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Social Security-Unlocking the Secrets-Timing Your Benefits · Money In Motion with Klaas Financial

• 0:00
  Speaker 1: And Happy Thursday. Our phone lines they are open to
• 0:03
  Speaker 1: you if you've got questions for our retirement planning professionals
• 0:06
  Speaker 1: from Class Financial love to have you check in and
• 0:09
  Speaker 1: join us this morning. All I gotta do is pick
• 0:11
  Speaker 1: up phone dial six oh eight three two one thirteen ten.
• 0:14
  Speaker 1: That's six oh eight three two one thirteen ten. Gonna
• 0:17
  Speaker 1: be talking about social Security this week, but the if
• 0:20
  Speaker 1: you've got any type of question, whether it's about specific
• 0:23
  Speaker 1: topic at hand or anything related to retirement planning, it's
• 0:26
  Speaker 1: a great opportunity to have our friends from Class Financial
• 0:30
  Speaker 1: answer your question again the telephone number six so eight
• 0:32
  Speaker 1: three two one thirteen ten. That's six oh eight three
• 0:35
  Speaker 1: two one thirteen ten. Learn more about Class Financial. They've
• 0:38
  Speaker 1: got a great website. It's class financial dot com. That's
• 0:41
  Speaker 1: coss k l aas Financial dot com. Hope you get
• 0:44
  Speaker 1: a chance today to check that out. You can learn
• 0:46
  Speaker 1: more about the team at COSS Financial. You can sign
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  Speaker 1: up for the weekly market Paul's newsletter. You can also
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  Speaker 1: listen back to this and previous shows. The podcasts available
• 0:54
  Speaker 1: right at classfinancial dot com and their telephone number six
• 0:57
  Speaker 1: oh eight four four two five six three seven. Don't
• 1:00
  Speaker 1: forget no charge for that initial get to know your
• 1:02
  Speaker 1: appointment tech Coss Financial. It will be complimentary to you
• 1:05
  Speaker 1: again their number six oh eight, four four, two, five, six,
• 1:08
  Speaker 1: three seven. Join this week by Eric Schwartz and Kyle
• 1:11
  Speaker 1: Kite of Class Financial.
• 1:13
  Speaker 2: Eric, how you doing this morning?
• 1:15
  Speaker 3: I'm doing great, Sean. How are you doing?
• 1:16
  Speaker 1: I'm doing really good. Great to talk with you, Kyle.
• 1:18
  Speaker 1: It's been a bit great to check in. Great to
• 1:20
  Speaker 1: hear from you.
• 1:20
  Speaker 2: How you been.
• 1:22
  Speaker 4: I've been doing well, Sean. Yea, it has been a
• 1:24
  Speaker 4: little while looking forward to it.
• 1:25
  Speaker 1: Yeah, We've got an exciting conversation for sure this morning
• 1:28
  Speaker 1: as we talk about social security, and I know we
• 1:30
  Speaker 1: get a lot of questions about social Security. We'll talk
• 1:33
  Speaker 1: about things like full retirement age, which is a really
• 1:36
  Speaker 1: important age there before, after and during we'll get those
• 1:40
  Speaker 1: kind of those details about why that FRA matters so much.
• 1:44
  Speaker 1: On this week's program mentioned the phone lines are open
• 1:47
  Speaker 1: to you. Another great thing going on on the program
• 1:49
  Speaker 1: is the Class Quiz Question of the Week your chance
• 1:51
  Speaker 1: to win a fantastic prize this week no exception, our
• 1:54
  Speaker 1: friends from Class Financial have provided a twenty five dollars
• 1:57
  Speaker 1: gift cards to Best Buy.
• 1:59
  Speaker 2: Tell you a little bit later on.
• 2:00
  Speaker 1: In the segment a little bit later on the show,
• 2:02
  Speaker 1: how you can win that gift card to best Buy.
• 2:05
  Speaker 1: A little tip though, if you listen closely to the program,
• 2:07
  Speaker 1: just about every show, the question and answer come up
• 2:09
  Speaker 1: during that week's program. This week's probably going to be
• 2:12
  Speaker 1: no exception. Speaking of the class quiz question week. Before
• 2:15
  Speaker 1: we get rolling on this week's topic, let's actually go
• 2:17
  Speaker 1: back to last week's show get a overview of the
• 2:21
  Speaker 1: question and answer there as well.
• 2:23
  Speaker 3: Eric, Yeah, se on one of these weeks we're gonna
• 2:25
  Speaker 3: have to leave the answer out of night fill and
• 2:27
  Speaker 3: see if people can get it right. But our winner,
• 2:32
  Speaker 3: our winner last week was Gloria, So congratulations to Gloria.
• 2:35
  Speaker 3: Thank you everyone for listening. The question last week was
• 2:39
  Speaker 3: true or false. Multi factor authentication, which is sometimes called
• 2:42
  Speaker 3: two factor authentication is like having two locks on your
• 2:46
  Speaker 3: doors instead of only one, and Gloria knew the answer
• 2:49
  Speaker 3: was true, So thank you to everybody again for listening.
• 2:52
  Speaker 2: Nice work, Gloria.
• 2:53
  Speaker 1: I've been doing this show, we've got to be coming
• 2:57
  Speaker 1: up on ten years now, and I don't think we've
• 2:59
  Speaker 1: ever we've ever missed the answer during the program, but
• 3:04
  Speaker 1: who knows. Yeah, it's again got to pay close attention.
• 3:06
  Speaker 2: To that stuff.
• 3:07
  Speaker 3: Catalyst.
• 3:08
  Speaker 4: Yes, yes you do.
• 3:09
  Speaker 1: And again that great opportunity this morning as we talk
• 3:12
  Speaker 1: with Kyle and Eric of klass Fans, a great opportunity
• 3:15
  Speaker 1: to get on there with their question six eight three
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  Speaker 1: two one thirteen ten. That's six o'h eight three two
• 3:20
  Speaker 1: one thirteen ten And Kyle, let's talk about the big
• 3:22
  Speaker 1: topic of course on a lot of folks' minds, which
• 3:24
  Speaker 1: is social security. Kind of narrowing that down a bit,
• 3:28
  Speaker 1: what exactly full retirement age is and should we consider
• 3:33
  Speaker 1: starting our benefits before, you know, maybe before that age,
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  Speaker 1: maybe as early as sixty two.
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  Speaker 2: What are some of the details? What do we need
• 3:40
  Speaker 2: to know there?
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  Speaker 4: Yeah, Sean, it's this is literally a million dollar question.
• 3:45
  Speaker 4: Depending on how long you live and when you decide
• 3:47
  Speaker 4: to take Social secure, gosh you big time. So deciding
• 3:50
  Speaker 4: when to start collecting social Security is one of the
• 3:52
  Speaker 4: most important decisions for retirees. For most people, this is
• 3:57
  Speaker 4: going to be a large part of their retirement income,
• 3:59
  Speaker 4: and for some it's even their only source of income.
• 4:01
  Speaker 4: So you want to make sure you get this thing right.
• 4:05
  Speaker 4: So let's start at the beginning of how you can
• 4:06
  Speaker 4: even look up your benefit. And they used to mail
• 4:09
  Speaker 4: this stuff out to you every year and a little
• 4:11
  Speaker 4: white piece of paper that had a green bar at
• 4:13
  Speaker 4: the top of it. But they've obviously gotten away, like
• 4:15
  Speaker 4: many places, from mailing them out all the time. But
• 4:17
  Speaker 4: you can still log into their website, which is SSA
• 4:20
  Speaker 4: dot gov, and then create an account and view your
• 4:23
  Speaker 4: personalized estimates and your full retirement age. So this will
• 4:26
  Speaker 4: have all of your earnings records on it and stuff
• 4:28
  Speaker 4: like that. We highly recommend people get on there and
• 4:30
  Speaker 4: at least set up a username and password and start
• 4:33
  Speaker 4: looking at this to make sure that it's right. So, yeah,
• 4:36
  Speaker 4: what is full retirement age? We'll start there, and then
• 4:38
  Speaker 4: we'll kind of talk through some of these other ages
• 4:40
  Speaker 4: that are important when it comes to Social Security. So
• 4:43
  Speaker 4: your full retirement age, it actually depends on the year
• 4:45
  Speaker 4: you were born. So if you were born from nineteen
• 4:48
  Speaker 4: read in nineteen fifty four, your full retirement age is
• 4:52
  Speaker 4: sixty six. If you were born between nineteen fifty five
• 4:56
  Speaker 4: and nineteen fifty nine, it's sixty six in some number
• 5:00
  Speaker 4: of months, so two months, four months, six months, eight months,
• 5:02
  Speaker 4: so on and so forth. But then if you were
• 5:04
  Speaker 4: born in nineteen sixty or later. Your full retirement age
• 5:07
  Speaker 4: is sixty seven. So your full retirement age, what it
• 5:10
  Speaker 4: actually is is this is when you're eligible for one
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  Speaker 4: hundred percent of your Social Security benefit without taking any reductions.
• 5:17
  Speaker 4: This is when you can go and make as much
• 5:19
  Speaker 4: money as you want. Some people call this double dipping.
• 5:21
  Speaker 4: You can pull your full Social Security at your full
• 5:23
  Speaker 4: retirement age and then still go work if you want to.
• 5:26
  Speaker 4: But then there's obviously you can really so the earliest
• 5:30
  Speaker 4: you can start is actually age sixty two, which is
• 5:34
  Speaker 4: obviously different than that full retirement age. But if you
• 5:36
  Speaker 4: start early, there's a few things that you need to
• 5:39
  Speaker 4: be aware of. You're usually gonna you're not usually you
• 5:42
  Speaker 4: are going to take a reduction in benefits because you're
• 5:45
  Speaker 4: collecting over over more years and Social Security wants to
• 5:49
  Speaker 4: adjust for that. And how much that is actually depends
• 5:52
  Speaker 4: on when exactly you start, because it's actually changing each
• 5:57
  Speaker 4: month that you wait. So if you take it at
• 5:59
  Speaker 4: six two and eight months, you're going to get a
• 6:01
  Speaker 4: bigger benefit than you would if you started at age
• 6:04
  Speaker 4: sixty two. And when is the best time to start? Well,
• 6:08
  Speaker 4: this isly you know the big question, and I joke
• 6:11
  Speaker 4: with clients all the time. Tell me the day you're
• 6:13
  Speaker 4: going to die, and I can tell you when we
• 6:14
  Speaker 4: should start Social Security, right, it's a lot easier to
• 6:16
  Speaker 4: figure that part out. So it really depends. But generally,
• 6:20
  Speaker 4: waiting until your full retirement age or even later means
• 6:23
  Speaker 4: a bigger monthly payout. So, for instance, somebody that was
• 6:27
  Speaker 4: born in fifty five retirement age of sixty six and
• 6:30
  Speaker 4: two months, if they wait until sixty six and two months,
• 6:34
  Speaker 4: they'll receive their full benefit amount. And then obviously the
• 6:37
  Speaker 4: other option is to wait past your full retirement amounts.
• 6:39
  Speaker 4: So for those of you that are long time listeners,
• 6:41
  Speaker 4: you've heard us talk about these delayed retirement credits are
• 6:44
  Speaker 4: drcs if you wait past your full retirement ages. We
• 6:48
  Speaker 4: were just talking about. Those delayed retirement credits are eight
• 6:51
  Speaker 4: percent per year all the way up until age seventy.
• 6:55
  Speaker 4: And Eric and I don't have an investment that we
• 6:57
  Speaker 4: can guarantee you in eight percent return on for as
• 7:01
  Speaker 4: much as we'd like to, and like I said, it's guaranteed,
• 7:03
  Speaker 4: so we can't. We don't have any other investments that
• 7:06
  Speaker 4: can promise that, So it may make sense to hold
• 7:09
  Speaker 4: off till seventy, even if it means spending down your
• 7:12
  Speaker 4: other assets a little bit to get that highest rate possible.
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  Speaker 4: And so the bottom line is once you get to
• 7:18
  Speaker 4: seventy though, there's no reason to wait past that, that's
• 7:20
  Speaker 4: the maximum amount. It will not grow up to seventy
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  Speaker 4: one or seventy two or anything like that.
• 7:25
  Speaker 1: Great insight this morning talking with Kyle Kite and Eric Schwartz.
• 7:28
  Speaker 1: They are our retirement planning professionals from Class Financial. Their
• 7:31
  Speaker 1: website Class financial dot com that's coss k l aas
• 7:35
  Speaker 1: financial dot com. Mentioned earlier the opportunity to get to
• 7:38
  Speaker 1: know the team mentioned, of course, the importance of subscribing
• 7:41
  Speaker 1: to podcast at classfinancial dot com. I had mentioned and
• 7:45
  Speaker 1: I made a mistake there. I should definitely do this
• 7:47
  Speaker 1: right off the bat because Class Financial has several different divisions.
• 7:50
  Speaker 1: You can actually learn more about those all online at
• 7:52
  Speaker 1: cossfinancial dot com that's coss k l aa s financial
• 7:56
  Speaker 1: dot com. Now they're tough number six, so eight four
• 7:58
  Speaker 1: four two, five, six three seven and so Eric, as
• 8:01
  Speaker 1: we get all that helpful information from Kyle, How then
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  Speaker 1: can my individual benefit? How can that be calculated? And
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  Speaker 1: will that grow over time?
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  Speaker 2: Will it go up? Over time. What's some of the
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  Speaker 2: nuances there.
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  Speaker 3: That's a really good question. And first off, to get
• 8:16
  Speaker 3: any benefit at all out of Social Security, you do
• 8:19
  Speaker 3: need to qualify by working enough and paying into the system.
• 8:23
  Speaker 3: So you earn credits when you work and pay Social
• 8:26
  Speaker 3: Security taxes. So in twenty twenty five, you get one
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  Speaker 3: credit for every one dollars in earnings that you have,
• 8:33
  Speaker 3: and you can get up to four credits per year.
• 8:36
  Speaker 3: Most people need forty credits or about ten years of
• 8:39
  Speaker 3: work in order to qualify for benefits. Now, these don't
• 8:44
  Speaker 3: all have to be you know, consecutive years or anything
• 8:47
  Speaker 3: like that. Your credits stay on file and if you
• 8:51
  Speaker 3: leave the workforce for a while and you come back later,
• 8:53
  Speaker 3: you can continue earning them. You're not starting at zero
• 8:56
  Speaker 3: or anything like that. Your benefit is actually calculated on
• 9:00
  Speaker 3: a thirty five year average of your highest earnings years.
• 9:04
  Speaker 2: Okay.
• 9:05
  Speaker 3: The other important thing to keep in mind about this
• 9:08
  Speaker 3: is it's adjusted for inflation. Okay, So people will often
• 9:12
  Speaker 3: say like, well, you know, I'm working, maybe in two
• 9:17
  Speaker 3: thousand and five I earned X amount of dollars and
• 9:20
  Speaker 3: it looks like a much smaller number. But when you
• 9:22
  Speaker 3: adjust that for twenty years of inflation. It actually is
• 9:25
  Speaker 3: a lot more buying power than you might think. So
• 9:29
  Speaker 3: it is a thirty five year average of your highest
• 9:32
  Speaker 3: years earnings. It's not the last five years, it's not
• 9:35
  Speaker 3: the last ten years. We hear all these kind of Oh,
• 9:38
  Speaker 3: I thought it was just this, or I thought it
• 9:39
  Speaker 3: was just that. It is a thirty five year average
• 9:42
  Speaker 3: of your highest years. Your benefit will increase over time.
• 9:46
  Speaker 3: So Social Security has a cost of living adjustment or
• 9:49
  Speaker 3: a COLA, and those start being applied once you turn
• 9:53
  Speaker 3: sixty two, even if you don't collect until later. So
• 9:56
  Speaker 3: for example, in twenty twenty four, the cost of living
• 9:59
  Speaker 3: adjustment was three point two percent, and then coming into
• 10:02
  Speaker 3: twenty twenty five it was two point five percent. They're
• 10:05
  Speaker 3: announced each October and they pretty closely follow follow inflation.
• 10:11
  Speaker 3: So that's the idea of adjusting the benefit over time
• 10:15
  Speaker 3: to keep up with rising costs. Now that we do
• 10:18
  Speaker 3: have a special note here for public workers, this is
• 10:21
  Speaker 3: new information from twenty twenty five. It's actually pretty interesting.
• 10:26
  Speaker 3: As listeners probably know, we have an office here in Madison,
• 10:29
  Speaker 3: but we also have one down in Love's Park, Illinois,
• 10:32
  Speaker 3: and this is something that actually impacts more of our
• 10:35
  Speaker 3: clients down in Illinois due to the way the State
• 10:39
  Speaker 3: of Illinois pension is structured. But the Social Security Fairness Act,
• 10:44
  Speaker 3: which was signed into law on January fifth of this year,
• 10:48
  Speaker 3: it repeals what's called the Windfall Elimination Provision or the
• 10:51
  Speaker 3: WEB and the Government Pension Offset or the GPO. Yeah,
• 10:57
  Speaker 3: so this means that retirees who receive pensions from non
• 11:01
  Speaker 3: covered employment, which can include government jobs at times, will
• 11:05
  Speaker 3: no longer have their Social Security benefits reduced based on
• 11:09
  Speaker 3: those earnings. So when we say non covered employment, we
• 11:12
  Speaker 3: mean roles where people are paying into a pension rather
• 11:17
  Speaker 3: than paying into Social Security. This change affects retirees who
• 11:22
  Speaker 3: receive pensions from public service jobs. So this is you know,
• 11:26
  Speaker 3: in some cases teachers, firefighters, and police officers, is as
• 11:29
  Speaker 3: well as those who work whose work was covered by
• 11:32
  Speaker 3: a foreign social security system. Now, just to be clear,
• 11:35
  Speaker 3: in Wisconsin, our teaching staff is not affected by this.
• 11:40
  Speaker 3: They are they pay into Social Security and the Wisconsin
• 11:43
  Speaker 3: retirement system. But there are there are situations, for example,
• 11:48
  Speaker 3: just just down in our Illinois office, where that's not
• 11:51
  Speaker 3: exactly the case. So, starting in February of this year,
• 11:55
  Speaker 3: Social Security began to pay retroactive benefits, and they're actually
• 11:59
  Speaker 3: increasingly benefit payments to those whose benefits have been affected
• 12:03
  Speaker 3: by these changes. If a beneficiary is due retroactive benefits
• 12:07
  Speaker 3: as a results of the new law, they will receive
• 12:10
  Speaker 3: a one time retroactive payment that'll just get deposited right
• 12:13
  Speaker 3: into the bank account that they have on file for
• 12:15
  Speaker 3: you by the end of March earlier this year, and
• 12:19
  Speaker 3: that payment will cover the increase in their benefit amount
• 12:22
  Speaker 3: back all the way back to January of twenty twenty four,
• 12:25
  Speaker 3: which is the month they decided that this would would
• 12:27
  Speaker 3: no longer apply. Now. Remember Social Security benefits are paid
• 12:31
  Speaker 3: one month behind, so most benefited, most affected beneficiaries will
• 12:35
  Speaker 3: begin receiving their new monthly benefit amount in April of
• 12:38
  Speaker 3: twenty twenty five, or they did start receiving that benefit
• 12:42
  Speaker 3: earlier this year.
• 12:43
  Speaker 1: Interesting, And for folks that are wondering about your cost
• 12:46
  Speaker 1: financial office and Loves Park, anyone that's decided to skip
• 12:49
  Speaker 1: the toll on I ninety, you drive right past the
• 12:53
  Speaker 1: office there, which I may have done a number of times.
• 12:56
  Speaker 1: So there's that, by the way, just a completely off topic.
• 13:00
  Speaker 1: That that state park, that rock Cut State Park, that's
• 13:03
  Speaker 1: right down there, looks really really cool. I gotta stop
• 13:06
  Speaker 1: there one of these.
• 13:08
  Speaker 4: Yeah. It's actually the largest state park in Illinois.
• 13:10
  Speaker 2: It's a really fast yeah learned.
• 13:14
  Speaker 1: Sometimes you'll learn things that you didn't expect, very very
• 13:17
  Speaker 1: cool stuff. As we talk with our retirement planning professionals
• 13:20
  Speaker 1: Kyle Kite and Eric Schwartz, of course they do come
• 13:22
  Speaker 1: from Class Financial conftuents from Class Financial. Of course their
• 13:26
  Speaker 1: office right here in Madison, just off Seminole Highway. Tell
• 13:29
  Speaker 1: for number six so eight four four two five, six
• 13:32
  Speaker 1: three seven. No charge for that initial get to know
• 13:34
  Speaker 1: your appoyment at COLSS Financially, it will be complimentary to
• 13:37
  Speaker 1: you again their number six oh eight four four two
• 13:39
  Speaker 1: five six three seven. We're going to continue our conversation
• 13:42
  Speaker 1: with Eric and Kyle, will talk a little bit more
• 13:44
  Speaker 1: about social Security, maybe wondering how exactly, uh you figure
• 13:48
  Speaker 1: out the right age to start taking benefits. We'll get
• 13:51
  Speaker 1: some details from Eric and Kyle. We will do that
• 13:53
  Speaker 1: next as Money in Motion with COSS Financial continues right
• 13:56
  Speaker 1: here on thirteen ten w ib A talking with our
• 13:59
  Speaker 1: retirement planning professionals Kyle Kite and Eric Schwartz. Of course,
• 14:02
  Speaker 1: Eric and Kyle come to us from Class Financial their
• 14:05
  Speaker 1: website class financial dot com. That's Class k l aas
• 14:09
  Speaker 1: financial dot com. Tel for number six oh eight four
• 14:13
  Speaker 1: four two, five, six three seven.
• 14:15
  Speaker 2: No charge for that.
• 14:16
  Speaker 1: Ininancial gets know you appointment to at COSS Financial, it
• 14:18
  Speaker 1: will be complimentary to you again their numbers six o
• 14:21
  Speaker 1: eight four four two five six three seven. Talking this
• 14:24
  Speaker 1: week about Social Security specifically, what all the details about
• 14:29
  Speaker 1: full retirement age and that kind of brings us as
• 14:30
  Speaker 1: we've been kind of covering this ground here try to
• 14:33
  Speaker 1: figure out what the right age to start taking benefits
• 14:37
  Speaker 1: in Kyle, what's uh, what is that break even at
• 14:40
  Speaker 1: age that that I often hear about.
• 14:43
  Speaker 4: Yeah, this is the biggest kind of heart of this decision, Sean,
• 14:46
  Speaker 4: and is the one that a lot of listeners that
• 14:48
  Speaker 4: are you know, astute would try and figure out themselves.
• 14:50
  Speaker 4: And you know, there's no one size fits all answer
• 14:53
  Speaker 4: to this. It depends on your health, your income, sort
• 14:55
  Speaker 4: of eligible for spouses benefits and things like that. So
• 15:00
  Speaker 4: some people, you know, want to pull their benefits at
• 15:03
  Speaker 4: sixty two just because they wanted as soon as they
• 15:05
  Speaker 4: can get it and get it in their hands, while
• 15:07
  Speaker 4: others prefer to wait to get it until like we said,
• 15:10
  Speaker 4: sixty seven or seventy. So it really comes down to
• 15:14
  Speaker 4: you know, the just the math on it and running
• 15:16
  Speaker 4: it out. So if you were to start early, let's
• 15:19
  Speaker 4: run through an example. So let's say your full retirement
• 15:22
  Speaker 4: age is sixty six. In two months, if you were
• 15:25
  Speaker 4: to start your benefit at sixty two, you would get
• 15:29
  Speaker 4: just seventy four point two percent of your full benefit,
• 15:32
  Speaker 4: so a little bit less than seventy five percent if
• 15:34
  Speaker 4: you started at sixty two, and if you started at
• 15:38
  Speaker 4: sixty five, you'd get about ninety two point two percent.
• 15:42
  Speaker 4: So you can see that's almost a twenty percent difference
• 15:44
  Speaker 4: just by wait in three years. And remember this is
• 15:47
  Speaker 4: locking in for the rest of your life. Obviously you
• 15:50
  Speaker 4: get your colas and things like that, but as that
• 15:53
  Speaker 4: the cola based off that smaller dollar amount, if you
• 15:55
  Speaker 4: start smaller dollars down in the future, so that's a big,
• 15:59
  Speaker 4: big difference. And this is why you know, we ask
• 16:02
  Speaker 4: a couple of key questions when people are looking to
• 16:04
  Speaker 4: start their benefit early. It's really depends on health. You know,
• 16:08
  Speaker 4: for some reason they think that their life expectancy is
• 16:10
  Speaker 4: much shorter than average, then maybe that's a good reason
• 16:13
  Speaker 4: to start it. Early. There's a few reasons where we
• 16:17
  Speaker 4: would recommend people started early, but honestly, we're going to
• 16:20
  Speaker 4: have people try to push it off longer if possible.
• 16:23
  Speaker 4: And so then you're calculating, Okay, if I started at
• 16:25
  Speaker 4: sixty two, I get the seventy four point two percent.
• 16:28
  Speaker 4: If I started at sixty five, I get ninety two percent.
• 16:31
  Speaker 4: So where does this break even where my benefits? Where
• 16:33
  Speaker 4: do I get my most bang for my bunk or
• 16:35
  Speaker 4: most bang for my buck? Right, So this is where
• 16:39
  Speaker 4: you know we start again running the math. So if
• 16:41
  Speaker 4: you were born in sixty two, your full retirement age
• 16:44
  Speaker 4: is sixty seven, and let's just say that your full
• 16:47
  Speaker 4: benefit amount at that sixty seven would be one thousand dollars.
• 16:51
  Speaker 4: If you were to start it at sixty two. Again
• 16:53
  Speaker 4: we're just using round numbers here. You would get set
• 16:56
  Speaker 4: a month a thirty percent cut, So you're getting thirty
• 16:59
  Speaker 4: percent less, but you're collecting it obviously five years sooner,
• 17:03
  Speaker 4: so you're getting the eighty four hundred dollars a year,
• 17:05
  Speaker 4: So that seven hundred a month is eighty four hundred
• 17:07
  Speaker 4: a year instead of the twelve thousand a year, which
• 17:10
  Speaker 4: is one thousand a month. So after five years, you
• 17:13
  Speaker 4: would take that eighty four hundred you get up to
• 17:17
  Speaker 4: that's how much you would have in your pocket by
• 17:19
  Speaker 4: taking it at sixty two. But if you wait until
• 17:22
  Speaker 4: sixty seven, you start getting that thousand dollars a month.
• 17:26
  Speaker 4: So then your break even point of Okay, I started later,
• 17:29
  Speaker 4: but I'm getting that three hundred dollars more a month.
• 17:31
  Speaker 4: Where does that Where do those lines cross over? And
• 17:34
  Speaker 4: it's around age seventy eight and eight months. And it's
• 17:37
  Speaker 4: no big surprise that you know, those break even points
• 17:41
  Speaker 4: tend to line up pretty closely with the average life
• 17:44
  Speaker 4: expectancy for Americans. Obviously, Social Security has a bunch of actuaries.
• 17:48
  Speaker 4: They've run them numbers on all these kind of things.
• 17:50
  Speaker 4: They have this figured out too. So if you were
• 17:54
  Speaker 4: you know, if you think you're going to live past
• 17:55
  Speaker 4: seven off, wait until sixty seven. If you think you're
• 17:59
  Speaker 4: going to pass way before then you would started earlier obviously.
• 18:02
  Speaker 4: And so this is why my joke comes in. Tell
• 18:04
  Speaker 4: me the day you're going to die, and we can
• 18:05
  Speaker 4: tell you when you should take this thing. Right. So
• 18:07
  Speaker 4: it's it's a very, very like I said, personal decision.
• 18:09
  Speaker 4: And there's so many different factors that go into making
• 18:13
  Speaker 4: this decision.
• 18:14
  Speaker 1: Talking this morning with Kyle Kite and Eric Schwartz, our
• 18:16
  Speaker 1: retirement planning professionals from COSS Financial. Of course, their website,
• 18:20
  Speaker 1: great website to learn more about Class Financial. It is
• 18:23
  Speaker 1: Cossfinancial dot Com. That's coss klaasfinancial dot Com. Telephone number
• 18:28
  Speaker 1: for the office right here in Madison six eight four
• 18:31
  Speaker 1: four two five six three seven. No charge for the
• 18:34
  Speaker 1: initial get to know you appointment at Coss Financial. It
• 18:36
  Speaker 1: will be complimentary to you again their number six oh
• 18:39
  Speaker 1: eight four four two five six three seven. We'll talk
• 18:43
  Speaker 1: about you may have heard earlier on in the segment
• 18:45
  Speaker 1: I think I think that was Kyle had mentioned about
• 18:48
  Speaker 1: retirement credits. Well, what if you don't have enough credits?
• 18:51
  Speaker 1: We'll get the details from Eric and Kyle next as
• 18:53
  Speaker 1: Money in Motion with Coss Financial continues right here on
• 18:56
  Speaker 1: thirteen ten wib I, Eric Schwartz and Kyle Kite. Of course,
• 19:00
  Speaker 1: Eric and Kyle come to us from Clause Financial, the
• 19:02
  Speaker 1: website class Financial dot com. That's colss k l aaskfinancial
• 19:06
  Speaker 1: dot com. They're telephone number six oh eight four four
• 19:09
  Speaker 1: two five six three seven. No charge for that initial
• 19:12
  Speaker 1: get to know your appoyment at clause financial it will
• 19:15
  Speaker 1: be complimentary to you again their number six oh eight
• 19:18
  Speaker 1: four four two five six three seven. We're talking social
• 19:21
  Speaker 1: security this week, and of course talking about when you
• 19:24
  Speaker 1: should be collecting your Social Security what all goes into that,
• 19:29
  Speaker 1: that thinking and that planning, and of course it's a
• 19:31
  Speaker 1: very very it's a complicated one, but it's certainly also
• 19:34
  Speaker 1: very personal one as well. And I apologize, Eric, you
• 19:37
  Speaker 1: were actually the one that mentioned earlier about the about
• 19:39
  Speaker 1: the four per year. You know.
• 19:41
  Speaker 3: That's okay, Sean, that's all right, I'll get over here.
• 19:45
  Speaker 1: I have genuine ized as soon as I said this way,
• 19:47
  Speaker 1: I think actually that was Eric that commented on it.
• 19:49
  Speaker 1: How about this then let's I'll let you answer the
• 19:52
  Speaker 1: question and you can have at this one. Then, So
• 19:54
  Speaker 1: what if you don't work enough to qualify for Social
• 19:57
  Speaker 1: Security on your own?
• 20:00
  Speaker 3: Yeah, that's a that's another good question, Sean. And even
• 20:04
  Speaker 3: if even if you haven't worked enough to get those
• 20:06
  Speaker 3: forty credits we were talking about earlier, that I was
• 20:09
  Speaker 3: famously talking about earlier, you might still you might still
• 20:13
  Speaker 3: qualify based on your spouse or even your ex spouse's record.
• 20:16
  Speaker 3: So this is this is where it gets even more
• 20:20
  Speaker 3: complicated and frankly, Kyle and I talked to clients about
• 20:24
  Speaker 3: Social Security all day, every day pretty much, and this
• 20:27
  Speaker 3: is probably one of the more difficult parts to help
• 20:31
  Speaker 3: people understand. So, if you're sixty two, right that that
• 20:35
  Speaker 3: age that you can actually begin your own Social Security benefit.
• 20:39
  Speaker 3: If you're sixty two or older, or if you're caring
• 20:41
  Speaker 3: for a child under sixteen or a child who is disabled,
• 20:45
  Speaker 3: you may be able to receive spousal benefits and if
• 20:49
  Speaker 3: you claim at your full retirement age, you can receive
• 20:52
  Speaker 3: up to fifty percent of your spouse's full benefit. Okay,
• 20:56
  Speaker 3: so keep in mind that you have to wait until
• 20:58
  Speaker 3: your full retirement age to get up to fifty percent
• 21:02
  Speaker 3: of your spouse's full benefit. If you draw earlier, you
• 21:05
  Speaker 3: can still get benefits, but it's not going to be
• 21:07
  Speaker 3: fifty percent. It'll be less than fifty percent, and so
• 21:12
  Speaker 3: it really kind of behaves just like your own benefits.
• 21:15
  Speaker 3: The earlier you claim, the less that you would actually
• 21:19
  Speaker 3: actually receive of as a percentage of your spouse's full benefit. Now,
• 21:24
  Speaker 3: if for widows and widowers, you may be able to
• 21:27
  Speaker 3: start with your own benefit and then switch to survivor
• 21:31
  Speaker 3: benefits later. Or vice versa. So if your ex spouse
• 21:34
  Speaker 3: passes away and you were married at least ten years,
• 21:38
  Speaker 3: you could qualify to begin survivor benefits. Survivor benefits are
• 21:43
  Speaker 3: a little bit different. You are actually able to start
• 21:45
  Speaker 3: them at age sixty, so that's just a little bit
• 21:50
  Speaker 3: of a different wrinkle for this group of folks. And again,
• 21:56
  Speaker 3: this is one of the few places that you can
• 21:58
  Speaker 3: still choose one benefit, so maybe your own benefit, and
• 22:04
  Speaker 3: then switch to a survivor benefit later on. Again, you
• 22:08
  Speaker 3: can do those in the reverse order as well. The
• 22:11
  Speaker 3: reason I bring this up is historically clients have asked
• 22:16
  Speaker 3: us a lot, and there's been a lot of talk
• 22:17
  Speaker 3: about what we call, or what was called violence Suspend,
• 22:21
  Speaker 3: which was basically a Social Security strategy for married couples
• 22:26
  Speaker 3: to kind of maximize the benefits they get out of
• 22:28
  Speaker 3: the program, and it involved starting with one benefit and
• 22:32
  Speaker 3: switching to the other, and that I believe in twenty
• 22:35
  Speaker 3: sixteen that was ended. It was sort of a loophole
• 22:40
  Speaker 3: in the system that they discovered and promptly got rid of.
• 22:44
  Speaker 3: So survivor benefits are really the only space where we're
• 22:48
  Speaker 3: able to kind of be moving from one type to
• 22:50
  Speaker 3: the other. Now let's talk about divorce. So if you
• 22:53
  Speaker 3: are divorced and not remarried once you're sixty two, if
• 22:57
  Speaker 3: the marriage lasted at least ten years, you are entitled
• 23:01
  Speaker 3: up to you might be entitled to up to half
• 23:03
  Speaker 3: of your your ex's benefit. Again, it's earlier you draw,
• 23:07
  Speaker 3: the less you you're going to receive off of that benefit.
• 23:12
  Speaker 3: And uh, let's see. I think going through here, I
• 23:15
  Speaker 3: think that's everything I wanted to cover on the spousal
• 23:18
  Speaker 3: benefits portion.
• 23:19
  Speaker 1: And I gotta ask you, Eric, I know there's a
• 23:21
  Speaker 1: lot of folks wondering. So if if you are divorced
• 23:24
  Speaker 1: but not remarried, and you are and you are, you know,
• 23:28
  Speaker 1: you might be entitled to have your spouse. But does
• 23:30
  Speaker 1: that affect the exes?
• 23:32
  Speaker 3: Uh, that's a great question.
• 23:35
  Speaker 1: In anyway, because I know there's some folks that'd be like,
• 23:37
  Speaker 1: I'll take this just for no other.
• 23:41
  Speaker 2: I'm gonna guess not.
• 23:43
  Speaker 3: There is no, there is not that that would just
• 23:45
  Speaker 3: be a even messier than it probably already is. But yeah,
• 23:50
  Speaker 3: this is this is something that generally, as we've seen
• 23:53
  Speaker 3: people go through this process, it's a little bit difficult
• 23:56
  Speaker 3: because it's not like you're spending a lot of time
• 23:59
  Speaker 3: with your form and able to take a look at
• 24:01
  Speaker 3: their social Security statement to see if you might get
• 24:03
  Speaker 3: benefits based off of it. But as you go through
• 24:06
  Speaker 3: the application process, you actually provide that information to Social
• 24:11
  Speaker 3: Security so they can they can determine if there's anything
• 24:14
  Speaker 3: that you would.
• 24:14
  Speaker 2: Qualify for something I always wonder about there as well.
• 24:17
  Speaker 2: Thank you, Eric.
• 24:18
  Speaker 1: Before we get to the class quiz question the week,
• 24:21
  Speaker 1: I think another thing too. I think a lot of
• 24:23
  Speaker 1: folks wonder Eric about this is when should I apply?
• 24:26
  Speaker 4: How?
• 24:26
  Speaker 2: How soon?
• 24:27
  Speaker 1: How far ahead should somebody apply? When would they need
• 24:30
  Speaker 1: to apply for Social Security?
• 24:33
  Speaker 3: Yeah, we get this question all the time. So you're
• 24:35
  Speaker 3: able to apply up to four months before you want
• 24:38
  Speaker 3: to receive your benefits. Okay, so that's that's the earliest
• 24:43
  Speaker 3: you can start. And I would say we we help
• 24:47
  Speaker 3: people do this all the time. Over the last probably
• 24:51
  Speaker 3: year or so, we've seen a little bit of a
• 24:55
  Speaker 3: slowdown in processing time. So I would say, if you
• 24:58
  Speaker 3: want to make sure benefits start, I would apply as
• 25:01
  Speaker 3: early as possible. So as soon as you hit that
• 25:03
  Speaker 3: four month timeframe, I would get the application in. The
• 25:06
  Speaker 3: application is fairly painless. You can do it online. That's
• 25:09
  Speaker 3: the quickest way to do it probably takes I don't know,
• 25:13
  Speaker 3: maybe ten minutes to actually go through and get it submitted,
• 25:19
  Speaker 3: and then it's just kind of a waiting game. So
• 25:21
  Speaker 3: I tell people, if you want to if you want
• 25:22
  Speaker 3: to get benefits starting in December, get working on it
• 25:26
  Speaker 3: right now.
• 25:26
  Speaker 1: Great guidance, great advice as always from our retirement planning professionals,
• 25:30
  Speaker 1: Eric Schwartz and Kyle Kite. You can learn more about
• 25:33
  Speaker 1: Eric and Kyle all online Class Financial dot com. That's
• 25:36
  Speaker 1: COSS k l a a as Financial dot com. You
• 25:39
  Speaker 1: can also listen back to this in previous shows podcast Again,
• 25:42
  Speaker 1: all available to you at Classfinancial dot com. They're telephone
• 25:45
  Speaker 1: number six oh eight four four two five six three seven.
• 25:48
  Speaker 1: No charge for that initial get to know your appointment
• 25:50
  Speaker 1: Tech Loss Financial. It will be complimentary to you again
• 25:53
  Speaker 1: their number six O eight four four two five six
• 25:56
  Speaker 1: three seven. You're also going to want to hold on
• 25:58
  Speaker 1: to that telephon number because it's time now for the
• 26:00
  Speaker 1: COSS Quiz question. The week works like this, In just
• 26:02
  Speaker 1: a moment, I'll ask you the Class Quiz question of
• 26:04
  Speaker 1: the week. You will then have thirty minutes from the
• 26:06
  Speaker 1: and today's program to call the COSS Financial Office right
• 26:08
  Speaker 1: here in Madison at six oh eight four four two
• 26:11
  Speaker 1: five six three seven, And if you are the first
• 26:13
  Speaker 1: call with the correct answer, you win this week's prize,
• 26:15
  Speaker 1: which is a twenty five dollars gift card to best buy.
• 26:19
  Speaker 1: This week's COSS Quiz question the week is this, how
• 26:22
  Speaker 1: many Social Security credits do you need to qualify for
• 26:26
  Speaker 1: our retirement benefit? Tell phone number six oh eight four
• 26:30
  Speaker 1: four two five six three seven. Hopefully you were paying
• 26:33
  Speaker 1: closer attention than I was to that section. Again, the
• 26:36
  Speaker 1: first call trict answer will win that twenty five dollars
• 26:39
  Speaker 1: gift card. Two Cost Financial again their number six oh
• 26:42
  Speaker 1: eight four four two five six three seven. Eric Kyle,
• 26:45
  Speaker 1: it's always great talking with both of you, guys. You
• 26:47
  Speaker 1: enjoyed this beautiful day and we'll do it all again
• 26:49
  Speaker 1: real soon.
• 26:50
  Speaker 4: Thanks Sean, Thanks Shawne too.
• 26:52
  Speaker 2: Take care guys.
• 26:52
  Speaker 1: News comes your way next right here at thirteen ten
• 26:55
  Speaker 1: WIBA