Episode Transcript
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Speaker 1 (00:00):
Niphone nines. They are open for you right now. If
you have questions for our retirement planning professionals from Class
Financial the website you can learn more. Let me actually
I put out the idea that you can call in.
I forgot to mention the phone numbers six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. I was so excited though, to
talk about the website colssfinancial dot com. That's coss Klaas
(00:22):
financial dot com. If you haven't been there recently, it's
a great day to check back in the the a
lot of great opportunities learn more about COSS Financial. Also
signo for the weekly Market Pulse newsletter that available to
you at cossfinancial dot com. Their telephone number six oh
eight four four two five six three seven. No charge
for the initial get to know you appointment tech Loss Financial.
(00:43):
It will be complementary to you again their number six
oh eight four four two five six three seven. And
if you'd like to join us this morning, all I
get to do is give us call six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. Joining us this week from Coss
Financial is CJ. Closs and Eric Schwartz. Jay, how you
doing this morning?
Speaker 2 (01:01):
I'm doing great, Sean. How are you?
Speaker 3 (01:03):
I'm doing really really good? And Eric, how have you been?
Speaker 4 (01:06):
I am doing great, Sean. It's a beautiful day and
excited to talk about social security.
Speaker 1 (01:10):
It's going to be a great conversation. Yeah, it is
a beautiful day as well.
Speaker 3 (01:14):
And as Eric.
Speaker 1 (01:15):
Mentioned, we are talking social security this morning, which is
always a very very popular topic. Don't forget if you
miss any part of today's program, you can always listen
back at colssfinancial dot com. Really cool thing we do
on the program each and every week is the Closs Quiz.
Question the week your chance to win a fantastic prize.
This week, our friends from Class Financially have provided a
twenty five dollars gift card to Panera. Tell you a
(01:36):
little bit later on the program how you could win
that gift card, little tipto. It pays to pay attention
to the program. It's just about every show. The question
answer come up during the program during Money in Motion
with Coss Financial. And before we get to this week's
topic in this week's conversation, let's actually take a look
back Eric at last week's program get the question and
answer there as well.
Speaker 4 (01:58):
Absolutely so thank you to our winner from last week,
who was Linda from Sac City. Thank you to Linda
and everybody for listening as always. And our question last
week was true or false? More potential conflicts of interest
arise when someone is selling you a product for a
commission versus providing you with service for a fee, And
(02:18):
the answer to that was true. So congratulations Linda.
Speaker 3 (02:21):
Nice work, Linda.
Speaker 1 (02:22):
I don't forget if you missed any part of last
week's program or want to subscribe to the podcast to
listen back to any show. Just that on over to
class financial dot com again. Phone lines are open six
to oh eight three two one thirteen ten. That's six
h eight three two one thirteen ten. Gets you on
the air with CJ Colas and Eric Schwartz, our retirement
planning professionals from Class Financial. Of course, we talk about
social security on the program, and I know a lot
(02:43):
of folks I'm kind of assumed that the best move is,
you know, of course, start collecting benefits asap, as soon
as you can. But for those who are still working, CJ,
what should they consider about about how their job might
impact their benefits.
Speaker 2 (02:58):
Yeah, great question.
Speaker 5 (03:00):
So, since social Security can be complex, we do like
to break it down into the key factors that impact
your benefits and the best timing for you to start
collecting collecting benefits. So one big question we'll tackle today
is if you plan to work while drawing Social Security,
how will that affect your benefits? But before we get
(03:20):
into that, let's start with an even bigger picture kind
of question, which is when should you begin taking your
Social Security benefit? So step one is to just evaluate
your overall income picture. This includes your retirement accounts like iras, pensions,
after tax savings, things like that, any part time earnings
you may have, and spousal income. Having a clear financial
(03:44):
picture that will help you will help you decide when
it makes the most sense to claim your Social Security benefit.
Step two, then is to determine your full retirement age
known as FR. Your FRA is when you qualify for
your full on reduced benefit, which means you can both
(04:05):
receive your full unreduced benefit and you can be working
generating as much income as you want to and have
no offset. More to come on that in a little bit,
but knowing your FRA whatever that full retirement age is
is critical because again it's your full unreduced Social Security benefit,
and on top of that, you could be quote unquote
(04:26):
double dipping, meaning still working and drawing Social Security and
have no offset. Now you can find your full retirement
age by logging into your individual account through www. Dot
SSA dot gov. You have to establish a login to
gain access to to your file, but you get the idea.
You can go in there and see what is my
(04:47):
full retirement age. Now, for those who don't want to
do that work, we are going to make it easier
for you, but you're just gonna have to pay attention. So,
if you were born between nineteen forty three and nineteen.
Speaker 2 (04:58):
Fifty four, your FRA is sixty six.
Speaker 5 (05:03):
But let me rephrase that your FRA was sixty six,
because anybody born within that window is already.
Speaker 2 (05:10):
Over sixty six.
Speaker 5 (05:12):
Okay, So if you're born between nineteen forty three and
nineteen fifty four, your full retirement age was sixty six.
If you were born between nineteen fifty five and nineteen
fifty nine, your FRA is sixty six plus some number
of months sixty six and two months, four months, six months.
Speaker 2 (05:29):
You get the idea.
Speaker 5 (05:30):
And then finally, if you were born in nineteen sixty
or later. Like I'm raising my hand right now. You
can't see me, but I'm raising my hand. Your full
retirement age is sixty seven. So that's why we say
you have to determine what your full retirement age is
because it's not the same age for everybody. Now, you
can claim benefits as early as sixty two. So because
(05:52):
we talked about this full retirement age, but truth be told,
people go, wait, I thought I could draw sole security
at sixty two. You can, But remember what did I
just tell you about your full retirement age. It is
your full unreduced benefit at age, at your full retirement age.
So if you draw at sixty two, it's pretty clear
to say it must be some reduced benefit because I'm
(06:16):
claiming early.
Speaker 2 (06:16):
And that's right.
Speaker 5 (06:17):
If your full retirement age is, say sixty six, and
you claim at sixty two, you'll only receive seventy five
percent of your full benefit full benefit meaning your full
retirement age benefit. If you wait until age sixty five,
you'll get ninety three point three percent of your full benefit.
Speaker 2 (06:37):
And here's the key.
Speaker 5 (06:37):
Once you start drawing early, it is a permanent reduction.
Speaker 2 (06:42):
You're not there.
Speaker 5 (06:43):
Now you can. There's some weird things you can do,
like you know, paying it all back and then you know,
and then basically reaccruing.
Speaker 2 (06:51):
But it's a nightmare. I'll just be frank with you.
Speaker 5 (06:53):
If you're gonna draw early, you're gonna permanently reduce your benefit.
Now that's not to say that you'll get no increases,
because do remember one you're on benefit, you can still
get what are called cola's cost of living adjustments for
inflation adjustments, but you're not going to ever go back
to that like long term a crul of unreduced benefits,
So just be cautious. These are irrevocable decisions generally, while
(07:17):
there are some bailouts. If you draw early and decide
you want to kind of reverse that decision, you can,
but it is extremely painful to do so. Now, of course,
the question is what happens youveclaimed Social Security before your
full retirement age while still earning income.
Speaker 2 (07:32):
This is where we began the show.
Speaker 5 (07:34):
So if I draw it sixty two, sixty three, sixty four,
this is before my full retirement age, and what if
I'm still working?
Speaker 2 (07:42):
This is where it's really tricky.
Speaker 5 (07:45):
If you reach your full retirement age in twenty twenty five,
the earnings limit is sixty two and sixty dollars before
Social Security with holds benefits. They'll deduct one dollar for
every three dollars earned over that limit, but only on
earnings before your full retirement age month.
Speaker 2 (08:04):
Okay, so here's the.
Speaker 5 (08:05):
Key we're talking about twenty twenty five. So just think
if I turn my full retirement age in twenty twenty five,
and let's just say for you, that's sixty six and
ten months, whatever it is, you have an earnings limit
of sixty two, one hundred and sixty dollars before your
full retirement age month. Now, if you're younger than full
(08:27):
retirement age and working in twenty twenty five, so imagine I'm,
you know, sixty three years old. So I'm not turning
full retirement age in twenty twenty five. I'm sixty three
years old, but I want to draw benefits in twenty
twenty five, at sixty three years old, while still working,
I have a working earnings limit of twenty three thousand,
(08:47):
four hundred dollars, and again, Social Security will withhold one
dollar of benefit for every two dollars earned above that amount.
Speaker 2 (08:57):
So what's going on here? Everybody like, what the heck?
Speaker 5 (09:00):
Well, social Security is trying to dissuade you from drawing
earlier unless you really need it. Okay, they're trying to say, hey,
your full unreduced benefit is at sixty six or sixty seven.
Speaker 2 (09:11):
Just wait right, but if.
Speaker 5 (09:13):
You want to draw early, you can. We just want
to dissuade you in case you're double dipping, meaning still working.
So if you're still working, they're just going to basically
take some of that money away if it's over certain limits,
and they'll push it out into the future. A lot
of people go, oh, they're taking my money from me. No, no, no, no.
Even when they even when they penalize you, so to speak,
it's actually not a penalty. They're just pushing it out
(09:36):
into the future when you get beyond your full retirement age.
So our encouragement would be, if you are planning on
drawing Social Security before your full retirement age and you
plan to continue working, please please please talk to a
good financial advisor, a good accountant, or talk to the
Social Security administration themselves, because you're going to want to
(09:57):
be super cautious.
Speaker 1 (09:58):
Talking this morning with a retirement planning professional CJ. Closs
and Eric Schwartz. Of course, they come to us from
Class Financial. Their website class financial dot com. That's Klaasfinancial
dot com. And their telephone number six oh eight four
four two five six three seven. No charge on the
initial get to know you appointment tech Loss Financial, It
will be complimentary for you again their number six oh
(10:18):
eight four four two five six three seven and c
Gen Eric love questions. If you've got one loved you,
join us this morn on telphon number six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. Get you right on the air
with CJ. Closs and Eric Schwartz, and Eric I'll bring
you in on this conversation. What about those folks who
have already reached their full retirement age and they still
want to work.
Speaker 4 (10:39):
Yeah, So the good news is once you hit your
full retirement age, which CJ was just saying there somewhere
between sixty six and sixty seven, there's no arning limit,
so you can go you can go right back to
work or continue working and earn as much as you
would like and continue to collect your Social Security benefit.
And if you if you can continue to work, your
(11:00):
benefit may actually continue to grow if you click if
you delay claiming, So again, like CJ said, you want
to make sure you're thinking this through when you're deciding
when to draw that benefit, and work with an advisor
to help make that decision. If you wait until age
seventy though, to start collecting, your benefit increases. Thanks to
(11:21):
something we call delay retirement credits or drcs, Social Security
increases your benefit by up to eight percent per year
if you delay past your full retirement age up until
age seventy. Now, once you get to seventy, there there's
no further increase, so generally it makes sense to start
collecting at that point, but you do get a larger
(11:41):
benefit if you wait even beyond that full retirement age.
Speaker 1 (11:44):
Really exciting stuff if you if you're in that position,
you know you talk about that eight percent, that's a
nice that's a nice growth number if you can hold off.
As we talked this morning with Eric Schwartz and CJ.
Closs our retirement plan professionals from Class Financial, don't forget.
If you've got a question, We've got a phone line
for you right now, love to have you join us.
Six oh eight three two one thirteen ten gets you
(12:04):
on the air with CJ and Eric. Don't forget, of course,
about the website Cossfinancial dot com. That's Coss k l
aa S Financial dot com and the tough number for
the office right here in Madison six oh eight four
four two five six three seven. What about taxes when
it comes to social Security? We'll get the details on that.
Next has Money in Motion with Coss Financial continues right
here thirteen ten WYB I talking with our retirement planning professionals, CJ.
(12:29):
Closs and Eric Schwartz. Of course they come to us
from Class Financial. The website it's Clossfinancial dot com. That's
Coss k l a a S Financial dot Com. They're
telephone number six oh eight four four two five six
three seven talking this week about social security and Eric
before the break, you got to talk about the fun
stuff the d r cs.
Speaker 3 (12:49):
Let's talk let's talk.
Speaker 1 (12:50):
Taxes on this one, and I'll let you explain how
this all works.
Speaker 4 (12:55):
Yeah. We always end up here, don't we, Sean.
Speaker 2 (12:57):
Yeah.
Speaker 4 (13:00):
So the short answer to the question we often get
from clients, which is do my Social Security benefits actually
get taxed? Is yes, they can be and we'll often
hear people say, well, I thought that Social Security benefits
weren't taxed, And the short answer to that is, well,
at one point they weren't, but it's been a long
time since they weren't taxed, and today you can expect
(13:24):
to be taxed at the federal and even at the
state level.
Speaker 3 (13:27):
So let's start with the federal level.
Speaker 4 (13:28):
That's that's kind of the first piece we'll bite off here.
If you file as an individual and you have a
combined income, so actually I want to stop there, combined income.
I want to kind of define this for folks. The
Social Security Administration defines combined income as your adjusted gross
income plus fifty percent of your Social Security benefits. There's
(13:55):
a couple other things they'll add back in there, like
non taxable interest and a couple other idea, but the
main things to think about are your adjusted growth income
plus fifty percent of your Social Security income. So, if
you're filing as an individual and you have a combined
income of twenty five thousand to thirty four thousand dollars
in the year, up to fifty percent of your benefits
(14:18):
may be taxable. Now, if you earn more than that
thirty four thousand dollars, up to eighty five percent of
that actually may be taxable. Now, if you file jointly
in your combined income which remember adjusted growth income plus
fifty percent of Social Security benefits, If your combined income
is between thirty two thousand and forty four thousand, up
(14:39):
to fifty percent of your benefits may be taxable. Now
if you pay, or if your combined income is more
than forty four thousand dollars, then again you're up to
eighty five percent of the benefit that may be taxable.
The federal government will not tax more than eighty five
percent of the Social Security benefits that you receive. Let's
talk briefly here about state t taxes. Fortunately for our
(15:02):
listeners here in Wisconsin, the state of Wisconsin does not
tax Social Security benefits. But as of twenty twenty five,
here there are nine states remaining that do tax Social Security.
So I'm just going to go through those briefly. That
would be Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont,
(15:27):
and West Virginia. So those are again the nine states
that currently tax Social Security. And a reminder to our
listeners here in the great state of Wisconsin. We do
not currently tax social Security benefits. And keep in mind
that list of nine states when you're thinking about where
you may want to retire someday.
Speaker 1 (15:44):
Really good, really good advice there, and that's important to
keep in mind as well, a lot of great information
from our retirement plan professionals, Eric Schwartz and CJ.
Speaker 3 (15:53):
Class.
Speaker 1 (15:54):
Of course, you can learn more online class financial dot com.
That's Class k l a as Financial dot com. They're
telephon number six oh eight four four two five six
three seven. No charge for that initial get to know
you appoinment tech Laws Financial. It will be complementary to
you again their office six oh eight four four two
five six three seven. So CJ, if someone is considering
(16:14):
taking starting Social Security this year one, how do they apply?
And I know you mentioned earlier cost of living? How
does that impact benefits?
Speaker 2 (16:24):
Yeah, good questions, Sean.
Speaker 5 (16:25):
So the earliest you can apply, as we mentioned before,
is at age sixty two, though again this won't be
your highest benefit.
Speaker 2 (16:32):
This is going to be a reduced benefit. You can
apply online at www dot SSA dot gov. Establish a
log in.
Speaker 5 (16:39):
You can actually put in routing information do withholdings all
of it.
Speaker 2 (16:44):
You can also call eight.
Speaker 5 (16:45):
Hundred seven seven two one two one three or visit
a local social security office. Now, by the way, people
have heard nightmares about social security offices. Eric and I
would say, hey, just be smart about it. Look at
when they're busiest. You can actually go online and they'll
show you when they're going to be busiest. So just
go in earlier in the morning when you know you
have some time to spare, and it can be nice
(17:07):
to speak to a human being to get signed up
for social Security. Once you've done that, there's typically not
a lot of you know, back and forth involvement thereafter.
So again online, calling the phone number, or going to
a local social security office. And then another important factor
would be that you can apply up to four months
before you turn sixty two or three months before you
(17:27):
want your benefit to start. So again, four months before
you turn sixty two or three months before you want
your benefit to start. I like to just say call
it three months, just three months in advance of when
you're going to draw social Security, go in and try
to get signed up. I would also say, because whether
you're online or at an office, you say, hey, I'm
here three months early I did my due diligence, and
(17:48):
so I want it to begin, you know, November first
of twenty twenty five, and inevitably, you know, it's like
December first and you haven't gotten your first payment.
Speaker 2 (17:56):
So here's what we typically say.
Speaker 5 (17:58):
The first payment is all ways a little behind. Now,
if Socialecurity Administration is listening to me and you disagree
with me, I'm so sorry. This has just been my
lived experience with clients. But it doesn't matter. It's not
that they won't catch you up or double pay you
or make sure that you started on that date. It's
almost like just this big crank that takes a while
to get started. So do try to make sure you
(18:20):
sign up three months in advance and then be a
little bit flexible on that first payment because it can take,
you know, a month or so for that crank to
get going, and then once it's going, it's kind of
like a locomotive, it's hard to turn.
Speaker 2 (18:30):
Off as well.
Speaker 5 (18:32):
So anyways, just be aware of that. Now, if you're
sixty five, you can apply for Medicare and Social Security
at the same time. This gets a little confusing for
people because they're like, hey, I want to sign up
for socialecurity and then they I just retired and they
go and do this, and there's some medicare components that
they have to you know, watch out for. And then
(18:54):
we mentioned cost of living adjustments. And each October, the
Social Security Administration and announces the cost of living increase
for the following year. This adjustment's help. This adjustment helps
benefits keep up with inflation and applies to all Social
Security recipients starting in January. Let me just pause on this.
(19:16):
This is a huge point of confusion for people. They say,
wait a minute, I heard that if I wait, it
grows by six, seven, eight percent something like that. And
it's like, yeah, that's if you're not drawing, okay. And actually,
once you get beyond your full retirement age, Eric was
talking about it, it's a linear eight percent if you
(19:38):
wait after sixty two up to your full retirement retirement age.
For every year you wait, it's about a seven percent increase. Okay,
so seven percent increase, eight percent increase, So somewhere in
that neighborhood. For every year I wait to draw, I
get a significant benefit increase That is totally different than
(19:59):
if I I'm already drawing. If I'm drawing, I actually
still get future increases. It's that those increases are inflationary.
Speaker 2 (20:08):
That's the key.
Speaker 5 (20:08):
The increases are inflationary, meaning there may be no increase,
or it might be one percent or two percent or
seven percent. It depends on what inflation is doing. So
just recognize there is a difference between delaying your benefit
and getting an increase, which is a guaranteed higher increase
amount versus once you've started drawing and having an inflation adjustment.
So I hope that's helpful for people. But just remember
(20:32):
that there is a cost of living adjustment to keep
up your benefit with the cost of goods and services
as the increase in the future.
Speaker 1 (20:40):
Can I ask you a quick question, c J, because I
know somebody's asking us, what if we have deflation, can
that cost of living go the other way?
Speaker 2 (20:47):
Yeah? Good question.
Speaker 5 (20:48):
I believe the answer is no. Eric, can you confirm
that we haven't ever had a deflationary decrease on Social Security?
Speaker 2 (20:55):
Have we not?
Speaker 4 (20:57):
That I'm aware of. I was going to say the
exact same thing.
Speaker 5 (21:00):
Yeah, we could be wrong on that one, Sean. That's
the first time I've ever forgotten the question. So yeah,
I'm going to like after the show, I'm going to
be looking online at the history because that history is
publicly available. Sure, I just can't remember if there's ever
any deflation area, but I don't think so.
Speaker 3 (21:14):
Okay, awesome, awesome, awesome. Anything else with the CJ. As
we talk with CJ.
Speaker 1 (21:19):
Closs and Eric Schwartzer, retirement planning professionals from Class Financial
what about for folks who who haven't yet started collecting
their benefit and cola increase?
Speaker 3 (21:27):
Any touched on it a little bit?
Speaker 4 (21:29):
There?
Speaker 3 (21:29):
What's that, pia there?
Speaker 2 (21:30):
Yeah? Yeah, good question.
Speaker 5 (21:32):
So again, if you haven't started collecting on your benefit,
you get these consistent increases. Those increases are fairly standard.
Between sixty two and your full retirement age. It's around
seven percent per year forevery year that you wait. But
then after you get beyond and by the way, you're
not going to find that number I just mentioned if
you go googling around, like wait, between.
Speaker 2 (21:51):
Sixty two and full retirement.
Speaker 5 (21:52):
Age, because the way Social Security defines that as they say, no, no, no,
no no, you're just going to get a reduction of
your full amount. Okay, so they call it your full
retirement age is your unreduced benefits. So if you draw early,
it's just a reduction. What I'm doing is I'm converting
that in the math and saying it's about seven ish
percent for every year that you wait. Now, once you
(22:14):
get to your unreduced benefit at full retirement age, then
it's a linear eight percent for every year you wait,
it's an eight percent increase. But here's the kicker, everybody.
If you're still working throughout all of this, and you're
adjusting up what's called kind of like income calculation or
your highest forty quarters or thirty five years of inflation
(22:38):
adjusted earnings, you can actually get more than a.
Speaker 2 (22:41):
Seven or eight percent increase.
Speaker 5 (22:43):
So a lot of math goes into this. You actually
need to understand the entire formula, the entire calculation to
see how it goes. But the biggest thing we want
people to realize is that if you draw sol security
benefits earlier, you are going to permanently reduce your benefit.
Which is why we often say caution. If you're gonna
do that, talk to a professional who can give you guidance.
Speaker 3 (23:04):
Talking this morning with CJ.
Speaker 1 (23:06):
Closs and Eric Schwartz, they are our retirement planning professionals
from Class Financial Online Costs Financial dot com. That's Coss
k l aa S Financial dot com. Great website to
learn more about COSS Financial, get to know the team,
also learn about their separate divisions. Great opportunity as well.
Listen back to this in previous shows podcasts. All online
also another option, of course, to submit a question in
(23:27):
the Money and Motion listener question corner. As a matter
of fact, we'll answer Andy's question and do the Class
Quiz question leak next. As Money in Motion with Coss
Financial continues right here on thirteen ten. Wiv A a
lot of great information in this week's program, as we
get every week from our friends at Class Financial. Don't
forget if you miss any part of the program, you
want to listen back or you want to share the show,
(23:47):
you can subscribe as well all online at COSS Financial
dot com. That's Coss k l a a s Financial
dot com to help it up for the office right
here in Madison six eight four four two five six
three seven. No charge for the initial gets to Know
You appointment tech Loss Financial. It will be complimentary to
you again their number six oh eight four four two
five six three seven. Many in Money in Motion Listener
(24:10):
Question corner and I am convinced CJ. When Malia came
up with both the class Quiz question the week and
the Money in Motion listener question corner.
Speaker 3 (24:17):
She was trying to.
Speaker 1 (24:18):
See how how well I can do with my with
my annunciation and pronunciations.
Speaker 3 (24:23):
They are both kind of tongues.
Speaker 1 (24:25):
Always our goal, always our goal. It's great stuff. We
got a great question this week as well, CJ. Andy
wrote in he says I'm retiring later this year and
wondering if I should roll over my four oh one
k into an IRA or leave it with my employer.
What should I consider before making that decision.
Speaker 5 (24:44):
Well, again, thanks Andy for submitting the question. We love
it when these coming online because it gives us time
to be prepared for him. But this one's a pretty
straightforward one. Before I answer Andy Andy's question, we were
able to confirm by the way that there is no
decrease for d inflation on Social Security recipients.
Speaker 2 (25:02):
I know you asked that before, Shawn. Thank you.
Speaker 5 (25:04):
So that's the answer. There's no reductions to your benefit,
just increases. Now, there may be no increase if there's
no inflation, but you're not going to see a reduction
for deflation. Okay, So to Andy's question, Great question, Andy,
Should you roll over your old four to one K
plan from your old employer or should you leave it
with your old employer? Truth be told, Andy, it's a
(25:26):
pretty complicated answer. You're probably going to want to talk
to your financial advisor or accountant. It depends on what
you're trying to accomplish, what your kind of sensitivity to
fees are, how many access to investments that you want.
But here would be some general guidance for you. If
your plan has low fees and good investment choices, and
you like managing money on your own, then leaving it
(25:48):
in the old for one K plan could be fine. Now,
there's some things you need to be aware of, which is,
if that company that you worked at decides to move
that four one K plan, you're going to get jerked
around with them to whatever the new plan provider is.
If they decide to change their fees, you're going to
get jerked around with that. And then when you go
to like perform distributions, it's a lot more herky jerky
(26:13):
inside of a four to one K plan structure. Because
they're standard with holdings, it's harder to increase or decrease
your withholdings. Setting up systematic withdrawals can be a little
more difficult.
Speaker 2 (26:23):
But again, if all you.
Speaker 5 (26:24):
Care about is like, no, I'm young, I'm not performing distributions.
It's just a low cost plan.
Speaker 3 (26:29):
Who knows.
Speaker 5 (26:29):
Maybe your employer pays all the fees associated with the plan.
That could be great, right, Or maybe you're fifty five
or fifty six and you want to take advantage of
the separation from service after the age of fifty five
provision that gives you access to your money before fifty
nine and a half. That's another great option. So you
get the point, Andy, it's a little bit complicated.
Speaker 2 (26:51):
Now.
Speaker 5 (26:51):
Obviously, if you roll money into an IRA, you typically
have a lot broader range of investment options, way more
control over your withdrawals, your district patterns, where you want
the money sent. You could you could invest in cheaper funds,
or you could hire a money manager to manage the
money for you, like our firm does right to actually
manage the investments and make decisions for you. So there's
(27:13):
no doubt that when you roll money into an IRA,
you get a lot more freedom and flexibility of choice,
But that doesn't.
Speaker 2 (27:20):
Mean it's necessarily the right decision.
Speaker 4 (27:22):
For you.
Speaker 5 (27:22):
So what we would say, Andy is great question. It
just kind of depends on who you are and what
you're trying to accomplish.
Speaker 1 (27:29):
Great question, Andy, And if you've got a question, of course,
we always open the phone lines up during the program.
You can also email just head on over to Cossfinancial
dot com. That's Coss k l aa S Financial dot com.
Can submit a question right online to be answered here
on the program.
Speaker 3 (27:44):
So we have getting over the website. You can get
to no CJ.
Speaker 1 (27:46):
Can get to know Eric, can get to know the
whole team as a matter of fact at COSS Financial
on their website. Learn more about their separate divisions as well.
And listen back to this in previous shows podcasts that'll
all available to you at Cossfinancial dot com. That's Coss
k l aa s finalil dot com. Time now for
the Closs Quiz Question of the Week. It works like this.
In just a moment, I'll ask you the class Quiz
question the week, and you'll have thirty minutes from that
(28:07):
program today's program to call the Class Financial Office right
here in Madison at six oh eight four four two five,
six three seven. If you are the first car with
correct answer you win this week's prize, which is a
twenty five dollars gift card to Panera. This week's Coloss
Quiz question the week is this, What is the earliest
you can generally apply and receive your Social Security retirement benefit?
(28:30):
Is it age fifty nine or age sixty two? Telephone
number six oh eight four four two, five six three
seven first call. Correct answer when that twenty five dollars
gift card to Panera North good as well. That's COSS
Financial's office right here in Madison, that first visit, that
first appoyment. It will be complementary to you again their
number six oh eight four four two five six three seven.
Speaker 4 (28:51):
C J.
Speaker 5 (28:51):
Eric.
Speaker 1 (28:52):
It is always fantastic chatting with you guys. You keep
cool and enjoy the weather and we'll talk real soon.
Speaker 2 (28:57):
Thanks Sean.
Speaker 3 (28:58):
Thanksean, Take care guys.
Speaker 1 (28:59):
Doctor already Greer joins us next right here on thirteen
ten w Ibi
Niphone nines. They are open for you right now. If
you have questions for our retirement planning professionals from Class
Financial the website you can learn more. Let me actually
I put out the idea that you can call in.
I forgot to mention the phone numbers six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. I was so excited though, to
talk about the website colssfinancial dot com. That's coss Klaas
(00:22):
financial dot com. If you haven't been there recently, it's
a great day to check back in the the a
lot of great opportunities learn more about COSS Financial. Also
signo for the weekly Market Pulse newsletter that available to
you at cossfinancial dot com. Their telephone number six oh
eight four four two five six three seven. No charge
for the initial get to know you appointment tech Loss Financial.
(00:43):
It will be complementary to you again their number six
oh eight four four two five six three seven. And
if you'd like to join us this morning, all I
get to do is give us call six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. Joining us this week from Coss
Financial is CJ. Closs and Eric Schwartz. Jay, how you
doing this morning?
Speaker 2 (01:01):
I'm doing great, Sean. How are you?
Speaker 3 (01:03):
I'm doing really really good? And Eric, how have you been?
Speaker 4 (01:06):
I am doing great, Sean. It's a beautiful day and
excited to talk about social security.
Speaker 1 (01:10):
It's going to be a great conversation. Yeah, it is
a beautiful day as well.
Speaker 3 (01:14):
And as Eric.
Speaker 1 (01:15):
Mentioned, we are talking social security this morning, which is
always a very very popular topic. Don't forget if you
miss any part of today's program, you can always listen
back at colssfinancial dot com. Really cool thing we do
on the program each and every week is the Closs Quiz.
Question the week your chance to win a fantastic prize.
This week, our friends from Class Financially have provided a
twenty five dollars gift card to Panera. Tell you a
(01:36):
little bit later on the program how you could win
that gift card, little tipto. It pays to pay attention
to the program. It's just about every show. The question
answer come up during the program during Money in Motion
with Coss Financial. And before we get to this week's
topic in this week's conversation, let's actually take a look
back Eric at last week's program get the question and
answer there as well.
Speaker 4 (01:58):
Absolutely so thank you to our winner from last week,
who was Linda from Sac City. Thank you to Linda
and everybody for listening as always. And our question last
week was true or false? More potential conflicts of interest
arise when someone is selling you a product for a
commission versus providing you with service for a fee, And
(02:18):
the answer to that was true. So congratulations Linda.
Speaker 3 (02:21):
Nice work, Linda.
Speaker 1 (02:22):
I don't forget if you missed any part of last
week's program or want to subscribe to the podcast to
listen back to any show. Just that on over to
class financial dot com again. Phone lines are open six
to oh eight three two one thirteen ten. That's six
h eight three two one thirteen ten. Gets you on
the air with CJ Colas and Eric Schwartz, our retirement
planning professionals from Class Financial. Of course, we talk about
social security on the program, and I know a lot
(02:43):
of folks I'm kind of assumed that the best move is,
you know, of course, start collecting benefits asap, as soon
as you can. But for those who are still working, CJ,
what should they consider about about how their job might
impact their benefits.
Speaker 2 (02:58):
Yeah, great question.
Speaker 5 (03:00):
So, since social Security can be complex, we do like
to break it down into the key factors that impact
your benefits and the best timing for you to start
collecting collecting benefits. So one big question we'll tackle today
is if you plan to work while drawing Social Security,
how will that affect your benefits? But before we get
(03:20):
into that, let's start with an even bigger picture kind
of question, which is when should you begin taking your
Social Security benefit? So step one is to just evaluate
your overall income picture. This includes your retirement accounts like iras, pensions,
after tax savings, things like that, any part time earnings
you may have, and spousal income. Having a clear financial
(03:44):
picture that will help you will help you decide when
it makes the most sense to claim your Social Security benefit.
Step two, then is to determine your full retirement age
known as FR. Your FRA is when you qualify for
your full on reduced benefit, which means you can both
(04:05):
receive your full unreduced benefit and you can be working
generating as much income as you want to and have
no offset. More to come on that in a little bit,
but knowing your FRA whatever that full retirement age is
is critical because again it's your full unreduced Social Security benefit,
and on top of that, you could be quote unquote
(04:26):
double dipping, meaning still working and drawing Social Security and
have no offset. Now you can find your full retirement
age by logging into your individual account through www. Dot
SSA dot gov. You have to establish a login to
gain access to to your file, but you get the idea.
You can go in there and see what is my
(04:47):
full retirement age. Now, for those who don't want to
do that work, we are going to make it easier
for you, but you're just gonna have to pay attention. So,
if you were born between nineteen forty three and nineteen.
Speaker 2 (04:58):
Fifty four, your FRA is sixty six.
Speaker 5 (05:03):
But let me rephrase that your FRA was sixty six,
because anybody born within that window is already.
Speaker 2 (05:10):
Over sixty six.
Speaker 5 (05:12):
Okay, So if you're born between nineteen forty three and
nineteen fifty four, your full retirement age was sixty six.
If you were born between nineteen fifty five and nineteen
fifty nine, your FRA is sixty six plus some number
of months sixty six and two months, four months, six months.
Speaker 2 (05:29):
You get the idea.
Speaker 5 (05:30):
And then finally, if you were born in nineteen sixty
or later. Like I'm raising my hand right now. You
can't see me, but I'm raising my hand. Your full
retirement age is sixty seven. So that's why we say
you have to determine what your full retirement age is
because it's not the same age for everybody. Now, you
can claim benefits as early as sixty two. So because
(05:52):
we talked about this full retirement age, but truth be told,
people go, wait, I thought I could draw sole security
at sixty two. You can, But remember what did I
just tell you about your full retirement age. It is
your full unreduced benefit at age, at your full retirement age.
So if you draw at sixty two, it's pretty clear
to say it must be some reduced benefit because I'm
(06:16):
claiming early.
Speaker 2 (06:16):
And that's right.
Speaker 5 (06:17):
If your full retirement age is, say sixty six, and
you claim at sixty two, you'll only receive seventy five
percent of your full benefit full benefit meaning your full
retirement age benefit. If you wait until age sixty five,
you'll get ninety three point three percent of your full benefit.
Speaker 2 (06:37):
And here's the key.
Speaker 5 (06:37):
Once you start drawing early, it is a permanent reduction.
Speaker 2 (06:42):
You're not there.
Speaker 5 (06:43):
Now you can. There's some weird things you can do,
like you know, paying it all back and then you know,
and then basically reaccruing.
Speaker 2 (06:51):
But it's a nightmare. I'll just be frank with you.
Speaker 5 (06:53):
If you're gonna draw early, you're gonna permanently reduce your benefit.
Now that's not to say that you'll get no increases,
because do remember one you're on benefit, you can still
get what are called cola's cost of living adjustments for
inflation adjustments, but you're not going to ever go back
to that like long term a crul of unreduced benefits,
So just be cautious. These are irrevocable decisions generally, while
(07:17):
there are some bailouts. If you draw early and decide
you want to kind of reverse that decision, you can,
but it is extremely painful to do so. Now, of course,
the question is what happens youveclaimed Social Security before your
full retirement age while still earning income.
Speaker 2 (07:32):
This is where we began the show.
Speaker 5 (07:34):
So if I draw it sixty two, sixty three, sixty four,
this is before my full retirement age, and what if
I'm still working?
Speaker 2 (07:42):
This is where it's really tricky.
Speaker 5 (07:45):
If you reach your full retirement age in twenty twenty five,
the earnings limit is sixty two and sixty dollars before
Social Security with holds benefits. They'll deduct one dollar for
every three dollars earned over that limit, but only on
earnings before your full retirement age month.
Speaker 2 (08:04):
Okay, so here's the.
Speaker 5 (08:05):
Key we're talking about twenty twenty five. So just think
if I turn my full retirement age in twenty twenty five,
and let's just say for you, that's sixty six and
ten months, whatever it is, you have an earnings limit
of sixty two, one hundred and sixty dollars before your
full retirement age month. Now, if you're younger than full
(08:27):
retirement age and working in twenty twenty five, so imagine I'm,
you know, sixty three years old. So I'm not turning
full retirement age in twenty twenty five. I'm sixty three
years old, but I want to draw benefits in twenty
twenty five, at sixty three years old, while still working,
I have a working earnings limit of twenty three thousand,
(08:47):
four hundred dollars, and again, Social Security will withhold one
dollar of benefit for every two dollars earned above that amount.
Speaker 2 (08:57):
So what's going on here? Everybody like, what the heck?
Speaker 5 (09:00):
Well, social Security is trying to dissuade you from drawing
earlier unless you really need it. Okay, they're trying to say, hey,
your full unreduced benefit is at sixty six or sixty seven.
Speaker 2 (09:11):
Just wait right, but if.
Speaker 5 (09:13):
You want to draw early, you can. We just want
to dissuade you in case you're double dipping, meaning still working.
So if you're still working, they're just going to basically
take some of that money away if it's over certain limits,
and they'll push it out into the future. A lot
of people go, oh, they're taking my money from me. No, no, no, no.
Even when they even when they penalize you, so to speak,
it's actually not a penalty. They're just pushing it out
(09:36):
into the future when you get beyond your full retirement age.
So our encouragement would be, if you are planning on
drawing Social Security before your full retirement age and you
plan to continue working, please please please talk to a
good financial advisor, a good accountant, or talk to the
Social Security administration themselves, because you're going to want to
(09:57):
be super cautious.
Speaker 1 (09:58):
Talking this morning with a retirement planning professional CJ. Closs
and Eric Schwartz. Of course, they come to us from
Class Financial. Their website class financial dot com. That's Klaasfinancial
dot com. And their telephone number six oh eight four
four two five six three seven. No charge on the
initial get to know you appointment tech Loss Financial, It
will be complimentary for you again their number six oh
(10:18):
eight four four two five six three seven and c
Gen Eric love questions. If you've got one loved you,
join us this morn on telphon number six oh eight
three two one thirteen ten. That's six oh eight three
two one thirteen ten. Get you right on the air
with CJ. Closs and Eric Schwartz, and Eric I'll bring
you in on this conversation. What about those folks who
have already reached their full retirement age and they still
want to work.
Speaker 4 (10:39):
Yeah, So the good news is once you hit your
full retirement age, which CJ was just saying there somewhere
between sixty six and sixty seven, there's no arning limit,
so you can go you can go right back to
work or continue working and earn as much as you
would like and continue to collect your Social Security benefit.
And if you if you can continue to work, your
(11:00):
benefit may actually continue to grow if you click if
you delay claiming, So again, like CJ said, you want
to make sure you're thinking this through when you're deciding
when to draw that benefit, and work with an advisor
to help make that decision. If you wait until age
seventy though, to start collecting, your benefit increases. Thanks to
(11:21):
something we call delay retirement credits or drcs, Social Security
increases your benefit by up to eight percent per year
if you delay past your full retirement age up until
age seventy. Now, once you get to seventy, there there's
no further increase, so generally it makes sense to start
collecting at that point, but you do get a larger
(11:41):
benefit if you wait even beyond that full retirement age.
Speaker 1 (11:44):
Really exciting stuff if you if you're in that position,
you know you talk about that eight percent, that's a
nice that's a nice growth number if you can hold off.
As we talked this morning with Eric Schwartz and CJ.
Closs our retirement plan professionals from Class Financial, don't forget.
If you've got a question, We've got a phone line
for you right now, love to have you join us.
Six oh eight three two one thirteen ten gets you
(12:04):
on the air with CJ and Eric. Don't forget, of course,
about the website Cossfinancial dot com. That's Coss k l
aa S Financial dot com and the tough number for
the office right here in Madison six oh eight four
four two five six three seven. What about taxes when
it comes to social Security? We'll get the details on that.
Next has Money in Motion with Coss Financial continues right
here thirteen ten WYB I talking with our retirement planning professionals, CJ.
(12:29):
Closs and Eric Schwartz. Of course they come to us
from Class Financial. The website it's Clossfinancial dot com. That's
Coss k l a a S Financial dot Com. They're
telephone number six oh eight four four two five six
three seven talking this week about social security and Eric
before the break, you got to talk about the fun
stuff the d r cs.
Speaker 3 (12:49):
Let's talk let's talk.
Speaker 1 (12:50):
Taxes on this one, and I'll let you explain how
this all works.
Speaker 4 (12:55):
Yeah. We always end up here, don't we, Sean.
Speaker 2 (12:57):
Yeah.
Speaker 4 (13:00):
So the short answer to the question we often get
from clients, which is do my Social Security benefits actually
get taxed? Is yes, they can be and we'll often
hear people say, well, I thought that Social Security benefits
weren't taxed, And the short answer to that is, well,
at one point they weren't, but it's been a long
time since they weren't taxed, and today you can expect
(13:24):
to be taxed at the federal and even at the
state level.
Speaker 3 (13:27):
So let's start with the federal level.
Speaker 4 (13:28):
That's that's kind of the first piece we'll bite off here.
If you file as an individual and you have a
combined income, so actually I want to stop there, combined income.
I want to kind of define this for folks. The
Social Security Administration defines combined income as your adjusted gross
income plus fifty percent of your Social Security benefits. There's
(13:55):
a couple other things they'll add back in there, like
non taxable interest and a couple other idea, but the
main things to think about are your adjusted growth income
plus fifty percent of your Social Security income. So, if
you're filing as an individual and you have a combined
income of twenty five thousand to thirty four thousand dollars
in the year, up to fifty percent of your benefits
(14:18):
may be taxable. Now, if you earn more than that
thirty four thousand dollars, up to eighty five percent of
that actually may be taxable. Now, if you file jointly
in your combined income which remember adjusted growth income plus
fifty percent of Social Security benefits, If your combined income
is between thirty two thousand and forty four thousand, up
(14:39):
to fifty percent of your benefits may be taxable. Now
if you pay, or if your combined income is more
than forty four thousand dollars, then again you're up to
eighty five percent of the benefit that may be taxable.
The federal government will not tax more than eighty five
percent of the Social Security benefits that you receive. Let's
talk briefly here about state t taxes. Fortunately for our
(15:02):
listeners here in Wisconsin, the state of Wisconsin does not
tax Social Security benefits. But as of twenty twenty five,
here there are nine states remaining that do tax Social Security.
So I'm just going to go through those briefly. That
would be Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont,
(15:27):
and West Virginia. So those are again the nine states
that currently tax Social Security. And a reminder to our
listeners here in the great state of Wisconsin. We do
not currently tax social Security benefits. And keep in mind
that list of nine states when you're thinking about where
you may want to retire someday.
Speaker 1 (15:44):
Really good, really good advice there, and that's important to
keep in mind as well, a lot of great information
from our retirement plan professionals, Eric Schwartz and CJ.
Speaker 3 (15:53):
Class.
Speaker 1 (15:54):
Of course, you can learn more online class financial dot com.
That's Class k l a as Financial dot com. They're
telephon number six oh eight four four two five six
three seven. No charge for that initial get to know
you appoinment tech Laws Financial. It will be complementary to
you again their office six oh eight four four two
five six three seven. So CJ, if someone is considering
(16:14):
taking starting Social Security this year one, how do they apply?
And I know you mentioned earlier cost of living? How
does that impact benefits?
Speaker 2 (16:24):
Yeah, good questions, Sean.
Speaker 5 (16:25):
So the earliest you can apply, as we mentioned before,
is at age sixty two, though again this won't be
your highest benefit.
Speaker 2 (16:32):
This is going to be a reduced benefit. You can
apply online at www dot SSA dot gov. Establish a
log in.
Speaker 5 (16:39):
You can actually put in routing information do withholdings all
of it.
Speaker 2 (16:44):
You can also call eight.
Speaker 5 (16:45):
Hundred seven seven two one two one three or visit
a local social security office. Now, by the way, people
have heard nightmares about social security offices. Eric and I
would say, hey, just be smart about it. Look at
when they're busiest. You can actually go online and they'll
show you when they're going to be busiest. So just
go in earlier in the morning when you know you
have some time to spare, and it can be nice
(17:07):
to speak to a human being to get signed up
for social Security. Once you've done that, there's typically not
a lot of you know, back and forth involvement thereafter.
So again online, calling the phone number, or going to
a local social security office. And then another important factor
would be that you can apply up to four months
before you turn sixty two or three months before you
(17:27):
want your benefit to start. So again, four months before
you turn sixty two or three months before you want
your benefit to start. I like to just say call
it three months, just three months in advance of when
you're going to draw social Security, go in and try
to get signed up. I would also say, because whether
you're online or at an office, you say, hey, I'm
here three months early I did my due diligence, and
(17:48):
so I want it to begin, you know, November first
of twenty twenty five, and inevitably, you know, it's like
December first and you haven't gotten your first payment.
Speaker 2 (17:56):
So here's what we typically say.
Speaker 5 (17:58):
The first payment is all ways a little behind. Now,
if Socialecurity Administration is listening to me and you disagree
with me, I'm so sorry. This has just been my
lived experience with clients. But it doesn't matter. It's not
that they won't catch you up or double pay you
or make sure that you started on that date. It's
almost like just this big crank that takes a while
to get started. So do try to make sure you
(18:20):
sign up three months in advance and then be a
little bit flexible on that first payment because it can take,
you know, a month or so for that crank to
get going, and then once it's going, it's kind of
like a locomotive, it's hard to turn.
Speaker 2 (18:30):
Off as well.
Speaker 5 (18:32):
So anyways, just be aware of that. Now, if you're
sixty five, you can apply for Medicare and Social Security
at the same time. This gets a little confusing for
people because they're like, hey, I want to sign up
for socialecurity and then they I just retired and they
go and do this, and there's some medicare components that
they have to you know, watch out for. And then
(18:54):
we mentioned cost of living adjustments. And each October, the
Social Security Administration and announces the cost of living increase
for the following year. This adjustment's help. This adjustment helps
benefits keep up with inflation and applies to all Social
Security recipients starting in January. Let me just pause on this.
(19:16):
This is a huge point of confusion for people. They say,
wait a minute, I heard that if I wait, it
grows by six, seven, eight percent something like that. And
it's like, yeah, that's if you're not drawing, okay. And actually,
once you get beyond your full retirement age, Eric was
talking about it, it's a linear eight percent if you
(19:38):
wait after sixty two up to your full retirement retirement age.
For every year you wait, it's about a seven percent increase. Okay,
so seven percent increase, eight percent increase, So somewhere in
that neighborhood. For every year I wait to draw, I
get a significant benefit increase That is totally different than
(19:59):
if I I'm already drawing. If I'm drawing, I actually
still get future increases. It's that those increases are inflationary.
Speaker 2 (20:08):
That's the key.
Speaker 5 (20:08):
The increases are inflationary, meaning there may be no increase,
or it might be one percent or two percent or
seven percent. It depends on what inflation is doing. So
just recognize there is a difference between delaying your benefit
and getting an increase, which is a guaranteed higher increase
amount versus once you've started drawing and having an inflation adjustment.
So I hope that's helpful for people. But just remember
(20:32):
that there is a cost of living adjustment to keep
up your benefit with the cost of goods and services
as the increase in the future.
Speaker 1 (20:40):
Can I ask you a quick question, c J, because I
know somebody's asking us, what if we have deflation, can
that cost of living go the other way?
Speaker 2 (20:47):
Yeah? Good question.
Speaker 5 (20:48):
I believe the answer is no. Eric, can you confirm
that we haven't ever had a deflationary decrease on Social Security?
Speaker 2 (20:55):
Have we not?
Speaker 4 (20:57):
That I'm aware of. I was going to say the
exact same thing.
Speaker 5 (21:00):
Yeah, we could be wrong on that one, Sean. That's
the first time I've ever forgotten the question. So yeah,
I'm going to like after the show, I'm going to
be looking online at the history because that history is
publicly available. Sure, I just can't remember if there's ever
any deflation area, but I don't think so.
Speaker 3 (21:14):
Okay, awesome, awesome, awesome. Anything else with the CJ. As
we talk with CJ.
Speaker 1 (21:19):
Closs and Eric Schwartzer, retirement planning professionals from Class Financial
what about for folks who who haven't yet started collecting
their benefit and cola increase?
Speaker 3 (21:27):
Any touched on it a little bit?
Speaker 4 (21:29):
There?
Speaker 3 (21:29):
What's that, pia there?
Speaker 2 (21:30):
Yeah? Yeah, good question.
Speaker 5 (21:32):
So again, if you haven't started collecting on your benefit,
you get these consistent increases. Those increases are fairly standard.
Between sixty two and your full retirement age. It's around
seven percent per year forevery year that you wait. But
then after you get beyond and by the way, you're
not going to find that number I just mentioned if
you go googling around, like wait, between.
Speaker 2 (21:51):
Sixty two and full retirement.
Speaker 5 (21:52):
Age, because the way Social Security defines that as they say, no, no, no,
no no, you're just going to get a reduction of
your full amount. Okay, so they call it your full
retirement age is your unreduced benefits. So if you draw early,
it's just a reduction. What I'm doing is I'm converting
that in the math and saying it's about seven ish
percent for every year that you wait. Now, once you
(22:14):
get to your unreduced benefit at full retirement age, then
it's a linear eight percent for every year you wait,
it's an eight percent increase. But here's the kicker, everybody.
If you're still working throughout all of this, and you're
adjusting up what's called kind of like income calculation or
your highest forty quarters or thirty five years of inflation
(22:38):
adjusted earnings, you can actually get more than a.
Speaker 2 (22:41):
Seven or eight percent increase.
Speaker 5 (22:43):
So a lot of math goes into this. You actually
need to understand the entire formula, the entire calculation to
see how it goes. But the biggest thing we want
people to realize is that if you draw sol security
benefits earlier, you are going to permanently reduce your benefit.
Which is why we often say caution. If you're gonna
do that, talk to a professional who can give you guidance.
Speaker 3 (23:04):
Talking this morning with CJ.
Speaker 1 (23:06):
Closs and Eric Schwartz, they are our retirement planning professionals
from Class Financial Online Costs Financial dot com. That's Coss
k l aa S Financial dot com. Great website to
learn more about COSS Financial, get to know the team,
also learn about their separate divisions. Great opportunity as well.
Listen back to this in previous shows podcasts. All online
also another option, of course, to submit a question in
(23:27):
the Money and Motion listener question corner. As a matter
of fact, we'll answer Andy's question and do the Class
Quiz question leak next. As Money in Motion with Coss
Financial continues right here on thirteen ten. Wiv A a
lot of great information in this week's program, as we
get every week from our friends at Class Financial. Don't
forget if you miss any part of the program, you
want to listen back or you want to share the show,
(23:47):
you can subscribe as well all online at COSS Financial
dot com. That's Coss k l a a s Financial
dot com to help it up for the office right
here in Madison six eight four four two five six
three seven. No charge for the initial gets to Know
You appointment tech Loss Financial. It will be complimentary to
you again their number six oh eight four four two
five six three seven. Many in Money in Motion Listener
(24:10):
Question corner and I am convinced CJ. When Malia came
up with both the class Quiz question the week and
the Money in Motion listener question corner.
Speaker 3 (24:17):
She was trying to.
Speaker 1 (24:18):
See how how well I can do with my with
my annunciation and pronunciations.
Speaker 3 (24:23):
They are both kind of tongues.
Speaker 1 (24:25):
Always our goal, always our goal. It's great stuff. We
got a great question this week as well, CJ. Andy
wrote in he says I'm retiring later this year and
wondering if I should roll over my four oh one
k into an IRA or leave it with my employer.
What should I consider before making that decision.
Speaker 5 (24:44):
Well, again, thanks Andy for submitting the question. We love
it when these coming online because it gives us time
to be prepared for him. But this one's a pretty
straightforward one. Before I answer Andy Andy's question, we were
able to confirm by the way that there is no
decrease for d inflation on Social Security recipients.
Speaker 2 (25:02):
I know you asked that before, Shawn. Thank you.
Speaker 5 (25:04):
So that's the answer. There's no reductions to your benefit,
just increases. Now, there may be no increase if there's
no inflation, but you're not going to see a reduction
for deflation. Okay, So to Andy's question, Great question, Andy,
Should you roll over your old four to one K
plan from your old employer or should you leave it
with your old employer? Truth be told, Andy, it's a
(25:26):
pretty complicated answer. You're probably going to want to talk
to your financial advisor or accountant. It depends on what
you're trying to accomplish, what your kind of sensitivity to
fees are, how many access to investments that you want.
But here would be some general guidance for you. If
your plan has low fees and good investment choices, and
you like managing money on your own, then leaving it
(25:48):
in the old for one K plan could be fine. Now,
there's some things you need to be aware of, which is,
if that company that you worked at decides to move
that four one K plan, you're going to get jerked
around with them to whatever the new plan provider is.
If they decide to change their fees, you're going to
get jerked around with that. And then when you go
to like perform distributions, it's a lot more herky jerky
(26:13):
inside of a four to one K plan structure. Because
they're standard with holdings, it's harder to increase or decrease
your withholdings. Setting up systematic withdrawals can be a little
more difficult.
Speaker 2 (26:23):
But again, if all you.
Speaker 5 (26:24):
Care about is like, no, I'm young, I'm not performing distributions.
It's just a low cost plan.
Speaker 3 (26:29):
Who knows.
Speaker 5 (26:29):
Maybe your employer pays all the fees associated with the plan.
That could be great, right, Or maybe you're fifty five
or fifty six and you want to take advantage of
the separation from service after the age of fifty five
provision that gives you access to your money before fifty
nine and a half. That's another great option. So you
get the point, Andy, it's a little bit complicated.
Speaker 2 (26:51):
Now.
Speaker 5 (26:51):
Obviously, if you roll money into an IRA, you typically
have a lot broader range of investment options, way more
control over your withdrawals, your district patterns, where you want
the money sent. You could you could invest in cheaper funds,
or you could hire a money manager to manage the
money for you, like our firm does right to actually
manage the investments and make decisions for you. So there's
(27:13):
no doubt that when you roll money into an IRA,
you get a lot more freedom and flexibility of choice,
But that doesn't.
Speaker 2 (27:20):
Mean it's necessarily the right decision.
Speaker 4 (27:22):
For you.
Speaker 5 (27:22):
So what we would say, Andy is great question. It
just kind of depends on who you are and what
you're trying to accomplish.
Speaker 1 (27:29):
Great question, Andy, And if you've got a question, of course,
we always open the phone lines up during the program.
You can also email just head on over to Cossfinancial
dot com. That's Coss k l aa S Financial dot com.
Can submit a question right online to be answered here
on the program.
Speaker 3 (27:44):
So we have getting over the website. You can get
to no CJ.
Speaker 1 (27:46):
Can get to know Eric, can get to know the
whole team as a matter of fact at COSS Financial
on their website. Learn more about their separate divisions as well.
And listen back to this in previous shows podcasts that'll
all available to you at Cossfinancial dot com. That's Coss
k l aa s finalil dot com. Time now for
the Closs Quiz Question of the Week. It works like this.
In just a moment, I'll ask you the class Quiz
question the week, and you'll have thirty minutes from that
(28:07):
program today's program to call the Class Financial Office right
here in Madison at six oh eight four four two five,
six three seven. If you are the first car with
correct answer you win this week's prize, which is a
twenty five dollars gift card to Panera. This week's Coloss
Quiz question the week is this, What is the earliest
you can generally apply and receive your Social Security retirement benefit?
(28:30):
Is it age fifty nine or age sixty two? Telephone
number six oh eight four four two, five six three
seven first call. Correct answer when that twenty five dollars
gift card to Panera North good as well. That's COSS
Financial's office right here in Madison, that first visit, that
first appoyment. It will be complementary to you again their
number six oh eight four four two five six three seven.
Speaker 4 (28:51):
C J.
Speaker 5 (28:51):
Eric.
Speaker 1 (28:52):
It is always fantastic chatting with you guys. You keep
cool and enjoy the weather and we'll talk real soon.
Speaker 2 (28:57):
Thanks Sean.
Speaker 3 (28:58):
Thanksean, Take care guys.
Speaker 1 (28:59):
Doctor already Greer joins us next right here on thirteen
ten w Ibi
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