Safe Money - 11-18-23

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Episode Transcript

(00:00):
Good Saturday morning to all. Onthis mid November Saturday. Dick sheldeg here
and this is safe Money. Weare here talking with you on Saturday before
Thanksgiving. Normally here every Saturday totalk with you about strategies we use with
our clients to manage and protect assetsand to manage and protect those assets safely

(00:25):
here in today's very unsafe world.We have been here on Saturday mornings for
a long time now, actually sincetwo thousand and eight, so there's lots
of years of safe money and wewill continue lots of years of safe money.
A reminder to all that we arecontinuing our virtual community meetings for the

(00:47):
month of November and December. Wehave several meetings remaining yet for the month
of November and December. These meetingsare virtual only, so they are planned
for December fifth and seventh, Tuesday, December fifth, and Thursday December seventh,
So that's a that's on a Tuesday, December fifth and Thursday, December

(01:11):
fifth. Remember, the Medicare annualEnrollment period runs until December seventh. Remember,
listeners, if you want to changeyour choice for Medicare, now is
the time to do so. TheMedicare annual enrollment period runs until December seventh.
As I mentioned, we have madeavailable these meetings for a long time

(01:34):
now, and we conduct these meetingsvirtually, so you remain in your own
home using your own computer equipment.Call us at five six three three three
two twenty two hundred four instructions onhow to participate in these meetings from your
own home. So again, themeetings are December December, Tuesday, December

(01:57):
fifth, and Thursday, decenth,seventh. So, if you are aging
into Medicare, turning sixty five inthe near future and becoming eligible for Medicare,
I know you are being inundated withsolicitations for various plans, and my
gosh, with ten Medicare supplement plansand we get to pick one of these

(02:20):
ten plans. With eighteen prescription drugplans, we get to pick one of
those eighteen plans, and with eightadvantage plans, and we get to pick
one. So I know it getsvery confusing. So how do you make
sense of all this? Boy?Our virtual community meetings will certainly help you,

(02:43):
so help you understand what is availablefor you and what choices you have.
Those meetings are again Tuesday, Decemberfifth, and Thursday, December seventh,
give us a call five sixty threethree three two twenty two hundred four
instructions on how to participate in thesemeetings, or you can send me an

(03:04):
email. Go to Dickshilling dot comas www. Dickshilling dot com and when
our website opens, scroll over tothe contact icon and drop down for our
email address. If you would liketo correspond via email. I want to
talk with you today about waiting untilage seventy. Waiting until age seventy will

(03:30):
result in higher possible benefits from SocialSecurity, but that's not always the best
choice. Now. I want totalk this morning about ten reasons to claim
social Security before age seventy, andyou can get this information go to the
social security website wwwsoisecurity dot gov andthere's an article there by Roger Woldner.

(03:57):
The publishing date was June seventh oftwenty three, and he talks about ten
reasons to claim social Security before ageseventy. The first reason he gives is
health issues. One reason you mightconsider claiming before age seventy is poor health.
This may be facing a reduced lifeexpectancy, and claiming at an earlier

(04:23):
age can help them maximize their lifetimebenefits. Claiming earlier than seventy can also
help them and can also help withexpenses related to your health condition. Number
two reason claiming survivor benefits. Widowsor widowers can take their survivor benefit as

(04:46):
early as age sixty or earlier ifthey are caring for a minor or disabled
child of their late spouse. Ifthe surviving spouse has reached their full return
and age, they can claim onehundred percent of their deceased spouse's benefit,

(05:06):
though that benefit amount will be reducedif the deceased spouse had claimed their benefit
prior to their full retirement age.Another option is for the surviving spouse to
claim their survivor benefit as early asage sixty, then convert to their own

(05:28):
benefit if it is higher, asearlier as sixty two or as late as
age seventy. This can provide aninitial stream of income that can be converted
to a higher level later on.The third reason you can maximize your married
couple's benefit. One common claiming strategyfor married couples is to have the higher

(05:51):
earning spouse wait until age seventy oras long as possible to claim their benefit
This ensures that their spouse will receivethe highest possible survivor benefit should the higher
earning spouse die first. It canmake sense for the spouse with the lower

(06:12):
benefit to claim prior to age seventyin order to provide an income stream earlier
in retirement. Even though their benefitwill be reduced. The couple has ensured
that the spouse with the lower benefitwill receive the maximum survivor benefit if needed.
The fourth reason for claiming prior toage seventy is to defer taxes on

(06:40):
retirement savings. In some cases yourclient, in some cases you might benefit
from claiming the Social Security benefits priorto age seventy in order to delay tapping
their retirement accounts. There may bea number of reasons for this, including
deferring taxes on money in retirement accountsor allowing their investments to continue to continue

(07:04):
to grow tax deferred. If clientsare still working, it is probably best
that they can wait to claim theirbenefits until they reach their full retirement age
to avoid benefit reductions that can't acompany earned income prior to their full retirement

(07:24):
age. Number five reason for claimingbenefits before age seventy. The number five
reason is to preserve inheritance for beneficiaries. Allowing investments to grow might be a
consideration for clients concerned about leaving alarger inheritance, Claiming social security earlier can

(07:51):
allow them to let these investments continueto grow. There might be a consider
iteration for clients with a variety ofa state planning situation, perhaps a client
with children or other family members astheir beneficiaries. The sixth reason is for

(08:13):
simply cash flow needs. Those enteringretirement have varying cash flow needs. Taking
solid security benefits early can help solvethese. For example, you may be
eligible for a pension where it isadvantageous to wait for a few years to
commence taking payments, so that couldbe a huge huge benefit. Taking sol

(08:41):
security benefits can provide cash flow thatoffers clients that offers you planning flexibility during
their retirement years. The seventh reasonis to take spousal benefits. For those
who not qualify for a benefit ontheir own or whose own benefit level is

(09:05):
quite low, a spousal benefit isa good option if applicable to qualify for
a benefit based on spouse's earnings.On a spouse's earnings record, the spouse
must already be taking their own benefit. In a situation where the spouse with
the higher benefit level is the youngerspouse, it can make sense for them

(09:26):
to claim their benefit before age seventyto allow the older spouse to claim a
spousal benefit. The eighth reason forclaiming social security before age seventy is to
invest for a greater return. Youmay have you may not need your benefit

(09:54):
to cover their living expenses and wouldlike to invest the money from their Social
Security benefit. They might consider commencingtheir benefit early and investing the money each
month in order to accumulate additional assetsfor retirement or to leave their beneficiaries upon
their death. Their lower monthly benefitlevel can potentially be offset by the ability

(10:20):
to invest these amounts each month overa longer period. Each client's situation is
different, and if this is anoption for one or more individuals, it's
important to show the pros and thecons of this approach, and will be
happy to do that. Boy.If you have questions on these listeners,

(10:41):
please give us a call five six, three, three three two twenty two
hundred will be happy to assist tothe ninth reason for claiming Social Security benefits
before age seventy is because of privatehealth insurn payments. For clients who retire

(11:03):
before they are eligible for Medicare,social Security benefits can help cover the cost
of health insurance in that gap period. Private health insurance can be very costly,
and there may also be an outof pocket medical costs to cover this
period. Boy, we deal withprivate health insurance daily, and we know

(11:26):
what the cost of private health insurance, especially for persons who are not yet
eligible for Medicare. You know,we become eligible for Medicare at age sixty
five, but the cost of privatehealth insurance for persons in their fifties or
their late fifties or early sixties,Boy, the cost of that health insurance

(11:50):
is very, very substantial. Soyou may draw on Social Security prior to
age seventy to help pay the costof that health insurance. So if you
retire into a down market for clientswho find themselves retiring into a down market

(12:15):
environment, claiming social Security prior toage seventy can allow you to use these
benefits for some or all of theirretirement spending needs and lieu of drawing money
from retirement and investment accounts whose valuehas been depressed due to the decline in
the markets. Boys, especially truetoday with the decline of the markets in

(12:39):
the past several years. And thenrelated there are eight reasons to avoid a
wroth conversion. One of the keyrea retirement planning decisions you face is one

(13:03):
to claim their Social Security benefits.Waiting until age seventy will result in the
highest possible benefit, but this isnot always the best choice because of different
circumstances. When to claim Social Securityis not a one size fits all proposition.
There may be a variety of reasonsfor you to claim their benefits before

(13:28):
age seventy, and I've stated someof these to you here. One of
the reasons is for the cost ofhealth issues. The second is for claiming
survivor benefits. The third is tomaintain married couple's benefits. The fourth is

(13:48):
to defer taxes on retirement savings program. The fifth is to preserve inheritance for
beneficiaries. Boy, these are important. Sixth is because of very simply cash
flow needs. Seventh is taking spousalbenefits, and boy, that's important for

(14:11):
those who do not qualify for abenefit on your own or whose benefit level
is quite low. A spousal benefitis a good option if applicable. To
qualify for a benefit based upon spouse'searnings, that spouse must already be taking
their own benefits, so that's animportant one. The eighth reason is would

(14:35):
be investing for a greater return.So if you don't need their benefit to
cover living expenses and would like toinvest the money from their Social Security benefit,
boy, it is very, verybeneficial if you claim Social Security prior

(14:56):
to age seventy and inst money investthat monthly payment, and by investing that
monthly payment that may help you laterin life. That lower monthly benefit that
you would receive by claiming the benefitearly can potentially be offset by the ability

(15:18):
to invest these amounts each month overa longer period of time. Each client
situation is different, and if thisis an option for one or miss,
I know what the cost of privatehealth insurance payments are because we work with
individual major medical insurance for persons beforethey are eligible for Medicare, and boy,

(15:43):
those costs of that major medical insuranceis substantial, and to help offset
that cost, that may be agood reason for claiming Social Security benefits earlier
to use that benefit to help payfor those costs, So that's something that
needs to be considered. What ifyou retire in a down market and boy,

(16:07):
that's happening today. For persons whofind themselves retiring into a down market
environment, claiming social security prior toaide safety prior to age seventy can allow
them to use these benefits for someor all of their retirement spending needs in
lieu of withdrawing money from retirement andinvestment accounts whose value has been depressed due

(16:33):
to the decline of the markets.The reduced retirement account withdrawals during this period
allows the investments in these accounts thetime to recover as markets recover. This
can help rebuild the value of aclient's retirement nesting, allowing their money to

(16:55):
last longer. So that is very, very import One of the key retirement
planning decisions that we face is whento claim that social security benefit. Waiting
to age seventy will result in thehighest possible social Security benefit, but this

(17:17):
is not always the best choice.When to claim social security is not a
one size fits all proposition. Theremay be a variety of reasons for you
to claim your benefits before age seventy. And I think i've stated some of
those for you this morning. Forindividuals with a reduced life expectancy due to

(17:44):
an illness or family history, itmakes sense to prepare a break even analysis
illustrating the age at which their lifetimebenefits from waiting to age seventy would exceed
their benefits from claiming at an earlierage. This type of an analysis can
be very useful en showing all theen showing everybody the differences in their potential

(18:07):
lifetime benefits when claiming early, regardlessof their reason for doing so. Don't
forget about a virtual monthly community meetingson Medicare, which you are coming up
here on December fifth and December seventh. December fifth is Tuesday, and on

(18:30):
that December fifth, we talk aboutthe basics of Medicare and then focus on
the Medicare supplement plans. Remember,there are ten Medicare supplement plans. We
get to choose one of these Medicaresupplement plans. And then in addition to
that, we have prescription drug plans, and there are eighteen prescription drug plans

(18:56):
in these Medicare regions. We getto pick one of those. The choices
are very very important. Now isthe time we are still in the Medicare
annual enrollment period and the enrollment periodruns until December seventh. So if you
wish to change your choice for Medicare, your choices. We either have the

(19:18):
three card system, or you havethe Medicare card issued by the government,
and you have a Medicare Supplement cardissued by a private insurance company, and
you have a third card issued bya private insurance company for the prescription drug
plan. Remember there are eighteen prescriptiondrug plans. We get to choose one

(19:41):
of them. There are ten Medicaresupplement plans. We get to choose one
of those ten plans. Medicare partsA and B is issued by the government.
So when you have original Medicare,you have the three card system.
You have your Medicare card, youhave your Medical Care Supplement card, and
you have your prescription drug card.That's the three card system. The alternative

(20:06):
to original Medicare is the one cardsystem, and that is a program issued
by a private insurance company and ittakes the A and B part of Medicare
away from the government and sponsors thatA and B coverage in your Medicare advantage
plan, as well as it addsa prescription drug plan to it. We

(20:29):
call that system the one card system, so there are pros and cons to
the one card system, just asthere are pros and cons to the three
card system. If you'd like tohave additional information, please call us call
us at five sixty three three threetwo twenty two hundred. Boy jot down
these dates for our Medicare meetings.We have a virtual meeting on Tuesday,

(20:56):
December fifth, and that meeting isdone virtually, so you stay in the
privacy of your home and use yourown computer equipment at home and access our
virtual meeting. Give us a callto get instructions on how to sign up
for that meeting. Call us atfive sixty three three three two twenty two
hundred, or go to my websiteWww. Dickshillig dot com and scroll over

(21:23):
to our contact icon for our emailaddress and send me an email if you'd
like to participate in that manner.Craig has conducts these meetings and he does
a very very good job at providinginformation that you need in order to make
your choice of original Medicare or theMedicare Advantage Plan. There are pros and

(21:48):
cons to original Medicare, just asthere are pros and cons to the alternative
to original medicare with the advantage plan. We have eight advantage plans available in
this reason. In these medicare regions, a medicare region is typically a county.
So in Iowa, Scott County andsurrounding counties are part of a Medicare

(22:10):
region, whereas in Rock Island RockIsland, Illinois, the City of Rock
Island is a Medicare region in thesurrounding counties to Rock Island County or medicare
regions as well. So there's awealth of information to be learned, a
wealth of information to be acquired,So feel free to give us a call

(22:33):
or send me an email again.My phone number five sixty three three three
two twenty two hundred. My emailaddress is Wwwdshillig dot com and then scroll
over to the contact icon and dropdown for my email address and send me
an email if you'd like to correspondin that manner. Remember, listeners,

(22:56):
we still have are wonderful indexinuity inwhich we are paying a forty five percent
bonus on that indexinuity. And asfar as I know that bonus is going
on, we haven't had information andsays it's going to be withdrawn. So

(23:18):
we're still offering a forty five percentbonus. So if you invest a minimum
of five thousand dollars, that fivethousand dollars will be bonused immediately by forty
five percent. If you invest aone hundred thousand dollars, that one hundred

(23:38):
thousand dollars will be bonused immediately byforty five percent. So your account value
then is one hundred and forty fivethousand. Now there's pros and cons with
any investment vehicle service, just asthere are prozen cons with this forty five
percent bonus index suity. The biggestdisadvantage of that forty five percent bonus index

(24:04):
annuity is that there's a holding period, and that holding period is lengthy.
It's a ten year holding period.Ten years is a long time, but
most companies allow some liquidity within thatten years and which you can withdraw after
the first year. You can withdrawup to ten percent of the annuity's value

(24:27):
without penalty. So that's a huge, huge benefit, huge huge bonus.
So keep those dates down for ourvirtual community meetings. We have Tuesday,
December fifth and Thursday, December seventhfor the next ones coming up and remember

(24:49):
that our Medicare annual enrollment period endson December seventh, so if you wish
to make a change in your choiceof Medicare, you have until December seventh
to make that choice. Then thenew plan will become effective the first of
January, so give me a callif you have questions, Call me at

(25:11):
five six three three three two twentytwo hundred, or go to my website.
Go to Dickshilling dot com and scrollover to the contact icon and drop
that down for my email address ifyou'd like to correspond in that manner.
That's about all I have for youthis weekend. Have a great, great

(25:32):
weekend, and happy happy Thanksgiving,Good Day.