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Social Security definitely offers a lot of retirement benefits, making it an excellent investment for anyone. However, not everyone is properly educated on maximizing how much you can get from it. Brian Powers talks with Jim Blair and Marc Kiner from Premier Social Security Consulting to share the most important strategies to follow to properly navigate Social Security and calculate its benefits. They enumerate tips for various situations, from divorced parents, deceased partners, disabled children, and many more. Jim and Marc also discuss early and full retirement, explaining the benefits either option can offer.

Listen to the podcast here:

Jim Blair And Marc Kiner On Getting The Most Out Of Your Social Security Benefits

Welcome, Jim Blair and Marc Kiner from Premier Social Security Consulting. Gentlemen, I’m happy to have you with us. Tell us more about yourselves and then about your consulting firm.

Brian, thanks for having us. This is Marc Kiner here. Jim and I are both based out of Cincinnati, Ohio. Our company is called Premier Social Security Consulting. I’m a CPA. I sold my practice back in 2012 so I can devote 100% of my time to the Social Security space. Our company does two things. We do consultations for people across the country, where we help them to understand and maximize their Social Security benefits. We also educate advisors across the country, thereby increasing their value to their clients.

In our eight-hour Social Security education class, we focus on three words, Situational Social Security, because we know everyone is in a different situation. They may be single, married or divorced. They may be surviving spouses. They might have some young kids to throw in there. Quite possibly, people may be public employees and they might still be able to follow that restricted application. At the end of our eight-hour day, our mission is to make sure advisors understand all the questions and issues that relate to every one of their individual clients. Jim Blair worked for the Social Security Administration for 35 years. Jim, take it away.

I did. It went pretty fast. I started off as a service representative. If you ever get to go in the office again, that’s the smiling face you see when you walk in the front door. They generally help people who are already receiving benefits. They maybe are overpaid or missing a check or have questions about their benefits and different things like that, but generally, people who have already applied. I moved into the claims taking part of it and took claims for retirement survivors, disability and health insurance. I did that for about ten years. I moved into the management end of it and spent the last many years as a district manager of the Piqua, Ohio office.

Most people are always wondering, “Where’s Piqua, Ohio?” Nobody has ever heard of it. It’s a nice, little rural community. The nice thing about it is it points out that regardless of where you live, there’s a Social Security office fairly close, some closer than others, but it’s probably the most accessible government office out there. Once they open back up to the public, you’ll be able to go in and talk to people if you need to. They’ve got a great website, the SSA.gov website. There’s a lot of good information on there. There are a lot of things you could do, but still, sometimes you need that personal touch, which is what I did for those 35 years.

Wives who are eligible for their own Social Security benefits might want to consider taking their own benefits as early as 62. Click To Tweet

I said, “Granted, I’m still a baby when it comes to Social Security, but it’s something that interests me.” Like you said, Marc, it’s situational. It’s not one size fits all. It’s one size kind of fits one. When somebody is ready to look at those benefits, what are some steps they should take?

The first step they should do is go to the SSA.gov website or SocialSecurity.gov website. They should create an online account. Over 50 million people have created online accounts so far. It’s a fairly simple process. This way, they can look at their benefit statement whenever they feel like it and make sure that their earnings are being posted correctly. They get some idea as to what the benefits will be at three ages, at age 62, at their full retirement age and at age 70. That’s always a good place to begin in reference to looking at to begin that the process of analyzing your Social Security options. Jim, how difficult is it to create an online account?

It could be a little challenging for some people. They’re going to ask you the easy questions, your name, Social Security number and date of birth. They do want to make sure that it is you and not your neighbor or somebody else trying to get into your record. There are a couple of ways that they’re going to prove your identity. One, this was the one that was the original way, they’re going to ask you questions that come off of your credit report. If you have frozen your credit report, you’ll need to unfreeze it and then they’re going to ask you three questions. One could be really easy. It could be, “Have you bought a car in 2018?” and “Have you borrowed the money from bank A, B, C or D?” As one person told me, they wanted to know the month and year he opened a specific credit card that he had.

He said, “I had that card since the ‘80s. I have no clue what month and year I opened that.” He took a guess and he guessed wrong and got locked out for 24 hours. You get up to three shots. After you’ve been locked out a third time, then you get the pleasure of contacting the Social Security office and they’ll help you through the process. They’ve come up with a new way. It’s a little easier. If you have a smartphone, they have a method where you can take a picture of your driver’s license or state ID, front and back, and they’ll approve your identity that way. Once you’ve got this done, the hardest of the whole thing is you have to create a username and password. You’ll be surprised if you think. Nobody uses the same username. I do. Lo and behold, lots of people do.

You’re going to have to come up with a username. I think that’s the toughest part of the whole thing. Once you’ve got that set up and ready to go, you can go in and look at your statement whenever you want. There are a lot of good things on there. If you’re not drawing Social Security, you can look at your benefits statement and it is up to date. It’s updated daily. We’re starting to see 2020 wages being posted on the statements themselves. You can look at your statement. You can get a new Social Security card if you want to. If you’re drawing benefits, you can get a benefit verification letter. You can get a replacement of 1099 if you need to for your taxes. Print all of that over right up from there.

TAP 26 | Social Security

Social Security: With new earnings, you may get an increase in benefits, or you may not.

 

You can get a new Medicare card, all sorts of things and maybe some of the things that would be a little difficult to do that now make it easy. If you change your address or change the bank that you want your benefits to go to, you can do it right on your account. It’s a great thing to do. I encourage everybody eighteen or older, create this account. They’re going to remind you every year to go in and look at your account. You want to make sure your wages are posted correctly because after all, that’s what they compute your benefit off of and just have access to that.

You guys have this great document they sent me. We’ll include it here so that people have access to it. It’s the ten things you should know before you file and making a plan. How are benefits calculated?

It’s a 35 five-year calculation. That’s a great question because a lot of people don’t know how benefits are calculated. A lot of people think it’s the last 3, 5 or 10 years or the highest 3, 5 or 10 years. We’re looking at 35 years of earnings. We did something special to those earnings. We’ll index them for inflation to bring them up to now’s dollars. If somebody is reading this blog who earned $40,000 back in 1985, the indexed amount now is about $120,000. That’s the amount that would be used in calculating your benefits. Who on earth would know what their indexed earnings are? Nobody. Somebody who is receiving benefits, continuing to work and making a decent income may not see any increase to the benefits at all because we index earnings for inflation to bring them up to now’s dollars.

A good thing about the 35 years is missing a few years is no big deal. You still get the bulk of your benefits. What’s a bad thing? I want to look at your first job at Wendy’s or McDonald’s. We’re going to index those earnings for inflation and they may be used in the calculation. One thing I want to mention. The return on investment for paying additional FICA taxes is generally very low. With new earnings, you may get an increase in benefits or you may not. There is a certain demographic of our population that would benefit the most from continued work. It’s those people who stayed home with the kids. It’s those people who have ten years of work but 25 years of zero earnings because it’s a 35-year calculation. Anytime you replace a zero year with something positive, you’ll have a nice increase in your Social Security benefits. The key is, nobody knows what their indexed earnings are. You can’t even get that at the Social Security website. Jim, how do you figure out somebody’s indexed earnings?

The easy way for me is there’s something called POMS. You know the government loves acronyms. It’s what the Social Security employees use to administer the laws and the regulations, but it is available to the general public. If you go on Google and put in POMS, it will give you a link to this. In that section, I can find that for every year, when someone turns 62, it will show what the indexing factors are for those years. We can find them if we need to. It’s just the general public is not going to understand how it works and be able to calculate their benefit, but it is available.

Social Security is a lifetime benefit, but it's all up to you to determine where you fall in the life expectancy table. Click To Tweet

It’s not only the general public, but 99% of the advisors across the country have no clue that we index earnings for inflation because I asked my advisors that all the time.

Sometimes it doesn’t make sense to take your benefits the minute you can get them. It’s the item I’ve heard out there.

Just because you’re 62 doesn’t mean you should file for your Social Security. There are a lot of things that are going to factor in. That is going to give you the least amount of monthly benefits and that’s over your lifetime. You don’t increase those benefits when you reach full retirement age. When you take a reduced benefit, it’s always reduced. People are living longer, receiving their benefits for a longer period of time. It’s the worst-case scenario the earlier you take the benefits. It’s not horrible, but it’s not the best situation for people. It also has a direct effect on survivor benefits and people don’t understand that part, too. Depending on how important survivor benefits are in your planning, taking benefits early are going to lower those benefits.

You could begin retirement and benefits as early as age 62 or as late as age 70. Only about 4% of the population wait until age 70, but if you did, you would be maximizing your benefits because you would get all those delayed retirement credits and if you wait beyond full retirement age. For people who were born between 1943 and 1954, the full retirement is age 66. It’s gradually going up to age 67. It will be there for people turning 62 in 2022. You can claim benefits anywhere from age 62 all the way up to age 70. A more popular age maybe 68.

If a husband waits to age 70, we’re now maximizing surviving spouse benefits to his wife when he’s gone. That’s a good thing. Wives who are eligible for their own Social Security benefits might want to consider taking their own benefits as early as possible at age 62. Don’t take a haircut. We understand that benefits will be reduced by 25%. However, that might give the husband the opportunity to wait until full retirement age or age 70 to claim his benefits. If he was born by that magic birth date of January 1st of 1954, there’s a special strategy he can use. He can file a restricted application, claim a spousal benefit off of his wife while at the same time his benefits are growing, earning those delayed retirement credits. We have a wife beginning her benefits early. The husband is waiting until age 70. If he was born by January 1, 1954, he got that restricted application. That’s a very powerful strategy.

TAP 26 | Social Security

Social Security: Anytime you replace a zero year with something positive, you’ll have a nice increase in your Social Security benefits.

 

Sometimes it does make sense for people to claim at age 62 like in that case I mentioned. What if you’re single? If you’re single, you may not want to wait until age 70. For example, I’m single. My full retirement age is going to be June of 2022. I’ll be 66. There’s probably no reason for me to wait until age 70. If I wait until age 70, I get more money, but what if I pass away at 72, 73 or 74? Not that I will, but you never know. Agree or not, it makes sense for single people in my mind for them to claim their benefits at their full retirement age. This way, they get a lower amount, but they get to start the benefits a little earlier at age 66 or whatever their full retirement age versus age 70. It’s not necessarily a bad thing for a married couple or for one spouse to draw early. Sometimes that does make some sense.

We’re talking about the surviving spouse. There are some options there once either the husband or wife passes, correct?

Yeah. When we’re talking about survivor benefits, especially if they’re eligible also on their own work record and they have some options there. First of all, you can take a widow’s or widower’s benefit as early as age 60 and then wait and switch to your own, maybe at 62 if it’s going to be higher, but you could also wait until your full retirement age or even wait until age 70. Even though you’re not taking your own benefit until age 70, you’re getting money each month in the meantime. On the other side of that coin, if your benefit is lower than the survivor benefit, you can take your own at age 62. It’s going to be reduced for age, but then when you reach your full retirement age, you switch over to the survivor benefit and you get that at the full rate that’s not reduced for age because you took your own early. You get the full rate of 100%.

The advantage here is you take a lower benefit in the beginning to receive a higher benefit later on and that higher benefit you’re likely to receive for a longer period of time. When we look at life expectancies, when we take a male in his 60s, he has an average, according to the Social Security Administration, the life expectancy of about age 84 and a female about age 87. They tell us that half of the people will live into their upper 80s, early 90s and 1/4 of the people will live to be 95 or older. Social Security is a lifetime benefit. The problem with the life expectancy table that Social Security gives us is they don’t tell us which one of us those are. We had to figure that out on our own, but we look at our health, our family history and that kind of thing. It’s something definitely to take into consideration. If you could take a lower benefit for a few years to get that higher benefit later, you can be much better off.

My father-in-law was ready to jump all over his benefits the minute he hit full retirement age but to each their own. You have to take in your individual health and family history. If both are still alive, but the marriage didn’t work out, what do divorced people have to take into consideration?

One size fits one in Social Security. Everyone is different, and so are the benefits they would receive. Click To Tweet

You can collect off of your ex-spouse while your ex-spouse is alive or deceased. Let’s assume I’m divorced. For my ex-wife to collect off of my work record, she must be single. I can be remarried, but she must be single. She must be at least age 62. Here’s the kicker. I need to be receiving either retirement or a disability benefit. We have to be married for ten years. That requirement that I would be receiving a benefit applies if we’ve been divorced for less than two years. Once we hit the two-year mark of being divorced, then I don’t have to be receiving a benefit for my ex-wife to be collecting off my work record. Divorce for less than two years, I must be receiving. Divorce for two years or longer, I don’t need to be receiving.

What if I brought three exes out there, Betty, Amber and Chloe? Let’s assume I was the higher-income earner. They could all draw off me at the same time. Let’s say I was the lower-income earner. I can draw off of Betty first, as she turns 62 first. Two years later, Amber turned 62. My benefit of Amber would be higher. I can switch. Two years later, Chloe turned 62 and my benefit off Chloe would be higher. I can switch again. As my ex-spouse has turned 62 different times, I can switch from one to the other as long as my benefit goes up. If when I apply for benefits, all three of my exes who are at least age 62, I would have to take off of the one that would give me the highest benefit. You can claim off of an ex-spouse, but you have to be married for ten continuous years. None of this stop and start type of thing. When we teach our class, we have a lot of fun when it comes to ex-spouses.

Back when we were able to do it live, that would always get people going. You could always tell that people got real interested when we started talking about that. I’m not sure exactly why, but they always seem to be interested in that.

It’s all about planning. We’ve talked about the spouses. Let’s talk about the kids. This is something I did not know. Are kids able to live off of either living parents’ or deceased parents’ benefits?

Yes, they’re eligible for either one. It’s either a life case or a death case. A life case means the parent is alive and receiving either retirement or disability benefits or in a death case, the parent has passed away. There’s a difference in the payment. If it’s a life case, then the child would receive 50% of the parent’s full retirement age benefit amount. It’s called a PIA, Primary Insurance Amount, but most people don’t understand that. They do understand the full retirement age benefit. In a deceased case, though, it’s 75%. Other than that, the rules are the same. It’s a minor child under the age of eighteen. They have to be unmarried and that’s the only requirement if they’re under the age of eighteen. If they are still in high school and they reached the age between 18 and 19, as long as they’re a full-time student in high school, they’ll draw until either they graduate or reach age nineteen.

TAP 26 | Social Security

Social Security: Depending on how important survivor benefits are in your planning, taking benefits early will lower Social Security benefits.

 

What may be a little more common is if a child becomes disabled before the age of 22, they can draw off of their parent’s work record. You’ll probably see a lot of people thinking about, “When should I start my retirement?” If they have a disabled child, that thought maybe, “I’m going to take my benefit a little earlier than I normally would have because now my child can get the benefit as well.” That’s definitely going to be a factor that people take into consideration.

You are 100% right when you say Situational Social Security. Off of the few things that we talked about and the different situations, it’s amazing with the different avenues that you can go down. It’s not so much one size fits all, but one size fits one.

Everybody is different. Let’s talk about married couples. You can have many different scenarios for the married couple. A husband and wife could be close in age or wide apart in age. Maybe they’ve got some young kids to consider. Maybe they were public employees. You can have the wife older than the husband and maybe even the higher earner of the two. A husband and wife wider in age, you want to consider the husband wait until age 70 because he’s maximizing his benefits and maximizing surviving spouse benefits to his wife when he’s gone.

A husband and wife a little closer in age, maximizing surviving spouse benefits, it may be important, but not as important because she won’t receive them for a longer time period. You may even have a wife who has never worked and all she is eligible for is a spousal benefit off of her husband’s work record. For her to receive a spousal benefit, he must turn his benefits on. Does he turn his benefits on at 66, or let’s assume that’s his full retirement age, to allow a spousal benefit to be payable to his wife? Does he wait until age 70? He gets those delayed retirement credits, but now we’ve delayed a spousal benefit payment by four years. It’s something that needs to be considered.

You were talking about children. I don’t think you mentioned this, but in case you did, I apologize. If you have a child under the age of 18/19, we can have the mother apply for her benefits first. The child will receive something off of the mother’s work record. Down the road, the husband files for his benefits and the benefit to the child will go up a bit because the husband’s work history is probably a bit stronger and the benefit off of the dad’s work history is a bit higher. First, the child gets a benefit off of the mom’s work history and then when the dad begins, he or she gets the benefit off of the dad’s work history. Sometimes, in that case, it makes sense for the moms to take their benefits a little earlier, so something is payable to the kids or a child.

What’s a good trigger? What’s a good point for someone to reach out to you? What’s the age? If I’m thinking about it, what’s a good time to do that?

A good time is age 60 or older. We can look earlier for people if they’re interested, but things can change. Their circumstances can change. It’s age 60 or older and before they apply for benefits. If someone knows for a fact, they’re not going to apply before their full retirement age. If they’re still working and working full-time, they may not be able to apply and receive benefits anyway. It doesn’t hurt to wait until it gets closer to that point. To take a first real good look at it, around age 60 or a little older is a good starting point.

However, benefits are payable to people even younger than that. For example, I did taxes for a long time. I had a tax client, a husband and wife and two young kids. The husband at the age of 45, was playing hockey and he passed away. He had a bad heart. His wife was able to receive a benefit as a spouse and as a mom taking care of two kids under the age of sixteen. She was only 45. She was receiving a benefit. The two kids were also receiving a benefit also off of the dad/husband’s work record. That’s a triggering point. You might have a spouse who passes away early. You’re taking care of a couple of young kids. The problem is, no one is going to tell you that. Somebody in that situation hopefully would be able to meet with their financial advisor and the financial advisor would understand that to be an opportunity. It’s not necessarily aged 60 to 70, even though that’s primarily who we talk to. It could be younger people at the same time.

TAP 26 | Social Security

Social Security: If you could take a lower benefit for a few years to get that higher benefit later, you can be much better off.

 

Going back to your statement of Situational Social Security. I can go ahead and assume, if someone is wondering or has a question, that’s a good time to say to shoot you guys an email. Check out your website. You have a lot of information and content on there, free retirement planning book and things that they can access and then obviously if they want to contact you. Give us that website. What’s your URL?

There are a couple of websites. For people looking for a consultation, the website is PremierSocialSecurityConsulting.com. For advisors who are looking for our training, the website is PremierNSSA.com. We have two websites, one for the public for consultations and the other one for the education that we do.

The tagline on your website is “Leaders in Social Security Consulting in Education.” That was definitely shown here and all the information you shared with us. Guys, we appreciate the time. Jim Blair and Marc Kiner, Premier Social Security Consulting, thanks a lot. We appreciate you guys being on the show.

Thank you, Brian. We appreciate it, too. Take care now.

Important Links:

About Jim Blair

TAP 26 | Social SecurityLead Consultant

Former Social Security Administrator, Jim Blair is the lead consultant in our Social Security Benefits department. Mr. Blair has over 35 years of experience in helping individuals manage their Social Security benefits and taking claims for retirement, survivors, disability and health insurance.

Most notably, he has also served as an Operations Supervisor and a District Manager for the Piqua, Ohio Social Security Office.

About Marc Kiner

TAP 26 | Social SecurityCPA

Marc Kiner has 35 years of experience in public accounting. Marc recently sold his CPA practice to concentrate on Social Security. His primary areas of service were to privately held businesses and individuals. Marc also consulted with clients on a variety of complex tax and business issues.

Marc obtained his Bachelors of Science degree in Accounting and Finance and a Masters Degree from the University of Cincinnati. He is licensed to practice as a CPA in the state of Ohio. Marc Kiner can be contacted directly at: mkiner@mypremierplan.com

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