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Good morning, and welcome to the Haven Financial Group Radio Show. I'm Larry Kolvig, Founder and CEO of the Haven Financial Group.
Again, thanks for listening. This morning.
We got guests Mitch Moss on today, a retirement advisor at Haven. We're going to talk cam about social security, something that is top of everybody's minds, or at least should be, because it's a big part of social security. And once again, great to be with you.
It is great to be with you as well. And Mitch, it's so wonderful to have you. And I know that Larry's been anxious to get you on to talk about social security. That's sort of your that's your area of expertise, I know. So we're going to look forward to hearing from you. Let's give everybody a sense of what's coming up today, how social Security is taxed, lower inflation and
social Security. Then we're going to talk about the Social Security colaw and your retirement, and then finally we'll wrap this show up a little bit later with some of the updates for social Security in twenty twenty five. Larry, you said it best. Social Security when it comes to retirement is sort of where it all starts.
He really do.
It's a number one income stream for retired Americans, and oftentimes people take it very lightly. You know, Well everybody turns it on at sixty two. Well, we think it should have a lot more thought put into it. Ultimately, is it sixty two or sixty five or seventy or anything in between. It should be an educated decisions and you know, and why we teach a lot of social security classes. Just this last week we had some that were very full, very well attended, because people want to learn,
they should learn. And then I'm sure Mitchell talk about when people do come in, they'll leave Haven with a Social Security maximization report that people find very very beneficial.
Absolutely terrific. Well again, Mitch, it's great to have you, and I think we'll just start with you if you don't mind. First off, social Security it certainly is, you know, a great safety net out there. Unfortunately a lot of people have started to base their entire retirement on social Security. And I feel confident that you have people come in and say, well, I'm not so worried about it because I've got my social Security that's going to start coming.
Talk to us about what you say to clients who are depending so much on Social Security payments.
Well, thank you again for having me. I appreciate it.
And just as Larry said, social Security is the number one income stream for retired Americans, and those folks that you know tend to be, you know, relying mostly on social Security. The goal is we want to maximize that out because again you hear so often you know, hey, I'm going to collect it at sixty two in a month, which is the earliest time that you can collect Social Security.
And then we start to really look at.
That and we say, well, is that really the best option for you, because it's about a twenty five percent pay cut from your full retirement age at sixty two as opposed to waiting till say sixty seven, with which is everybody born after nineteen sixty now full retirement age is sixty seven. So we want to kind of look at that, and then again if those folks need additional
income or more funds in retirement. A lot of times we look at well, are you going to continue to work past sixty seven or is there reasons to delay, because again it's starting to grow, and if those folks that take it at seventy are really folks that kind of have to take it at seventy to get the most they can out of that soci security benefit.
So one of the things that I think a lot of people don't realize is that there is a portion of Social Security that is taxed. So let's walk through that if we could, because that may play a really big role for a lot of people about when they start to draw. So walk us through which portion is taxable and who might be affected.
Well, everybody's going to be taxed at some point right now, there's a very limited amount of people that will not be taxed. So if you're you know, your single incomes under thirty two thousand, there will be no tax on your Social Security adjusted gross and couples under forty four right, So we want to start.
Looking at that again.
You want to take into consideration obviously with any tax professional, your CPA, you want to adjust with them as well to see how much of it. But fifteen percent of your soci Security tax or a socialecurity benefit is never taxable, but up to eighty five percent that benefit will be taxable at.
The federal level.
And we're talking the federal level right now. So if your adjusted gross income as couples is over forty four thousand, up to eighty five percent of that benefit will be taxed.
Okay, So does that change or is there a better way to calculate that? Depending on your age and when you start to draw that.
It's really based on the income not age.
Okay, all right, and does that include survivor spouse benefits?
It includes any soci security benefit you had have, plus any qualified distributions from retirement funds. So they're talking about your adjusted gross income, right, So all the income streams that you take, distributions from iras, et cetera, those are going to count towards your income stream, so it's not just the base social Security.
Mitch Moss is our guest. He is a retirement specialist with Haven Financial Group. So let's talk about what you say to your clients when they come in about this taxable income and how you maximize for them to make sure that you know it doesn't affect them in such a negative way.
Well, again, it's we you know, there's not a lot we can do with the thresholds that they have, which really haven't been adjusted with cost of living for the last twenty plus odd years, so you know, they're really low thresholds as far as the taxable base. So we want to make sure that you know, people say, well, I want to reduce my taxable exposure to Social Security. Well, most of my clients are living on average of fifty sixty thousand dollars a year.
So it's really hard to necessarily get below those taxable thresholds.
So as far as limiting that, it's it's really tough to do unless they start changing the thresholds on the taxable base.
So I would think that probably your advice would be to start looking at other ways to protect yourself from tax because your social Security is going to be taxed, correct, correct.
So you know, if we're really worried about you know, a lot of times when clients take their Social Security or thing before full retirement age, we say, well, maybe we should live off a little bit of the wroth something that doesn't qualify for income, so we can lower thresholds as far as tax going that direction. But again
it's really lifestyle. Now, if you're fortunate enough that you have everything and you in a non qualified account and you're pulling from those funds, a lot of your social Security won't be taxable because we can keep.
Those thresholds below a certain threat level.
So cam's icking to add. You know, taxes are a big discussion. We have lots of discussion because it really does matter where you draw from. Is it pre tax accounts, is it a savings account, what type of it is it, and we say taxing of Social Security. It's a progressive tax, you know, zero percent up to fifty percent up to eighty five. It's not all of it is going to be taxed at eighty five, but it really does matter.
And I want to point out we're here in Minnesota, and you know, we've been discussing the federal taxation, but we're one of nine states right now as of twenty twenty five that does tax it, depending upon what your income is. The state of Minnesota did make a change here last summer. So if you're under a certain threshold, I think it's one hundred and five thousand and change, if you're married and eighty two adjusted gross income, you
won't be taxed at the state level. And if you're wondering what states are in addition to that, it's Colorado, Connecticut, Montana, New Mexico, Rhode Island, Utah, and Vermont.
As well as West Virginia.
So you're probably thinking maybe I'm going to move to South Dakota, Arizona, Florida, and.
I get it.
However, I always caution people make sure you check out the applicable taxes in those states, because different states have different taxes. So it comes back to this, have a partner that talks about taxes.
Lance is our in house CPA.
We're in the middle of tax season, but this tax planning is an ongoing annual thing.
It's throughout the course of the year.
Again, to make sure that you understand the tax code where you draw from and that's where us we at Haven Financial Group, we really want to be part of that discussion. Just this week, as every week, we have folks that come in that haven't been given the attention and it shows up with oh, my goodness, we owe a bunch of money. Oh my goodness, nobody told us to withhold more. You know what, have a good partner that you can lean on so you're not trying to do it all yourself.
And Mitch, let me just ask you one final question on the taxation. Do you find that you have people who come in and say, listen, I'm ready to draw Social Security and then when you start to walk them through this this is a determining factor about when they're going to draw. Maybe they decide I'm not ready to take that income if it's going to be taxed at this point.
Absolutely, especially with those folks that are still working and they come in and they say, you know what, maybe I'm going to double dip a little bit and grab that Social Security to pay off maybe some debt or some things like that. And I go, well, you're at this tax bracket. You add the Social Security benefit on top of that, now you're going to be pushing into
another tax racket. Maybe we should delay earn those delayed credits on social Security because the interest they might be saving to pay down a little bit of debt isn't going to offset the tax charge that they're going to hit.
Yeah. Absolutely, all the more reason to sit down with experts like the two of you to talk about when is the best time to draw when you realize that not only are you maybe leaving some benefits on the table, but you also might be facing a tax issue that you don't want to face. If this all sort of brings a bell with you and you've had some questions about social security, any questions about social security, and certainly
about taxes related to social security. Even financial groups number six one two five zero four eight four zero zero six one two five zero four eight four zero zero they teach social security classes on a regular basis throughout the metropolitan area. There you can go to Eavenfinancialgroup dot com to find out when one of those those seminars are going to be held one of those classes to learn a little bit more and get some answers to
some of the questions that you may have. Don't have to be a client and they are free, but you do need to sign up. All right, gentlemen, when we come back, let's talk a little bit more about lower inflation and social security, how that affects people's benefits. You're listening to the Haven Financial Group Radio Show.
Don't go too far. We're gathering more important insights and retirement ways. Devin, The Haven Financial Group Radio Show will be right back. Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kulvig and Kim Karagan. Now back to the show.
Good morning, and welcome again to the Haven Financial Group Radio Show.
Thanks for listening.
Give us a call at six one two five zero four eighty four hundred, or visit us online at Havenfinancialgroup dot com, where you can find all kinds of as you mentioned, Kim, all kinds of classes that we're teaching throughout the metro area. And again, social security is just one of those discussions that you know, people have questions on and that's our job description at Haven is to answer questions.
Later in the show, Mitchell.
Talk about how we put together a Social Security Maximization Report, and again it's good to have Mitch on discussing about these really important topics.
Absolutely, Mitch, thank you for joining us this morning. We wanted to talk a little bit about inflation and its impact on social security. You know, we have seen what we believe has been crazy inflation for quite some time. It does seem to be trending a bit in the right direction, which is good news for everyone. Talk about inflation and how it impacts social security benefits.
Well, absolutely, that's one of the main drivers obviously with the cost of living adjustment that they look at with social security. But over the history of social security, it's never really keeping up with inflation, right. Obviously, we get a cost of living and we've had a few really good years these last few years with cost of living adjustments, but as it starts to tailor down a little bit.
I mean in twenty twenty five.
It's two point seven, which obviously sounds good, but inflation is sitting well over the three percent mark right now that we can look up you know, obviously I know just about anything. But again we want to be looking at that. That twenty twenty four cola was three point two and even higher those previous years, but we had high inflation.
But it doesn't necessarily keep up with inflation.
Yeah.
The tough part about that is that while it's not keeping up, that doesn't mean that retirees costs are staying down. I mean they're still facing a lot of major.
Costs absolutely, So you know, when it comes to the inflation, and obviously eggs are a big talk about right now. You know, just a price of things obviously go up and up and up, and again that cost of living is relied on so heavily by really just about any of our clients, whether low income to high income. It is one of the major players social security in your retirement income portfolio.
So what do you First off, let's walk through what you're telling your clients. I would imagine you have a number of people coming in who are very concerned about the fact that their cost of living raise is not equaling their costs at the grocery store.
Well, and as Larry can contest through all these different shows that he's been doing, and the talk that we have with our clients is you have to prepare in other areas to make up for the differences that are coincided with social Security. You know, nobody necessarily wants to be living just on social Security, so you want to be really protected with your other assets and getting that inflationary growth in those areas as well.
Sure, yeah, Kim, if I may add, you know costs.
You know, everybody's pocketbook, almost everybody's pocketbook has been hurting for quite a while. When we say costs, we're talking housing costs, We're talking, as Mitch said, eggs, food, electricity, hospital, medical, healthcare services.
All of those things.
And you should one shouldn't become too reliant on Social Security. I've said it many times. You know, I understand life happens and certain things that are out of our control. But you know, the cost of living adjustment, which we're talking about this segment.
Is not guaranteed every year.
Yes, we've seen some decent ones due to the inflation that we've had in recent years, but in twenty ten, there was no increase twenty fifteen, there was no increase or the history buffs that are listening in nineteen eighty and nineteen eighty one we had a fourteen point three and eleven point two percent increase.
Way back in the early eighties.
It's not guaranteed though, so figure out what you know, We help people figure out what their other income streams are, what other assets do.
They have to deal with?
Do we need to make some adjustments on their investments, do we need to make some changes to our strategy, or does one really need to look at putting pencil a pen to paper and say, how do we reduce our expenses? Is there some frivolous spending that we're doing so creating a budget? Yes, I know budgets are not fun for anybody, but they're important just as much for the retiree as it is the young person. Because you know, our retirees, most of them are on a fixed income.
How can we try to keep up with inflation?
You know?
So we want to look at all the different investment vehicles that are out there to develop a good plan that can do so we can position ourselves to accomplish these goals.
And you know, Larry while we're talking about social security today. Inflation is something that you and I talk about on a regular basis because it has been so impactful for everyone and for people who are just getting ready to
put a good portfolio together. This is really something that you guys try to build into a portfolio for retirement because inflation is going to happen, and if you're in a retirement for thirty years, kits us are very good you're going to hit some rough spots along the way.
Chances are guaranteed you're going to hit some rough spots along the way, because that's what happens. It abs and it flows, It goes up, and it goes down, and in the moment, it seems like, oh my goodness, we've never been faced with this before, because that's in the moment. But we have been faced with this before, maybe not to the degree uh maybe never obviously to the degree
of what your age is. And oftentimes with age we notice things differently because we weren't retired before, we were working before, we had an income before, and now we're not working and our fixed income is what it is. So it's part of our process, which I'm sure Mitch'll talk about here during the show of what one could expect if they come out to one of our classes, if if they call in and they want you know, we're ringing in their ear saying I need to get
more information. We have a proprietary process that we walk people through to really get to the root of any potential problems. Come up with some recommendations and people find that very very valuable and at the end of the day, they have nothing to lose and only things, only information to gain.
So Mitch, let's walk through what happens when you attend, you know, one of those learning sessions about social security. What would people how can they benefit from in on one of those classes.
Absolutely, whether you come to a class or you just call our direct line and book an appointment. Again, just like you said, there is absolutely no charge for it. So what we do is we sit down and I start to get to know the client. You know, what is it that you have, what do you have going on? What is it you're trying to accomplish in the future.
Because soci security at the end of the day, if you're an average husband and wife that had an average income per se, you're looking at eight hundred to well over a million dollars of soci security benefits if you live to the ages of eighty five and ninety. So that's a large piece of the puzzle when it comes
to portfolio planning. We have a lot of clients that come in and they've done really well, say four or five hundred thousand dollars save they have it in their four oh one K. But social security actually is a
larger piece of that puzzle going forward. So coming in we get to know some of these things, what do they have, what do they need to accomplish, and then we run a fourteen page report, right good better invest on how and when to take social security based on life expectancy and that conversation that we have wanting to get to really know you because I know on the Socialcurity website they have a slide bar and you can adjust that slide bar and get an idea of what that benefit might be.
But that's not really telling you.
Anything in the long run because it all coincides with all the other aspects that you have inside your portfolio. Are you going to work you can have a part time job, should you delay, should you not?
And again we're always.
Talking about the text, but it's a way we want to get to know you again. Fiduciary type investments. Investment advising is what we want to be talking about. We want to get to know the client, what their outcomes are, and how do we produce that. And that fourteen page report is helpful and those are the numbers that we'll use when we put any planning together if you decided to.
Do that in the future.
Fourteen page report that sounds like a lot of pages is a report. I can't imagine there's that much to report on me at any point. So what's in that fourteen pages, Well, a lot.
Of data, so it's you know, it's putting inflation in on average. I'm using about two percent cost of living inflation because that you know, over a ten year period, that's kind of the average.
We want to put that in.
Soci security reports that you get online do not right, they're not factoring in cost of living, so we want to adjust with that. We're also going to be putting in an average expense. You know, what are your expenses and we're going to include those with a cost of living increase as well. So we're going to get some real good numbers and everybody who's come in. And I've had people come in over the years and they're like, you know, Mitch, I already got an idea. I already
know what I'm going to be doing. We run the report and nine times out of ten they change their mentality or their thinking about how and when they take their Social Security benefits. I'm not trying to change that, but the numbers don't lie, right, So that fourteen page report is people are It's just eye opening.
Yeah, Larry, again, this is something that as an individual, you don't have access to that kind of information and you don't know about that information, and it's why it's so important to have a partner.
Yeah, well you don't know, You don't know, and oftentimes you don't know where to turn to. So if you have questions about what this means for your own financial decisions, you're not alone, you know. I know there's many listeners that go, what is that?
What is the truth? What should we do?
There's many factors to weigh into this. You have your own personal, say situation. It's not one gluff. It's all just because your neighbor did something at sixty four doesn't mean you should be doing it at sixty four. There's lots of variables that go into making good sound decisions. So if that's you, give us a call at six one two five oh four eighty four hundred. It's a
very laid back approach. I know that fourteen page report sounds daunting, Kim, but it's really good, better best based on your circumstances, normal life expectancies, what would be the best decision for you. A lot of times people take that right to the Social Security Office when it's their time to turn it on, because it's really a roadmap that simplifies the whole process.
Six one two five zero four eight four zero zero. That's how you get in touch with our friends here at Haven Financial Group and by the way, Havenfinancialgroup dot com. That's where you get more information about some of those classes that Mitch was telling us about. Gentlemen, when we come back, more Social Security chat. This is the Haven Financial Group Radio Show.
Ready to find your financial safe haven. Your dream retirement is in reach. Don't go away, The Haven Financial Group Radio Show.
Will be right back.
Are you worried that your financial strategy might be missing something, Well, you're in the right place. Larry Kulvig is back and ready to help you find your financial safe Haven.
Good morning, and welcome again to the Haven Financial Group Radio show. I'm Larry Kulvig, founder and CEO of the Haven Financial Group, on with Mitch Moss, one of our internal retirement specialists, and of course Kim always good to be with you, talking about social security, what to do, what not to do? Do something, a failure to plan as a plan to fail, we know that one hundred percent. So just doing something and if that's just getting together was to have a cup of coffee and.
A cookie, well so be it.
But I will tell you you will leave here having learned something because people find it very insightful and know there's no cost to come visit with us, not none whatsoever.
All Right, Mitch Moss is with us. He is our guest. He's a retirement specialist with Haven. Mitch, you know, we've had the opportunity here so far to talk about what I'm going to call a sort of normal social security issues. Typically, this is maybe a couple that are drawing and making decisions about when each of them are going to draw situations like that. Let's talk about some of the specialties, some of the maybe situations that people run into that
make their situation a little more unique. For example, let's talk about if someone passes away and the other spouse begins to draw their social security and how that works, and maybe you know what happens when there's a divorce, these kinds of things. So let's talk through some of those.
Yeah.
Absolutely, And these questions come up, you know, pretty much quite often, because obviously life happens, and you know, we want to make sure that we're prepared. And obviously it's just not looking at your social security or a husband and wife type social security. We want to make sure that those benefits continue on. So, you know, I like real world experience because sometimes it kind of brings things home just a little bit more.
So. I had a woman she had.
Come out to one of our classes several years ago, and she had signed up for one of those one on one strategies. She came in and she wanted to give me a little bit of information. Right off the bat, she goes, you know, match, i lost my husband six months ago.
I'm sixty five years of age.
I'm a hairdresser, I work out of my house, and I'm not above what we call the earnings limit, because there is an earning limit on Social Security that you can make before they start reducing your benefit. And she goes, I don't know what to do. He was the higher wager. Should I start collecting his? Should I start collecting mine? And you know, with the information that she had already given me, I said, you know what. I already knew what we were going to do. But I said, let's
run the report. Let's see what the report said. The report said exactly what I thought it was going to say. E said, for her to start her benefits now she was below the earning we need to get some income in and who knows that when you lose somebody, Is this the right time to start making major financial decisions? Absolutely not right. We want to get the right information. You know, the logical choices take the higher benefit. But in her situation, we wanted to try to grow that
widow benefit. So in about a year and a half, she started her benefit. First, got the income coming into the house. Then in about a year and a half we switched from her benefit over to the unreduced window benefit, which was at her full retirement age. What that did has got her an extra fifty eight dollars a month
in her check for the rest of her life. Now, I know for some of our listeners, fifty eight bucks is fifty eight bucks, but when you're on more of a fixed income, right, that's a tank of gas, it's a week's worth of groceries. If she would have taken his benefit first, she would have been out that fifty eight dollars for the rest of her life.
Now, that was the only thing that we actually.
Helped her out with, but it was a big impact on her. We did the math on it, and it was somewhere over you know, eleven twelve thousand dollars over her lifetime. But if she would have done it the other way, she would.
Have been out.
Then she would have just missed out on that that situation.
If you would Number one, good for you that you were able to help that woman in to bring those extra benefits to her. But number two, I think a lot of people who are listening, I'll bet they didn't even realize that you can draw your own until a certain point and then you can draw the higher even if that person is gone. I know I did not realize that. So you can change your.
Benefits absolutely, and it's a strategy we want to look at, you know, quite often because the example that I used was, actually, you know, it's fifty eight dollars, but I see where it's not hundreds, if not thousands of dollars more, because we always want to be maxing out that higher benefit. Another example, I had a woman come in she had lost her husband and she was going to start on that benefit, and they had done quite well.
They had plenty of.
Income, they had plenty of savings saved up, retirement funds, et cetera. So the strategy that we're going to use is we're going to use some of those benefit. Were going to take the lower benefit, which was hers early even though it wasn't going to cover all of her needs for the month, for her monthly needs, but we're going to start taking some draw down on her iras
and things of that nature. Then we were going to wait and grow his, and by growing his we actually got that up probably almost one thousand dollars more a month, which then in turn lessen the drawdown on the iras for the rest of her life. So it's a position we start looking at prior to getting the max benefit out of Social Security, using some of your qualified funds first and letting that other benefit continue to grow.
POY and again, this is one of those things that people don't realize or maybe they don't know how to put the strategy together unless they have a partner to do that. And certainly the folks that have in financial group can partner with you. What happens in divorce situations? Is anyone entitled to Social Security benefits?
Yeah?
Absolutely there is a benefit. So if you've been married for ten years and divorced for at least two years, you may qualify for up to half of your ex spouses What that really means, it's not in addition to yours.
It's up to half.
So if your ex spouse has a benefit of say three thousand dollars a month, and your benefit is a thousand, you may qualify for an extra five hundred dollars right up to half, not in addition too, But you have to been married for ten years and divorced for two. So now I know there's a lot of folks out there, And I actually had a client she had been married
twice over ten years and divorce for two. From both of those folks, I said, please pick the higher one, right, So a little bit of joke there, but again we want to make it.
I guess we're getting the right benefit that we can.
And what if your if your former spouse is remarried and you're not, are you still entitled.
Absolutely you are. You're still entitled to that.
And if and again, if you're divorced and your ex spouse passes away and you have not been remarried, you're still entitled to a full widow benefit. So you're not only getting half of the ex spouses but you're entitled to that full expouse benefit if they happen to pass away.
And Kim there, if you're dealing with X situation divorce situation, and you think, well, does it affect my ex? You may want it to affect him or her negatively, but it does not. It has no effect whatsoever. And technically for a married couple, we talk about strategies. There's over seven hundred different ways that you can actually take social Security. Now, it's not that complicated. Okay, most of them are not relevant. We helped simplify that process for folks, meaning just keep
it simple. And I'll give you another example too. We had a lady in that long ago and she came in thinking she qualified for an ex spousal benefit, and it didn't take long in the conversation to figure out she did not qualify. But in the conversation it came out that her ex was deceased. Now, she quickly pointed out she had nothing to do with him being deceased, nothing to do with.
It, But she qualified for the ex survivor's.
Benefit, which was better than what would have been the ex spousal benefit. So you're saying, well, how do I know that if this is applicable to me? Social Security does not call you in say why aren't you doing it this way? Why aren't you doing it this way? Did you know that this makes more sense? And listeners, how many of you have ever read the Social Security Handbook? I bet not too many. How many of you know that social Security doesn't always make sense, similarly to the
tax code doesn't always make sense? So how do you figure this out having conversations with somebody that deals with this all the time. And I'll tell you, I just read a study that seventy six percent of advisors don't feel comfortable talking about our topic today, which is social Security. Now, how could we be retirement specialists. If we don't talk about the biggest income stream for retired Americans, and why are we comfortable? Because we're having this discussion in every
single meeting. And if you're dealing with twenty year or thirty or forty or fifty year olds, you're probably not talking about social Security. And if you don't talk about something in a regular basis, you don't have the confidence.
Over the wherewithal.
We have longtime advisers that come in and go, we know nothing about Social Security, and that's fine, but it's our duty to help them in this area for sure.
Absolutely. By the way, I'm about to go on vacation. Maybe i'll get that handbook and read it on the beach. That sounds like some real great reading, right.
Boy, I can't imagine that'll be Kim, that's.
Gonna be a terrible vacation. If that's the case, all right? If you if you yeah, right, then there you go. Now that's when I might need to read it. If any of this is ringing a bell with you, and I feel confident that there's many of you listening and you're saying, Wow, they are answering some of my questions, but I have more You can call them at Han Financial Group at six one two five zero four eight four zero zero six one two five zero four eight
four zero zero. You know, there's no question that is silly. Don't don't be embarrassed, don't hold off because you think you should know it, because again, as as we have made very clear, most people don't read the handbook or for that matter, stay up on some of the changes that occur when it comes to social security. Hevenfinancialgroup dot com.
You can also get more information there. So, having said that, in our next segment, we're going to talk about some of the changes and the updates coming up here in twenty twenty five when it comes to social security. Before we go to the break real quickly here, Mitch, let me ask you this. I asked this of Larry all the time. I'm going to ask you, is social security solvent?
Short answer is yes? Right? Is social security going away? No? Right? Are they going to make changes to soci security? Absolutely right? Are we going to like the changes? No right?
But they've been making changes since the inception of social security. You know, for one instance, you know when you first when socialecurity first came out, the full retirement age was sixty five.
Well, and then they changed it. Houston, we have a problem. Adam A.
Fuller was the first recipient of a sociecurity check. She lived to one hundred because life is and see back in the day was sixty seven to sixty eight for males. Right, they only thought they were going to pay two or three years, so they made changes. Right now, it's sixty seven full retirement age for anybody born over nineteen sixty most logical choice. And again this is just me thinking about it. They're probably going to extend the age out
a little bit longer. Right, for those folks that are nearing soci security, it's not going to affect them.
Is it going to affect me?
I was born in nineteen seventy three, Absolutely right, But my full retirement age might go from sixty seven to sixty seven and four months. Is that going to be a major impact on my?
Right? So again, they are going to make.
Some changes, and you know, we just have to see what those will be coming down the pipe.
All right.
Mitch Moss is our guess to heat is a retirement specialist with Haven Financial Group, and we're going to talk about some of those changes that are occurring. In twenty twenty five, update everybody on social security updates. When we come back right here on the Haven Financial Group Radio Show with you.
Don't go too far. We're gathering more important insights and retirements government Haven Financial Group Radio Show.
We'll be right back.
Stick around. You've got questions, We've got answers. Your tune to the Haven Financial Group Radio Show with your host Larry Kulvig and Kim Karragan. Now back to the show.
Good morning once again, and welcome to the Haven Financial Group Radio Show. I'm Larry Culvig, founder and CEO of the Haven Financial Group, on with Mitch Moss, a retirement specialist here at the Haven Financial Group. If you're looking for more information or something that we're talking about today or maybe other shows, key retirement topics that you have questions, worries, concerns, reservations you just don't know, how about you get those
questions answered. Feel free to come on and visit with us. Because if you've been having a question for years, why didn't you get it answered because you probably never asked it or nobody knew you had the question. So again, that's the purpose of what we do in retirement and We're.
Very proud to do it. So updates.
Just when you figure things out, they make changes, some good, some bad, some indifferent. And how do you find out about those changes.
Well, you find out about them through folks like you, I think, because otherwise you have to go and read that booklet like you said, and I don't think too terrible, and many people are planning to do so. So let's start with this, Mitch. Obviously, cost of living adjustment in twenty twenty five, we talked about this at the start of the show, but let's recap that and where that stands this year.
The average cost of living or the cost of living for twenty twenty five is two point five percent increased this last year, twenty twenty four was three point two So obviously we've seen a reduction in the cost of living from last year to this year because obviously inflation is starting to dwindle a little bit.
Yep. Absolutely, what you think are some of the biggest changes this year that people really need to be aware of, Well, a.
Couple of things.
Obviously, the maximell taxable earnings went from one hundred and sixty thousand to one seventy six. There's a max benefit that you can receive from Social Security based on you know, your years of service, right, how much have you made over those years and paid into Social Security. The max last year was one sixty eight six, and this year it jumped to one seventy six because there is a max benefit. I've always had people come in and they say, how come I got a little bit of pay raise?
They were high way journers in you know November December is because they hit that one hundred and seventy six or one hundred and sixty eight number, and then they got a little bit more because they weren't paying into the Social security industry. So that's a big change. The other thing is the tax credit or the credits. Right, you can get four credits a year. So in twenty twenty four the MAXIMUMORIU was seventy two forty for four credits. In twenty twenty five it's went up to eighteen ten.
So you've had to earn a little bit more to earn those credits. That obviously goes up every year because again they're just making changes.
Which what are those credits? Explain that if you will, So.
You need a ten year work history to qualify for Social security and that ten year work, you can get four credits a year based on basically call it what is it two and forty dollars a year. So those four credits over ten years gives you forty credits, and that's how you qualify. I know Larry has a story about somebody who came in and she didn't have full credits. But again that's you know, you have to have ten years. Now, if you get to nine years and nine months, do
you qualify. No, it has to be ten or more.
Okay, So full retirement age. We talked about that. It has gone up correct.
The full retirement age, and we've known that these were the calculations several years. I've had a sheet on my desk that states, you know, they say this year obviously now that if you were born over nineteen sixty, your full retirement age now is sixty seven. If you were born in fifty nine at sixty six and ten months, if you're born in fifty eight at sixty six and eight months, et cetera. But now it's sixty seven, right, and that's the max that we have right now. They
haven't made any changes to extend those out. Like I was saying, earlier. The changes I think that are coming down the road is they're going to change that again, So it might be sixty seven in some months, maybe all the way up to sixty eight, depending on the year of birth.
Yeah, Cam, if I could summarize, you know, earliest, you're going to take it at sixty two. From sixty two to sixty six, it grows by six percent plus the cost of living adjustment whatever that applicable number is. From sixty six to seventy we call those delayed credits, it grows by eight percent plus the cost of living adjustment.
So the reality is longer the wait, the bigger the check. Now, for a married couple, maybe the lower bread winner takes it earlier, the higher bread winner maybe just waits a little bit longer because the surviving spouse is going to get that higher amount. If you take those security early, there's going to be a reduction, no way around it. There could be for you, of course, and then your spouse if they take it early. So that's why we want people to make an educated decision. Just don't take
it because everybody else in your family's taking it. Are we trying to steer people to make them wait?
Absolutely?
Not.
Susie Orman thinks that pretty much everybody should wait till seven. For some that's the right answer, and for many that's the absolute wrong answer. It's really individual your variables in your life. Are your variables? Are you going to continue to work, are you not going to work? Is it a part time job? What are the other income streams? All of these are variables. Maybe you have longevity. Everybody in your family lives past ninety, well, I would hope
that you might be waiting till seventy. Then right again, it's just giving this making a thoughtful, educated decision because over time, that's a lot of dollars.
Absolutely so, Mitch, we've talked about some of the changes in twenty twenty five, and I'm sure there's a lot of people who are listening who maybe didn't know about those or have some questions about them. And again, you can call six one two five zero four eight four zero zero, that's a Heaven Financial group and tell them that you heard us here on the radio, that you heard Mitch Moss talking about Social Security and some of the changes in twenty twenty five, and you've got some
questions about them. I want to ask you, though, which about what you think is the biggest mistake that people make when it comes to social security.
It's taking it right away at sixty two and not knowing the ramifications or the benefits that will help them going forward. One of the biggest things I always kind of ask my clients. I go, well, what did your person, maybe the person that you're working with, what did they say about sociecurity? And I usually get well, we've never really talked about it. You know, and as Larry's talked many many times over this radio show that socialcurity is
a number one incomestry for retired Americans. So if you're not talking about the benefits of social security, I get this a lot of times. You know, those folks out there that have pensions, you're going to love that pension. Larry talks about it all the time too, But would you take a reduction in your pension by taking it early? And those people that have pensions are absolutely like, no way, I'm going to get the most I can out of
that pension. Well, we want to do the same thing on social security because again I've got lots of clients they have a good pension.
Again, you're going to love it.
Along with Social Security, all those benefits that every dollar you take out of social Security is less a dollar we have to worry about taking out.
Of your iras or your ross or your other accounts.
Maybe you want to plan for legacy that might leave more money to the kids, or more money for vacations, or more money for whatever it might be by taking those benefits at a later date and getting the higher benefit. And again, like Larry says, longevity and things of that nature, we want to get the most we can out of it.
Sure, absolutely. And so when someone comes in and sits down and talks with you, what are the questions they should be asking about their own personal situation? What are the things that they need to be aware of to share with you so that they can make the most out of drawing social Security?
Well, I ask some qualifying questions, right, They're going to be ballpark type questions.
I don't need to know super specifics. What do you have here? What do you have there? What are your goals? What are your objectives and retirement?
And based on those qualifying questions, we can go through and start figuring out, Okay, what are going to be.
The income needs going forward? Right?
Is there a reason should we have to do we have to max out social security? Is there a reason to work a little bit more? Is there a reason to draw off your qualified funds first to let that soci security benefit grow? And we'll do some basic math and kind of show you what those those outcomes really will be down we'll come out to.
One of the things we haven't talked about, but I know that, Larry, you've talked about in previous shows, and that's the fact that it's not both of you, if you comes in as a couple, not both of you need to turn it on at the same time.
Yeah. Absolutely, we do this strategy a lot.
So husband and wife might come in and you know, one might not have had as good a work history as the other one, so we might start collecting that benefit early. We always want to start on the smaller benefit and max out the higher of the two benefits.
And we might shift and say, all right, well we're gonna even though you both might be retiring at the same time, we still might collect that lower benefit first, live off of some of those qualified funds, and then pick that other one up at a higher rate because the higher benefit always lives on And don't you want to leave your spouse or significant other the higher benefit for the rest of their life.
If something got for will God forbidding happen to you?
Absolutely? All right? So what would your gentlemen like our listeners to walk away from this show knowing today?
Well, I think most importantly that it should be an educated decision. It's a big decision, and it's oftentimes thought of so flippantly, Well, I'm just going to turn it on because that's what I do, and that's the wrong
way to look at it. We don't have to make it complicated, we certainly don't, but put some thought into it, because numerous times, almost every single week, people come in with this idea, this notion that this is what they're going to do, and with conversations that they have with us and Mitch specifically, they leave there going, well, my idea wasn't the right idea, and had I not add this conversation, we would have probably made the wrong decision.
That's hey, if that's what a conversation can bring bring out is a possible right decision, why not take advantage of it? You know, social security is the gushing today, it has been. It's one of the retirement puzzle pieces. There's numerous retirement pieces, puzzle pieces, if you will, that need to be discussed, this one being one of them. Taxes being another one. We're in the middle of tax season, forward thinking tax planning lance. Our CPA is it's his
favorite time of the year because he's doing taxes. He's as happy as ever making sure Uncle Sam doesn't get any more than they deserve. So the taxes, the investments, if you're worried about the markets, we've had volatility lately, stress tests that portfolio and medicare if you're retiring this year, or maybe you got a pink slip that you didn't see coming. Healthcare is a big discussion that it's people. They don't talk about it and think about it enough.
So there should be coordination in all these retirement areas, more so in retirement than ever. And up until this point, if you've not been retired, you probably haven't thought of it that way.
Mitch, about out of time here very quickly, any final thoughts from you.
Come on in.
Get that fourteen page report. It's going to help you out in any of your planning.
I love that. Mitch Moss Retirement Specialists, thank you. So much for being a part of the show today. Six one two five zero four eight four zero zero. That's the number and that's how you can get some of these questions that you have lingering answered. Come in and visit with the specialists there at Haven Financial Group. Larry enjoyed it.
Thanks Cam, I have a great week. We'll see you next week.
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