 All right our first speaker Mary Beth Franklin is a contributing editor at investment news specializes in social security Medicare and retirement income. She's been a financial journalist for more than 40 years and has covered everything from federal budget and tax policies to consumer finances. She's been editor at Kiplingers She became a certified financial planner in 2015 is now an in-demand speaker at conferences just like this one all over the place She's a frequent guest on radio and TV. She's a host of the retirement repair shop podcast in her free time She likes to read garden ski and play the piano. Mary Beth Franklin come on up You probably heard yesterday that the cost of living adjustment for Social Security for 2024 was just announced 3.2% as we had expected now Yeah, it's less than half than the 8.7% we got this year But keep in mind it's also larger than the average cost of living adjustments over the last 20 years Which was about 2.6% so yay for people collecting Social Security They will actually get a bump about 59 bucks a month for the average Social Security benefit now, of course, that's only one piece of the puzzle for those of you who are collecting Social Security You know that your Medicare Part B premiums are deducted from those Social Security benefits Now we normally don't know to about Thanksgiving what those premiums are going to be Always something to talk to your friends and family about it Thanksgiving But surprise this morning on the way here They announced the Medicare Part B premiums for next year And they are merely going up by about 10 dollars a month. So that's good news the average Medicare Part B premium will be roughly 175 dollars a month next year that goes up by 10 bucks The Social Security benefits going up by more than 50 So most of you will have a net increase in your Social Security benefits However, because you're successful investors and may be paying high income surcharges known as income related monthly adjustment amount or Irma as in a hurricane for your healthcare cost of retirement They also announced that the new Irma surcharges will start at a new threshold of 103 thousand dollars a month for singles 206 thousand for married couples So that may mean depending on your income that if you were paying Irma this year You might slip into a lower bracket or possibly disappear altogether I know when I do my income taxes I care less about the tax brackets and a whole lot about those Irma surcharges and do Whatever I can as a self-employed person with a solo 401k to get the numbers below those thresholds But today we're really talking about Social Security And I'm obviously I'm clicker happy here We're going to learn how the claiming age marital status and earnings limit affect the amount of Social Security benefits You're also going to discover how claiming strategies for married couples and in some cases eligible divorce spouses May be able to maximize Social Security benefits over two lifetimes And I really want you all to understand that Social Security retirement benefits and Social Security survivor benefits are two different pots of money and depending on your individual circumstances It's quite possible. You may be able to claim one type of benefit first and switch to the other larger benefit later You can do it in either order and I'll give you an example in a few minutes The key is how do you become eligible for Social Security? This is you must pay to play kind of game You have to work in covered employment for essentially at least 10 years To earn the minimum number of 40 credits of covered work You can earn up to four credits per year Therefore you have to work about 10 years to get these 40 credits But that does not tell you how much you will get in retirement Your actual benefits are based on your average lifetime earnings with Social Security defines as your top 35 years of index earnings So you work 40 years those low earning years when you're flipping burgers and delivering newspapers. Remember those? I used to write for those So those low earning years go away and they bish your future benefits on your highest 35 years But again, that still doesn't tell you how much you're going to get each month because the key is How old are you when you claim your benefits? and you all know Hmm my clicker just stopped working. Is that a reason? Okay help from the back You all know that you can claim benefits as early. Maybe it's a power thing up that works You can claim benefits as early as age 62 But I bet a whole lot of people in this room don't plan to do that Because if you claim benefits at the earliest age of 62 your benefits are permanently reduced by up to 30 percent for the rest of your life And if you claim benefits early and continue to work, which I think is a really bad idea You are also subject to earnings restrictions if you make too much Which is about $22,000 a year now You will start losing some or all of your benefits at least temporarily due to the earnings cap Now if you wait till your full retirement age, which is anywhere between 66 and 67 depending on when you were born Then you get 100 percent of those benefits that you work so hard for and paid so much for in the form of fika taxes And even if you continue to work you can keep all those benefits because earnings restrictions go away once you reach your full retirement age But for those people who are willing and able to delay collecting up until age 70 There is a huge bonus You earn an extra 8 percent per year for every year You postpone claiming beyond your full retirement age up until age 70 So for somebody like me whose full retirement age is 66 waiting till 70 means a 32 increase in my monthly benefits for the rest of my life Now I suspect some of you in here were born in 1960 or later in which case your full retirement age is 67 It also means that yes, you can earn delayed retirement credits But unlike me you're not going to get a 32 increase because if your full retirement age is 67 You only have three years between 67 and 70 for a maximum of a 24 increased and people will often say to me. Hey, my full retirement age is 67 Should I wait until 70 to claim and my answer is always the same? I have no idea It will all depend on what interest rates are at the time Now for the past decade, we have been living in a zero interest rate environment So for people whose full retirement age was 66 and who had other sources of income and were relatively healthy Hey, wait until 70 to collect 8 a year was a slam dunk decision We are now getting to 5 plus in interest rates on fixed investments like a cd So this may decision may be a little less tantalizing going forward This is the most powerful Graphic I can show you the difference between claiming your benefits as soon as possible at age 62 Versus waiting until the maximum age of 70 increases your social security benefits by 76 Per month for the rest of your life now as a certified financial planner. There is no investment I can suggest to you that is going to increase your income by 76 Essentially over an eight year investment period, but instead of investing your money you're investing your life Now who gets those delayed retirement credits? It's very important to understand. They are delayed retirement credits They only apply to a workers own retirement benefit If I am not eligible for social security on my own earnings record or I am but it's a small benefit And I'm married. Well, I'm also entitled to a benefit as a spouse My spousal benefit is worth up to 50 percent of my working spouse My husband my wife's full retirement age benefit But that maximum amount is if I claim at my full retirement age It does not continue to grow by 8 a year up until age 70 that only applies to a workers own benefit Same thing with survivor benefits if I am a surviving spouse or in some cases an eligible surviving ex spouse My survivor benefit is worth up to 100 of what my late husband late wife late ex was entitled to if I claim it at my full retirement age It does not continue to grow. I cannot tell you how many financial advisors I have talked to who said Well, my client was recently widowed and I told her to wait till 70 to get the biggest survivor benefit possible No, you don't the biggest survivor benefit is if he or she claims at her full retirement age It does not continue to grow. So the big question for everybody here is should you delay? Certainly the pros are the longer you wait up until age 70 the bigger the benefit you get And by having a bigger benefit each year when there's a cost of living adjustment That percentage is applied to a bigger base. So in dollar terms you end up with a bigger increase each year It's also very important for married couples to consider Because if you have at least one spouse Preferably the one with the bigger self security benefit who tends to be the man who is often the higher earner and who Sorry guys actually is going to die first That's the person you want to wait till age 70 because you are creating the biggest retirement benefit during that person's lifetime And if that person dies first, it is now creating the largest possible survivor benefit for the spouse left behind Now it's not a slam dunk decision Hey, if you need the money, that's what it's there for go ahead and take it And i'll tell you a few secrets at the end of this of how to reverse that decision if you change your mind If you're in poor health the whole idea is Waiting until age 70 to collect the biggest benefit possible is a bit like the lottery You must be present to win if you don't think you're going to be around a long time Maybe you don't want to wait and a lot of people really freak out at the idea of Dying before they claim I usually say to them. What do you care? You're dead Your spouse will be real happy if you waited till 70 And then they say well, what's the break-even age? You're a bunch of engineers and nerds out there I know you asked that question. So yeah, frankly, how long do I have to live to make the decision worthwhile to delay those benefits? The difference between claiming at 62 and full retirement age is roughly you have to live till 78 Anything past that is grave that you would have gotten more in social security benefits over your lifetime 78 is less than the average life expectancy Which is about 86 for 65 year old woman 84 for 65 year old man What about the difference between claiming at 62 versus 70? Yes, you have to live till about 83 to make that a worthwhile decision again Less than average life expectancy Think about this from a married couple standpoint That break-even age is essentially spread over two lives because someone is likely to get the survivor benefit I just briefly mentioned the earnings cap if you claim benefits before your full retirement age and continue to work And have earnings from a job or self employment Not other types of earnings like pension other government benefits Investing none of those count But if you claim benefits before your full retirement age and continue to work and make too much money This year is about 21 000 a year next year. It's about 22 000 a year Now you're going to lose some or all of your benefits But not forever once you reach your full retirement age So security will recalculate your benefit and they'll say hey, mr. Johnson I see you claimed your benefits at 62 and you took a 30 percent haircut But I also see that over the last several years You have forfeited two years worth of benefits due to excess earnings So now going forward you reach your full retirement age We're going to pretend that instead of claiming at 62 and taking a 30 percent haircut You claimed at 64 and take a smaller haircut going forward So benefits you have lost due to excess earnings are restored to you in the form of larger monthly benefits going forward So my number one rule as I mentioned before is if you're going to keep working don't collect social security It's simply an accounting nightmare and not worth it I also mentioned and i'm trying to be really good on time here strategies for married couples that it makes most sense for One spouse preferably the one with the biggest benefit to wait up until age 70 to lock in Not only the maximum retirement benefit during your life But potentially the largest survivor benefit for the spouse left behind But having said that it might make sense for the other spouse the lower earning spouse To go ahead and collect benefits early at 62 if he or she is no longer working Or at full retirement age if they are still working It brings some cash flow into the household Takes away a bit of the sting of having the other spouse wait till 70 and there's no downside Because even though that wife let's say claims her own retirement benefits early at 62 And those retirement benefits are permanently reduced for the rest of her life It will have no impact on her survivor benefit if she is at least full retirement age at the time So she could collect reduced retirement benefits first And when she becomes widowed she could collect full survivor benefits worth up to 100 of what her late spouse was collecting Now if you're like a typical dual income couple many wives have worked all their lives and often not making as much as their husband They may have their own retirement benefit and they are also entitled to a spousal benefit because they are married So if my own retirement benefit is bigger than half of my husband's that spousal benefit goes to waste I just get my own retirement benefit If however, my own retirement benefit is smaller and once my husband claims his It's going to trigger a spousal benefit for me. So I am going to get the larger of the two amounts But let's say I was a stay at home spouse take care in the kids never Earned my own retirement benefit. Sure. I am entitled to a spousal benefit Once my husband claims his to trigger a benefit for me So in couples like that it might not make sense for the husband to wait till 70 to claim Because the other spouse also has to wait for him to claim Before she gets her benefit. You might want to look at your other sources of retirement income How do we make this plan work? The goal of most married couples should be how do I maximize the survivor benefit? I do this by having one spouse wait until 70 to claim the biggest amount Now here's my favorite part rules for divorce spouses I will say that I personally have been married for 45 years. So it does not apply to me Yes, that is purple heart territory in some cases I have two best girlfriends who each married nine and a half years And apparently their divorce attorney never told them that they had to be married at least 10 years In order to be able to claim benefits on an ex spouse's record So if you remember nothing else from my presentation tell your friends families girlfriends everyone around here that The rule for social security is there must be at least a decade between I do and I don't If your marriage is falling apart in years eight and nine string out the paperwork The only dates that married are the day you walk down that aisle and the date of your final divorce decree I have had financial planners send me information about their clients and I will see there might be Nine years 11 months in 29 days. They will get squat. Don't let that happen to your friends and family So here's the basic rule if you had been married at least 10 years divorced and currently single You may be eligible to collect on your ex's earnings record if it is larger than your own Now if you remember and mentioned that for married couples currently married couples if one spouse is not Eligible for her own retirement benefit. She can still get it as a spouse Well, imagine a really nasty divorce and one ex spouse says to the other I am never going to retire and you are never going to get a dime on my social security Well, congress thought that was a problem. So among the 2700 rules that govern social security benefits There are a lot of exceptions and a lot of the exceptions apply to divorce spouses So here's the first one in addition to being married at least 10 years divorced and currently single If you have been divorced at least two years and you're each at least 62 years old and therefore eligible for social security You can collect on your ex even if your ex has not yet claimed. You are known as an independently entitled spouse Well, what about if your ex dies? This is the silver lining for divorce spouses Um, here here's a little refresher course Your spousal benefit while your ex is alive is worth 50 percent of his or her full retirement benefit Your survivor benefit after your ex dies is worth 100 percent of your survivor benefits You're all mouth geniuses out there. Yes, your ex is worth twice as much dead than a life But you probably knew that anyway One other weird little exception for divorce spouses I told you you must be married at least 10 years divorced and currently single to collect on a living ex But guess what if you wait till age 60 or later to remarry You still can't collect on a living ex but you can collect on a dead ex even if you're married to someone else I don't make up the rules. I just try to explain the madness And as I mentioned If you are entitled to a survivor benefit and a retirement benefit You may be able to claim one first and switch to the other later two minutes left Four minutes. Oh, I can do a lot in that For example, let's say my husband has died. I'm a 62 year old widow I have my own retirement benefit, but I'm not working at the moment My benefit as a survivor is much bigger. What should I do? I would say claim your reduced retirement benefit right now And even though it's permanently reduced Don't worry about it because when you get to your full retirement age You are now going to switch to your full survivor benefit Worth 100 of what your late husband was entitled to or was claiming at the time he died But what happens if you're a business executive? You've lost your wife to breast cancer when she was young You're also entitled to a survivor benefit, but hey, you're still working. You're making a lot of money. What should you do? When you reach your full retirement age when the earnings restrictions go away You should claim your full survivor benefit But in the meantime your own retirement benefit continues to grow by 8 percent a year up until age 70 And then at age 70 you would switch And for the singles out there got nothing for you It all comes down to what is your average life Lifetime earnings and the age when you claim I would say absolutely try to wait till at least your full retirement age to claim Remember that's when the earnings restrictions go away. So even if you continue to work You could claim that full retirement age. Do you want to wait till 70? That's a tougher decision for singles Yes, certainly you will get a bigger benefit But if you happen to die before you claim You do not have any survivors and that money just goes back into the self security pool So for a lot of singles, they feel more comfortable claiming it full retirement age Even if they don't need the money and then they can bank it and now at least you're good to get about 5 and a half percent in a cd For any of you people who are public employees in states that don't pay into the self security system California, texas, louisiana a bunch of the new england states illinois, ohio If you receive a public pension based on work where you didn't pay fika taxes and you also entitled the self security benefit You'll get it, but it will be reduced If on the other hand you have a public pension based on work where you didn't pay fika taxes And now you try to claim as a spouse or a survivor Probably not going to get anything because the very onerous government pension offset gpo also known as grumpy partner rule Says that if I have a public pension based on work where I didn't pay fika Social security is first going to reduce any potential benefit by two thirds of the amount of my pension My pension is six thousand dollars a month two thirds of that is four thousand dollars a month Subtracted from a potential social security spousal survivor benefit Probably go to white foot out So the planning key there is if you're in a married couple where you have one public employee Who is not likely to be eligible for a survivor benefit? Then you in the private sector may not want to delay till 70 because one of the goals is to maximize the survivor benefit But if you're a surviving spouse can't get it I'd say take it a full retirement age and enjoy your retirement I will stop there because I'm right at my time. There are more slides here You're feel feel free to review them and ask me questions later. Thank you