Chris:
And welcome into another edition of On the Money, presented by the Certified Financial Group right here on WDBO1073 FM, and AM 580 Orlando’s News and Talk. We got express lines right into the On the Money offices here on the show at 844-580-WDBO. That is 844-580-9326.
Chris:
Financial Times calls them one of the top 300 firms in the country, and you can get in touch with the Certified Financial Group right here, right now on the show, 844-580-WDBO, 844-580-9326. Taking all your questions today.
Chris:
We’ve got the Oracle of Orlando, Joe Burt and Aaron Burt in the building. Good morning, gentlemen. What kind of questions will we take today?
Joe Burt:
Well, Aaron and I here this morning to answer any questions that you might have for our regular folks that follow us on Facebook, or we’re hoping to hear Denise [Kovach 00:01:09] this morning. Denise is under the weather, and I’m sure she’s listening. We hope you’re getting well. Although, I did see a picture of you and Joe on Facebook just not too long ago, and you we’re looking pretty good. In any case, we hope you’re feeling better.
Joe Burt:
And Aaron and I are here to take your questions regarding your personal finances. Things that might be on your mind. Decisions that you’re trying to make about your IRA, about a 401k, about a real estate purchase, mutual funds, long term healthcare, annuities, life insurance, reverse mortgages, all that and more. These are the things that Aaron and I, and the 12 other certified financial planners now at Certified Financial Group provide for our clients, guidance for a fee. We work with our clients as a fiduciary, providing investment advice and financial planning. We’ve been doing it for over 40 years.
Joe Burt:
Been on the radio here with WDBO for over 30 years, and we’re still at it. We know if you have questions out there, chances are there’s probably a dozen other people that have the same question. We’re harmless, so pick up the phone, and dial these magic numbers. We’ll be glad to talk with you. Because we know that we go through life trying some of this, trying some of that, and wake up when we’re 55 years old, find out that perhaps we don’t have our act together. And that’s why we’re here to be your financial body shop. Patch you up, get some Bondo on that, and get you on the way.
Joe Burt:
And I see we’ve got a call coming in, and I see Chris is busy, and the call just dropped off. So, that’s the way it works. Once again, you can reach us … Oh, the call is back. That’s amazing. Aaron and I are at our studio here up in Altamonte Springs, and we built this when we did our renovation. It’s working have very, very well, and we have a direct line right into the studio to see exactly what our producer there is doing. And we’ve got a call from Paul from Traverse, and he wants to talk about dividends, among other things. Why don’t we put him on the air, and we’ll talk about the topic of the day in a minute.
Chris:
Let’s go ahead and do that. Paul, welcome onto the show.
Joe Burt:
Morning Paul.
Aaron Burt:
Hey Paul.
Paul:
Hello. How you doing?
Joe Burt:
We’re doing great. How are you?
Paul:
I’m well. My question is basically about the difference between qualified dividends and ordinary dividends. How do you tell the difference when a stock pays it, or is it possible?
Joe Burt:
Well, it should be on the 1099 that you get. I get 1099s, [crosstalk 00:03:16] and it breaks it out. That’s that. [crosstalk 00:03:17] Go ahead.
Paul:
Okay. Is there any way to do it in advance?
Joe Burt:
No, I don’t think so. I don’t know that there is.
Paul:
Okay.
Joe Burt:
You’re doing it because you’re trying to do some tax projections, I presume?
Paul:
Yes.
Joe Burt:
Yeah. No, I don’t know that there is a way to do it in advance. I do know when you get 1099, it’s broken out for you, but I can’t tell you-
Paul:
Yeah.
Joe Burt:
Yeah.
Paul:
Yeah, I saw the list.
Joe Burt:
Yeah, yeah. I wish we could be more help, how to project that.
Paul:
Oh, okay. [crosstalk 00:03:51] Well, thank you very much.
Joe Burt:
Hold on. Hold on, Paul. Hold on, Paul.
Aaron Burt:
Hey Paul, you own an individual stock, or is it you’re talking about from a mutual fund, or where are these dividends coming from?
Paul:
They’re coming from individual stocks. AT&T, United Healthcare, Broadcom, that kind of thing.
Aaron Burt:
Okay. And you’ve historically held them, yes?
Paul:
Yes.
Aaron Burt:
Yeah. Because most dividends are going to be qualified, unless otherwise, but they don’t change. The dividends that you’re receiving wouldn’t change from year to year.
Joe Burt:
Well, the amount would of course.
Aaron Burt:
Well, the amount would, but the qualification of the dividend wouldn’t. If you’ve been receiving qualified dividends, I don’t have any reason to suspect that you would now start receiving unqualified dividends. But really, it’s just a question of, as you know, the taxation of those dividends as you receive them whether it’s capital gains or ordinary income.
Paul:
Okay.
Joe Burt:
All right. Sorry, Paul, but that was a great question.
Paul:
[crosstalk 00:04:46] Thank you much.
Aaron Burt:
Yep.
Chris:
That was a good question, Paul.
Joe Burt:
Yeah. Wow, good question. We don’t have an answer for him because I don’t know that there’s a way to know in advance.
Aaron Burt:
No, I don’t think you would know in advance, unless the company is telling you one way or the other when the dividend is published. Because they have to announce the dividend date, and I would think at that point that you would know the type of dividend being paid. But again, you have no control over that, so it’s either going to be qualified or unqualified, and you really have no control. I guess if you sold the security, you wouldn’t get the dividend, and that’s one way you could control it, but yeah. Anyway …
Joe Burt:
There we go.
Chris:
I appreciate that call, Paul. You can jump-
Joe Burt:
Thanks, Paul.
Chris:
You can jump on his line at 844-580-WDBO, 844-580-9326. Also, check out the Facebook live stream right now. You can interact that way as well. Facebook.com/onthemoneyfl. You can leave questions and comments in the video there, and we’ll play those, talk about those live on the air, too.
Chris:
In the meantime though, let’s go ahead and transition over to our topic of the day. Because we do have a good one here. Three reasons why you should wait until age 70 to collect Social Security benefits.
Aaron Burt:
Yeah, so we talk about Social Security a lot with our clients when we come in and do individual financial planning with them. And Social Security obviously is a big topic because people have paid into the Social Security system through their payroll taxes over all these years. And once they become qualified, they look at it as basically a pension or an annuity stream that they’re going to receive once they retire. And so, they want to start tapping into that pot of money in order to supplement whatever other savings, or investments, or pensions that they have.
Aaron Burt:
And so, Social Security is a big topic that we talk about. And the question always comes up, well, people, first of all, really don’t understand the system that much. They know that they’ve paid in all these years, and they just know that at 62 or as early as 62, they can start receiving benefits.
Aaron Burt:
The topic always comes up why should we delay, or what age should we start taking Social Security? And most people, or a lot of people, I shouldn’t say most, but a lot of people that come into see us think that when they retire, they actually need to start tapping into Social Security right away, and that’s not necessarily true. You can delay Social Security to as late as age 70. And you can delay it further than that, but your benefit no longer grows past age 70.
Aaron Burt:
And so, a lot of the questions that we have is should we delay from when we start or when we’re eligible for Social Security until age 70? And so, the topic today is why you should wait until age 70, and really one of the biggest reasons to wait until age 70 is because the delayed retirement credits that you earn.
Aaron Burt:
The Social Security system is built to actually encourage people to push their Social Security, or claiming their Social Security benefit out. And the reason they do that obviously is because of the actuarial reasons, that if they can encourage people to push it out, then they won’t be drawing from the system as long. I think that that was good thinking maybe 20 years ago, but now people are living longer. And because people are living longer, I actually think the delayed retirement credit system is going to change.
Aaron Burt:
But currently, you earn 8% per year on your benefit for every year that you delay from your full retirement age until age 70. If your full retirement age is 66, and you delay your benefit until age 70, your benefit’s actually going to be 32% larger by delaying. And that does not include cost of living increases. You add that in there, your benefit is going to grow significantly by delaying until age 70.
Aaron Burt:
The number one reason to delay obviously is those delayed retirement credits. Then, what we end up doing with clients is trying to figure out how we can fill in that gap from full retirement age until age 70. And a lot of times, it makes sense to maybe pull money from your assets, especially with the way the markets are performing. Maybe we pull out of your assets in order to get that 8% growth that the government’s going to give you, or maybe we pull from savings, or you keep working in order to continue to fill that gap, and meet your living expenses.
Aaron Burt:
The first thing there is the delayed retirement credits. The second thing is longevity. We always encourage the older spouse to wait as long as possible, or not the older spouse. We always encourage the higher earning spouse to wait as long as possible. Because of the way the Social Security system is designed, it has what are called survivor benefits built into it. And survivor benefits allow the surviving, if you’re married, allows the surviving spouse to continue to get the larger of the two benefits that either spouse earns.
Aaron Burt:
For instance, if I am earning, or if I’m getting $2,000 from the Social Security system per month, and my wife’s getting $1,000 from the Social Security system per month, and I pass away, she’s going to take over my $2,000 benefit. By delaying and getting the bigger benefit, it not only protects the higher earning spouse, but it also protects the other spouse, because they would inherit that benefit if something were to happen to the first spouse.
Aaron Burt:
There is some sort of longevity insurance built into that because of the fact that there are survivor benefits built into the Social Security system. By delaying, you’re not only helping yourself, or yourself and wife as a couple, but you’re also helping the survivor if something were to happen to you as the higher earner. That’s one of the reasons as well.
Aaron Burt:
The other reason is a tax reason. And because of the way that Social Security is taxed, by delaying, you can actually keep your tax bill a little bit lower because of the calculation on the tax system. By pushing off the benefit, half of your Social Security benefit is factored into the taxable calculation. And if that benefit is higher, then obviously you can push off the percentage of Social Security that’s taxed.
Aaron Burt:
Three great reasons to delay Social Security until age 70. This is something that we talk about with our clients when we do planning. We actually have some pretty nifty software to show the benefits of pushing that benefit out, and showing how much more you can earn by optimizing your benefits. Again, that’s our topic for today.
Joe Burt:
These are part of the things that we do day in and day out working with our clients, and providing financial planning for a fee. Doing a deep dive into what you own. And there’s so many different scenarios today, and when to select Social Security, how to claim it. But when you see the benefit, and when we do planning, as Aaron alluded to, we look at, okay, if we’re going to defer Social Security, where is the income going to come from to bridge that gap?
Joe Burt:
And what we’re after when we do financial planning, and work with clients, and trying to get them to and through their retirement years is how do we guarantee as much income as we can get? And Social Security is your best form of guaranteed income. Now, I know there’s some people who probably ran off the road when they heard me say that, but Social Security is in fact the best form of guaranteed income. Better than a corporate pension plan, better than anything else that’s out there. Because you can be sure that they will not default. Despite what it’s current situation is, they will not default on Social Security payments to you. We look at that, and we factor that in, and then we help a client make a decision as to what the best claiming strategy is.
Aaron Burt:
I also want to throw in a couple of caveats there of why you wouldn’t want wait until age 70.
Joe Burt:
Exactly.
Chris:
Well, let’s save those.
Aaron Burt:
Okay.
Joe Burt:
Okay.
Chris:
Let’s save those for after the break here. 844-580-WDBO, 844-580-9326. Go ahead, get your phone calls up. We’ll continue on this conversation as well. Plenty of more show to get to. You’re listening to On the Money right here on WDBO, where we’re planning tomorrow …
Joe Burt:
Today.
Chris:
And welcome back to On the Money, presented by the Certified Financial Group on WDBO 1073 FM, and AM 580 Orlando’s News and Talk. If you want to get in touch with us, right now you can at 844-580-WDBO, 844-580-9326. 844-580-WDBO.
Chris:
Just a reminder that there are two workshops coming up with the Certified Financial Group. We’ve got Countdown to Retirement coming up on October 23rd, 10:00 AM to 12:00 PM. And then, Healthcare Options in Retirement. Gary [Abley’s 00:13:35] going to host that one it looks like, and that’s November 6th from 10:00 AM to 12:00 PM. The sixth and the 23rd, a couple more workshops coming up.
Chris:
In the meantime though, let’s finish up what we were talking about there. Because I am also curious that not everyone is going to have instances where holding out until 70 is worth it. And if you’re on hold there, please hold for a second. I’ll come grab you in just a moment. But what are some instances where maybe it would be more beneficial to grab that retirement before reaching 70?
Aaron Burt:
Well, the biggest one is health related. Because if you for some reason are sick, or it’s all based off life expectancies, right? If you’re trying to make up the delta between starting at age 66 and delaying until age 70, it’s just a mathematical calculation to find the break even point. And the break even point is in your early 80s. It’s going to be 82, 83 years old. If for some reason your health is deteriorating, or not good in the years between 66 and 70, or you know your family has poor longevity, bad genes, or whatever it is that might be going on with you, then obviously that would be a reason for you to want to start the benefit early.
Aaron Burt:
But I would go back to the fact that even if the higher earner doesn’t necessarily have the best health, by pushing off their benefit, they’re still guaranteeing a larger benefit for their spouse. That has to always be taken into consideration, that you’re not just thinking about yourself, but you’re thinking about the two of you. It makes the calculation a little bit more difficult, but we can plug in different life expectancies, and see what makes the most sense given projected longevities.
Joe Burt:
Yeah. That’s critical. Locking in that higher income for the surviving spouse, you want to look at that. And some people take the, when they take their pension, they take what’s called a single life option, which gives you the most payout for your lifetime. But when you pass away, it’s over. And if the only guaranteed income you have is Social Security, you want to be sure that perhaps that the benefit that your surviving spouse will get is the highest that he or she can get.
Joe Burt:
But these are all the things that we go through in detail when we do financial planning for our clients. We charge a fee for that. We don’t do it for free, we actually charge a fee. And if you don’t believe that you got the value, we’ll be glad to give your money back on the financial planning side. Give us a call. Go to our website. That’s financialgroup.com, financialgroup.com. You can learn all about Aaron and me, and the 12 industry certified financial planners that make up Certified Financial Group. We are the largest independent financial planning firm I think in central Florida. I don’t think there’s anybody that has more certified financial planners under one roof than we do, and we’re very proud of that.
Joe Burt:
And I see we got a couple of calls there, Chris, so you want to fire it up?
Chris:
Yes, we do. Let’s go to Cindy Novito first.
Joe Burt:
Good morning, Cindy.
Aaron Burt:
Hey Cindy.
Cindy:
Good morning. I have been saving in my 401k for about 28 years.
Joe Burt:
Good for you.
Cindy:
Thank you. I’m currently putting in 19%, but I started recently, my company started offering a Roth 401K. I’m not sure if I’m saying that right.
Joe Burt:
Yep. Roth 401. Yep.
Cindy:
I’m putting in currently 11 in the 401k, and I’m putting eight into the Roth, and I just don’t know if that’s the right thing to do. I thought about getting the tax free money benefit at this point. I’m 59 and a half.
Joe Burt:
Okay. Let’s talk about, first of all, are you married?
Cindy:
Yes.
Joe Burt:
Okay. The real decision that Aaron and I focus around or base this on is what your tax situation is. The real key is with the regular traditional IRA or traditional 401k, you’re putting in pre-tax money, you’re getting an immediate tax savings, whereas with the Roth, you have to pay that with after tax money. It depends on what your tax situation is. Do you want to give us an idea of what your income is, combined?
Cindy:
Combined, it’s about 80 let’s say, because now I’ve cut back on some hours, because my husband’s having some health problems.
Joe Burt:
Oh, okay.
Cindy:
Let’s say it’s 80.
Joe Burt:
Okay. And you’re married, filing a joint return. You’re not giving up anything really in terms of tax savings. You are in the 12% tax bracket, so at worst, you’re giving up 12%. It’s not a bad idea to take advantage of that. Maybe split it 50/50, and have some tax free money in your retirement years.
Joe Burt:
I’d like you to, in fact, listers, this always comes up, and I throw this out when people bring up the Roth. I’ve said it 100 times, but it’s always worth saying, because it’s a great piece that I wrote many years ago for Kiplinger, it’s called Roth, a Wolf in Sheep’s Clothing. It’s out there on the internet. Roth, a Wolf in Sheep’s Clothing, and it’ll give you some of the pros and cons of converting a Roth, or converting a traditional IRA or 401k into a Roth.
Joe Burt:
Cindy, does that help? That give you help?
Cindy:
Yeah. Yeah. For now, just maybe 50/50 then?
Joe Burt:
Yeah. Yeah, I think I’d do 50/50. Yep.
Cindy:
Okay. Thank you.
Joe Burt:
You’re welcome, Cindy. And that’s one of the things that Aaron and I do when we’re looking at our clients in recent times now, when we do the tax projections. Right, Aaron? How we do that?
Aaron Burt:
[crosstalk 00:18:34] Well, I guess [inaudible 00:18:35] talk about that after the break.
Joe Burt:
I hear the bumper music kicking in. Okay. That’s a clue.
Chris:
It’s a clue. We’ll get to that coming up here. We’ve also got Doug calling in from Daytona Beach. We got to get to him as well. We’re planning tomorrow, [crosstalk 00:18:44] today with the Certified Financial Group on WDBO.
Chris:
Welcome back to On the Money, presented by the Certified Financial Group on WDBO 1073 FM, and AM 580 Orlando’s News and Talk. You can go ahead and give us a call right now at 844-580-WDBO. That is 844-580-9326. 844-580-WDBO.
Chris:
What do you say, guys? Should we continue back onto the phone lines here?
Aaron Burt:
Yeah.
Joe Burt:
Let’s do it.
Aaron Burt:
Doug’s been there for a while. Let’s talk to Doug.
Chris:
Let’s do it. Doug, how you doing this morning?
Joe Burt:
Hey Doug.
Doug:
Good morning, guys. I really enjoy your show.
Joe Burt:
Thank you.
Aaron Burt:
Thank you.
Joe Burt:
Thanks for holding on.
Doug:
Sure. Listen, I have a 17 year old grandson, and I’ve set up a number of years ago a Unified Gift to Minors Act account for him. And what I believe is that at 18, it becomes his.
Aaron Burt:
Correct.
Doug:
What I’m trying to understand is over the next several months before he turns 18, is there any tax liability to me, to him? Is there a strategy in getting ready to turn this over, or is there anything I should be thinking of, or doing? And how does that turnover actually happen?
Joe Burt:
Well, right now, where does the money live? With a mutual fund, or with a bank? Where is it living?
Doug:
No, they’re in individual stocks.
Joe Burt:
They’re in individual stocks.
Doug:
As they were kids-
Joe Burt:
Sure.
Doug:
… right, I’d buy them two shares of Disney, [crosstalk 00:21:18] three shares of McDonald’s. Things that they would know.
Joe Burt:
Got it. Got it, got it. Yeah.
Aaron Burt:
Got it.
Joe Burt:
Okay. They’re sitting in a brokerage account somewhere?
Doug:
Yes.
Joe Burt:
Okay. All right. You’re right, when they turn 18, under the Uniform Gift to Minors, now there’s a difference between a Uniform Gift to Minors and a Uniform Transfer to Minors. And does the account say UGMA or UTMA?
Doug:
I think it says UGMA.
Joe Burt:
Okay. That’s the 18 deal, right, Aaron?
Aaron Burt:
Yes. There was two different. The Uniform Gift to Minors is the older law. Was established back in the ’50s. The UTMA is an extension actually of the UGMA, and it allows people to act as custodian until age 21. That’s really the biggest difference is the 18 and 21.
Aaron Burt:
But if you set it up under UGMA, which is the old law, or actually UGMAS are still around, but most people now do UTMAs currently going forward. But since it’s a UGMA, you are locked into the 18 age. And basically, what’s going to happen is is when they turn 18 years old, the brokerage account should contact you and say, “Hey, your beneficiary’s no longer a minor, and they need to take control of the account.”
Aaron Burt:
And what’ll happen is is they need to go, and establish a new account with that custodian, or whatever brokerage account that they want to go with. And the assets then transfer from your name as custodian to their name as account owner, and the shares are now theirs underneath. And it carries forward the cost basis. If you bought AT&T at 10 bucks, and now it transfers over, theirs still have AT&T, and their cost basis is 10 bucks. It transfers over at cost basis to them.
Aaron Burt:
Basically, you’ve already given the shares away, so there’s no taxation consequences to you, but the taxation’s going to occur to them if they sell the shares. And then, obviously they have to deal with capital gains, and all that kind of stuff.
Joe Burt:
You follow?
Doug:
Okay. If they don’t sell the shares, and it’s unrealized gains-
Joe Burt:
That’s correct.
Doug:
… they would have no tax liability.
Joe Burt:
That’s correct.
Aaron Burt:
Yes, sir. [crosstalk 00:23:12] Until they sell it.
Joe Burt:
You’ve done a great job of educating, hopefully, the youngsters there, now 17, 18 years old, and they’re going to see these shares of Disney, or AT&T, or whatever you bought. Maybe you bought some Tesla, or Google, or whatever it was.
Doug:
I wish.
Joe Burt:
Yeah. Okay. But the point is is that they now have their own brokerage account. And 18, now that money is theirs. And this is the time for grandpa to sit down with your grandson, and show him the time value of money, or how money compounds over time. And that small account that he has today could be worth, depending on how much is in there today, several $100,000. If he doesn’t touch it.
Doug:
I hope so.
Joe Burt:
If he doesn’t touch it. And because they’re in individual stocks, the only thing left to contend with is whatever dividends are being generated around that time.
Joe Burt:
And while we’re on dividends, you may have been in the early part of the program, Doug, we were talking, early caller wanted to inquire about qualified versus non-qualified dividends, and if there is a way to tell what’s going to be what. Most dividends that are paid by US companies, and some foreign companies, are what’s considered qualified dividends. And depending on how long you’ve held the shares, when you get those dividends, they should be treated as long term capital gains.
Joe Burt:
Unqualified dividends come from things like REITs, and money market mutual funds, and some other forms of certainly things that are non-taxable entities. But for the most part, most dividends that you receive are what I call qualified dividends. And-
Aaron Burt:
He needs to be made aware of that, because he’s going to start getting those 1099s once he turns 18, and he needs to file that in his taxes, and include that going forward, or his parents are going to have to going forward. Something that’s going to have to be considered as well. Good teaching moment here, and good job for setting him up for the future.
Joe Burt:
Yeah. Congratulations, Doug, and congratulations to your young grandson there. Hopefully uses this money wisely.
Doug:
Okay. I hope so. Thank you guys.
Joe Burt:
You’re welcome, Doug. Thanks for the call. Yep, yep.
Aaron Burt:
Yep.
Chris:
I love when we get the calls of listeners who are, are starting and implementing these things with their children or grandchildren at such a young age, because it really will help them long term in immense ways. That they don’t realize, but will realize once they get older.
Joe Burt:
Oh yeah. [crosstalk 00:25:24] Why don’t you tell our listeners about this book?
Aaron Burt:
I can read your mind. All right. I’m actually taking this course right now to continue my education. It’s called the CAP course, which stands for chartered advisor and philanthropy. I’m actually learning on how to have conversations to work with clients who are basically have charity on their mind, and how to have those conversations, and the best way to establish accounts for them, and to give to charity wisely.
Aaron Burt:
As part of my class though, we had a guest speaker that met with our group about a month ago, and the conversation was around how to educate younger beneficiaries about money. And we get this question a lot, actually. What should we do? Can you recommend any books?
Aaron Burt:
One of the books that he recommended, it’s actually called How to Turn 100 into a Million, I believe is the name of the book. And during the conversation that we were having with this speaker, I looked it up on Amazon, and I had it delivered to my house that same night, which is amazing.
Aaron Burt:
[crosstalk 00:26:25] But so, it showed up in my mailbox, and I gave it to my 12 year old son, and he cannot put this thing down. One of the very first things is how to have a conversation with your parents about a allowance, how to start your own small business. He’s trying to figure out how to buy candy at a cheap price, and sell it to his people at school. It makes money on the side. It’s all sorts of things about economics, but in that younger, early teen kind of language so that they can understand it. We get that question a lot. I’m throwing the name of that book out there. It’s called How to Turn 100 into a Million. Very easy reading, but my 12 year old is eating it up.
Joe Burt:
And we say this time and time again, our educational system has failed miserably when it comes to teaching us how to save and invest for our future, and that’s why we’re raising generation upon generation of financial illiterates. And you get through life, and you’re trying to keep things together, and you don’t realize how important it is to save for your future. Because when you retire, the only thing you’re going to have, unless you’re fortunate enough to have a pension, is Social Security, plus whatever you’ve been able to save and accumulate over your working lifetime.
Joe Burt:
That’s why it’s so critical that you use your IRA, your 401k, your 457, your 403B, whatever it is, use it to the max, pay yourself first, put that money in there, get the tax deduction, let it grow for you without being taxed. And then when you retire, you’ve got a pile of money to draw from, in addition to Social Security. Because living on Social Security is not a pretty picture. Social Security was never meant to be a retirement plan, it’s really a safety net. And unfortunately, it’s a safety net with very, very large holes in it. Most people certainly cannot maintain their standard of living when they retire if that’s all they have is Social Security.
Joe Burt:
And it’s what Aaron and I do. As certified financial planners, we look at our client situation, look at what they need to do, how they need to prepare, how much they need to save. The real key is what people want to know is what they call the number. How much capital do I need when those paychecks stop to maintain my lifestyle? And then, once I have that, where do I draw it from? Do I draw it from my taxable account, from my tax-free account, my Roth account? How much do I take? When do I take from Social Security?
Joe Burt:
All those things are financial planning. It’s what Aaron and I, and all of those CFPs here at Certified Financial Group do day in and day out for a fee. Helping our clients through those decisions. And the worst thing that you want to have happen is ignore it, and look back five years from now saying, “Gee, I wish I’d have known,” or, “Gee, I’m sorry I did that because I didn’t know.” And that’s what planning is.
Joe Burt:
We charge a fee for that. We are not the most expensive, but you certainly don’t want to work with the cheapest. And we’d be glad to work with you. Give us a call. You can go to our website, that’s financialgroup.com, financialgroup.com. Learn all about us, and how we work with our clients as certified financial planners, working as fiduciaries.
Chris:
And of course, you can still give us a call right now. Phone lines are open at 844-580-WDBO, 844-580-9326. 844-580-WDBO. When we come back, we’ll talk a little about those upcoming workshops, scoremyfunds.com, and whypeoplepayus.com. We’re planning tomorrow, [crosstalk 00:29:22] today. The Certified Financial Group on WDBO.
Chris:
And welcome back to On the Money, presented by the Certified Financial Group right here on WDBO 1073 FM, and AM 580 Orlando’s News and Talk. Hey, just a reminder that Rodney [Ownby’s 00:30:47] at the office right now taking calls, if you want to call them at 407-869-9800, 407-869-9800, or 1-800-EXECUTE, as if you are executing a financial plan.
Chris:
We did get a question here on the Facebook page. Paul jumped on the Facebook, and asked us, “I’m taking Social Security disability. If I marry, would my spouse automatically qualify for spousal benefits? Does she have to have paid into the system for 40 quarters?”
Aaron Burt:
Yes. The answer to that question is no, she does not automatically qualify for Social Security benefits. The rule around spousal benefits is you have to be married at least a year, or the spouse needs to be the parent of your child as well. There’s an either/or there to qualify for the spousal benefits.
Aaron Burt:
And there’s another little piece to that, too. They have to, obviously to take benefits as a spouse, need to be of age in order to take benefits. A lot of times, people who are on Social Security benefits, they’re younger than 62. If they’re getting disability benefits, I should say. And so, the spouse needs to be 62 years old in order to get that spousal benefit.
Aaron Burt:
And that spousal benefit would be half. If they take spousal benefits at full retirement age, would be half of what the person who is on disability would be entitled to at their full retirement age. There’s a lot of rules around Social Security, spousal benefits, and disability benefits. But to answer the question directly, the answer is no, you have to be married at least a year, or again, they have to be the parent of your child.
Joe Burt:
And the 10 years or 40 quarters applies to her own benefit. That’s the other there, too. She can apply for her own benefit, or apply for the spousal benefit.
Joe Burt:
And so, those are all the questions that we look at when we do financial planning for our clients. And those are critical decisions, and sometimes people make the wrong decisions. Aaron and I worked on cases over the years, seeing people for the first time, and we point out to them that they left a lot of money on the table.
Aaron Burt:
Yeah. Yeah. And a lot of people don’t understand the rules, and a lot of the rules were phased out. Well, we used to be able to file and suspend, and do restricted application for spousal benefits, and there was all sorts of things that we could do in order to increase the benefits. A lot of those things are going away because of Congress I guess caught on to people trying to take advantage of the system, or actually just get the benefits that they’re entitled to based off the way that the laws are written.
Joe Burt:
Right. I like that better.
Aaron Burt:
Yeah. Taking advantage of the way that the laws are written. And that’s part of the problem with Congress, when they write these laws, they don’t really think about the implications of what they’re writing. It sounds great, but then once in actuality, there’s ways to take advantage of the way that the law is written in order to get the benefits you do.
Aaron Burt:
Then, they start plugging these holes once the things catch on, which is what happened with Social Security. They took benefits away from some people when they got rid of the file and suspend, and the restricted application. But we’ve seen people that came in, and they just didn’t know about those things. And when we pointed it out to them, we were able to get them checks that they would not have gotten otherwise.
Aaron Burt:
There are some people that are still eligible for restricted application. If you were born before 1954, and you are not on Social Security spousal benefits, there’s still an opportunity there for you to be able to do that. That’s something that we point out when we meet with clients that we’re aware of that they ought to be considering. Because again, you’re leaving your own money on the table of the benefit that you’re entitled to.
Joe Burt:
And these are among the many things that Rodney or Gary will be covering in the upcoming workshop. That’s October 23rd. And so, make a reservation for that. All you have to do is go to our website. That’s financialgroup.com, financialgroup.com. Click on the icon up there, and you can make a reservation right online.
Joe Burt:
Seating is limited. We hold this in our new learning center. Accommodate about 30 people comfortably, with our state-of-the-art audio visual equipment. And if you get here early enough, you’ll be able to stop in, and see us do the program right here in our studio right here in Altamonte Springs.
Chris:
That’s the benefit of it starting at 10:00 AM is that they can get there, and they can watch you guys do your thing for the hour of the show, and then they can go and learn a little bit.
Aaron Burt:
That’s right. I also really quick want to plug our scoremyfunds.com. Scoremyfunds.com is a website that we created for people that have questions about the quality of the mutual funds or ETFs that they have in their portfolio. It’s a very easy thing. You go on there, scoremyfunds.com. You plug in your ticker symbols. We’ll generate a report to you using our state-of-the-art fiduciary evaluation system to determine the quality of those investments, and we’ll give that back to you for free. There’s absolutely no cost.
Aaron Burt:
A lot of people have held onto mutual funds, and they really have no concept of the quality of the funds that they have. And so, this is a great way for people that are interested, go to scoremyfunds.com, plug in your ticker symbols, and we’ll email you back a report on the quality of the investments that you have in your portfolio.
Chris:
There you go. Good stuff there. And of course, you’ve also got, what was the other website? That whypeoplepayus.com. We got a minute left. Real quick.
Joe Burt:
Yeah, that’s a great website. Over the course of years, we’ve heard from many, many clients as to why they like paying us. And so, whypeoplepayus.com. I think if you go there, you see the 10 major reasons why people use Certified Financial Group for what we do for our clients. That’s an easy one, whypeoplepayus.com.
Joe Burt:
And we hope to see you at one of the upcoming workshops we’ve got scheduled. As we said, you can get more information about us by going to financialgroup.com. And you can get Rodney in our office right now, 407-869-9800. Rodney’s a certified financial planner in addition to being a CPA, and he’d meet with you as well. Also in our Windermere office, we have an outpost down there in South Orlando.
Chris:
That’s right. Good stuff there. Of course, don’t forget, check them out, scoremyfunds.com, whypeoplepayus.com. And again, go online, sign up for those workshops. You’ve got one coming up October 23rd, and then another one on November 6th. We’re planning tomorrow, [crosstalk 00:36:46] today with the Certified Financial Group on WDBO.