Dec. 13, 2024

Intro of Host Bonita Bell-Andersen - Social Security Basics workshop, Part 1

Show Notes
Transcript

Learn the answers to these questions:
• Will Social Security be there for me?
• How do I coordinate benefits with my spouse?
• When should I apply for Social Security?
• How can I maximize my benefits? What if my spouse dies?
Social Security is far more complicated than most people realize. The decisions you make now can have a tremendous impact on the total amount of benefits you stand to receive over your lifetime. Find out how you can avoid the most common mistakes that people make!

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The topics and opinions expressed in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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or it's employees are affiliates. Any questions or comments should

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be directed to those show hosts. Thank you for choosing

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W FOURCY Radio.

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Welcome to to Ask Good Questions Podcasts, broadcasting live every Wednesday,

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six pm Eastern Time on W four CY Radio at

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W fourcy dot com. This week and every week, we

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will reach for a higher purpose in money and life,

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as well as a focus on health and wellness. Now,

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let's join your hosts, Vanita bell Anderson, as together we

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start with Asking Good Questions.

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Hello, and welcome to the Ask Good Questions podcast, where

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we start with asking good questions about money and health

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and whatever else is top of mind. My name is

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Benita bell Anderson, your financial advisor host, and today is

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our first ever podcast. We are kicking it off today. First,

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I will be doing an introduction about myself, and then

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we will be going through interesting tidbits about social security,

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basically a mini workshop, if you will, as that is

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something I have been teaching workshops on for years. Today

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will be part one. There is so much to go

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through with this, and so this will be a topic

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that is obviously best for people who are in this

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stage of life. Next week we will be doing part

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two well, where we figure out how to coordinate social

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Security with our other retirement assets that we have. But

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today we will be going through a lot of the

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basics and so that you understand just what in the

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heck you're dealing with with this government benefit program that

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we all know about. So all right, so if we

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can go ahead and start the slides. So again, I'm

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so excited to be starting this, and so let me

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ask you or tell you a little bit about myself.

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I've been a financial advisor for about twenty five years.

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I have been teaching at local community colleges for many years.

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I'm also an author. My latest book is called Money,

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Mindset and the Suddenly Single, The Ultimate Guide for Divorcees

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and Widows. This is actually out on Amazon right now.

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I'm a proud team member of Tencap Wealth Coaching and

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have done a lot of community service through the years

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with local nonprofits. I'm married to a tired pharmacist. A'm

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mother to three amazing daughters and sons in laws. I'm

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mother in law to four amazing sons and their wives,

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and I am grandma to twenty three little ones. How

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in the heck did that happen. I'm a big sports

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fan of Gonzaga basketball because I hail from Spokane, Washington.

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I'm also a washing State University alum, so I'm all

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about Cougar's football and all South Seahawks football. You can

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tell I'm a washing State girl. I am into the

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newest craze out there called pickleball, and I'm an avid

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scuba diver. Don't get to go to do that nearly enough,

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so I basically became a snowbird about It's been about

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five years ago. I do have an office up in

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Washington State and an office in southern Utah, but basically

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everything is remote now, so it works really well. So

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my husband, who has been very supportive of all these

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crazy things that I've done, is a dad, a grandpa,

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a wife supporter. He had lost his first wife to cancer,

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and I have gone through a divorce. So he's been

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exploring new avenues and retirement, including pickleball and hiking and

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family history research and volunteering. He's the one waving at

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you in that lower right hand corner. All of our

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families long distances many of you might be able to

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relate to. So we are mobile, going where they are

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quite a bit. And if I have to work, and

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when I do work, it's a lot of times from

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my laptop and my cell phone. So here's a quick picture.

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Now we're going to be talking about so security today.

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You know what, I'm not so concerned about you and me.

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I'm concerned about all these little ones. I'm concerned about

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the kids that are in their mid forties and wondering

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what's going to happen, but especially these little ones that

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have maybe fifty sixty years years from now, what's going

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to be happening there. We're going to be talking about

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a lot of that. So, because optimizing your social security

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is what I call this, knowing what you can do

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so that you know what you should do. So this

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discussion is going to take part over the course of

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two weeks. Today's part one and We will finish up

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this discussion next week with how to integrate Social Security

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with the rest of your retirement savings. And of course

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you know when you have when you're dealing with a

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financial advisor, there is a disclosure. This is an in

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educational program, is non intended to sell investments or insurance products.

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It's not intended to provide tax or legal advice. Always

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consult and consult with whatever advisor you work with to

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make sure that you're doing what's right for your situation.

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It's also not endoorsed or approved by the Social Security

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Administration or any other federal or state government agency, so

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there's no offers here. What I will be doing is

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inviting you to do a zoom call with us at

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the end of the program so that you can get

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your questions answered about your particular situation. My firm that

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I'm affiliated with is called ten Cap Wealth Coaching. It's

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a registered investment advisory firm that's an SEC nationally licensed firm,

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and we have a phenomenal team that does a myriad

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of things and so it is a very I'm very

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very happy and please to be associated with that. So

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today is an over the pre tops. If you will

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look at social security issues. We want to encourage questions,

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but ask for you to reserve that content and unique

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to your situation for your complementary strategy session on Zoom

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and the scheduling link will be at the end of today.

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All right. There is a PDF that I will also

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give you, which is called the Social Security fact Sheet,

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and so that will be coming to you when you

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schedule that appointment. All right. So here's the question on

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everybody's mind. Doesn't it just make sense to just take

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the benefit at age sixty two and be done with

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it and get paid for a longer amount of time

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than waiting until age seventy Well, are you thinking you're

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maybe going to live past age seventy nine? You know,

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more and more and more people are going into their nineties.

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But fifty percent of the population has filed by age

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sixty two. That's you know what. In a lot of cases,

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it's because people don't have any of their income. It's

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kind of sad. Well, by FRA, which means full retirement age,

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approximately ninety five percent have filed. There's only about one

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percent of the population that delay until age seventy. But

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I'm going to talk to you about why you should

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do that. So this is what happened about almost ten

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years ago. Congress, by the way, has the ability to

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make changes to Social Security whenever they want, and you

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can bet there's going to be more changes coming up.

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But they did quite a few changes that had to

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do with some things that people had been used to

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for a long time called file and suspend, retroactive, lump sum,

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restricted application. That all changed and now pretty much everything

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is based off of your own benefit that you get

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at full retirement age. So what in the heck is that, Well,

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it's when the formula has figured out what your benefit

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is going to be at your full retirement age, which

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is for most people on this podcast, you are going

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to be aged sixty seven. There's a possibility that some

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you know you basically you look at your Social Security

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Estimated Benefits statement and you'll find out when your full

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retirement age is. But if you do anything, and I'm

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going to be repeating this, anything you do before your

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full retirement age, you're going to get penalized. And if

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you wait beyond your full retirement age, you're going to

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receive a bonus some things called delayed credits. All right,

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So let's just quickly look at where we've been. Nineteen

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thirty five was when Franklin Delano Roosevelt signed it into law,

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but it didn't take long before taxes were being taken out.

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And nineteen forty was when there were regular monthly benefit

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payments began, fifty six when they started disability, but it

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was until nineteen seventy two that they actually started doing

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cost of living increases. So there are four hundred and

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fifty four million numbers that have been issued, criminy. That's

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a lot of numbers. The amount of taxes collected is

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about thirteen point eight trillion, and the amount of benefits

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paid has been about eleven point three tip trillion. That's

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going up. There's a lot of baby boomers that are retiring.

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So back in nineteen forty, two hundred and twenty two thousand,

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four hundred and eighty eight people were receiving social security

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less than one percent of the population, but now sixty

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six million people and that's going up. We've got lots

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of baby boomers that are retiring right now, so that's

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about twenty two percent of the total pop population. Back

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in nineteen forty, the typical benefit was about twenty two

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dollars and seventy one cents. Now the average monthly benefit

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is eighteen sixty two. So you could see there's been

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quite a few changes over the years. So just remember

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that Congress can and will make a lot of changes,

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and there's got to be some changes coming up. Back

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in nineteen forty, the average life expectancy was sixty four.

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Now it's in the mid eighties, with many, many, many

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more living into their nineties because of the the things

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we have going on with the medical science and everything.

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But I'm going to go over this. See the little

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box there that talks about how payroll taxes are going

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down and if Congress doesn't do anything, there is only

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going to be enough money to pay seventy nine percent

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of scheduled benefits. Talk about what in the heck does

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that mean? So again, so that you have context on

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what's going on with this government program. In nineteen forty,

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there was one hundred and fifty nine workers to every

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one person receiving soial security. Twenty ten, it dropped to

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two point now nine now it's two to one, really

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just about And the year that they're expecting benefits to

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go down is twenty thirty four. So This is something

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that's been on the table for a long time, and

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Congress has been kicking it down and down and down.

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But how long do you need to plan for retirement?

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If you're a healthy male, you have a twenty five

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percent chance of living beyond ninety two. Healthy females at

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sixty five, well, twenty five percent chance of living past

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ninety four. But if you are a couple you're both

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healthy at age sixty five, there's a twenty five percent

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chance of at least one of you living beyond ninety seven,

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and at least a ten percent chance of one of

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you living beyond one hundred. And we see that with

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all of the birthdays happening for people that are reaching

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one hundred years old. This is scary too. This came

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out several years ago, but this was an article in

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Time magazine about a baby living to be Could a

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baby live to be one hundred and forty two? Well,

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the authors of the article thought so. And that's a

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scary thought for a lot of baby boomers and people

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that are retiring because they're going, do I have enough money?

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You know, how's that going to How's that going to

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work out? But this is what social Security's legal name

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is Old Age Survivor and Disability Insurance is basically an

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insurance program put on by the government. Now, Idam A.

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Thuller was the very first one that ever received of benefit.

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Now I'm telling you that because she received her first

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benefit in nineteen fifty. But talking about people that live

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on item may passed away in nineteen seventy five at

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the age of one hundred. So this thing with people

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living a long time and needing income for a long

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time after they retire from working is a serious issue

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something to be considered. All right, let's turn to qualifying

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for this benefit. It's tied to your work record. There's

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a maximum of four credits every year. One credit is

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worth one thousand, seven hundred and thirty dollars, which means

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four credits in one year is six nine hundred and twenty.

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It is only earned income, that means no income from

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rentals and things like that. To qualify for Social Security,

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you need to have a minimum of forty credits, which

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basically means ten years of work. Right. Okay, let's talk

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about spouses because that is a big topic. Now, if

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you are in the same age bracket that I am,

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you probably remember these people. This is Ward in June Cleaver.

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The show was called Leave It to Beaver, and we're

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going to use them as an example family. Okay, Ward

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earned credits while he was working and June stayed home

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with the Wally and the beav. So we're going to

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take them through several different scenarios on with having to

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do with SOB security. So basically, what a spousal benefit

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00:15:47.200 --> 00:15:51.000
means with SOB security is that a non working spouse

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who may have benefits and may not, but let's say

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she has a lot less than her husband, she is

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entitled to fifty percent of his higher benefit. So in

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all cases, I don't care how you're looking at this.

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If you do any of this before your age, your

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full retirement age, you are going to be your benefit

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is going to be reduced. And so like at age

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sixty two, their benefit is reduced by as much as

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thirty percent. That is locked in and it stays that

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way for the rest of your life. So I'm going

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to make an argument for waiting until seventy so you

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maximize your Social Security all right, So, but with spousal benefits,

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that spousal benefit is based on the higher earning spouse,

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they're fifty percent of their benefit, which doesn't increase after

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00:16:52.639 --> 00:16:55.840
full retirement age. So the spousal benefit is always based

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on the full retirement age of the higher earning spousey.

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So then let's take this example with June. So let's

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say Ward is that his FRI or full retirement age,

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he retires and he claims his benefit. Let's say it's

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just make it two thousand a month. So what is

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June's spousal benefit fifty percent? Right, one thousand. So let's

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say her own benefit at full retirement age is eight hundred. Well,

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what they're doing now is they're doing what they call

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a spousal add on. So they would add on to

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June's benefit that she would take if she take took

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00:17:40.119 --> 00:17:43.400
it at her full retirement age, a two hundred dollars

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00:17:44.119 --> 00:17:46.880
spousal add on, so she would get up to one

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thousand dollars. And so that is the most common way

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that spousal benefits are done. If she does anything before

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her full retirement age, there's going to be a reduction. Okay.

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So here's the thing to remember. After full time and age,

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a spouse has the option to choose their own benefit

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or file for their spousal benefit. Okay, Now, remember whatever

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I'm saying is generalities. You will need to talk to

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Social Security to get the skinny on your particular situation. So,

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but between a husband and a wife, one or the

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other has to file for benefits in order for the

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other to be eligible to receive spousal benefits. Okay, you

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don't have to file until you're actually ready to take

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your Social Security. You don't have to file when you

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reach age sixty seven. You can wait until you're seventy

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if you want to, and Social Security is not going

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to come knocking on your door saying, hey, you haven't

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filed yet. So, however, what I say is a lovely

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gift to your spouse if you're if the you know,

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amusing generality is here. But if the husband is older

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and he has he has a larger benefit. It's the

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00:19:09.759 --> 00:19:15.359
lovely gift to the spouse if he waits to optimize

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and take his Social Security at age seventy and have

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the largest Social Security check that he can have, because

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if he dies before her, that larger benefit will go

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to her. And so that is why I say that

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is a huge gift to the spouse. If the spouse

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is going to live beyond them. Well, let's say that June.

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Let's back to June. Let's say she does wait until

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full retirement age and she gets that two hundred dollars

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spouse of benefit. All right. Now, if she waits until

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age seventy, her own benefit is going to be larger,

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and so that's you know, that would be to her

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benefit to now I get it. Sometimes people can't wait.

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But if you can wait until seventy, because cost of

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living increases are going to be based on the higher number,

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and that is all, you know, going to factor into

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how much you're going to have when you're eighty and

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how much you're going to have when you're ninety. Well,

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what about divorce spouses. A lot of the same things apply,

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but in the case of a divorce spouse, they have

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to be currently unmarried. They have to be at least

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sixty two. But remembered, don't take it at sixty two.

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It's going to be reduced if you do. They had

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to have been married at least ten years and the

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x spouse needs to be at least sixty two, all right,

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So those are all things to remember. So if you

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in order to maximize your benefits. You might be qualified

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to take a divorce spouse benefit from age sixty seven

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to seventy, and then start your own benefit at age seventy.

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I'm not saying that this is exactly going to happen

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in your situation. You have to go talk to Social Security,

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but just make sure you're asking him the right questions.

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Don't let them talk you into starting your benefit early,

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because that lower benefit that you get penalized on is

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going to be locked in for the rest of your life.

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So let's just say we're back to warden June. Let's

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say they divorced after the beaver was caught shoplifting at

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JC Penny. Can you believe it? Well, she's sixty two,

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she's currently unmarried, they were married for at least twenty years,

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and Ward is sixty five, but he's delaying his benefits

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until he's aged seventy, So believe it or not, she

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can go into the Social Security office with a copy

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of their marriage certifigured and the divorce papers and he

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doesn't even have to know that is the truth. They

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might not necessarily even contact him. So what about widows?

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What about people that have lost a spouse?

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These are that.

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By the way, these are the things that I am

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addressing in my book, which is called Money Mindset and

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the Suddenly Single for those that have gone through a divorce,

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those that are dealing with having lost a spouse, and

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those are all things that I find are critical for

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people who are going through that change in life. So

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if someone has lost a spouse, that spouse can switch

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to her husband's higher benefit at his death and vice versa.

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There's no gender thing here, it's just whoever's benefit is higher.

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The survivor benefit is going to be based on the

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high earning spouse's benefits. So if the wife was a

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higher earner and died, then she's going to keep her

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own benefit. If her husband's benefit was lower. That benefits

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can include any delayed credits because they waited, and also

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those cost of living increases. So a widowed spouse can

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claim benefits as early as age sixty or fifty if

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they're disabled. But please, please please don't do that because

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you're going to be penalized. It gets locked in, and

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like I said, that locked in penalty stays with you

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throughout your life. So if a widow was married at

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least ten years and their spouse dies, whether they were

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still married or divorced at the time of the death,

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they may be entitled to a survivor benefit. So if

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the survivor remarries before age sixty, there is a survivor

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benefit unless that marriage ends. Okay, So here's another story

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that I made up. Let's say Ward passed away and

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June read Mary's at age fifty five to Ted, Ward's

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golfing buddy. So she goes in to claim benefits at

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age sixty based on Ward, but was disallowed because of

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her marriage to Ted. So believe it or not, she

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could promptly divorce Ted and claim her benefits on Ward.

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And let's say that she now happily lives on a

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golf course with the beef who owns the course. So

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there's crazy things that can happen, and there's a myriad

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way of these things, the way these things come across,

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so it's totally you know, individual situations. So here's the

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thing about widows. They can qualify for benefits based on

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00:24:57.079 --> 00:24:59.880
their own work credits, and if they do that, they

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00:25:00.079 --> 00:25:02.880
they want to receive survivor benefits from age sixty to

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sixty nine and then take advantage of delaying credits on

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their own benefit at age seventy. So remember again I'm

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becoming a broken record here. All there's reductions to benefits

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on all of these ways that happen if you take

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it before your full retirement age. Okay, just remember that,

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So no talking about working until you reach full retirement age.

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Working is going to reduce your benefit. Do not take

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Social Security while you're still working before your full retirement age.

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So once you reach full retirement age, your benefits are

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recalculated so you receive the full benefit. However, you're going

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00:25:48.680 --> 00:25:51.400
to you know, you're going to pay taxes on your

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Social Security as well as your work income. And because

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of having that soile Security, you may be bumping yourself

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up into another tax bracket. So just remember those types

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of things. Here's an example. So let's say before your

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full retirement age, so Security is going to deduct one

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dollar benefits for every two dollars you earn above twenty

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two thousand, three hundred and twenty dollars in twenty twenty four.

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Now remember these numbers were are going to go up

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slightly in twenty twenty five. But Ward, who's sixty two,

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decides to work part time at that golf course that

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the beave owns, and he earned twenty four thousand and

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five twenty, Well, you deduct the income allowed of twenty

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two thy three twenty and that leaves twenty two hundred,

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of which so Security and the irs are going to say,

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you need to give us back eleven hundred dollars, or

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basically fifty percent of the twenty two hundred that he

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Intro of Host Bonita Bell-Andersen - Social Security Basics workshop, Part 1

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