says I'm retiring later this year and
• 24:34
  Speaker 1: wondering if I should roll over my four oh one
• 24:36
  Speaker 1: k into an IRA or leave it with my employer.
• 24:40
  Speaker 1: What should I consider before making that decision.
• 24:44
  Speaker 5: Well, again, thanks Andy for submitting the question. We love
• 24:47
  Speaker 5: it when these coming online because it gives us time
• 24:49
  Speaker 5: to be prepared for him. But this one's a pretty
• 24:51
  Speaker 5: straightforward one. Before I answer Andy Andy's question, we were
• 24:55
  Speaker 5: able to confirm by the way that there is no
• 24:58
  Speaker 5: decrease for d inflation on Social Security recipients.
• 25:02
  Speaker 2: I know you asked that before, Shawn. Thank you.
• 25:04
  Speaker 5: So that's the answer. There's no reductions to your benefit,
• 25:08
  Speaker 5: just increases. Now, there may be no increase if there's
• 25:11
  Speaker 5: no inflation, but you're not going to see a reduction
• 25:13
  Speaker 5: for deflation. Okay, So to Andy's question, Great question, Andy,
• 25:18
  Speaker 5: Should you roll over your old four to one K
• 25:20
  Speaker 5: plan from your old employer or should you leave it
• 25:23
  Speaker 5: with your old employer? Truth be told, Andy, it's a
• 25:26
  Speaker 5: pretty complicated answer. You're probably going to want to talk
• 25:28
  Speaker 5: to your financial advisor or accountant. It depends on what
• 25:31
  Speaker 5: you're trying to accomplish, what your kind of sensitivity to
• 25:34
  Speaker 5: fees are, how many access to investments that you want.
• 25:38
  Speaker 5: But here would be some general guidance for you. If
• 25:41
  Speaker 5: your plan has low fees and good investment choices, and
• 25:45
  Speaker 5: you like managing money on your own, then leaving it
• 25:48
  Speaker 5: in the old for one K plan could be fine. Now,
• 25:53
  Speaker 5: there's some things you need to be aware of, which is,
• 25:55
  Speaker 5: if that company that you worked at decides to move
• 25:58
  Speaker 5: that four one K plan, you're going to get jerked
• 26:01
  Speaker 5: around with them to whatever the new plan provider is.
• 26:03
  Speaker 5: If they decide to change their fees, you're going to
• 26:06
  Speaker 5: get jerked around with that. And then when you go
• 26:08
  Speaker 5: to like perform distributions, it's a lot more herky jerky
• 26:13
  Speaker 5: inside of a four to one K plan structure. Because
• 26:15
  Speaker 5: they're standard with holdings, it's harder to increase or decrease
• 26:18
  Speaker 5: your withholdings. Setting up systematic withdrawals can be a little
• 26:22
  Speaker 5: more difficult.
• 26:23
  Speaker 2: But again, if all you.
• 26:24
  Speaker 5: Care about is like, no, I'm young, I'm not performing distributions.
• 26:28
  Speaker 5: It's just a low cost plan.
• 26:29
  Speaker 3: Who knows.
• 26:29
  Speaker 5: Maybe your employer pays all the fees associated with the plan.
• 26:33
  Speaker 5: That could be great, right, Or maybe you're fifty five
• 26:36
  Speaker 5: or fifty six and you want to take advantage of
• 26:38
  Speaker 5: the separation from service after the age of fifty five
• 26:41
  Speaker 5: provision that gives you access to your money before fifty
• 26:44
  Speaker 5: nine and a half. That's another great option. So you
• 26:47
  Speaker 5: get the point, Andy, it's a little bit complicated.
• 26:51
  Speaker 2: Now.
• 26:51
  Speaker 5: Obviously, if you roll money into an IRA, you typically
• 26:54
  Speaker 5: have a lot broader range of investment options, way more
• 26:57
  Speaker 5: control over your withdrawals, your district patterns, where you want
• 27:01
  Speaker 5: the money sent. You could you could invest in cheaper funds,
• 27:06
  Speaker 5: or you could hire a money manager to manage the
• 27:08
  Speaker 5: money for you, like our firm does right to actually
• 27:10
  Speaker 5: manage the investments and make decisions for you. So there's
• 27:13
  Speaker 5: no doubt that when you roll money into an IRA,
• 27:15
  Speaker 5: you get a lot more freedom and flexibility of choice,
• 27:19
  Speaker 5: But that doesn't.
• 27:20
  Speaker 2: Mean it's necessarily the right decision.
• 27:22
  Speaker 4: For you.
• 27:22
  Speaker 5: So what we would say, Andy is great question. It
• 27:26
  Speaker 5: just kind of depends on who you are and what
• 27:28
  Speaker 5: you're trying to accomplish.
• 27:29
  Speaker 1: Great question, Andy, And if you've got a question, of course,
• 27:31
  Speaker 1: we always open the phone lines up during the program.
• 27:34
  Speaker 1: You can also email just head on over to Cossfinancial
• 27:36
  Speaker 1: dot com. That's Coss k l aa S Financial dot com.
• 27:40
  Speaker 1: Can submit a question right online to be answered here
• 27:43
  Speaker 1: on the program.
• 27:44
  Speaker 3: So we have getting over the website. You can get
• 27:45
  Speaker 3: to no CJ.
• 27:46
  Speaker 1: Can get to know Eric, can get to know the
• 27:47
  Speaker 1: whole team as a matter of fact at COSS Financial
• 27:49
  Speaker 1: on their website. Learn more about their separate divisions as well.
• 27:52
  Speaker 1: And listen back to this in previous shows podcasts that'll
• 27:55
  Speaker 1: all available to you at Cossfinancial dot com. That's Coss
• 27:58
  Speaker 1: k l aa s finalil dot com. Time now for
• 28:01
  Speaker 1: the Closs Quiz Question of the Week. It works like this.
• 28:03
  Speaker 1: In just a moment, I'll ask you the class Quiz
• 28:05
  Speaker 1: question the week, and you'll have thirty minutes from that
• 28:07
  Speaker 1: program today's program to call the Class Financial Office right
• 28:10
  Speaker 1: here in Madison at six oh eight four four two five,
• 28:13
  Speaker 1: six three seven. If you are the first car with
• 28:15
  Speaker 1: correct answer you win this week's prize, which is a
• 28:17
  Speaker 1: twenty five dollars gift card to Panera. This week's Coloss
• 28:21
  Speaker 1: Quiz question the week is this, What is the earliest
• 28:24
  Speaker 1: you can generally apply and receive your Social Security retirement benefit?
• 28:30
  Speaker 1: Is it age fifty nine or age sixty two? Telephone
• 28:34
  Speaker 1: number six oh eight four four two, five six three
• 28:37
  Speaker 1: seven first call. Correct answer when that twenty five dollars
• 28:39
  Speaker 1: gift card to Panera North good as well. That's COSS
• 28:41
  Speaker 1: Financial's office right here in Madison, that first visit, that
• 28:44
  Speaker 1: first appoyment. It will be complementary to you again their
• 28:47
  Speaker 1: number six oh eight four four two five six three seven.
• 28:51
  Speaker 4: C J.
• 28:51
  Speaker 5: Eric.
• 28:52
  Speaker 1: It is always fantastic chatting with you guys. You keep
• 28:54
  Speaker 1: cool and enjoy the weather and we'll talk real soon.
• 28:57
  Speaker 2: Thanks Sean.
• 28:58
  Speaker 3: Thanksean, Take care guys.
• 28:59
  Speaker 1: Doctor already Greer joins us next right here on thirteen
• 29:02
  Speaker 1: ten w Ibi