S10 E206 - Financial Security: Understanding Social Security

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Transcript

SPEAKER_01 0:00

This is Next Steps for Seniors with your host, Wendy Jones. Each week, Wendy brings resources and information to help guide you through those next steps with elderly parents and loved ones. If you have questions or topic suggestions, you can call us at 248-651-5010.

SPEAKER_00 0:19

Hi, I'm Wendy Jones. Next steps for seniors, conversations on aging hosts. And my topic today is Social Security. Why is it Social Security? Because everybody that calls my office actually said that's the number one question that we have to ask them. Every single person. How much do you get in Social Security? And here's why. Because as we age, we're usually on a limited income after we retire. And we got two sources of income coming in: either a pension in 401k and Social Security. That's it. And all the money that you've saved your entire life in some kind of an account. And what happens is, just to be totally transparent, the people that call my office have already spent all that money that they've saved their entire life because they're like 80, 90 plus. And they're like, okay, uh, I ran out of money. And I'm like, well, my first question is, well, what do you get from Social Security? Because that number is usually the most consistent number as we age that you have, besides your pension. Hopefully, you have a pension. Nowadays, we just have a 401k. But regardless, it was a forced savings. And I pray for all those people that have pensions and be thankful for that, by the way. Okay. So moving into Social Security. So number one, there are 68 million Americans that receive Social Security. I don't know if you knew that. And it represents quite a bit of income, usually up to 30, 40% of income for people in the U.S. Now, of course, it's not meant to be a savings plan. It's more of a lifeline. It's something. Something's better than nothing. And you have poured into Social Security your entire life. Now, I know you were forced to pay into it, but now it's time to get that back. That now that you can get that back. And you can only get that back when you reach full retirement age or after the age of 62. Now, let's be honest, it used to be a full retirement age of 62. Now, full retirement age is 67. So if you were born after 1960, your full retirement age is now 67. And why do we keep raising the full retirement age of Social Security? Uh yeah, to save some money, just FYI, because we're spending a lot of it. And and we're going to have more seniors than ever before in history in our country in a few short short years. We're calling them the good old baby boomers. So, yes, we are going to have a ton of seniors, and we do need to stretch our Social Security. So let's get into the nitty-gritty because this is really important. Number one, do you know how much you're going to get from Social Security? Do you have any idea if you're 50 and you're listening to this program? If you're 60 and you're listening to this program, and if you don't have an idea, get your pen and paper ready because I'm about to tell you how to figure that out. Number one, go to SSA.gov. You can actually register yourself with your Social Security number and you can find out how much you're going to get. All right, very important. Number two, phone number. Ready? 1-800-772-1213. Very important. You can call and you can figure out how much Social Security you're going to get. The other super big decision is when you're going to take it. No, I'm not going to be able to tell you that answer, but your financial advisor should be able to tell you. I can tell you this, that if you were born after 1960, your full retirement age is 67. And if you can hold out to 67, fantastic. I can also tell you this. At 70, any age older than 70, you get no more money. You get the same number that you get at 70. So why would you not just take it at 70? I'm just saying. Okay. So the reality is, unfortunately, a lot of people are using Social Security as a lifeline. It's the only income they have. And I'm going to tell you a story so you can better understand this. I had a sweet little couple that retired at 65. They are now 86 and 88. They have a modest home. They've lived from 65 to 88 just fine. They did all the things they wanted to do. They paid their utilities, paid their taxes, blah, blah, blah. And now they're at a point where the wife needs more care. She needs she needs help. Okay. She's not able to do the things she used to be able to do. And the husband is exhausted. He's 88 and he cannot take care of her. So the reality is he walked into my office, and this is why I'm telling you this story. And he says to me, I don't know what to do. I don't have enough money to care for my wife. Now, number one, that is not something I ever want any of you to be in that position. But the reason you're listening to this podcast is because if you are, I'm going to tell you a couple things that you can be doing now so that you're not. So number one is this gentleman did you did have savings, but he used all of his savings. Why? Because he did not know how long he was going to live, and nobody does. So I tell everybody, plan like you're going to live to a hundred years old. Absolutely positively plan like you're going to live to a hundred. Because the reality is you'll probably pass before a hundred, but no man knows the day nor the hour. And that's what the Bible says. So the reality is if you don't know, you better plan like you're going to live a long time. So that's the number one thing. And and please don't spend all of your money. I want you to enjoy retirement. I do not want you to live in fear, but you do not need a Corvette. You do not, well, maybe you do. But anyway, it's your money. But please know that it is $6,500 a month today in 2024 to pay for an assisted living. And it is not covered by insurance. So everybody thinks insurance is gonna cover you. That is not the case. Medicare and Medicaid do not cover assisted living, do not cover independent living in a roundabout way. Well, there's a whole nother podcast on that, but it's private pay. And home care is private pay. You want a caregiver to sit and help you with a shower or make your food or hold your hand, that's private pay too. And that's about $34 an hour. So there's that. So the reason I'm telling you that is because when you go into Social Security and you figure out that you only get $1,800 a month, and I don't know how much you make, you're gonna have to figure it out. Everybody's is different. You got a problem, right? $1,800 a month is not gonna cover assisted living, and it is not gonna cover, you know, all of the things that you want to do as you retire. That's why you need that savings account, and that's why you need your $401K in your pension. So please, please, please, please, if nothing else, take away from this program that you can definitely find out what that number is and you should find out what that number is early. SSA.gov or call 1-800-772-1213. One more thing. A lot of people are going back to work because they don't have enough money. I'm gonna tell you this in 2024, you can earn up to $22,320 from another job and still collect your social security. So that's important to know and have no repercussions to that. If you make more than that, you're gonna have to talk to your financial planner because there are some repercussions to that. So those are the basics, and I do want to go back to my story about the little man. So a couple of things his wife can qualify for Medicaid. And Medicaid is a great program for people who have meet eligibility requirements both financially and medically. Now let me just add to that that Medicaid will usually pay for a nursing home. Okay. Anyone who's been in a nursing home, uh, Medicaid My Choice Waiver was designed by our state to keep people out of a nursing home, but give you some additional funds. And it's not a lot, but it's some, and you can qualify for that if you are very, very low income. This particular lady would qualify for my choice waiver. So that was the benefit there. The other benefit, if you've if you're a veteran and served our country, and let me just say thank you to all those veterans out there, you also get a benefit. It's called aid in attendance. So please, please, please, please know that there are some answers out there. I don't want you to feel like you're doom and gloom if you don't make a lot of money or have a lot of money. That is why we are here to help you. Aid in attendance is fantastic. My choice waiver, Medicaid. There's programs called PACE. All of these programs are available to you, and they're maybe called different things in different states, but they are available for our low-income suite people who need to take care of themselves as they age, just like the gentleman and his wife. So please plan for the future is my number one takeaway. Figure out exactly what you're getting for Social Security so you know. And then you can make an educated decision on how much extra you need to have. And please do not spend all of your money because you're gonna need it the most in your later years. 70% of people need some kind of care as they age. 70%. So there's a pretty high chance that you're gonna need somebody to help you do something, and all of that is out-of-pocket expenses. All right, God bless you. Don't live in fear, embrace this time, be educated on it, and look up the information so you know in advance. Talk to your financial planner too. You can also call our office, 248-651-5010, and we are always here for you.