We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for August 5, 2024
Radon and Murs discuss Social Security spousal benefits. Social Security is a complex subject, and today, we’re diving into the intricacies of spousal benefits. To help us navigate this important topic, we are joined by Heather Schreiber, a consultant with a wealth of knowledge about Social Security. Heather’s expertise will help you understand the nuances of Social Security spousal benefits, which is crucial for making informed decisions about your retirement planning.
Every week, we have podcasts come out, and as new listeners find us, it can get very tedious to find all the resources we provide. This week we have prepared an End of 2023 wrap up to highlight some of the episodes from this year.
Reviewing 2023’s Episode List
Finding an episode on your respective listening platform will vary, so we’re going to provide:
Title
Episode number
Date
We’ll also link to the location on our website where you can listen to each podcast to make it a bit easier to find.
Ep. 193 – Navigating The Decision to Retire Now or Work Longer – January 16, 2023
If you’re wondering if you can retire or if you’re ready to retire, you’ll love this episode. It can be an overwhelming process, so we take some time to outline important considerations such as:
Budgeting
Health and Age
Goal and Interests
This episode helps you think through your financial readiness to secure your retirement.
Ep. 197 – 10 Reasons Everyone Needs a Power of Attorney in Retirement – February 13, 2023
Anything can happen at any time. A Power of Attorney, particularly a Durable Power of Attorney, is one that we’ve seen come up a lot this year with clients. Disability or incapacitation can happen at any time.
We outline 10 very important reasons to have your Power of Attorney documents in order, including:
Protecting Privacy
Dealing with Tax Matters
Having Someone to Manage Your Finances
A Power of Attorney is up there in importance with your will and HIPAA authorization.
You’ll learn the ins and outs of Power of Attorney documents in this episode.
Ep. 201 – Do You Need a Trust in Retirement? – March 13, 2023
We did quite a few episodes on trusts this year because they’re such an important part of retirement planning. We’ve partnered with professionals in this area so that our clients can easily have a trust put in place for them.
In this episode, we interview Andres Mazabel at Trust & Will. He addresses the common question, “Do I Need a Trust?”, to really help you understand if a trust is right for you or not.
Ep. 204 – Social Security Spousal Benefit in Retirement – April 3, 2023
Social Security has a lot of complications, which is why we brought Heather Schreiber on to explain how spousal benefits work. In our example scenario, one client has worked their entire life, and his spouse did not.
His spouse assumed that without working, she wouldn’t have Social Security, but we explained how she would receive $1,700 a month in benefits.
For many couples, an additional $1,700 in benefits is completely finance-altering. If you’re close to Social Security age, this is certainly a good episode to listen to.
Ep. 208 – Maximizing Tax Benefits by “Bunching” – May 1, 2023
If you’re charitably inclined, you can leverage “bunching” and donor-advised funds to save money on your taxes. In the episode, we discuss how you can bunch multiple years of contributions into one so that you can take a larger deduction.
Utilizing this strategy has saved some of our clients hundreds or thousands of dollars.
Ep. 217 – You Have Enough to Retire, but How Do You Create an Income – July 3, 2023
Creating income is challenging when you’re in the accumulation phase of life transitioning into the retirement phase. In this episode, we discuss how to put assets into buckets and methods that you can follow to have a consistent income.
We talk about sequence of return risks and how to really have fun in retirement.
Ep. 219 – Annuities or CDs – What You Should Consider – July 17, 2023
Last year, interest rates rose. For annuities and CDs, interest rates were favorable and therefore quite attractive to many people. In this episode, we cover what you need to think about when deciding between an annuity and a CD.
Ep. 223 – Protecting Against Cybersecurity Threats – August 14, 2023
Cybersecurity is something that you may not expect to see on this list, but it’s a crucial topic that demands attention. Around this time of year (the holiday season), threats increase dramatically.
You may receive spam and phishing threats from many directions, including texts and emails.
We outline 14 items for you to consider to help protect yourself from these threats going into 2024.
Ep. 224 – Long-Term Care Planning Options – August 21, 2023
Long-term care planning is something no one wants to think about, but it’s something that you really must dive into before you need it. Our guest Jessica Iverson talks with us about how this form of planning has evolved, the breakdown of increasing costs, and alternative options that are available.
You do have options where you’re not stuck in a “use it or lose it” scenario, which is what we cover in great detail in this episode.
Ep. 226 – Integrated Wealth Management Experience in Retirement – September 4, 2023
In this episode, we look at what integrated wealth management means and how it works in our practice. You will be interested in this episode if you want to know how we address:
Ep. 234 – Roth IRA – 5-Year Rule – Your Retirement – Part 2 with Denise Appleby – October 30, 2023
Denise Appleby was our special guest during this episode, and she discusses Roth IRAs in such great detail that it’s a must-listen. We go over the rules for Roth accounts and conversions from start to finish in a nice and easy manner.
Ep. 235 – The Art of a Risk-Adjusted Portfolio in Retirement – November 6, 2023
Risk in retirement exists, but you can use a risk-adjusted portfolio to hedge those risks. We explore determining risk tolerance and some of the strategy behind investment styles. We also take some time to define terms like:
Ep. 236 – Rae Dawson – The Basics of a CCRC – November 13, 2023
Note: Rae was also on for Episode 236 on November 27 (listen here) for Part 2.
Rae teaches a class on Continuous Care Retirement Community (CCRCs) at Duke University, and joined us on the podcast to dive in on the basics, such as:
We do love it when someone refers a family member or friend to us. Sometimes the question is, “How can we introduce them to you?” Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.
Here are this week’s items:
Portfolio Update: Murs and I have recorded our portfolio update for April 3, 2023
This Week’s Podcast – Social Security Spousal Benefit in Retirement
In this Episode of the Secure Your Retirement Podcast, Radon and Murs speak with Heather Schreiber about social security spousal benefits and how it works. Heather is a retirement income strategist, speaker, writer, and educator of financial, legal, and tax professionals.
Listen in to learn how spousal income works for couples with wide disparities in income benefits…
This Week’s Blog – Social Security Spousal Benefit
We actually had a client come to us this week who has a spouse, and they’re a little bit different in age. He told us to wait until he is 70 to take Social Security, but he wants his wife to take her benefits at 62.
He wanted to know one important thing: if he passes away, will she receive his benefit instead?
If you’re in the midst of retirement planning or trying to gain as much knowledge as you can to secure your retirement, you might need to know about spousal benefits…
Heather Schreiber is someone who we hire as a consultant to help us with the many iterations of Social Security planning. She is our special guest on this week’s podcast, and she has talked to us about spousal benefits.
Why?
We actually had a client come to us this week who has a spouse, and they’re a little bit different in age. He told us to wait until he is 70 to take Social Security, but he wants his wife to take her benefits at 62.
He wanted to know one important thing: if he passes away, will she receive his benefit instead?
If you’re in the midst of retirement planning or trying to gain as much knowledge as you can to secure your retirement, you might need to know about spousal benefits.
What to Think About in a Scenario Like This
First, there are a few things that Heather recommends that we pay attention to in this scenario:
There’s a disparity between the spouses’ income benefits
He was waiting until he was 70 to receive more benefits
When you’re married and both spouses are collecting Social Security, if one spouse dies, the surviving spouse can step in and collect the higher benefit. If, for example, the spouse retiring at age 62 had higher benefits, she could continue taking her own benefits if her husband’s benefits were not higher.
If you take any benefit early, like in the example above, the benefit will be reduced because the spouse took it early.
Once the woman’s husband files for retirement, things can change slightly. The maximum spousal benefit you can receive is 50% of what the higher benefit spouse will receive. When her husband retires, she can step up and take her spouse’s benefit, which will be reduced.
Why?
She decided to retire early and will receive the difference between her greater spousal benefit and her reduced retirement benefit. Since the difference is added to the equation, she will receive slightly less than 50% of her spousal’s benefit.
However, she could receive survivor benefits, which does a few things:
Allows her to receive 100% of her deceased husband’s benefits
Receive 100% of delayed retirement credits
Of course, her spouse will be deceased at this point, which reduces income greatly.
Unfortunately, there is no simple answer to Social Security. Taking your benefits early will lower your lifetime income, but you’ll also have the freedom of being retired. When walking our clients through retirement planning, we find that 30% of a person’s income is often from Social Security.
Retirement Planning: Understanding Social Security Spousal Benefits
Spousal benefits are for married couples, and keep in mind that if your spouse dies, then we would transition to “survivor benefits.” However, when your spouse is retired, you can receive “spousal benefits.”
A few requirements must be met:
You must be retired for a full year
Spouse must file for benefits for the other spouse to collect
Often, a spouse who doesn’t have 40 earned credits will benefit from up to 50% of their spouse’s benefits. You may even have your own benefits if these benefits are higher.
With people living longer, it’s a challenge to make the critical decision on when to retire because there are pros and cons to retiring earlier or later.
While the government says that you’ll receive 50% of your spouse’s benefit, your spouse must wait until full retirement age to receive the maximum spousal benefit. An example can help you conceptualize this better:
Spouse 1 has a full retirement age benefit of $2,000.
Spouse 2 hasn’t earned their own benefits, and they can take up to 50% of their spouse’s benefits.
If the working spouse takes retirement at 62, their full benefit may drop to $1,400, but the second spouse’s starting point is still based on the $2,000 amount.
If the wage owner may wait until 70, they may receive $2,600 a month, but their spouse is still based at $2,000.
When the government says, “up to 50%,” this is when things get confusing. This figure is based on when the working spouse files for benefits. Let’s assume a stay-at-home mom takes her spousal benefit at 62. She will receive a reduced benefit.
The starting point for spousal benefits is always 50% of the higher-earning spouse’s full retirement age benefit.
A scenario would be:
Stay-at-home mom is a little older
Working spouse earns more and retires at 62
If the spouse who is a stay-at-home mom decides to take spousal benefits at full retirement, she will receive the full $1,000, even though her spouse may receive $1,400.
In this case, it may be beneficial for the stay-at-home spouse to wait until she reaches 67 to claim spousal benefits because she will receive $1,000 while her spouse receives $1,400.
There are a lot of strategies that we go through with our clients that look at when the optimal time to take Social Security is based on their unique situation.
What is a Restricted Application?
Restricted benefits are something we’re asked about a lot, and they work like this:
Person 1 is entitled to their spousal and own benefit
Can you claim your spousal benefit and allow your own benefits to continue gaining credit and take it later?
In the past, this was a viable strategy, but now this strategy is only available to people who will be70 by January 1st of 2024.
If you’re 69 right now and have chosen not to take your benefits yet, you can file a restricted application, which allows you to take your spouse’s benefits (if they have claimed them) and wait to claim your benefits until you hit 70, allowing you to enjoy higher benefits as a result.
The folks that can use a restricted application are in a small group, but if you fall into this group, it’s important to contact us now.
Anyone who wasn’t born before January 1, 1954, can select only one type of benefit. You cannot allow your own benefit to grow like in the past. You’ll only be allowed to take your spousal benefit if it is greater than your own benefit, but this cannot happen until your spouse files.
However, the spousal benefit is always the “greater of the two,” meaning that if your spousal benefit is higher than your own benefit, Social Security will compare the benefits and give you the “greater of the two.”
We know that this can be very confusing for anyone reading this because it’s a complex topic. Feel free to contact us if you have any questions relating to spousal benefits and when to take Social Security.
