Social Security Maximization - YouTube

Today's Cardinal Lesson- we're  talking about Social Security.  

And specifically this time of year, it's the  1st of February, and the numbers are just posted  

on the Social Security system. In your my Social  Security Account. So I just ran my own statement,  

they actually went up over the weekend, and so I  printed it off and it's a good time to just talk  

about all the subjects that we're talking about  today. And we're going to use me as the example.  

Now if you do not have a my Social Security  account, and you're getting ready for a  

retirement, which I'm thinking you're probably  doing if you're watching my series of videos.  

This is a must do, okay. So I'm going to  go over this quickly, you go to SSA.GOV.  

And then you hit on the button that says either  ‘Sign Up or Sign In’ and if you don't have an  

account it's going to be ‘Sign Up.’ And once you  click on that, it's going to have a Sign-Up. It's  

going to do a bunch of Identity Verification, and  what I… don't do this in a hurry. Because I have  

several people come back to me, when they're doing  this, when we're starting a financial plan. And  

they're trying to get the account open under My  Social Security, so they can get this statement.  

And it kicks them out and then they've got to  call Social Security. And my goal for any of my  

listeners, anybody I'm doing a financial plan, is  to never have to talk to Social Security. The best  

situation is if we can deal with them online, but  for this one, if you mess this up they're going to  

do Identity Verification. Which they really run  your Credit Report and they ask you did you own:  

a you.. know a ‘99 Buick, a 2012 Cadillac, or a  BMW? You know they just give you a choice. And did  

you have a Mortgage with ‘XYZ’ Bank? A-B-C bank?  You need to get those things correct. And then  

I think they give you a second chance. But it's  really obvious to me that people are doing this  

in a hurry, and when they do it in a hurry they  get kicked out. And then it's forever getting one,  

but you need to get you a My Social Security  account. And then once it's open, make sure you  

keep your password in handy, and your User ID.  You need to open one of these for your Spouse  

or your Spouse needs to do it, and if you're  going to come to me for help, and we're going  

to do a financial plan together- This is going  to be one of the requirements. Is, I'm going to  

get this statement from you: one of many things  that you're going to send in. So just important  

if you get one thing out of this video is get this  account, and then if you already have an account,  

go ahead and print your Social Security statement.  Because they just added your 2021 earnings. I mean  

they just plugged them in, and so these numbers  that I'm gonna go over here, for me and my wife,  

they go up a little bit every year. Because  what they predicted last year, it's now more  

for a number of reasons, we're going to be going  over that today. But I need this to do financial  

planning, you need it just to have an idea of  what you can count on from Social Security.  

So the new statement is what they're putting  out. Now it's just two pages long. It's a little  

more condensed, a little easier to read,  they got some of the garbage out of there.  

It's still a government document that you need a  decoder, like me, to help you out with. But the  

numbers that you're looking for; and these are my  numbers: is I'm 63 and ½ right now, which is, and  

they tell me on here that I can get $2,608 a month  if I file for Social Security, right now. Okay,  

which I'm not going to do, then they also tell  me at my Full Retirement Age: 66 in Eight Months.  

Which it's an odd month amount, because we're  under a phase in, but for all purposes I was born  

in 1958. That is my Full Retirement Age. And the  amount of my check is projected to be $3,360. And  

then I'm going to be one of these people- at least  the plan now- is to wait till I'm 70. And the  

amount that I can expect at 70 is $4,308 a month.  So, you know I look at that, and most people that  

before they meet me and we're talking about  financial planning, I'm counseling with them  

about this. They'll immediately say, ‘Oh yeah  I've looked at my statement. I got my statement.’  

And they'll.. they'll quote one of these numbers.  And they'll say that's when I'm going to take it.  

I've already got a plan, okay, and that's fine.  And I'm going to work with that, but what I do in  

Financial Planning is, could we look at some other  options, even though we're not going to do that.  

Is there's a whole lot to look at. In fact, I have  another video on YouTube that talks about Seven  

Factors you need to take into consideration  that are unique to you in your situation  

before you make that decision, finally. So  I'm not going to be going over those today,  

but off of the statement, these are the three  numbers. Is the numbers, if you took it right now,  

the number if you waited till your Full Retirement  Age, or if you waited till 70, that's the number.  

Now for my spouse, she has her own  record, but what happens is on her  

own record, because she pretty much has taken  care of our children for the last 30 years.  

And she worked some, out of college, and  some a little bit later. And her benefit  

is small enough that she's going to be way  better off filing as the Spouse of me. So,  

and her Full Retirement Age is 66 and 10 months.  So we still need her statement or she still needs  

a Social Security Account. I don't have it in here  today but if you're doing this on both of you,  

you don't want to say, ‘Oh my wife's  like that.’ We'll still run her record,  

I want to verify all of that. She's at 66 and  10 months, because she's one year younger-  

is her Full Retirement Age and what she'll receive  is my amount of $3,360. You divide that by two,  

so she's going to get 50% of that or $1,680 a  month is her benefit, while I'm still living. You  

know if I pass away before she does, so instead of  her benefit, she's going to get my benefit, okay.  

Now what this whole thing is about for people  that haven't taken Social Security, yet,  

is you need a filing strategy, okay. Now the whole  video has parts for those of you that are already  

taking your Social Security. So don't disconnect  now, but it's just the.. the crux of this video,  

is developing a filing strategy at  a point in the future that's going  

to be optimal for you and your situation.  So, now we're going to go over mine, okay.  

So if you know where I have a minimum of  66 and 8 months. Meaning that I have to..  

I have to at least file at my Full Retirement  Age or after, mainly around my wife's amount.  

But if you, just my strategy is I'm gonna get at  70: $4,308 a month right off of here. And my wife  

is not gonna get half of that amount. She's  going to get half of this amount which is $1680,  

or it's almost $6,000 a month which is a  pretty substantial Social Security Check.  

If we're both alive when I'm 70 and she's 69  and we're looking forward to a number of years  

of collecting Social Security, enjoying  retirement. That's a that's a pretty nice  

check by the month to get from the government back  on the money that we've paid in. Now the actual  

amount that we get in 6 and ½ years is going  to be larger than this, really for two reasons.  

First reason is the Social Security Cost of  Living Adjustments. For 2022, the people that  

are getting Social Security right now. They got a  5.9% inflation increase because all this inflation  

that's going on. So that made my numbers that  are here off.. increase because even though I'm  

not getting Social Security now, that got baked  into these numbers. And that's going to go on  

every year until I'm 70. Now I hope we don't have  inflation that high, sustained for six years,  

I'm not wishing that. But if that did  happen, this number is going to be  

much larger because of all the years of that. The  second reason is I'm going to have six more years  

at the highest earnings potential. So if we want  to get technical, these numbers are pretty good,  

but they're not as big as they could have  been. Because what Social Security does,  

is they take your 35 or they take my 35 highest  years of earnings, where I paid in the most  

Social Security. And then they base it to come  up with these numbers, and I went through my  

system and I looked at it, and I've at 28 of my 35  years, I've made the maximum for Social Security.  

And then the other seven years that are  plugged in there, are something short of that,  

probably not a lot short of that, but they're  short of that. So I have six more years  

where I'm gonna earn at the maximum, and it's  consequently that this number could be $7-8,000  

a month by the time we're actually collecting  it. But in any case, for planning purposes we're  

going to use this number, and then we're going  to put into the software for you, and for me.  

We're going to estimate Inflation and estimate all  of those factors, but nonetheless, we got this as  

a baseline to work with. Now, what then becomes,  is we start looking at the Retirement Income Plan,  

so we know we got this coming in and  then we got the rest of my other assets  

where I'm going to create an income once I retire.  And I'm fortunate that I've saved a lot of wealth  

over the years, some in Retirement Accounts,  some not in Retirement Accounts. Some in Life  

Insurance cash values that are accessible.  So I'm going to have a pot of resources  

available to me at 70 when I'm collecting  this by the month. And for Social Security,  

the way they calculate the  Income Taxes on Social Security,  

is by your other income. So you know it says  only a portion of Social Security is taxable,  

and it's taxable at either 0%,  somewhere in between, or 85%  

of the income- or countable is a better word,  than taxes. So if we call this $72,000 a year,  

my preference is to count zero of it toward my..  um Income Tax Bill. But I probably have to pay  

a little bit of tax, but 85% of that amount  that's only going to happen if I have a whole  

bunch of other income besides Social Security.  And what I've done in my planning to date and  

I continue to do over the next six years, is  to do a lot of Roth Conversions so that I have  

other assets that I can tap to supplement my  income. And that I won't have to pay Taxes  

on Distributions from a Roth IRA. Nor do I have  to pay Taxes on Distributions from my Cash Value  

Life Insurance. So that's a backup pot of money  that's available to supplement my income. And  

frankly, if I don't need any more than that in  any given year, then I could just take nothing  

out of there. And just let them let them keep,  let them keep growing Tax-Free. Now in any case,  

your other income, besides Social Security from  a planning- we need to get that as much of that  

as we can in the Tax-Free, so that you really can  live a a Tax-Free or a very Low-Tax Retirement.  

Because in the end, it really doesn't matter, the  number of the money you get you just need to have  

enough money coming in every month to do what you  want to do. You know and I'm I'm thinking that  

$10,000 a month after Taxes, because  my Taxes are going to be very low,  

would be a pretty nice allowance for retirement.  And you know it's a little over $300 a day,  

that it's kind of hard to spend all that kind  of money unless you're out buying boats. And  

you know we already have a second home, a  third home, I don't know taking $100,000  

vacations or something. And most people in  their 70’s are not doing that kind of stuff.  

I mean most people that I work with, I have a lot  of clients that live just fine off of this. Now,  

what I want to get across to everybody is, if  I've talked larger numbers and you're sitting  

here watching that say, ‘Well that guy's done  real well. That doesn't… how does that apply  

to me?’ Well, listen, the work I do for people,  who are not perhaps as successful as they would  

have liked to have been, or they had a job  that was still successful. They just they  

have a smaller Social Security check. They have  smaller accounts than I was talking about. Look  

that's what we're in business to do, as I get the  most satisfaction out of helping people. If you  

cut these numbers in half and you cut this number  in half, and then you still have other resources  

over here. This actually making their Income Tax  Free, is actually easier to do for those people.  

So this is all inclusive and if you've got way  more money than all of this, and you might be  

saying, ‘Well, I'm just going to have to pay a lot  of tax on my Social Security.’ Well not so quick.  

I mean we can come up with a budget and get enough  Roth Conversions that we can defer Taxes. Postpone  

Taxes. Get into Tax-Free, so that you're able  to live off of low lower Tax or low Tax money  

and then just defer Taxes on the rest of your  Estate to pass on to the next generation. So  

we cover the spectrum in Financial Planning,  and it's probably the easiest for to do a lot  

of the work on people that have less. I'm  Hans Scheil and I thank you for listening.