March 18, 2025 • 33 mins
Episode Guest: Rob Soerens
Rob is a financial advisor with Gateway Financial Advisors, holding over a decade of experience in the financial industry. Prior to his current role, Rob practiced as an attorney specializing in mergers and acquisitions, tax law, and estate planning. Transitioning from law to financial advising, Rob's expertise spans across investment strategies, retirement planning, and social security benefits. His vast knowledge and practical experience provide valuable insights, especially for clients navigating the complexities of Social Security.
Episode Summary:
In this engaging episode of the Teaching Tax Flow podcast, Chris Picciurro, alongside co-host Rob Sorence from Gateway Financial Advisors, delves into the intricacies of Social Security benefits. Episode 127 is packed with information crucial for anyone planning their retirement or currently navigating the Social Security system. With an emphasis on timely decisions and common pitfalls, this episode serves both the seasoned and novice planners alike.
The episode kicks off with an exploration of the fundamental aspects of Social Security, including qualification requirements and the significance of the 40-credit rule. Rob and Chris discuss the earnings record and how it impacts the benefits calculation over a 35-year work history. They stress the importance of understanding life expectancy and break-even points in maximizing Social Security benefits. The conversation broadens to cover spousal benefits, including provisions and strategies for surviving spouses, divorced individuals, and non-working partners. The hosts also address the evolving nature of Social Security regulations and the need for updated information, underscoring the importance of collaboration with financial advisors.
Key Takeaways:
- Social Security benefits are determined by the 40-credit rule and averaged earnings over 35 years of work history.
- The earliest age to claim Social Security is 62, with potential benefits maximized at age 70. It's crucial to weigh personal health and longevity in these decisions.
- Spousal benefits considerations include special provisions for widowed, divorced, and non-working partners, affecting filing strategies.
- Keeping informed of evolving regulations is vital; outdated information can lead to suboptimal financial planning.
- Regularly review your Social Security statement to ensure accuracy and address any discrepancies early.
Notable Quotes:
- "Social Security was set up in 1935, and the life expectancy back then was 59 for males, a stark difference to today's expectations."
- "If you expect longevity and want to protect for it, then you could definitely wait... it's about risk adjusting your income based on your expected life expectancy."
- "You can step into the shoes of a deceased spouse and claim at their record if it benefits the surviving spouse."
- "Up-to-date information is crucial because the rules regarding Social Security are constantly changing."
- "Checking your Social Security statement is kind of like checking your credit report; make sure everything is accurate."
Resources:
- Social Security Administration - Official Site - Access your Social Security statement online.
Don't miss out on this comprehensive episode that could shape your financial future and retirement plans. Tune in to unlock deeper insights on Social Security today and stay updated with more expert-driven episodes from the Teaching Tax Flow podcast.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Tripolsky (00:02):
Hey, everyone, and welcome back to the Teaching
Tax Full podcast episode 127.Today, we are gonna dive
directly into social security.We're gonna get all those
questions that you have answeredwith a great guest. But before
we do that, as always, let'stake a brief moment and thank
our episode sponsor.
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current plan, Legacy Lock makesit as easy as pie. Legacy Lock
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John Tripolsky (00:47):
Hey, everybody, and welcome back to the teaching
tax flow podcast. As you heardin the intro today, we are gonna
look at Social Security. Sowhether you know a lot about it
or not, this is a good place tobe. We're gonna have a great
conversation around it. Startthinking in your mind a little
bit if you do have any questionsthat you may want answered to
this because, here's the here'sthe bonus of it, We're probably
(01:07):
gonna have this guy back that wehave on as a guest today and do
another episode on a little bitdeeper of a dive at some point.
So if we don't get to your toyour specific questions on this
one, shoot them over to us,whether it's in a comment on
Facebook, YouTube, email,defeating taxes, wherever you
want to, shoot them over. We'llbe sure to get to them next
time. So without further delay,Chris Pacquero, welcome back to
(01:29):
your own show, sir. How are youdoing, man? I got my tongue
tied.
I'm so excited, I guess.
Chris Picciurro (01:34):
I know. I'm very excited about this topic
and guest. I am doing amazing.Happy to be back on the teaching
tax flow podcast. We're gonna betalking about a topic that
actually was a hot button issue,the last presidential election
as far as tax ability.
We're we're and we're gonna talka little bit about tax on this,
but more importantly, we'regonna tackle some questions that
(01:56):
are very prominent in theteaching tax flow community.
We've had a lot in the defeatingtaxes private Facebook group,
and we're gonna work withsomeone that that I work with
regularly both on mutual clientsand with our own, you know, with
our with our own retirementaccounts. And so I'm excited to
introduce Rob Sorens fromGateway Financial Advisors. Rob,
(02:19):
welcome to the Teaching Tax Flowpodcast, and how are you doing
today?
Rob Soerens (02:22):
I'm doing great. Thanks for having me on.
John Tripolsky (02:25):
And, Chris, was gonna start us here a little bit
different. I was gonna say, youknow what? We're gonna change
this up and because usually, youfind a way to inject pickleball
comment into a show. So I wasgonna throw it out first and
say, you know, kinda debunk themyth that everybody that plays
pickleball is not collectingSocial Security. So so I found
(02:46):
my little tie in there.
So I mean, there's a fair amountthat are, but thought I'd be the
first one to throw a pickleballcoming out, and now I'll shit
up, and you can have a realconversation.
Chris Picciurro (02:53):
So Well, thank you very much for that. And, you
know, Rob already already getsharassed enough about playing
pickleball by myself and our themy a good dear friend of mine
that introduced me to Rob's andRob's colleagues, guy named
Brian. So we're not gonna talkabout pickleball, but you could
be in a pickle when it comes toSocial Security. So let's let's
(03:15):
dive into that, and we're gonnabe talking today about filing
for your Social Securitybenefits. You know, this is an
this is kind of an intimidatingsituation.
What in my experience as a taxprofessional, here's what I see
a lot of. Oh, I worked my entirelife to build up some type of
(03:37):
benefit. I go to file, and now Ifeel lost again. But there's
some things that you need to beaware of when you're maximizing
that Social Security benefitbecause we're all paying into it
significantly through ourlifetime. And then and then once
we can understand those basics,then you can start planning
because sometimes, especiallyfor people that own businesses,
it might make sense to employ aspouse to build up some credits.
(04:00):
So we're gonna we're gonna runwe're we're gonna just dive into
this with Rob. Rob is a, like Isaid, a financial adviser with
gate with Gateway, but also, Iattended a couple of his
presentations specifically aboutfiling for Social Security
benefits, and that was one ofthe reasons that we we've been
sitting on this topic for a longtime waiting for the right
person to to join the show. Soso, Rob, we're gonna start off
(04:22):
with can you give us just alittle bit of of personal
history and and what led you toto, you know, to becoming a
financial adviser and andhelping clients with those
decisions about Social Security?
Rob Soerens (04:34):
Oh, yeah. Great. Thanks a lot. So I've been in
the financial industry for overten years. Prior to that, I was
an attorney, and I was doing acombination of mergers and
acquisitions and anti tax law,estate planning.
And I I just really have decidedI I I left being an attorney and
(04:56):
and decided about eight yearsago to refocus on being in
financial advising andinvestments, because I really
love that there's just such anot only is it an emotionally
salient and important issue foreverybody and every family, but
it's also, you know,practically, you know,
exceedingly important. And toget things right, both the
(05:20):
investments, college planning,retirement planning. You know,
if you if you set yourself upcorrectly at different stages,
you're gonna be very happy withyourself down the road, and
there are certainly mistakesthat could be made, and there
are certainly, you know,virtuous proper things to do to
(05:40):
sell sell yourself up forsuccess. And I just enjoy being
able help people do that. Andthen I also just enjoy the stock
market separately, and so theinvestment component.
But the the planning component,yeah, I just love having that
those conversations with peopleand helping them, because it is.
It can be bewildering. And justlike many things in life, you
(06:05):
don't really know how they workuntil you need to know how they
work. So, oh, mom and dad arenow going to a assisted living
facility because they can't liveon on their own anymore. And now
you a whole new world opens upof complexity of how that
everything, you know, operates,and does Medicare cover any of
(06:27):
it?
I don't know. I mean, I do, but,like, they don't know like, they
didn't you don't know soup tonuts. You don't know anything
about it because you didn't needto until the occasion arises. So
it's the same thing with SocialSecurity. You kind have this
vague idea that, you know, downthe road and you get this
statement once a year from theSocial Security Administration
like, hey.
If you continue on thistrajectory, this is gonna be
your, you know, your benefit.And, you know, I think most
(06:50):
people glance at it and go,that's nice or whatever. You
know, toss it, and, you know, ifyou're your twenties or thirties
or even forties maybe. But asyou get closer, you're like,
wait a second. This this mightbe a crucial component or the
crucial component of ourretirement funding.
And, yeah, you get to 62 or 65or 67, and, you know, the the
(07:13):
IRS and a lot of other rulesaren't that clearly for a
layperson and even for a taxattorney. And so it can be
needlessly complex or can seemneedlessly complex, but it
really isn't that complex whenyou get down to it if you have
somebody that's been through itbefore.
Chris Picciurro (07:33):
Right. And that's the thing is you've
guided many, many people throughthis process, but most peep you
know, in general, you reallyonly go through it one time,
each person. So Right. It's notthat you'll
Rob Soerens (07:44):
learn it, and then you don't have to learn it
again. And unless somebody asksyou what your experience was,
that was, yeah, one timeknowledge. Hey. Hey. That's a
really good point.
Yeah. Exactly.
Chris Picciurro (07:53):
So it's it's kinda scary. Yeah. Well, let's
talk about what you know, canyou talk about we'll start off,
like, what is Social Security,and and how do you qualify? Do
you have to do you have to havea certain amount of income,
amount of years worked?
Rob Soerens (08:09):
Yeah. There is no threshold amount of income, but
there is a threshold amount ofwork history, and there's
something called a 40 creditrule. Each credit accrues by
every quarter that you've paidinto the system, so that would
mean literally ten years. Theydon't have to be contiguous. But
in order to fall qualify forthat or Medicare for that
(08:32):
matter, you need to qualify forthis.
So there are some exceptions.You know, your nonworking
spouse, your spouse worked,you're on their but, generally,
for a for a benefit to beavailable, discounting widows
and nonworking spouses who wouldbe claiming on your benefit if
they if that arose, Somebody hasto have worked for have that 40
(08:54):
credits accrued, and then thebenefit you receive is just
tiered based on your income overthirty five years. So they look
at your entire they look at 30if if you've hit the 40 credit
rule, then you're, okay. Great.You're in.
Now they look at your thirtyfive years of work history
before you claim, before youfile. Right. And if you didn't
(09:16):
work the full thirty five years,every year you didn't work is a
goose egg. It's zero. So, youknow, that works against your
average.
So, you know, that's day to day,you're not really gamifying your
life towards your SocialSecurity number. I'm sure you're
getting jobs that pay as muchmoney as you can get. You know?
Chris Picciurro (09:32):
And
Rob Soerens (09:32):
that makes sense for your family, and it just so
happens you get a work historyand an average. But that's
basically how it works. And soyou may wonder, like, so why
does, you know, a guy down thestreet get $4,400 a month, then
I get 27 or, you know, or 1,700a month? It was based on the
average of the earnings overthat thirty five years. And then
(09:54):
there's a formula that, youknow, break points on that.
So, for example, an interestingand I don't wanna get too off
track here. Steer me back to theto the course if I get too far
off track. But so for example,in 2025, the maximum if you had
the maximum average earningsover that period, if you claim
(10:16):
to age 62, which is the earliestyou can claim, you would start
receiving $28.31 a month, andthen that's subject to a cost of
living increase every year. Ifyou're waiting till your full
retirement age, for most people,that'd be 67. For some, it's 66
and some months.
It'll be 4,018 a month. And thenif you wait until 70, it would
(10:36):
be fifty one zero eight a month.So yeah. So that I mean, in a
nutshell, that that's thesystem. Sure.
One thing that's veryinteresting is it was set up in
1935. The original taxes paidinto the system under, you know,
FDR. Original taxes paid in thesystem started being gathered in
(10:59):
1937, and the first payouts werein 1940. When it was enacted in
1935, the life expectancy so theretirement age in the Social
Security Act 1935, you know,ninety years ago, was age 65.
Well, the life expectancy formales was fifth was 59.
So it's it's it's it's it's itwas not necessarily intended to
(11:24):
do what it do does now, which isa pension plan for everybody.
But yeah. But it's yeah. It'sthat's basically I'm sorry. I
went off a little bit, butthat's that's, in a nutshell,
what Social Security is.
Chris Picciurro (11:34):
Well, and right. There there's there's a
lot of you know, this basically,this wasn't built for where
we're at today. I mean, that'sthat was built almost, you know,
coming up on a hundred yearsago. I wanna talk about the 40
credit rule because myunderstanding is you can get up
to four credits per year, likeyou said. What happens if
someone and and does that dependon when you earned that money in
(11:57):
the year, or or are there arethere any rules for, like,
someone that's self employed?
You know, let's say
Rob Soerens (12:02):
Self employed people also, you pay self
employment tax. It counts. Yeah.So there's yeah. You don't have
to people do have that worry.
You know? I've never had a w twoor, you know, bear barely. You
know, basically yeah. If you ifyou pay self employment tax,
you're paying into the system,and that and you're getting the
credits.
Chris Picciurro (12:19):
And so if if someone was to pay 10,000 of
self employment tax, okay, weknow it's 15.3% of their net
income if they're self employed.Does that does that get prorated
into different you know, in canthey do they get four credits
for that for that year, or is ityou know?
Rob Soerens (12:39):
That you know, that's a great that's a great
question. I have not inpersonally dealt with that
directly. I know I I Iunderstand your question. I can
I can if you give me a briefsecond, I can look that one up?
Chris Picciurro (12:51):
Yeah. No problem.
John Tripolsky (12:52):
And, Chris, almost if I can add to that a
Chris Picciurro (12:54):
little bit. You know, let's
John Tripolsky (12:55):
say, theoretically. Right? Let's say
for whatever length of time,whether it's ten year well, you
know, for sake of conversation,let's just say it's for all
thirty five years. Right? Saysomebody earns a hundred
thousand, and somehow they'vemanaged to legally and ethically
avoid paying any tax every year.
Like, does that, are theybasically riding a goose egg the
(13:19):
whole way to the end of therace, or or how does that look
too, I guess? Would be don'tknow if that adds to or goes
against what you're askingthere, Chris.
Chris Picciurro (13:26):
No. What I'm asking is if someone's self
employed, how do they accumulatecredit? So we know that self
basically, it depends on theirnet income, their net self
employment earnings. So for each
John Tripolsky (13:36):
Yeah.
Chris Picciurro (13:36):
You know, in twin I mean, we could talk about
2024. You get a credit for everyabout $1,700 of net self
employment earnings. So if youhave net self employment
earnings of, let's say, about$7,000, then you
Rob Soerens (13:47):
Then you get the four credits.
Chris Picciurro (13:48):
The four credits. So yeah. Yeah. That
that's that's what we're whatwe're talking about. Otherwise,
like Rob said, from for the vastmajority of people, they're
having those so that SocialSecurity tax withheld out of
their w two wages, and it justgoes right into the system, and
their employer matches that.
So that's, you know, that's howthat works. And now you
mentioned some reallyinteresting figures. Right? So
(14:10):
if we the earliest now, letlet's assume that you don't have
a special situation ordisability or any anything like
that. Let's say you're just a oryou the earliest you can file is
at age 62.
At that point, you'd get about2,800. I think you said $28.31
or $28.34 of of benefit permonth. I think if you wait till
full, quote, unquote, fullretirement age at, well, at this
(14:33):
point, let's call it 67 yearsold, you get about $4,018 per
month. And then if you wait tillyou're 70, you you would get
$51.00 8 per month. So peoplewill say, well, wait a second.
Why don't I just wait till I'm70 to file? However, there's
eight years of between 62 and 70that you would have been earning
(14:53):
that income, and a lot of peoplemight say, well, I'm I've, you
know, may have done well formyself, or maybe I'm still
working. I have a pension. Idon't need the money right now.
Maybe I shouldn't file.
Which leads me to the questionof, in general, I'm we don't
have a crystal ball. Right? Soif someone could file at age 70
and unfortunately pass away twomonths later, and and they don't
get retroactive pay for theeight years they could have
(15:14):
filed. Right? That that's justnot how it works.
What are you seeing in generalare look. What are the main
factors someone has to considerwhen deciding the timing of
filing, and what approximatelyis your breakeven point that you
found for weight waiting it out?
Rob Soerens (15:33):
So that's a question that a ton of people
try to figure out. Obviously,you're yeah. You're right.
You're trying to look into acrystal ball, and there's no way
of knowing. You know, it's it'sit's health.
Right? Expect life ex your youryour own understanding of your
own life expectancy. Obviously,you could be hit by a car
tomorrow. Right? So, you know,it's it's the same thing you're
doing when claiming an annuity,you know, which which you know,
(15:54):
how do you you know, whichclaiming method do you take
based on how long you think youmight live.
So the breakeven point let's sayyou you picked at 62. Right? You
say, I'm just gonna go. I don'tknow what my health is or, you
know, who know you know, I Iengage in risky activities. I,
you know, I go skydiving andbase jumping a lot and whatever,
and so this might not last thatlong.
(16:16):
I mean, right, know, like
Chris Picciurro (16:17):
62. Good for you.
Rob Soerens (16:18):
Cool. If you claim at 62 versus waiting until 70,
like your max. Right? You seebecause there's a huge it's
almost double. You you only get55% of the benefit if you claim
at 62 versus waiting to 70.
Your breakeven point generallyis about the age 80 to 82. So
(16:39):
meaning the point at which ifyou had waited to 70 to claim
that largely increased monthlypayment actually out accrues
what you, you know, you althoughseven extra years or eight extra
years earned Right. You know,collecting it. About 80 or 82.
Now if you, you know, if youtake, you know, the calculation
62 to set 67, your fullretirement age, that's about 78
(17:03):
to 80, the breakeven point.
Okay. And so you know? Or orfull retirement age, 67, to
waiting to the max, 70. Thebreakeven point's somewhere
between age 82 and 83. So Right.
For people, they're like, hey.All of my parents, grandpa know,
they live into their nineties. Ihave no health issues. You know?
(17:23):
I do a risk I engage inliterally zero risky sports or
whatever.
You know? I don't eat shellfish.You know? Whatever it is. You
know, it's still a gamble, but,yeah, if if you expect longevity
and wanna, you know, protect forlongevity, then you could
definitely wait just knowingthat the breakeven point isn't
gonna be until those ages,roughly.
Chris Picciurro (17:42):
Right. Yeah. I mean, it it's a p it's a piece
of your financial plan, youknow, and that's that's
Rob Soerens (17:47):
a Exactly. Yep. Think about. Yeah. You're kind
of risk adjusting your incomebased on your expected life
expectancy, and you're doing ityourself.
You know? The the SocialSecurity Administration doesn't
do it for you. You you get todecide.
Chris Picciurro (18:00):
And let's so so let's talk into you've got your
own each individual has theirown filing decision. There are
also decisions that have to bemade by spouses, surviving
spouses, ex spouses. Right?Yeah. Yeah.
Can you talk just a little acouple of minutes about the
spousal considerations?
Rob Soerens (18:20):
Yeah. So like I was saying earlier, you could be a
nonworking spouse and stillcollect. In fact, you you you
definitely you always cancollect. There's just different
ways. So if you're widowed, youcan actually start collecting at
age 60.
Now it would be reduced. Itwouldn't be the full benefit,
and and let you it's the samething. If you wait until you're
(18:40):
67 or 70, you get a highermonthly benefit, but then you're
still doing that break you know,breakeven analysis for yourself.
If you're a nonworking spouse,you're you're also not cut out.
You can also claim you can claimat 62 or wait till 67 or wait
until 70.
Oh, actually, you don't wannawait till 70 on that one. That's
(19:01):
a unique one. If you're just aregular spouse, it's called the
spousal benefit. And what youcan get is if you wait until
full retirement age and yourworking spouse that has the
record, you know, the 40credits, has claimed, then you
can claim as the nonworkingspouse up to half of theirs. So
(19:23):
in other words,
Chris Picciurro (19:24):
you could
Rob Soerens (19:24):
be getting your working spouse's full benefit if
they wait until 67 plus halfagain that. Right? So a 50%
between the two of you. Wow. Nowif you claimed at 62 and your
spouse is older, you know, andthey've or or they claim at 62
too, but they have to haveclaimed.
Your spouse has to have claimed.But you're only gonna get half
of what they claimed at. So ifthey claimed at 62 and they
(19:47):
already had a reduced benefit,you're only gonna get half of
their reduced benefit. Sothere's that. Widows don't
obviously, a widow doesn't haveto wait till they've claimed
because the the so if theypredeceased you and, you know,
at 50 and now you're 60, youcould claim on off of their
record if you wanted to.
So that's that's a, you know,that's a big benefit there. If
(20:09):
you're divorced, very important.If you are married to them for
ten years and you have beendivorced for two or more years
and you're age 62 or older andnot remarried, then you can
claim on their benefit Ah. Ontheir record. I'm sorry.
On their record. And you andthey don't have to have claimed.
(20:30):
So unlike so still marriedspouses, the the the working
spouse has to have claimed forthe spouse to claim. But for a
widow or a divorcee, somebodywho's divorced, they do not have
to do that. The the other thethe other the ex spouse or
deceased spouse did not have tohave claimed for you to claim on
their record.
Chris Picciurro (20:51):
Wow. That's a very interesting and Yeah. Oh,
go ahead. I'm sorry.
Rob Soerens (20:57):
No. And and and it's now if you have a just a a
much weaker record, you canstill claim on your spouse. So
this is a very interesting solet's say you got a very
disparate let's say, like, she'sa corporate attorney earning
$300 a year, and he was achemistry teacher, you know, and
he maxed out at $75 a year inthe high school. And, you know,
(21:17):
loved his job, but just did highschool might be exam bad example
because you're probably a statepension. But, you know,
something like that.
Right? And so let's say, youknow, just making up numbers
totally. Let's say he was gonnaget 2,200 or 1,700 because of,
you know, the and then she wasgonna get maxed out. Let's say
she was maxed out at, you know,4,400 or whatever it was. If her
(21:40):
record half of that is greaterthan his or, you know, by sorry.
If his record, half of it is,you know, is is greater than
hers, the nonworking spouse orthe not much working spouse or
the lower paid spouse, you canstill claim the spousal record
to get half. So you getwhichever is higher, your own
record or half of your spouse's.
Chris Picciurro (22:02):
And then let me ask this question. So and and if
you let's just let's say thatyour spouse has a high you know,
what we call a a good recordhigh record. Yeah. Sure. Yeah.
Rob Soerens (22:12):
The High average. Whatever.
Chris Picciurro (22:13):
The yes. The the the other spouse claims off
of the higher earning spouse.Right? So let's say they're both
drawing Social Security at thesame time, and the higher
earning spouse passes away. Isthere any adjustment for the the
surviving spouse?
Like, do they get any step up?
Rob Soerens (22:31):
The higher you you you you you're not gonna go to a
you're not gonna stay at a 50%.You're just gonna go to you can
step into their shoes.
Chris Picciurro (22:38):
So you get yeah. I remember you saying
that. So, basically, but youhave you have less you have one
less person to support, soyou're getting the higher of the
two.
Rob Soerens (22:46):
Because now you're basically claiming as a widow.
And so yeah. So you're now ableto yeah. So you're you're you're
not gonna you're gonna lose theone and, you know, one and a
half times that you're you know,the spouse and then, you know,
spousal, but you're gonna, yeah,you're gonna step into their
shoes and claim at their record,at their loan.
Chris Picciurro (23:05):
Absolutely. What are some of the the things
that we that we should be awareof as far as, you know, filing
mistakes, that that you mightsee out there that people kinda
make a boo boo about? You know?And, and then maybe two or three
tips that they could take now,regardless of their age, is is
(23:26):
someone that has maybe maybefiled already or or hasn't filed
already.
Rob Soerens (23:32):
Well, so there used to be so I think I don't have
any maybe very specific filingrecommendations, but there's a
lot of old information out therethat can lead people to make
decisions that are suboptimal.So there used to be file and
suspend, which was an optionwhere like I said, you know, the
(23:54):
the the the higher earningspouse or the older spouse, you
know, had to have filed for thethe nonearning spouse or the
lowering spouse to file. They'reon their spousal record to get
the half of, you know, theirlarger amount. Well, so what you
used to be able to do is thehigher earning spouse would file
at 62 and suspend. Meaning,like, I've I've I've filed, but
I'm not gonna claim it.
So there would still accruesuntil they start actually taking
(24:17):
the monthly payments, but thatallowed the other spouse, the
lower or spouse, to then nowclaim on off of their record if
it was higher. Right? And sosome people are under the
assumption that that's still thecase and file not really
realizing that that is not thecase, thinking that, oh, you
know, I'll I'll file and thenI'll you know, what's the
(24:38):
suspension process? How do I dothat? Oh, no.
You can't do that. So, you know,that's I I think there's because
their rules change a lot, peopleget stuck in their head, the
rule that they learned the onetime they went to the seminar
fifteen years ago. Is that thatwould be my honestly or this
podcast. You know? In fiveyears, it could be like they
(24:58):
they could have lost thispodcast, like, know, you know,
next week, and then five years,they're going to, you know, file
or figure it out, and the ruleshave changed.
But this is you know, what we'vesaid on this podcast is stuck in
their head. So I would say thebiggest thing honestly is you
have to get up to dateinformation because the rules
constantly change.
Chris Picciurro (25:16):
And that's why it's important to be working
with a get a a licensedfinancial adviser. Right?
Because, I mean, even as apractitioner CPA, I I've had
it's at least four or five timesa year someone from the teaching
tax slow community comes to usand says, hey. I just sold my
primary residence. I I did youknow, what do I how much of a
house do I have to buy to to notpay tax?
(25:38):
Well, the section one twenty oneexclusion changed. You don't
have to buy a replacement housefor the value. This changed
almost twenty years ago. It'sjust one of those things that,
but but, you know, they may havebeen in the house twenty five
years, and that was the that'swhat the rules were with the
last time they did this.
Rob Soerens (25:53):
And they're making decisions based off. They may
have been planning on thatwithout talking to anybody for a
long time. Right? And makingdecisions based off that. Or the
opportunity cost of not doingsomething because they thought
that was the rule.
So that would be my main thing.I totally agree with that. Like,
that happens all the time.Happens to me. I mean, it
happens to everybody.
You you get something in yourhead because it was true at one
point, and then why would youupdate that? Because, you know,
(26:15):
unless you're you have to make adecision on it, you have a lot
of other things going on. So,yeah, that's my my main thing is
you gotta get up to dateinformation because the
information you have, honestly,is often gonna be wrong. Even
though it wasn't wrong when youhad it, it's it might very well
be wrong then.
Chris Picciurro (26:30):
Right. Well, and one more thing. So it is to
kinda put a bow on this episode,because I know we're gonna we're
gonna have Rob back on in thefuture, talk about some other
items, but this was really theone zero one kind of the the the
fine you know, the basics offiling for Social Security. If
you haven't met with thefinancial adviser and reviewed
your Social Security statementin the last twenty four months,
(26:52):
I would highly recommend you dothat. I believe Rob, you might
be able to put a little morecolor into this, but I believe
you go to the ssa.gov.
They used to mail them out, butI don't think they mail them out
anymore. I think you had to getthem online. I could be wrong.
However, couple reasons. One,your Social Security could be a
very big factor in yourretirement.
Rob Soerens (27:12):
And two It's important to know that number.
Yep.
Chris Picciurro (27:14):
You need that number. Yes. And two, there's
been several times where there'sbeen a misreporting of benefits.
An employer went defunct. You'reyou're it doesn't match your w
two, and it caught and if it'sfour, five, six years ago, it's
gonna be really hard to fix.
Rob Soerens (27:31):
Yeah. I I completely agree with that. It's
kinda like checking your creditreport. Right? Only maybe, you
know,
John Tripolsky (27:37):
in some
Chris Picciurro (27:37):
ways analogy.
Rob Soerens (27:38):
More important. Well, I guess, not just as
important, but, yeah, very, veryand it's it's not hard to do,
and, you know, and it's notcomplicated. It's just a list of
years and numbers. Right? And ifthe the number that they list
for that year is your, you know,your total income that they're
gonna count towards is wrongbased on what, you know, you
filed your taxes, you know, theamount you put on your taxes,
yeah, that you wanna get on topof that.
Absolutely right. And, yeah, youknow, ten years later, you know,
(28:02):
the employer, good luck gettingthe records from them if they're
not around. Right? So now youhave a challenge.
Chris Picciurro (28:07):
Exactly. Well, before John puts a bow on this,
I we brought we dusted this off.We brought it back from the
early episodes when we have aguest. Rob, we're gonna put you
on the hot seat for some funquestions, not related to Social
Security. I know it'sdisappointing.
And and then, again, if you, youknow, if you are listening to
(28:28):
this or have a loved one thatyou're thinking about right now,
definitely reach out to theTeaching Tax Flow team. Check
the show notes. We can get youconnected. You know, talk to
your financial adviser or getyou get you connected with Rob
and the team that that I couldsay I've worked with. You're
gonna want you're gonna wanna dothat.
So, so yep. Okay. So, Rob.Alright. Here we go.
(28:48):
Your favorite sports team.
Rob Soerens (28:51):
It's the Green Bay Packers. I'm from Wisconsin.
Chris Picciurro (28:54):
So Yes.
Rob Soerens (28:55):
Sorry. Sorry. Sorry for you Michiganders there, but
I was rooting the lions. I wasrooting for the lions in the
playoffs after the the packersgot bumped, but, you know, I
mean, you you could wimp intothe playoffs with 16 of your
starters out. I mean, I don'tknow what you're gonna it would
have been a miracle if theypulled anything off.
John Tripolsky (29:13):
And, Rob, I'm just a bandwagon fan for the
Detroit Lions anyways,admittedly. So A Packer
Rob Soerens (29:17):
is the religion of the state of Wisconsin, so
Chris Picciurro (29:19):
you can't
Rob Soerens (29:19):
you can't not yeah.
Chris Picciurro (29:21):
That's true. The okay. So, you know, I know
you're you're you run a lot, andyou're very healthy, but so you
might you might be the secondperson that says, I don't have
an answer to this on thispodcast, but your favorite
cereal.
Rob Soerens (29:36):
No. So, honestly, I actually eat cereal almost every
day, but it's not a boxedcereal. I eat basically, I eat
oats and raisins and and almondsevery every single day, either
for breakfast or as a snack inthe afternoon. Mhmm. So, I mean,
that's kind of a cereal.
Right?
Chris Picciurro (29:51):
It's a healthy cereal. Yeah. So you're you're
healthier than mine's GoldenGrahams, which is I mean, there
are worse cereals, but GoldenGrahams, I wouldn't call
Rob Soerens (29:58):
it had to pick a totally unhealthy one that'll
okay. I mean, I love LuckyCharms and Kale Chocula. Like, I
mean, if I'm gonna, like, hitit, like, I it's Yeah. You know,
if it's like I mean, honestly,actually, next month, you know,
maybe on the on the seventeenth,I'll have a, you know, box of
Lucky Charms or something.
Chris Picciurro (30:12):
Oh, you've got to. Well, we had an issue in our
house. We had an egregious anegregious violation of family
rules occur with my 11 year oldwhen he was just starting to be
able to feed himself. We hadLucky Charms, and he found in in
he unmonitored Lee. He'sprobably about eight at the
time.
He grabbed all of the actualmarshmallows, and I was left
(30:34):
with just the boring
Rob Soerens (30:36):
Bowl. You've, like, dug through some Yeah. I'm
guilty. When I was a kid, I a %did that. You know, in fact, it
it are you aware they actuallysell the marshmallows?
No. Oh. Buy a bag of LuckyCharms marshmallows. They sell
them. I don't I I I don'tremember where we got it, but
you you can they yeah.
They got smart, they realizedthere's some people that just
want the marshmallows. Can getthem. Wow. They they even put
(30:58):
them in a stocking or somethingat Christmas.
Chris Picciurro (31:00):
Well, a final my final hot button question.
What does your an ideal weekendlook like for you?
Rob Soerens (31:09):
Well, so I I don't run as much as I like rucking
lately, so, you know, with aweighted, you know, with a
weighted backpack. So I lovedoing that. I love hitting the
trails, like the wooded trailsnear my house, because I like to
be out there and playing cardswith family or friends. It's
(31:30):
only part of the year, but I I Ilike to watch the NFL. So if,
you know, if football's on him,that that's definitely part of
it.
Obviously, we're gonna you know,not that could be the case for
until September. And, you know,hopefully, you know, a good meal
with the family and reading atleast getting some reading in. I
love to read both history andand fiction.
Chris Picciurro (31:53):
Well, we know that the, yeah, we know that the
the packers are you know,they're they've got they they're
always a contender, and, youknow, the NFL seems like it's
all all year round now. So
John Tripolsky (32:03):
Yeah. That's true.
Chris Picciurro (32:05):
You know? Awesome.
John Tripolsky (32:06):
Well, Rob, thanks thanks for joining us on
here too. You know? It's I'mglad we we didn't end with
pickleball this time, unlikeunlike other shows that we do.
So I think that's a huge win forus.
Rob Soerens (32:16):
But I'm sure I'll end up on pickleball, Abby. I I
keep on getting Brian keeps onyou know, Chris is my friend,
keeps on hammering on me tojoin, and so I it looks like
something even I could probablydo.
Chris Picciurro (32:26):
So
John Tripolsky (32:26):
Oh, you're you're within a hundred miles,
you know, geographic proximityof Chris, so it'll happen. He'll
get you out there. So untilthen, as we always close out
here, we will see everybody backhere again on the teaching tax
full podcast next week, same dayof the week, different time,
roughly, completely differenttopic. Thanks again, Rob, for
(32:47):
joining us. Chris, and I'll seeyou here next week.
You can't escape me that easy.
Chris Picciurro (32:50):
Sounds good.
John Tripolsky (32:51):
Alright, everybody. Thank you and have a
great week for everybody that'slistening or watching this
episode of our podcast.
Disclaimer (32:59):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment adviser.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(33:21):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
Hey, everyone, and welcome back to the Teaching
Tax Full podcast episode 127.Today, we are gonna dive
directly into social security.We're gonna get all those
questions that you have answeredwith a great guest. But before
we do that, as always, let'stake a brief moment and thank
our episode sponsor.
Ad Read (00:22):
This podcast is brought to you by Legacy Lock. If you
are new to estate planning orsimply need to review your
current plan, Legacy Lock makesit as easy as pie. Legacy Lock
is a unique platform thatenables you to easily complete
your attorney drafted documentsconveniently from the comfort of
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John Tripolsky (00:47):
Hey, everybody, and welcome back to the teaching
tax flow podcast. As you heardin the intro today, we are gonna
look at Social Security. Sowhether you know a lot about it
or not, this is a good place tobe. We're gonna have a great
conversation around it. Startthinking in your mind a little
bit if you do have any questionsthat you may want answered to
this because, here's the here'sthe bonus of it, We're probably
(01:07):
gonna have this guy back that wehave on as a guest today and do
another episode on a little bitdeeper of a dive at some point.
So if we don't get to your toyour specific questions on this
one, shoot them over to us,whether it's in a comment on
Facebook, YouTube, email,defeating taxes, wherever you
want to, shoot them over. We'llbe sure to get to them next
time. So without further delay,Chris Pacquero, welcome back to
(01:29):
your own show, sir. How are youdoing, man? I got my tongue
tied.
I'm so excited, I guess.
Chris Picciurro (01:34):
I know. I'm very excited about this topic
and guest. I am doing amazing.Happy to be back on the teaching
tax flow podcast. We're gonna betalking about a topic that
actually was a hot button issue,the last presidential election
as far as tax ability.
We're we're and we're gonna talka little bit about tax on this,
but more importantly, we'regonna tackle some questions that
(01:56):
are very prominent in theteaching tax flow community.
We've had a lot in the defeatingtaxes private Facebook group,
and we're gonna work withsomeone that that I work with
regularly both on mutual clientsand with our own, you know, with
our with our own retirementaccounts. And so I'm excited to
introduce Rob Sorens fromGateway Financial Advisors. Rob,
(02:19):
welcome to the Teaching Tax Flowpodcast, and how are you doing
today?
Rob Soerens (02:22):
I'm doing great. Thanks for having me on.
John Tripolsky (02:25):
And, Chris, was gonna start us here a little bit
different. I was gonna say, youknow what? We're gonna change
this up and because usually, youfind a way to inject pickleball
comment into a show. So I wasgonna throw it out first and
say, you know, kinda debunk themyth that everybody that plays
pickleball is not collectingSocial Security. So so I found
(02:46):
my little tie in there.
So I mean, there's a fair amountthat are, but thought I'd be the
first one to throw a pickleballcoming out, and now I'll shit
up, and you can have a realconversation.
Chris Picciurro (02:53):
So Well, thank you very much for that. And, you
know, Rob already already getsharassed enough about playing
pickleball by myself and our themy a good dear friend of mine
that introduced me to Rob's andRob's colleagues, guy named
Brian. So we're not gonna talkabout pickleball, but you could
be in a pickle when it comes toSocial Security. So let's let's
(03:15):
dive into that, and we're gonnabe talking today about filing
for your Social Securitybenefits. You know, this is an
this is kind of an intimidatingsituation.
What in my experience as a taxprofessional, here's what I see
a lot of. Oh, I worked my entirelife to build up some type of
(03:37):
benefit. I go to file, and now Ifeel lost again. But there's
some things that you need to beaware of when you're maximizing
that Social Security benefitbecause we're all paying into it
significantly through ourlifetime. And then and then once
we can understand those basics,then you can start planning
because sometimes, especiallyfor people that own businesses,
it might make sense to employ aspouse to build up some credits.
(04:00):
So we're gonna we're gonna runwe're we're gonna just dive into
this with Rob. Rob is a, like Isaid, a financial adviser with
gate with Gateway, but also, Iattended a couple of his
presentations specifically aboutfiling for Social Security
benefits, and that was one ofthe reasons that we we've been
sitting on this topic for a longtime waiting for the right
person to to join the show. Soso, Rob, we're gonna start off
(04:22):
with can you give us just alittle bit of of personal
history and and what led you toto, you know, to becoming a
financial adviser and andhelping clients with those
decisions about Social Security?
Rob Soerens (04:34):
Oh, yeah. Great. Thanks a lot. So I've been in
the financial industry for overten years. Prior to that, I was
an attorney, and I was doing acombination of mergers and
acquisitions and anti tax law,estate planning.
And I I just really have decidedI I I left being an attorney and
(04:56):
and decided about eight yearsago to refocus on being in
financial advising andinvestments, because I really
love that there's just such anot only is it an emotionally
salient and important issue foreverybody and every family, but
it's also, you know,practically, you know,
exceedingly important. And toget things right, both the
(05:20):
investments, college planning,retirement planning. You know,
if you if you set yourself upcorrectly at different stages,
you're gonna be very happy withyourself down the road, and
there are certainly mistakesthat could be made, and there
are certainly, you know,virtuous proper things to do to
(05:40):
sell sell yourself up forsuccess. And I just enjoy being
able help people do that. Andthen I also just enjoy the stock
market separately, and so theinvestment component.
But the the planning component,yeah, I just love having that
those conversations with peopleand helping them, because it is.
It can be bewildering. And justlike many things in life, you
(06:05):
don't really know how they workuntil you need to know how they
work. So, oh, mom and dad arenow going to a assisted living
facility because they can't liveon on their own anymore. And now
you a whole new world opens upof complexity of how that
everything, you know, operates,and does Medicare cover any of
(06:27):
it?
I don't know. I mean, I do, but,like, they don't know like, they
didn't you don't know soup tonuts. You don't know anything
about it because you didn't needto until the occasion arises. So
it's the same thing with SocialSecurity. You kind have this
vague idea that, you know, downthe road and you get this
statement once a year from theSocial Security Administration
like, hey.
If you continue on thistrajectory, this is gonna be
your, you know, your benefit.And, you know, I think most
(06:50):
people glance at it and go,that's nice or whatever. You
know, toss it, and, you know, ifyou're your twenties or thirties
or even forties maybe. But asyou get closer, you're like,
wait a second. This this mightbe a crucial component or the
crucial component of ourretirement funding.
And, yeah, you get to 62 or 65or 67, and, you know, the the
(07:13):
IRS and a lot of other rulesaren't that clearly for a
layperson and even for a taxattorney. And so it can be
needlessly complex or can seemneedlessly complex, but it
really isn't that complex whenyou get down to it if you have
somebody that's been through itbefore.
Chris Picciurro (07:33):
Right. And that's the thing is you've
guided many, many people throughthis process, but most peep you
know, in general, you reallyonly go through it one time,
each person. So Right. It's notthat you'll
Rob Soerens (07:44):
learn it, and then you don't have to learn it
again. And unless somebody asksyou what your experience was,
that was, yeah, one timeknowledge. Hey. Hey. That's a
really good point.
Yeah. Exactly.
Chris Picciurro (07:53):
So it's it's kinda scary. Yeah. Well, let's
talk about what you know, canyou talk about we'll start off,
like, what is Social Security,and and how do you qualify? Do
you have to do you have to havea certain amount of income,
amount of years worked?
Rob Soerens (08:09):
Yeah. There is no threshold amount of income, but
there is a threshold amount ofwork history, and there's
something called a 40 creditrule. Each credit accrues by
every quarter that you've paidinto the system, so that would
mean literally ten years. Theydon't have to be contiguous. But
in order to fall qualify forthat or Medicare for that
(08:32):
matter, you need to qualify forthis.
So there are some exceptions.You know, your nonworking
spouse, your spouse worked,you're on their but, generally,
for a for a benefit to beavailable, discounting widows
and nonworking spouses who wouldbe claiming on your benefit if
they if that arose, Somebody hasto have worked for have that 40
(08:54):
credits accrued, and then thebenefit you receive is just
tiered based on your income overthirty five years. So they look
at your entire they look at 30if if you've hit the 40 credit
rule, then you're, okay. Great.You're in.
Now they look at your thirtyfive years of work history
before you claim, before youfile. Right. And if you didn't
(09:16):
work the full thirty five years,every year you didn't work is a
goose egg. It's zero. So, youknow, that works against your
average.
So, you know, that's day to day,you're not really gamifying your
life towards your SocialSecurity number. I'm sure you're
getting jobs that pay as muchmoney as you can get. You know?
Chris Picciurro (09:32):
And
Rob Soerens (09:32):
that makes sense for your family, and it just so
happens you get a work historyand an average. But that's
basically how it works. And soyou may wonder, like, so why
does, you know, a guy down thestreet get $4,400 a month, then
I get 27 or, you know, or 1,700a month? It was based on the
average of the earnings overthat thirty five years. And then
(09:54):
there's a formula that, youknow, break points on that.
So, for example, an interestingand I don't wanna get too off
track here. Steer me back to theto the course if I get too far
off track. But so for example,in 2025, the maximum if you had
the maximum average earningsover that period, if you claim
(10:16):
to age 62, which is the earliestyou can claim, you would start
receiving $28.31 a month, andthen that's subject to a cost of
living increase every year. Ifyou're waiting till your full
retirement age, for most people,that'd be 67. For some, it's 66
and some months.
It'll be 4,018 a month. And thenif you wait until 70, it would
(10:36):
be fifty one zero eight a month.So yeah. So that I mean, in a
nutshell, that that's thesystem. Sure.
One thing that's veryinteresting is it was set up in
1935. The original taxes paidinto the system under, you know,
FDR. Original taxes paid in thesystem started being gathered in
(10:59):
1937, and the first payouts werein 1940. When it was enacted in
1935, the life expectancy so theretirement age in the Social
Security Act 1935, you know,ninety years ago, was age 65.
Well, the life expectancy formales was fifth was 59.
So it's it's it's it's it's itwas not necessarily intended to
(11:24):
do what it do does now, which isa pension plan for everybody.
But yeah. But it's yeah. It'sthat's basically I'm sorry. I
went off a little bit, butthat's that's, in a nutshell,
what Social Security is.
Chris Picciurro (11:34):
Well, and right. There there's there's a
lot of you know, this basically,this wasn't built for where
we're at today. I mean, that'sthat was built almost, you know,
coming up on a hundred yearsago. I wanna talk about the 40
credit rule because myunderstanding is you can get up
to four credits per year, likeyou said. What happens if
someone and and does that dependon when you earned that money in
(11:57):
the year, or or are there arethere any rules for, like,
someone that's self employed?
You know, let's say
Rob Soerens (12:02):
Self employed people also, you pay self
employment tax. It counts. Yeah.So there's yeah. You don't have
to people do have that worry.
You know? I've never had a w twoor, you know, bear barely. You
know, basically yeah. If you ifyou pay self employment tax,
you're paying into the system,and that and you're getting the
credits.
Chris Picciurro (12:19):
And so if if someone was to pay 10,000 of
self employment tax, okay, weknow it's 15.3% of their net
income if they're self employed.Does that does that get prorated
into different you know, in canthey do they get four credits
for that for that year, or is ityou know?
Rob Soerens (12:39):
That you know, that's a great that's a great
question. I have not inpersonally dealt with that
directly. I know I I Iunderstand your question. I can
I can if you give me a briefsecond, I can look that one up?
Chris Picciurro (12:51):
Yeah. No problem.
John Tripolsky (12:52):
And, Chris, almost if I can add to that a
Chris Picciurro (12:54):
little bit. You know, let's
John Tripolsky (12:55):
say, theoretically. Right? Let's say
for whatever length of time,whether it's ten year well, you
know, for sake of conversation,let's just say it's for all
thirty five years. Right? Saysomebody earns a hundred
thousand, and somehow they'vemanaged to legally and ethically
avoid paying any tax every year.
Like, does that, are theybasically riding a goose egg the
(13:19):
whole way to the end of therace, or or how does that look
too, I guess? Would be don'tknow if that adds to or goes
against what you're askingthere, Chris.
Chris Picciurro (13:26):
No. What I'm asking is if someone's self
employed, how do they accumulatecredit? So we know that self
basically, it depends on theirnet income, their net self
employment earnings. So for each
John Tripolsky (13:36):
Yeah.
Chris Picciurro (13:36):
You know, in twin I mean, we could talk about
2024. You get a credit for everyabout $1,700 of net self
employment earnings. So if youhave net self employment
earnings of, let's say, about$7,000, then you
Rob Soerens (13:47):
Then you get the four credits.
Chris Picciurro (13:48):
The four credits. So yeah. Yeah. That
that's that's what we're whatwe're talking about. Otherwise,
like Rob said, from for the vastmajority of people, they're
having those so that SocialSecurity tax withheld out of
their w two wages, and it justgoes right into the system, and
their employer matches that.
So that's, you know, that's howthat works. And now you
mentioned some reallyinteresting figures. Right? So
(14:10):
if we the earliest now, letlet's assume that you don't have
a special situation ordisability or any anything like
that. Let's say you're just a oryou the earliest you can file is
at age 62.
At that point, you'd get about2,800. I think you said $28.31
or $28.34 of of benefit permonth. I think if you wait till
full, quote, unquote, fullretirement age at, well, at this
(14:33):
point, let's call it 67 yearsold, you get about $4,018 per
month. And then if you wait tillyou're 70, you you would get
$51.00 8 per month. So peoplewill say, well, wait a second.
Why don't I just wait till I'm70 to file? However, there's
eight years of between 62 and 70that you would have been earning
(14:53):
that income, and a lot of peoplemight say, well, I'm I've, you
know, may have done well formyself, or maybe I'm still
working. I have a pension. Idon't need the money right now.
Maybe I shouldn't file.
Which leads me to the questionof, in general, I'm we don't
have a crystal ball. Right? Soif someone could file at age 70
and unfortunately pass away twomonths later, and and they don't
get retroactive pay for theeight years they could have
(15:14):
filed. Right? That that's justnot how it works.
What are you seeing in generalare look. What are the main
factors someone has to considerwhen deciding the timing of
filing, and what approximatelyis your breakeven point that you
found for weight waiting it out?
Rob Soerens (15:33):
So that's a question that a ton of people
try to figure out. Obviously,you're yeah. You're right.
You're trying to look into acrystal ball, and there's no way
of knowing. You know, it's it'sit's health.
Right? Expect life ex your youryour own understanding of your
own life expectancy. Obviously,you could be hit by a car
tomorrow. Right? So, you know,it's it's the same thing you're
doing when claiming an annuity,you know, which which you know,
(15:54):
how do you you know, whichclaiming method do you take
based on how long you think youmight live.
So the breakeven point let's sayyou you picked at 62. Right? You
say, I'm just gonna go. I don'tknow what my health is or, you
know, who know you know, I Iengage in risky activities. I,
you know, I go skydiving andbase jumping a lot and whatever,
and so this might not last thatlong.
(16:16):
I mean, right, know, like
Chris Picciurro (16:17):
62. Good for you.
Rob Soerens (16:18):
Cool. If you claim at 62 versus waiting until 70,
like your max. Right? You seebecause there's a huge it's
almost double. You you only get55% of the benefit if you claim
at 62 versus waiting to 70.
Your breakeven point generallyis about the age 80 to 82. So
(16:39):
meaning the point at which ifyou had waited to 70 to claim
that largely increased monthlypayment actually out accrues
what you, you know, you althoughseven extra years or eight extra
years earned Right. You know,collecting it. About 80 or 82.
Now if you, you know, if youtake, you know, the calculation
62 to set 67, your fullretirement age, that's about 78
(17:03):
to 80, the breakeven point.
Okay. And so you know? Or orfull retirement age, 67, to
waiting to the max, 70. Thebreakeven point's somewhere
between age 82 and 83. So Right.
For people, they're like, hey.All of my parents, grandpa know,
they live into their nineties. Ihave no health issues. You know?
(17:23):
I do a risk I engage inliterally zero risky sports or
whatever.
You know? I don't eat shellfish.You know? Whatever it is. You
know, it's still a gamble, but,yeah, if if you expect longevity
and wanna, you know, protect forlongevity, then you could
definitely wait just knowingthat the breakeven point isn't
gonna be until those ages,roughly.
Chris Picciurro (17:42):
Right. Yeah. I mean, it it's a p it's a piece
of your financial plan, youknow, and that's that's
Rob Soerens (17:47):
a Exactly. Yep. Think about. Yeah. You're kind
of risk adjusting your incomebased on your expected life
expectancy, and you're doing ityourself.
You know? The the SocialSecurity Administration doesn't
do it for you. You you get todecide.
Chris Picciurro (18:00):
And let's so so let's talk into you've got your
own each individual has theirown filing decision. There are
also decisions that have to bemade by spouses, surviving
spouses, ex spouses. Right?Yeah. Yeah.
Can you talk just a little acouple of minutes about the
spousal considerations?
Rob Soerens (18:20):
Yeah. So like I was saying earlier, you could be a
nonworking spouse and stillcollect. In fact, you you you
definitely you always cancollect. There's just different
ways. So if you're widowed, youcan actually start collecting at
age 60.
Now it would be reduced. Itwouldn't be the full benefit,
and and let you it's the samething. If you wait until you're
(18:40):
67 or 70, you get a highermonthly benefit, but then you're
still doing that break you know,breakeven analysis for yourself.
If you're a nonworking spouse,you're you're also not cut out.
You can also claim you can claimat 62 or wait till 67 or wait
until 70.
Oh, actually, you don't wannawait till 70 on that one. That's
(19:01):
a unique one. If you're just aregular spouse, it's called the
spousal benefit. And what youcan get is if you wait until
full retirement age and yourworking spouse that has the
record, you know, the 40credits, has claimed, then you
can claim as the nonworkingspouse up to half of theirs. So
(19:23):
in other words,
Chris Picciurro (19:24):
you could
Rob Soerens (19:24):
be getting your working spouse's full benefit if
they wait until 67 plus halfagain that. Right? So a 50%
between the two of you. Wow. Nowif you claimed at 62 and your
spouse is older, you know, andthey've or or they claim at 62
too, but they have to haveclaimed.
Your spouse has to have claimed.But you're only gonna get half
of what they claimed at. So ifthey claimed at 62 and they
(19:47):
already had a reduced benefit,you're only gonna get half of
their reduced benefit. Sothere's that. Widows don't
obviously, a widow doesn't haveto wait till they've claimed
because the the so if theypredeceased you and, you know,
at 50 and now you're 60, youcould claim on off of their
record if you wanted to.
So that's that's a, you know,that's a big benefit there. If
(20:09):
you're divorced, very important.If you are married to them for
ten years and you have beendivorced for two or more years
and you're age 62 or older andnot remarried, then you can
claim on their benefit Ah. Ontheir record. I'm sorry.
On their record. And you andthey don't have to have claimed.
(20:30):
So unlike so still marriedspouses, the the the working
spouse has to have claimed forthe spouse to claim. But for a
widow or a divorcee, somebodywho's divorced, they do not have
to do that. The the other thethe other the ex spouse or
deceased spouse did not have tohave claimed for you to claim on
their record.
Chris Picciurro (20:51):
Wow. That's a very interesting and Yeah. Oh,
go ahead. I'm sorry.
Rob Soerens (20:57):
No. And and and it's now if you have a just a a
much weaker record, you canstill claim on your spouse. So
this is a very interesting solet's say you got a very
disparate let's say, like, she'sa corporate attorney earning
$300 a year, and he was achemistry teacher, you know, and
he maxed out at $75 a year inthe high school. And, you know,
(21:17):
loved his job, but just did highschool might be exam bad example
because you're probably a statepension. But, you know,
something like that.
Right? And so let's say, youknow, just making up numbers
totally. Let's say he was gonnaget 2,200 or 1,700 because of,
you know, the and then she wasgonna get maxed out. Let's say
she was maxed out at, you know,4,400 or whatever it was. If her
(21:40):
record half of that is greaterthan his or, you know, by sorry.
If his record, half of it is,you know, is is greater than
hers, the nonworking spouse orthe not much working spouse or
the lower paid spouse, you canstill claim the spousal record
to get half. So you getwhichever is higher, your own
record or half of your spouse's.
Chris Picciurro (22:02):
And then let me ask this question. So and and if
you let's just let's say thatyour spouse has a high you know,
what we call a a good recordhigh record. Yeah. Sure. Yeah.
Rob Soerens (22:12):
The High average. Whatever.
Chris Picciurro (22:13):
The yes. The the the other spouse claims off
of the higher earning spouse.Right? So let's say they're both
drawing Social Security at thesame time, and the higher
earning spouse passes away. Isthere any adjustment for the the
surviving spouse?
Like, do they get any step up?
Rob Soerens (22:31):
The higher you you you you you're not gonna go to a
you're not gonna stay at a 50%.You're just gonna go to you can
step into their shoes.
Chris Picciurro (22:38):
So you get yeah. I remember you saying
that. So, basically, but youhave you have less you have one
less person to support, soyou're getting the higher of the
two.
Rob Soerens (22:46):
Because now you're basically claiming as a widow.
And so yeah. So you're now ableto yeah. So you're you're you're
not gonna you're gonna lose theone and, you know, one and a
half times that you're you know,the spouse and then, you know,
spousal, but you're gonna, yeah,you're gonna step into their
shoes and claim at their record,at their loan.
Chris Picciurro (23:05):
Absolutely. What are some of the the things
that we that we should be awareof as far as, you know, filing
mistakes, that that you mightsee out there that people kinda
make a boo boo about? You know?And, and then maybe two or three
tips that they could take now,regardless of their age, is is
(23:26):
someone that has maybe maybefiled already or or hasn't filed
already.
Rob Soerens (23:32):
Well, so there used to be so I think I don't have
any maybe very specific filingrecommendations, but there's a
lot of old information out therethat can lead people to make
decisions that are suboptimal.So there used to be file and
suspend, which was an optionwhere like I said, you know, the
(23:54):
the the the higher earningspouse or the older spouse, you
know, had to have filed for thethe nonearning spouse or the
lowering spouse to file. They'reon their spousal record to get
the half of, you know, theirlarger amount. Well, so what you
used to be able to do is thehigher earning spouse would file
at 62 and suspend. Meaning,like, I've I've I've filed, but
I'm not gonna claim it.
So there would still accruesuntil they start actually taking
(24:17):
the monthly payments, but thatallowed the other spouse, the
lower or spouse, to then nowclaim on off of their record if
it was higher. Right? And sosome people are under the
assumption that that's still thecase and file not really
realizing that that is not thecase, thinking that, oh, you
know, I'll I'll file and thenI'll you know, what's the
(24:38):
suspension process? How do I dothat? Oh, no.
You can't do that. So, you know,that's I I think there's because
their rules change a lot, peopleget stuck in their head, the
rule that they learned the onetime they went to the seminar
fifteen years ago. Is that thatwould be my honestly or this
podcast. You know? In fiveyears, it could be like they
(24:58):
they could have lost thispodcast, like, know, you know,
next week, and then five years,they're going to, you know, file
or figure it out, and the ruleshave changed.
But this is you know, what we'vesaid on this podcast is stuck in
their head. So I would say thebiggest thing honestly is you
have to get up to dateinformation because the rules
constantly change.
Chris Picciurro (25:16):
And that's why it's important to be working
with a get a a licensedfinancial adviser. Right?
Because, I mean, even as apractitioner CPA, I I've had
it's at least four or five timesa year someone from the teaching
tax slow community comes to usand says, hey. I just sold my
primary residence. I I did youknow, what do I how much of a
house do I have to buy to to notpay tax?
(25:38):
Well, the section one twenty oneexclusion changed. You don't
have to buy a replacement housefor the value. This changed
almost twenty years ago. It'sjust one of those things that,
but but, you know, they may havebeen in the house twenty five
years, and that was the that'swhat the rules were with the
last time they did this.
Rob Soerens (25:53):
And they're making decisions based off. They may
have been planning on thatwithout talking to anybody for a
long time. Right? And makingdecisions based off that. Or the
opportunity cost of not doingsomething because they thought
that was the rule.
So that would be my main thing.I totally agree with that. Like,
that happens all the time.Happens to me. I mean, it
happens to everybody.
You you get something in yourhead because it was true at one
point, and then why would youupdate that? Because, you know,
(26:15):
unless you're you have to make adecision on it, you have a lot
of other things going on. So,yeah, that's my my main thing is
you gotta get up to dateinformation because the
information you have, honestly,is often gonna be wrong. Even
though it wasn't wrong when youhad it, it's it might very well
be wrong then.
Chris Picciurro (26:30):
Right. Well, and one more thing. So it is to
kinda put a bow on this episode,because I know we're gonna we're
gonna have Rob back on in thefuture, talk about some other
items, but this was really theone zero one kind of the the the
fine you know, the basics offiling for Social Security. If
you haven't met with thefinancial adviser and reviewed
your Social Security statementin the last twenty four months,
(26:52):
I would highly recommend you dothat. I believe Rob, you might
be able to put a little morecolor into this, but I believe
you go to the ssa.gov.
They used to mail them out, butI don't think they mail them out
anymore. I think you had to getthem online. I could be wrong.
However, couple reasons. One,your Social Security could be a
very big factor in yourretirement.
Rob Soerens (27:12):
And two It's important to know that number.
Yep.
Chris Picciurro (27:14):
You need that number. Yes. And two, there's
been several times where there'sbeen a misreporting of benefits.
An employer went defunct. You'reyou're it doesn't match your w
two, and it caught and if it'sfour, five, six years ago, it's
gonna be really hard to fix.
Rob Soerens (27:31):
Yeah. I I completely agree with that. It's
kinda like checking your creditreport. Right? Only maybe, you
know,
John Tripolsky (27:37):
in some
Chris Picciurro (27:37):
ways analogy.
Rob Soerens (27:38):
More important. Well, I guess, not just as
important, but, yeah, very, veryand it's it's not hard to do,
and, you know, and it's notcomplicated. It's just a list of
years and numbers. Right? And ifthe the number that they list
for that year is your, you know,your total income that they're
gonna count towards is wrongbased on what, you know, you
filed your taxes, you know, theamount you put on your taxes,
yeah, that you wanna get on topof that.
Absolutely right. And, yeah, youknow, ten years later, you know,
(28:02):
the employer, good luck gettingthe records from them if they're
not around. Right? So now youhave a challenge.
Chris Picciurro (28:07):
Exactly. Well, before John puts a bow on this,
I we brought we dusted this off.We brought it back from the
early episodes when we have aguest. Rob, we're gonna put you
on the hot seat for some funquestions, not related to Social
Security. I know it'sdisappointing.
And and then, again, if you, youknow, if you are listening to
(28:28):
this or have a loved one thatyou're thinking about right now,
definitely reach out to theTeaching Tax Flow team. Check
the show notes. We can get youconnected. You know, talk to
your financial adviser or getyou get you connected with Rob
and the team that that I couldsay I've worked with. You're
gonna want you're gonna wanna dothat.
So, so yep. Okay. So, Rob.Alright. Here we go.
(28:48):
Your favorite sports team.
Rob Soerens (28:51):
It's the Green Bay Packers. I'm from Wisconsin.
Chris Picciurro (28:54):
So Yes.
Rob Soerens (28:55):
Sorry. Sorry. Sorry for you Michiganders there, but
I was rooting the lions. I wasrooting for the lions in the
playoffs after the the packersgot bumped, but, you know, I
mean, you you could wimp intothe playoffs with 16 of your
starters out. I mean, I don'tknow what you're gonna it would
have been a miracle if theypulled anything off.
John Tripolsky (29:13):
And, Rob, I'm just a bandwagon fan for the
Detroit Lions anyways,admittedly. So A Packer
Rob Soerens (29:17):
is the religion of the state of Wisconsin, so
Chris Picciurro (29:19):
you can't
Rob Soerens (29:19):
you can't not yeah.
Chris Picciurro (29:21):
That's true. The okay. So, you know, I know
you're you're you run a lot, andyou're very healthy, but so you
might you might be the secondperson that says, I don't have
an answer to this on thispodcast, but your favorite
cereal.
Rob Soerens (29:36):
No. So, honestly, I actually eat cereal almost every
day, but it's not a boxedcereal. I eat basically, I eat
oats and raisins and and almondsevery every single day, either
for breakfast or as a snack inthe afternoon. Mhmm. So, I mean,
that's kind of a cereal.
Right?
Chris Picciurro (29:51):
It's a healthy cereal. Yeah. So you're you're
healthier than mine's GoldenGrahams, which is I mean, there
are worse cereals, but GoldenGrahams, I wouldn't call
Rob Soerens (29:58):
it had to pick a totally unhealthy one that'll
okay. I mean, I love LuckyCharms and Kale Chocula. Like, I
mean, if I'm gonna, like, hitit, like, I it's Yeah. You know,
if it's like I mean, honestly,actually, next month, you know,
maybe on the on the seventeenth,I'll have a, you know, box of
Lucky Charms or something.
Chris Picciurro (30:12):
Oh, you've got to. Well, we had an issue in our
house. We had an egregious anegregious violation of family
rules occur with my 11 year oldwhen he was just starting to be
able to feed himself. We hadLucky Charms, and he found in in
he unmonitored Lee. He'sprobably about eight at the
time.
He grabbed all of the actualmarshmallows, and I was left
(30:34):
with just the boring
Rob Soerens (30:36):
Bowl. You've, like, dug through some Yeah. I'm
guilty. When I was a kid, I a %did that. You know, in fact, it
it are you aware they actuallysell the marshmallows?
No. Oh. Buy a bag of LuckyCharms marshmallows. They sell
them. I don't I I I don'tremember where we got it, but
you you can they yeah.
They got smart, they realizedthere's some people that just
want the marshmallows. Can getthem. Wow. They they even put
(30:58):
them in a stocking or somethingat Christmas.
Chris Picciurro (31:00):
Well, a final my final hot button question.
What does your an ideal weekendlook like for you?
Rob Soerens (31:09):
Well, so I I don't run as much as I like rucking
lately, so, you know, with aweighted, you know, with a
weighted backpack. So I lovedoing that. I love hitting the
trails, like the wooded trailsnear my house, because I like to
be out there and playing cardswith family or friends. It's
(31:30):
only part of the year, but I I Ilike to watch the NFL. So if,
you know, if football's on him,that that's definitely part of
it.
Obviously, we're gonna you know,not that could be the case for
until September. And, you know,hopefully, you know, a good meal
with the family and reading atleast getting some reading in. I
love to read both history andand fiction.
Chris Picciurro (31:53):
Well, we know that the, yeah, we know that the
the packers are you know,they're they've got they they're
always a contender, and, youknow, the NFL seems like it's
all all year round now. So
John Tripolsky (32:03):
Yeah. That's true.
Chris Picciurro (32:05):
You know? Awesome.
John Tripolsky (32:06):
Well, Rob, thanks thanks for joining us on
here too. You know? It's I'mglad we we didn't end with
pickleball this time, unlikeunlike other shows that we do.
So I think that's a huge win forus.
Rob Soerens (32:16):
But I'm sure I'll end up on pickleball, Abby. I I
keep on getting Brian keeps onyou know, Chris is my friend,
keeps on hammering on me tojoin, and so I it looks like
something even I could probablydo.
Chris Picciurro (32:26):
So
John Tripolsky (32:26):
Oh, you're you're within a hundred miles,
you know, geographic proximityof Chris, so it'll happen. He'll
get you out there. So untilthen, as we always close out
here, we will see everybody backhere again on the teaching tax
full podcast next week, same dayof the week, different time,
roughly, completely differenttopic. Thanks again, Rob, for
(32:47):
joining us. Chris, and I'll seeyou here next week.
You can't escape me that easy.
Chris Picciurro (32:50):
Sounds good.
John Tripolsky (32:51):
Alright, everybody. Thank you and have a
great week for everybody that'slistening or watching this
episode of our podcast.
Disclaimer (32:59):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment adviser.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(33:21):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
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