Latest / Money In Motion with Klaas Financial / Social Security Timing

Transcript

Social Security Timing · Money In Motion with Klaas Financial

• 0:00
  Speaker 1: And our phone lines are open to you right now
• 0:02
  Speaker 1: at six oh eight three two one thirteen ten. That's
• 0:05
  Speaker 1: six oh eight three two one thirteen ten. If you
• 0:08
  Speaker 1: have questions for our retirement planning professionals from Class Financial
• 0:11
  Speaker 1: love to hear from you this morning, get your ride
• 0:13
  Speaker 1: on the air. Of course, you can learn more about
• 0:15
  Speaker 1: COSS Financial on their website Coss Financial dot com. That's
• 0:19
  Speaker 1: spelled klaas Financial dot com. Website's got a ton of
• 0:23
  Speaker 1: great information about Coss Financial. Learn about their separate divisions.
• 0:26
  Speaker 1: You can learn about the team at Costs Financial. You
• 0:28
  Speaker 1: can also sign up right online for the weekly Market
• 0:31
  Speaker 1: Pulse newsletter. Again, that available to you at Cossfinancial dot com.
• 0:36
  Speaker 1: Their telephone number six oh eight four four two five
• 0:39
  Speaker 1: six three seven. No charge for that initial get to
• 0:41
  Speaker 1: know your appointment at Costs Financial. It will be complementary
• 0:44
  Speaker 1: for you again their telephone number six oh eight four
• 0:46
  Speaker 1: four two five six three seven. And you get on
• 0:49
  Speaker 1: the air and join the program this morning, give us
• 0:51
  Speaker 1: call six oh eight three two one thirteen ten. That's
• 0:53
  Speaker 1: six oh eight three two one thirteen ten. Joined this
• 0:57
  Speaker 1: week by CJ Closs and Eric Schwartz. CJI, how you
• 1:00
  Speaker 1: doing this morning?
• 1:01
  Speaker 2: I'm doing great. Good morning Sean, morning Cej.
• 1:03
  Speaker 1: Great to talk with you.
• 1:04
  Speaker 2: Eric.
• 1:04
  Speaker 1: How have you been?
• 1:06
  Speaker 3: Good morning Sean. I'm I'm doing great, and it's it's
• 1:09
  Speaker 3: been a good week.
• 1:09
  Speaker 1: It has been. It looks like a great week and
• 1:11
  Speaker 1: great weekend ahead. And yeah, we've got a great conversation
• 1:15
  Speaker 1: ahead as well, one of I think out of all
• 1:17
  Speaker 1: of them, and I put it back to you guys,
• 1:20
  Speaker 1: because I think you probably would agree on this as
• 1:22
  Speaker 1: anytime we talk so security seems to be one of
• 1:24
  Speaker 1: those biggest, bigger topics and we get a lot of
• 1:27
  Speaker 1: questions and a lot of interaction as well, so it
• 1:29
  Speaker 1: should be it should be a pretty good show ahead. Again,
• 1:32
  Speaker 1: we'll be talking about navigating that social security maze and
• 1:35
  Speaker 1: certain terms and things that you hear when it comes
• 1:37
  Speaker 1: to social security and why they matter and how they
• 1:40
  Speaker 1: matter as well as mentioned of course, oftentimes get questions
• 1:44
  Speaker 1: about social security and whether it's on the exact topic
• 1:46
  Speaker 1: we're talking about, or if you just have a question
• 1:48
  Speaker 1: about retirement planning in general. We'd love to have you
• 1:50
  Speaker 1: join us helpful number here at station six eight three
• 1:53
  Speaker 1: two one thirteen ten. That's six oh eight three two
• 1:55
  Speaker 1: one thirteen ten. Before we start this week's conversation though
• 1:59
  Speaker 1: about so scarity, let's actually take a look back at
• 2:01
  Speaker 1: last week's program. Of course, each and every week we
• 2:03
  Speaker 1: do the Class Quiz Question week. This week will be
• 2:05
  Speaker 1: no exception, chance to win a great prize from our
• 2:07
  Speaker 1: friends at class Financial, chance to win a twenty five
• 2:09
  Speaker 1: dollars gift card to Sephora. Typically the question and answer
• 2:12
  Speaker 1: come up during the program, so listen closely for the
• 2:16
  Speaker 1: question and answer for the Class Quiz Question week. We'll
• 2:18
  Speaker 1: get you more details on how you can win it
• 2:19
  Speaker 1: later on in the program. But again, before we get
• 2:22
  Speaker 1: rolling on this week's topic, let's actually look back at
• 2:24
  Speaker 1: last week's program and talk about the click Closs Quiz
• 2:27
  Speaker 1: question week. Get the question and the answer there as well.
• 2:31
  Speaker 3: Yeah, so thank you to everybody for listening. As always,
• 2:35
  Speaker 3: in big congratulations to our winner from last week, and
• 2:37
  Speaker 3: that was Penny from Stoton. The question was there are
• 2:41
  Speaker 3: three simplified types of investor personalities and it's a fill
• 2:45
  Speaker 3: in the blank so that they are conservative, moderate, and
• 2:48
  Speaker 3: blank and the answer was aggressive. So again congratulations to
• 2:53
  Speaker 3: Penny forgetting that question right.
• 2:55
  Speaker 1: And of course, if you want to listen back to
• 2:57
  Speaker 1: last week's program, or maybe a miss part Today Show,
• 3:00
  Speaker 1: or catch any of the programs. You can always head
• 3:02
  Speaker 1: on over to Clossfinancial dot com. That's Closs k l
• 3:06
  Speaker 1: a as financial dot com. Listen to the podcast and
• 3:08
  Speaker 1: subscribe there as well. Congratulations. As Eric points out to Penny,
• 3:13
  Speaker 1: you two can be like Penny, listen close to the
• 3:14
  Speaker 1: program because again typically the question answer to class quiz
• 3:17
  Speaker 1: question we come up during the show, and of course
• 3:19
  Speaker 1: we're diving into social security and kind of that maze
• 3:22
  Speaker 1: this week and full retirement age of course starts sixty two.
• 3:26
  Speaker 1: What's kind of the real deal and let's kind of
• 3:28
  Speaker 1: get that get that low down CJ. Nope, did we
• 3:34
  Speaker 1: lose CJ? Oh No, Eric, are you able to.
• 3:40
  Speaker 3: Charms to hear me?
• 3:41
  Speaker 1: I can hear you, lon and clear. For some reason,
• 3:42
  Speaker 1: we're not we're not hearing CJ. But would you like
• 3:45
  Speaker 1: to like to take this one? Take a take a
• 3:47
  Speaker 1: crack at it.
• 3:47
  Speaker 3: I sure can, excellent. Yes, yes. So. One of the
• 3:51
  Speaker 3: biggest questions we get, you know, as it relates to
• 3:54
  Speaker 3: retirement is surrounding social security. This is a big piece
• 3:58
  Speaker 3: of the puzzle for a lot of folks, and it
• 4:01
  Speaker 3: seems to be in the news. No matter what's going
• 4:03
  Speaker 3: on in the world. So let's just kind of dive
• 4:05
  Speaker 3: into to some of the I'll say, like big details here.
• 4:10
  Speaker 3: So first things. First, full retirement age or FRA. Think
• 4:15
  Speaker 3: of this as your Social Security sweet spot. Okay. It
• 4:18
  Speaker 3: is the first age at which you can receive your
• 4:21
  Speaker 3: full Social Security benefit without a reduction for claiming early.
• 4:27
  Speaker 3: So full retirement age it does vary a little bit.
• 4:29
  Speaker 3: It's somewhere between sixty six and sixty seven. For folks
• 4:35
  Speaker 3: who are born between nineteen forty three and nineteen fifty four,
• 4:38
  Speaker 3: your full retirement age is sixty six. And then those
• 4:42
  Speaker 3: folks born between fifty five nineteen fifty five and nineteen
• 4:45
  Speaker 3: fifty nine, you will have your Social Security full retirement
• 4:49
  Speaker 3: age be sixty six and some number of months it varies.
• 4:54
  Speaker 3: And then finally for people born after nineteen sixty, it's
• 4:58
  Speaker 3: pretty simple. Sixty seven is your full retirement age. And
• 5:01
  Speaker 3: again this is where you're gonna get one hundred percent
• 5:05
  Speaker 3: of your benefit. Now, you can start receiving benefits before
• 5:09
  Speaker 3: your full retirement age, okay, So you can start as
• 5:11
  Speaker 3: early as sixty two. Now there's a trade off. You're
• 5:14
  Speaker 3: gonna get less each month, right, but you are collecting
• 5:17
  Speaker 3: for potentially more years. And the other thing is you
• 5:22
  Speaker 3: can start as early as sixty two, but you can
• 5:24
  Speaker 3: start on any month between sixty two and seventy. Okay,
• 5:29
  Speaker 3: So sometimes people think, gosh, I can only collect at
• 5:32
  Speaker 3: sixty two, sixty five, and sixty seven. No Social Security
• 5:37
  Speaker 3: will will pro rate your benefit down to the month,
• 5:41
  Speaker 3: so you can start anytime between between sixty two and seventy.
• 5:46
  Speaker 3: How much will you get? When we get this question
• 5:48
  Speaker 3: on the best place to get that information is to
• 5:52
  Speaker 3: get a personalized number is to go to SSA dot
• 5:56
  Speaker 3: gov make an account, and historically we away to wait
• 6:00
  Speaker 3: for things to be mailed to us and they would come,
• 6:02
  Speaker 3: you know, maybe once a year, sometimes not. And SSA
• 6:06
  Speaker 3: doc gov has a ton of great tools just to
• 6:09
  Speaker 3: understand what your benefits going to look like, how much
• 6:12
  Speaker 3: you can get, and what your options are. So I
• 6:15
  Speaker 3: really really encourage people go to SSA doc gov and
• 6:19
  Speaker 3: find out more about your Social Security benefit and when
• 6:22
  Speaker 3: is the best time to collect? Oh, this one is
• 6:26
  Speaker 3: another good one. It depends, you know. We love to
• 6:29
  Speaker 3: say that, but waiting until you're full of retirement age
• 6:32
  Speaker 3: usually means you'll get bigger checks. The reason we always
• 6:35
  Speaker 3: say it depends is we can't really answer this question
• 6:39
  Speaker 3: perfectly unless we know exactly how long everybody's going to live.
• 6:42
  Speaker 3: Right If we know that, I mean, it's really easy
• 6:45
  Speaker 3: to determine, you know what, when is the most opportune
• 6:49
  Speaker 3: time to start. So where we tend to start with folks,
• 6:53
  Speaker 3: is say, okay, well, based on the other income sources
• 6:56
  Speaker 3: you have in retirement, based on how much you've saved,
• 6:59
  Speaker 3: how much you want spend. That's how we can help
• 7:02
  Speaker 3: you figure out when you need to draw your Social
• 7:04
  Speaker 3: Security to kind of accomplish your goals of having retirement income.
• 7:08
  Speaker 3: And you know, maybe you have some legacy goals, so
• 7:11
  Speaker 3: we can use Social Security as a tool to kind
• 7:14
  Speaker 3: of help you those hit those targets. Now, if you
• 7:18
  Speaker 3: wait past your full retirement age, so remember that's between
• 7:21
  Speaker 3: sixty six and sixty seven, you do get an increase
• 7:25
  Speaker 3: each year until you get to age seventy. So you
• 7:28
  Speaker 3: are actually going to have an eight percent increase to
• 7:31
  Speaker 3: your monthly benefit every year until you turn seventy. Now
• 7:35
  Speaker 3: that is a pretty good deal. We at Class Financial,
• 7:39
  Speaker 3: we obviously have an investment management team here and they
• 7:44
  Speaker 3: would tell you eight percent guaranteed is a pretty good deal.
• 7:48
  Speaker 3: When you get to seventy though, that is pretty much
• 7:51
  Speaker 3: that is go time. There are very few reasons to
• 7:54
  Speaker 3: wait past age seventy to actually start your benefits.
• 7:57
  Speaker 1: A great information there from Air Schwartz and CJ. Closs,
• 8:01
  Speaker 1: our retirement planning professionals from Class Financial. And before we
• 8:04
  Speaker 1: get to some of the math of the CJ, is
• 8:06
  Speaker 1: there anything you wanted to add to that add to
• 8:08
  Speaker 1: that last section?
• 8:08
  Speaker 2: There no sorry about that. I my microphone kind of
• 8:12
  Speaker 2: went blank there, but I'm back in.
• 8:14
  Speaker 1: Good to have you along. Yet, technology is, as we
• 8:17
  Speaker 1: all know, is fantastic. When it works, then it's like,
• 8:19
  Speaker 1: oh goodness, but good to have you back with us.
• 8:22
  Speaker 1: Back with us CGF course talking with CJ. Closs and
• 8:24
  Speaker 1: Eric Schwartz, as mentioned, our retirement planning professionals from Class Financial.
• 8:27
  Speaker 1: Phone lines are open if you've got a question six
• 8:29
  Speaker 1: oh eight three two one thirteen ten. That's six soh
• 8:32
  Speaker 1: eight three two one thirteen ten. You can learn more
• 8:34
  Speaker 1: about Class Financial on their website COSS Financial dot com.
• 8:38
  Speaker 1: That's Coss k l Aasfinancial dot com Telpha number six
• 8:42
  Speaker 1: oh eight four four two five six three seven. No
• 8:45
  Speaker 1: charge for that initial gets to know your appointment at
• 8:46
  Speaker 1: loss financial it will be complementary to you again their
• 8:49
  Speaker 1: number six oh eight four four two five, six three seven.
• 8:53
  Speaker 1: So Eric, let's break down that that math when it
• 8:56
  Speaker 1: comes to those numbers and kind of calculations when it
• 8:59
  Speaker 1: comes to your your Social Security benefit. And I think
• 9:02
  Speaker 1: a lot of folks wonder is will I ever get
• 9:04
  Speaker 1: a boost?
• 9:07
  Speaker 3: Yeah? So, at a very basic level, in order to
• 9:10
  Speaker 3: qualify for Social Security benefits, you have to earn what
• 9:13
  Speaker 3: are called credits, Okay, So you have to essentially work,
• 9:17
  Speaker 3: pay payroll taxes, and earn those credits over your working years.
• 9:23
  Speaker 3: So in twenty twenty five, if you earn one eight
• 9:26
  Speaker 3: hundred and ten dollars, that is equal to one credit,
• 9:30
  Speaker 3: and you can earn a maximum of four credits per year.
• 9:35
  Speaker 3: And in order to qualify for benefits, you need to
• 9:37
  Speaker 3: have forty credits. Okay, so four per year, forty credits.
• 9:40
  Speaker 3: That's ten years of work history. That is the goal
• 9:43
  Speaker 3: to qualify for Social Security benefits. Now, if you don't
• 9:47
  Speaker 3: have forty but you are, Let's say you work for
• 9:51
  Speaker 3: maybe five years and then something takes you out of
• 9:54
  Speaker 3: the workforce. If you return later, you can keep adding
• 9:58
  Speaker 3: to your total and and get get up to that
• 10:01
  Speaker 3: forty credits. They don't need to be consecutive.
• 10:05
  Speaker 2: Now.
• 10:07
  Speaker 3: The reason that this is one we hear a lot
• 10:10
  Speaker 3: so talking about talking about how how your benefit is calculated.
• 10:15
  Speaker 3: I'll have people say to me, you know, towards the
• 10:17
  Speaker 3: end of their working years, gosh, I got to make
• 10:19
  Speaker 3: sure that you know, I'm putting in as many hours
• 10:22
  Speaker 3: as I can and making as much as I can
• 10:24
  Speaker 3: because they're gonna they're gonna calculate my Social Security based
• 10:27
  Speaker 3: on my you know, my last years of work, right,
• 10:30
  Speaker 3: maybe my three or my five last years. That is
• 10:33
  Speaker 3: not true. So Social Security is going to use your
• 10:36
  Speaker 3: thirty five highest earning years to calculate your your benefit.
• 10:40
  Speaker 3: And that is adjusted for inflation. So when you look
• 10:43
  Speaker 3: at your Social Security statement, you may look back and see,
• 10:46
  Speaker 3: you know, twenty five years ago, maybe you earned less money.
• 10:49
  Speaker 3: But when we adjust it for inflation, it, you know,
• 10:53
  Speaker 3: it brings the dollars back up to today's time value
• 10:57
  Speaker 3: of money, and it it provides you with a larger
• 11:02
  Speaker 3: larger benefit than it looks like. But if we think
• 11:04
  Speaker 3: about this thirty five year average of working work history,
• 11:10
  Speaker 3: we all start with thirty five zeros right, if we've
• 11:12
  Speaker 3: never worked before, we have zero's for thirty five years.
• 11:16
  Speaker 3: So every year that you work, regardless of how much
• 11:19
  Speaker 3: you're earning, you are increasing your Social Security benefit because
• 11:22
  Speaker 3: you are taking away one of those years of zero earnings. Okay,
• 11:26
  Speaker 3: So no matter how much you're earning, you are you
• 11:29
  Speaker 3: are improving your benefit by working. Now, you'd asked about
• 11:33
  Speaker 3: will you ever get a boost on your Social Security benefit?
• 11:36
  Speaker 3: So that is what we would call a cost of
• 11:38
  Speaker 3: living adjustment or a COLA. And you do get cola's
• 11:42
  Speaker 3: starting at age sixty two, even if you wait to
• 11:45
  Speaker 3: get your benefit. And twenty twenty five that was two
• 11:48
  Speaker 3: and a half percent, and then the year before last
• 11:51
  Speaker 3: year was three point two percent. Okay, So definitely we'll
• 11:56
  Speaker 3: be seeing those cost of living adjustments over time.
• 11:58
  Speaker 1: Talking this morning with Eric Schwartzee J. Coloss. They are
• 12:01
  Speaker 1: our retirement planning professionals from Claws Financial online Class Financial
• 12:05
  Speaker 1: dot com. That's Class k l a as Financial dot
• 12:08
  Speaker 1: Com Telpha number six oh eight four four two five
• 12:10
  Speaker 1: six three seven. No charge for that initial gets no
• 12:13
  Speaker 1: appointment at Class Financial. It will be complementary to you. Again,
• 12:16
  Speaker 1: they're number six oh eight four four two five six,
• 12:19
  Speaker 1: three seven, Things are a little different if you are
• 12:21
  Speaker 1: a government worker.
• 12:22
  Speaker 3: Correct, they are. They are. And we I feel like
• 12:26
  Speaker 3: we talk about social Security with quite often on the
• 12:30
  Speaker 3: show because it's such an important program, but it's an
• 12:34
  Speaker 3: old program and we don't often have a lot of
• 12:36
  Speaker 3: new things to talk about related to it. This is
• 12:38
  Speaker 3: a this is an exception here. So beginning in twenty
• 12:43
  Speaker 3: twenty five, specifically back on January fifth, the Social Security
• 12:47
  Speaker 3: Fairness Act was signed into law, and that made some
• 12:50
  Speaker 3: pretty big changes for folks who worked for or who
• 12:54
  Speaker 3: have a government pension. So the Social Security Fairness Act
• 13:00
  Speaker 3: ends what's called the Windfall Elimination Provision or WEB and
• 13:05
  Speaker 3: the Government Pension Offset GPO. So these are these two provisions.
• 13:10
  Speaker 3: They've essentially reduced or eliminated the Social Security benefits of
• 13:15
  Speaker 3: over three point two million people. And those were folks
• 13:18
  Speaker 3: who received a pension based on work that was not
• 13:21
  Speaker 3: covered by Social Security, so they had a non covered pension. Okay,
• 13:26
  Speaker 3: so this is probably strange to hear for a lot
• 13:29
  Speaker 3: of folks, especially in Wisconsin. We don't have very many
• 13:33
  Speaker 3: positions in our state government that don't pay into that
• 13:37
  Speaker 3: don't pay into Social Security, but our neighbors to the south.
• 13:40
  Speaker 3: In Illinois, there are a number of positions working for
• 13:44
  Speaker 3: the state government where actually instead of paying into Social Security,
• 13:49
  Speaker 3: employees actually pay into all of their retirement contributions into
• 13:54
  Speaker 3: the state pension. So the Social Security Fairness Act it
• 13:58
  Speaker 3: increases social secure benefits for certain types of workers, including teachers, firefighters,
• 14:05
  Speaker 3: police officers in some states, federal employees who are are
• 14:10
  Speaker 3: covered by the Civil Service Retirement system, and people whose
• 14:13
  Speaker 3: work had been covered by like a foreign social security
• 14:16
  Speaker 3: system for example. So complicated topic, but it is a
• 14:21
  Speaker 3: big change. So if you are one of those workers
• 14:25
  Speaker 3: who has a government pension and maybe have been impacted
• 14:29
  Speaker 3: by this, go to SSA dot gov and get up
• 14:33
  Speaker 3: to date information on how this might affect you.
• 14:36
  Speaker 1: Talking this morning with Eric Schwartz and Cjcklass, they are
• 14:39
  Speaker 1: our retirement planning professionals from Class Financial, I hope you've
• 14:42
  Speaker 1: had a chance to check out the website. If not,
• 14:44
  Speaker 1: head on over their COSS Financial dot com that's coss
• 14:47
  Speaker 1: k l a a s financial dot com. Can of
• 14:49
  Speaker 1: course learn more about everyone at COSS Financial, the separativations
• 14:53
  Speaker 1: as well how they can help you or if you're
• 14:55
  Speaker 1: an employer, some options there and what they all can
• 14:58
  Speaker 1: provide at COSS Financial. I'll send up for the weekly
• 15:00
  Speaker 1: Market Pulse newsletter that at the website COSS Financial dot com.
• 15:03
  Speaker 1: Tell for number six oh eight four four two five
• 15:06
  Speaker 1: six three seven. No charge for that initial get to
• 15:08
  Speaker 1: know your appointment tech loss financial. It will be complementary
• 15:11
  Speaker 1: to you again. Their number six oh eight four four
• 15:13
  Speaker 1: two five six three seven. Talk about you hear that
• 15:16
  Speaker 1: term break even. We'll find out from c Jan Eric
• 15:18
  Speaker 1: what that is and is it possible to figure that out?
• 15:21
  Speaker 1: What We'll get all those details and so much more
• 15:23
  Speaker 1: as we continue our conversation Money in Motion here at
• 15:26
  Speaker 1: Costs Financial on thirteen ten. Wuib I walking this week
• 15:29
  Speaker 1: with our retirement planning professionals CJ. Closs and Eric Schwartz.
• 15:32
  Speaker 1: Of course they come to us from Class Financial the
• 15:35
  Speaker 1: website colss financial dot com. That's coss k l aa
• 15:38
  Speaker 1: as Financial dot com at telephon number six O eight
• 15:41
  Speaker 1: four four two five six three seven. No charge for
• 15:44
  Speaker 1: that initial gets to know your appointment tech loss Financial.
• 15:47
  Speaker 1: It will be complementary to you again. Their number six
• 15:50
  Speaker 1: oh eight four four two five six three seven talking
• 15:53
  Speaker 1: this week about social security and h CJ one of
• 15:57
  Speaker 1: the things you often hear folks wondering about is picking
• 16:00
  Speaker 1: that right age, and what exactly and where exactly is
• 16:04
  Speaker 1: that break even point? What do people need to know there?
• 16:07
  Speaker 2: CJ. Yeah, So social security and retirement planning, it's kind
• 16:11
  Speaker 2: of like a personal puzzle that you have to figure out.
• 16:14
  Speaker 2: And this is often why people will come to us
• 16:16
  Speaker 2: as a retirement planning expert to say, hey, I've got
• 16:19
  Speaker 2: these different income streams, whether it be a pension or
• 16:22
  Speaker 2: a Social Security income stream, or like Eric was talking about,
• 16:26
  Speaker 2: Hey I was part of a non covered pension in
• 16:28
  Speaker 2: the state of Illinois and now there's a change. I mean,
• 16:31
  Speaker 2: these are complicated things with significant impacts over the remainder
• 16:37
  Speaker 2: of your retirement years. So this is often how and
• 16:40
  Speaker 2: when and where we get involved. But when you're thinking
• 16:44
  Speaker 2: about your future retirement income streams, including social Security, consider
• 16:49
  Speaker 2: all of those income sources. What we would do is
• 16:52
  Speaker 2: we would sit down and say, hey, what investments do
• 16:55
  Speaker 2: you have, what pensions do you have, what Social Security
• 16:58
  Speaker 2: income will you have? Anybody working? When do you want
• 17:02
  Speaker 2: to retire? When can you afford to retire? And then
• 17:05
  Speaker 2: based upon all that data, we will say you should
• 17:07
  Speaker 2: draw from here first Now for the somebody who's not
• 17:12
  Speaker 2: in the industry, that might sound like, oh my goodness,
• 17:14
  Speaker 2: I have no idea how to do that analysis. But
• 17:18
  Speaker 2: it's not actually that complicated once you're on our side
• 17:21
  Speaker 2: of the fence and understand kind of the tax impacts
• 17:24
  Speaker 2: of each of these income streams. Social Security, this is
• 17:28
  Speaker 2: not right within my topic right now, but social Security
• 17:30
  Speaker 2: is a little bit unique. Social Security can be legitimately
• 17:34
  Speaker 2: in the state of Illinois or a state of Wisconsin
• 17:37
  Speaker 2: at least completely tax free. If your income is low
• 17:40
  Speaker 2: enough on a provisional basis, you will have no tax
• 17:44
  Speaker 2: federal or state on sociecurity. Now, if your total income
• 17:48
  Speaker 2: or was known as your modified adjusted gross income gets
• 17:50
  Speaker 2: high enough, then they start taxing your Social Security. And
• 17:53
  Speaker 2: then if your income is much much, much higher, you
• 17:56
  Speaker 2: cap out at eighty five percent of your Social Security
• 18:00
  Speaker 2: being income taxable. So you get the idea. It's important
• 18:03
  Speaker 2: to know these things because it has an impact on
• 18:05
  Speaker 2: when you draw in where you draw in all these things. Now,
• 18:09
  Speaker 2: longevity is another important question because some people like us
• 18:13
  Speaker 2: will say, hey, you should wait to draw later, which
• 18:15
  Speaker 2: we'll talk about here in a moment. But then if
• 18:18
  Speaker 2: you're very unhealthy, and you're retired at sixty two, you
• 18:21
  Speaker 2: probably just want to draw it as early as you
• 18:23
  Speaker 2: can to try to get as much benefit out as
• 18:25
  Speaker 2: you can. Because here's the kicker with social Security. If
• 18:28
  Speaker 2: you don't have a spouse or somebody who's going to
• 18:30
  Speaker 2: be claiming on your record after you die somehow, then
• 18:33
  Speaker 2: there's really not a lot of benefit of waiting if
• 18:37
  Speaker 2: you are sick or ill, or if you expect to
• 18:39
  Speaker 2: die at an earlier or earlier than average age. Now,
• 18:43
  Speaker 2: with all of this being said, you asked the question
• 18:45
  Speaker 2: of what is this break even thing? Well, listen, break
• 18:48
  Speaker 2: even is actually not that complicated of a concept. Imagine
• 18:51
  Speaker 2: you have an Excel spreadsheet or even just a piece
• 18:53
  Speaker 2: of paper in front of you, and you know that
• 18:55
  Speaker 2: if you draw at age sixty two, which is the
• 18:57
  Speaker 2: earliest that you can draw, that your benefit's going to
• 18:59
  Speaker 2: be lower. As a matter of fact, it's about for
• 19:02
  Speaker 2: somebody who's full retirement age is, you know, sixty six.
• 19:05
  Speaker 2: In some number of months, if you draw aus early
• 19:08
  Speaker 2: sixty two, you're only getting about seventy four percent of
• 19:11
  Speaker 2: your full retirement age benefit. So if I draw sixty two,
• 19:14
  Speaker 2: it's a lower amount, but I'm money ahead, right, that's
• 19:18
  Speaker 2: the key. I'm money ahead of the other version of
• 19:21
  Speaker 2: myself that would have waited to full retirement age. And
• 19:24
  Speaker 2: I'm way money ahead of the other version of myself
• 19:26
  Speaker 2: that would have waited to seventy Everybody gets this. But
• 19:30
  Speaker 2: if you kind of put those that Excel spreadsheet down
• 19:32
  Speaker 2: and you say, but if I had waited to seventy,
• 19:35
  Speaker 2: the benefit is larger, and therefore I start catching up
• 19:38
  Speaker 2: on the former version that drew earlier. So this is
• 19:41
  Speaker 2: just a simple, you know, nominal math equation. We're ignoring
• 19:45
  Speaker 2: expected returns and inflation right now. We're just basically looking
• 19:48
  Speaker 2: at at the nominal dollar amount, and at some point
• 19:52
  Speaker 2: in the future those numbers break even. Well, here's the kicker, everybody.
• 19:56
  Speaker 2: For most Americans under most situations, that break even a
• 20:00
  Speaker 2: hers somewhere between seventy eight and eighty. Okay, So meaning
• 20:04
  Speaker 2: if I draw at sixty two, sixty three, sixty four,
• 20:07
  Speaker 2: sixty fivety six, sixty seven, sixty eight, sixty nine, or
• 20:10
  Speaker 2: seventy they all break even somewhere between seventy eight and eighty.
• 20:16
  Speaker 2: Now why does this matter, Because that's about that's about
• 20:19
  Speaker 2: life expectancy. So listen, If you think that the Social
• 20:24
  Speaker 2: Security Administration cares when you draw, social Security, you clearly
• 20:29
  Speaker 2: don't understand how they built the math. They just don't
• 20:33
  Speaker 2: care when you draw because on average, it's irrelevant. Now,
• 20:39
  Speaker 2: notice what I just said there, On average, here's the key.
• 20:44
  Speaker 2: If everybody in your family live to ninety or older,
• 20:49
  Speaker 2: you could actually game it a little bit. You could say, hmmm,
• 20:54
  Speaker 2: well social Security doesn't care, but I care. And I
• 20:57
  Speaker 2: know that if I wait and get a larger benefit
• 21:00
  Speaker 2: and I live to age ninety, I'm money way ahead.
• 21:03
  Speaker 2: So you get the idea social Security Administration could care less.
• 21:07
  Speaker 2: Do we as financial planners as we work with our clients,
• 21:10
  Speaker 2: do we care about your family medical history and your
• 21:12
  Speaker 2: personal medical history and expectations of you know, when you'll
• 21:16
  Speaker 2: pass away?
• 21:16
  Speaker 3: Oh?
• 21:17
  Speaker 2: You bet you? And that has a big impact on
• 21:20
  Speaker 2: when we give suggestions around when you should draw.
• 21:23
  Speaker 1: Talking this morning with CJ. Closs and Eric Schwartz, they
• 21:26
  Speaker 1: are our retirement planning professionals from Class Financial website, Class
• 21:29
  Speaker 1: Financial dot Com tel forh number six So eight four
• 21:31
  Speaker 1: four two five six three seven So, CJ, what if
• 21:35
  Speaker 1: we heard talk a little bit about credits earlier? What
• 21:37
  Speaker 1: if you don't have enough credits.
• 21:40
  Speaker 2: Yeah, good question. So you may still have some options.
• 21:44
  Speaker 2: So if you don't have enough credits, Eric mentioned it earlier,
• 21:47
  Speaker 2: but you there's these credits that you earn. You can
• 21:49
  Speaker 2: earn up to four credits per year, and so they
• 21:52
  Speaker 2: say forty credits is the minimum that's required to be
• 21:55
  Speaker 2: eligible for your own Social Security benefit. If you understand
• 21:58
  Speaker 2: that four credits per year, forty credits, well, that sounds
• 22:03
  Speaker 2: like ten years. CJ. That's right. If you have about
• 22:05
  Speaker 2: ten years of working history, then you will be eligible
• 22:09
  Speaker 2: for your own benefit. Some people don't have that. I'll
• 22:12
  Speaker 2: take my spouse as an example of this. She has
• 22:14
  Speaker 2: worked outside of the home, but not for accumulative ten years,
• 22:18
  Speaker 2: and therefore, on her own record, she would get nothing.
• 22:21
  Speaker 2: But let's just pause for those of you who have
• 22:23
  Speaker 2: listened to us talk on the air. Enough about this,
• 22:25
  Speaker 2: you go, But but but wait a minute. If CJ
• 22:27
  Speaker 2: were to die, wouldn't his wife be eligible for his benefit? Yes?
• 22:32
  Speaker 3: She would.
• 22:33
  Speaker 2: And wait a minute, I've heard you talk about you're
• 22:35
  Speaker 2: eligible for all of yours or half of your spouses,
• 22:37
  Speaker 2: whichever is greater. So even if CJ's alive and he draws,
• 22:41
  Speaker 2: couldn't she get half of his. Yes, she could. So
• 22:45
  Speaker 2: you get the idea. Just because my spouse is not
• 22:48
  Speaker 2: eligible based on her own record, it doesn't mean she
• 22:51
  Speaker 2: won't get a Social Security benefit. If I pass away,
• 22:54
  Speaker 2: she could get a benefit. Now there's limitations on when
• 22:57
  Speaker 2: she can get that benefit, but she could get a benefit.
• 23:00
  Speaker 2: And then also if even if I'm alive and I draw,
• 23:03
  Speaker 2: she's eligible for half of mine, even though she may
• 23:06
  Speaker 2: not qualify on her own record. And then there's other
• 23:08
  Speaker 2: things like well what if a divorce happens, So what
• 23:12
  Speaker 2: if I'm not eligible on my own record, but I
• 23:15
  Speaker 2: was married to somebody for ten years who was eligible. Well, yeah,
• 23:19
  Speaker 2: that may apply, but here's a key. Generally you had
• 23:22
  Speaker 2: to have been married for ten years, and generally you
• 23:25
  Speaker 2: can't have remarried before I think it's sixty or sixty two.
• 23:30
  Speaker 2: So you get the idea. There are a lot of
• 23:33
  Speaker 2: kind of quirks and things to be aware of relative
• 23:36
  Speaker 2: to Social Security. If you have an odd situation where
• 23:39
  Speaker 2: you don't know how it'll work. So think of a
• 23:41
  Speaker 2: divorce from many years ago, or if you were recently
• 23:45
  Speaker 2: a widow or widow where we would just highly suggest
• 23:48
  Speaker 2: schedule an appointment at the Social Security Administration Office, explain
• 23:51
  Speaker 2: your situation and get a summary of what your benefits
• 23:54
  Speaker 2: might be.
• 23:54
  Speaker 1: Talking this morning with CJ. Class and Eric Schwartz, retirement
• 23:57
  Speaker 1: planning professionals from Class Financial, the website class financial dot com.
• 24:01
  Speaker 1: That's coss k l a A S financial dot com.
• 24:03
  Speaker 1: They're telephon number six o eight four four two five
• 24:06
  Speaker 1: six three seven, which if your conversation with c gen
• 24:09
  Speaker 1: Eric next has money in motion with Coss Financial continues
• 24:11
  Speaker 1: right here on thirteen ten Wui b A talking with
• 24:16
  Speaker 1: our retirement planning professionals c J. Closs and Eric Schwartz.
• 24:19
  Speaker 1: Of course they come to us from Class Financial, the
• 24:21
  Speaker 1: website coss financial dot com. That's coss k l a
• 24:25
  Speaker 1: A S Financial dot com. Telephone number six oh eight
• 24:28
  Speaker 1: four four two five six three seven. Don't forget no
• 24:31
  Speaker 1: charge for that initial get to know your appointment tech
• 24:33
  Speaker 1: Loss Financial. It will be complementary to you again their
• 24:36
  Speaker 1: number six oh eight four four two five six three seven.
• 24:39
  Speaker 1: Talking with Cjen Eric this week about Social Security. And
• 24:43
  Speaker 1: you know we've talked about taking social social Security early,
• 24:47
  Speaker 1: but what about folks that are still working? Are their
• 24:50
  Speaker 1: income limits orre some restrictions that folks there need to
• 24:53
  Speaker 1: know about.
• 24:54
  Speaker 2: Yeah, that's a great question, Sean.
• 24:55
  Speaker 3: So this is a really common point of confusion, especially
• 24:59
  Speaker 3: as people are are thinking about taking benefits early. So
• 25:02
  Speaker 3: if you claim your Social Security before your full retirement age,
• 25:06
  Speaker 3: which you remember right now is somewhere between sixty six
• 25:08
  Speaker 3: and sixty seven depending when you were born, and you
• 25:12
  Speaker 3: continue to work so earn earned income, not your pension income,
• 25:16
  Speaker 3: not your investment income, but actually working income, your benefits
• 25:21
  Speaker 3: can be temporarily reduced. So hang onto that word. They're
• 25:24
  Speaker 3: temporarily as well. Okay. The earnings test applies again only
• 25:29
  Speaker 3: if you're collecting prior to full retirement age. So if
• 25:32
  Speaker 3: you hit full retirement age, you can work to your
• 25:34
  Speaker 3: heart's content. Social Security administration does not care. But in
• 25:39
  Speaker 3: twenty twenty five, if you are under full retirement age
• 25:42
  Speaker 3: for the entire year, Social Security will deduct one dollar
• 25:46
  Speaker 3: from your benefits for every two dollars that you earn
• 25:49
  Speaker 3: above twenty three thousand, four hundred dollars. Okay, so essentially
• 25:54
  Speaker 3: you're gonna have to pay back one dollar for every
• 25:56
  Speaker 3: two that you earn over twenty three four hundred dollars. Now,
• 26:00
  Speaker 3: in the year that you reach full retirement age, the
• 26:02
  Speaker 3: rules are a little bit different. So in twenty twenty five,
• 26:05
  Speaker 3: social Security will deduct one dollar for every three dollars
• 26:09
  Speaker 3: that you learn that you earn above sixty two and
• 26:13
  Speaker 3: sixty dollars. So this only applies to earnings before the
• 26:17
  Speaker 3: month that you reach your full retirement age. But if
• 26:20
  Speaker 3: you are still working, you really want to think twice
• 26:23
  Speaker 3: about taking benefits before full retirement age. Once you get
• 26:26
  Speaker 3: to your full retirement age, there is no earnings test,
• 26:29
  Speaker 3: and you can earn as much as you want now mention,
• 26:32
  Speaker 3: I remember earlier I said to hang on to that
• 26:35
  Speaker 3: temporarily reduced comment. So these deductions are not lost forever.
• 26:41
  Speaker 3: When you reach your full retirement age, social Security will
• 26:44
  Speaker 3: actually recalculate your benefits and you'll receive a higher monthly
• 26:48
  Speaker 3: amount to account for the benefits that were withheld. So
• 26:51
  Speaker 3: the earnings, the earnings test, It can be a nuisance,
• 26:55
  Speaker 3: but theoretically you should receive those benefits later. And again
• 26:59
  Speaker 3: it only applies to working income, not your pension or
• 27:02
  Speaker 3: other retirement income.
• 27:04
  Speaker 1: Pretty a lot of really great information, as always pretty
• 27:07
  Speaker 1: interesting stuff as we talk with our retirement planning professionals.
• 27:10
  Speaker 1: Eric Schwartz and CJ Closs don't freaking learn more about
• 27:13
  Speaker 1: Eric CJ and the whole team at Loss Financial on
• 27:16
  Speaker 1: their website Coss financial dot com. That's Coss Klaas Financial
• 27:20
  Speaker 1: dot com. Telphon number six oh eight four four two
• 27:23
  Speaker 1: five six three seven. No charge for the initial gets
• 27:25
  Speaker 1: to know you appointment at Loss Financial. It will be
• 27:27
  Speaker 1: complementary to you again their number six oh eight four
• 27:30
  Speaker 1: four two five six three seven. Want to hold on
• 27:32
  Speaker 1: to that telephone number because time now for the class
• 27:34
  Speaker 1: quiz question the week. It works like this, In just
• 27:36
  Speaker 1: a moment, I'll ask you the class quiz question the week.
• 27:38
  Speaker 1: You will then have thirty minutes from the in today's
• 27:39
  Speaker 1: program to call the Class Financial office right here in
• 27:42
  Speaker 1: Madison at six oh eight four four two five six
• 27:45
  Speaker 1: three seven. If you are the first caller, you win
• 27:47
  Speaker 1: this week's prize, which is say twenty five dollars gift
• 27:49
  Speaker 1: card to Sephora. This week's class quiz question week is this.
• 27:53
  Speaker 1: According to Social Security, if you were born after nineteen sixty,
• 27:57
  Speaker 1: your full retirement age FRARA is considered. What age is
• 28:02
  Speaker 1: it sixty five or sixty seven? Telphia number six oh
• 28:06
  Speaker 1: eight four four two five six three seven. First call,
• 28:09
  Speaker 1: correct answer when the twenty five dollars gift cartoof Sephora
• 28:11
  Speaker 1: and again that's Class Financials Office right here in Madison,
• 28:14
  Speaker 1: Telpha number six oh eight four four two five six
• 28:17
  Speaker 1: three seven CJ. Eric. It's always fantastic chatting with both
• 28:20
  Speaker 1: of you guys. You enjoy this beautiful day.
• 28:22
  Speaker 2: Thanks Sean, Thanks Sean, see you guys.
• 28:24
  Speaker 1: News comes your way next year. Thirteen ten wu ib
• 28:27
  Speaker 1: A