Social Security is back in the headlines, and Congress may finally be preparing to talk about fixing it. The proposed PROMISE Act creates a process requiring lawmakers to debate and vote on solutions designed to keep Social Security solvent for decades. It does not raise the retirement age, eliminate the payroll-tax cap, or invest the trust fund in the stock market, despite what some of the headlines may lead you to believe.
Joe and OG break down what the legislation actually does before turning to the part that matters most at your kitchen table: building a smarter Social Security claiming strategy. They explore how your benefits are calculated, why your online estimate may be misleading if you plan to retire early, when waiting until age 70 could pay off, and how taxes, employment income, marriage, divorce, survivor benefits, and the rest of your retirement portfolio should influence your decision.
What You’ll Walk Away With
- What the PROMISE Act actually proposes, why it’s primarily about creating a congressional process, and which frequently discussed Social Security reforms aren’t included in the legislation
- Why Social Security could still pay approximately 78% of scheduled retirement benefits if the trust fund runs short and Congress does nothing
- The potential fixes lawmakers may eventually debate, including raising the retirement age, increasing the payroll-tax cap, and investing some Social Security assets in a diversified fund
- Why you should create an account with the Social Security Administration now, verify your earnings history, and check it regularly for missing or incorrect information
- How Social Security’s 35-year earnings calculation works and why retiring early could add zero-income years that make your current benefit estimate overly optimistic
- Why “When should I claim Social Security?” is usually the wrong first question and what you should examine before choosing an age
- How to think about Social Security alongside your IRA, 401(k), brokerage accounts, real estate, and other retirement-income buckets
- The tradeoffs between claiming at age 62, waiting until full retirement age, and earning delayed retirement credits through age 70
- Why there’s no additional benefit for waiting beyond age 70 and why Social Security may begin sending payments whether you’ve remembered to claim or not
- How your health, expected longevity, employment status, marital status, and spouse’s benefit can change the best claiming strategy
- Why claiming Social Security early while you’re still working can create an earnings-test headache and potentially require benefits to be withheld
- How Social Security income, IRA distributions, Roth conversions, and other income may affect your taxes and Medicare IRMAA surcharges
- The retirement-income mistake OG sees frequently: spending down a portfolio while delaying Social Security, then failing to reduce those portfolio withdrawals once Social Security begins
- How spousal benefits actually work, why receiving “half of your spouse’s benefit” is an oversimplification, and why couples shouldn’t automatically claim at the same time
- Why survivor benefits, divorce, remarriage, the 10-year marriage rule, and differences in earnings histories require planning well before retirement
- Which public employees may have unique Social Security situations and why people previously affected by WEP or GPO should revisit their benefits
- Doug’s Bugs Bunny trivia and the surprising lesson from Mel Blanc about negotiating for recognition, protecting your work, and building a personal brand
Why This Matters Now
Social Security’s long-term funding problem is getting harder to ignore, but waiting for Congress to settle the issue isn’t a retirement strategy. Changes to taxes, retirement ages, or benefits may eventually arrive, but your claiming decision will still depend on your income needs, work history, family circumstances, health, and other assets.
The biggest advantage you have is time. Checking your earnings record, understanding how your estimate was calculated, and coordinating Social Security with the rest of your retirement plan can prevent decisions that permanently reduce your income. Retirement doesn’t happen in Congress. It happens at your kitchen table.
From the Basement
A discussion about bipartisan Social Security legislation quickly sends OG into orbit over Congress creating a process to create another process. Then his brother makes everything worse by winning the Masters ticket lottery after OG has spent decades being rejected.
Joe attempts to restore order with a game of “Is It in the Act?” while Doug demonstrates that the best way to understand legislation is apparently to become the show’s lowest common denominator. Later, Doug celebrates Bugs Bunny’s birthday, explains how Mel Blanc turned an on-screen credit into a career-building asset, and reminds everyone that knowing how the Masters lottery works may be just as important as understanding Social Security.
The crew also previews Financial Action Month, including five episodes this week and a bingo sheet to help Stackers take action throughout August.
Resources Mentioned
CNBC reporting by Lorie Konish — Coverage of the PROMISE Act and the congressional effort to address Social Security’s long-term solvency
Social Security Administration — Create an account, review your earnings history, and view your estimated retirement benefits at ssa.gov
ID.me — Identity-verification service used to access your online Social Security account
Stacking Benjamins Guides and Scout — Benefits, tax-planning, and college-planning resources at stackingbenjamins.com/guides
Acquired: The Walt Disney Company — The long-form episode referenced during the discussion of Walt Disney, Oswald the Lucky Rabbit, intellectual property, and protecting your creative assets
Financial Action Month Bingo — Download the bingo sheet and prepare for August at stackingbenjamins.com/bingo
Enjoy!
Our Headline
Doug’s Trivia
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Other Mentions
- The United States Social Security Administration
- Simple, secure login | ID.me (Create your secure login for SSA.gov)
- Personal Finance Guides to Help You Make Smarter Money Moves
- StackingBenjamins.com/bingo
Join Us Wednesday
Tune in on Wednesday for a special episode when we let’s turn the spotlight on the other behemoth: Fidelity. What’s the story of this brand that holds so much of the world’s money? We’re joined by a guy who’s done all the research: Justin Baer from the Wall Street Journal
Written by: Kevin Bailey
Miss our last show? Listen here: A Former OpenAI Researcher Says 70% Chance of Human Extinction — Here’s What to Do With That (SB1872) | Stacking Benjamins
Episode transcript
[00:00:00] Joe: It is Monday, and that means we are back. OG, how you doing, man?
[00:00:07] OG: Fair.
[00:00:08] Joe: Fair to middling?
[00:00:10] OG: I don’t know what middling is, but I’m fair.
[00:00:14] Joe: Doug, are you middling?
[00:00:16] OG: I’m meddling.
[00:00:18] Joe: Well, at the beginning of the show, we take fair up a notch because people that performed well beyond fair performed above the call of duty were the men and women in our armed forces, and we salute them to begin every week.
[00:00:31] Joe: So grab those mugs, stackers, ’cause it’s time to salute the troops. On behalf of the men and women making podcasts in mom’s basement and the men and women stacking Benjamins around the world, thanks for all you do. Let’s go, uh, stack some Benjamins together now this week, shall we?
[00:00:50] Doug: Thanks, everybody.
[00:01:00] opener: Nothing. Here’s your nine pence.
[00:01:01] Joe: I’m not dead.
[00:01:03] opener: Here. He says he’s not dead. Yes, he is.
[00:01:05] Joe: I’m not.
[00:01:06] opener: He isn’t? Well, he will be soon. He’s very ill.
[00:01:08] Joe: I’m getting better.
[00:01:09] opener: No, you’re not. You’ll be stone dead in a moment. I can’t take him like that. It’s against regulations
[00:01:20] Doug: Live from Joe’s mom’s basement, it’s The Stacking Benjamins Show
[00:01:34] Doug: I’m Joe’s mom’s neighbor, Doug, and Social Security is back in the news as legislators in Washington work to duct tape one of the biggest government social programs. We’ll cover that, but even better, we’ll share what’s important to know about your Social Security benefits so you can maximize your money and avoid some common mistakes.
[00:01:54] Doug: And that’s not all. You know what else we’re gonna do? I’m gonna wow you with some of my money-themed trivia. So buckle up, buttercup. And now two guys who are only podcasting so they can get out of mowing the lawn, it’s Joe and oh, J- J- J- G.
[00:02:19] Joe: Hey there, Stackers. And you know how difficult mowing the lawn would’ve been last week if we were further north, OG, than Texarkana? It would’ve been wild. I went to visit my sister and, uh, it was, uh… T- talk about middling. It was a little, little overcast there from all the fires.
[00:02:38] OG: Yeah, thanks, Canada.
[00:02:42] Joe: There, there goes Canada again.
[00:02:44] Doug: Can we just get, like, a big ceiling fan to exhaust all the…
[00:02:48] Joe: That’s all Canada had to do was get some fans, put them up. Yeah. We could have actually even done that at the border. Oh, welcome back to The Stacking Benjamins Show, everybody. We have a great show on tap. We haven’t talked about Social Security in a long time, and, uh, the reason we’re addressing it, Doug, as you mentioned, there’s some new legislation out around Social Security.
[00:03:08] Joe: So I think that is a good signal to go, you know what? We should talk about not really what government’s doing, although we will dive into that a little bit, what’s on the table, but in the second half of today’s show, we’re also gonna do the more important thing. Regardless, what should you do to make sure you don’t make some of the common mistakes a lot of people make?
[00:03:28] Joe: ‘Cause man, people making mistakes all over Social Security. So we’ve got all that and more on today’s episode, but first we have a few sponsors who help us keep on keeping on. Let’s talk first about Scout. Scout is in all of our guides. You know, benefits, open enrollment time is coming up for a lot of companies around the world, and Scout will help you take care of your benefits, as will the guide.
[00:03:56] Joe: We’ve got a very quick checklist at the front of every guide that if you do these things, you’re gonna avoid many of the common mistakes. But we have guides to your benefits, your taxes, and college planning. Talk about… That’s also coming up here as, uh, another group of students become freshmen at colleges and universities.
[00:04:18] Joe: Why trust AI versus the wisdom of a team that’s been doing this for over 55 years collectively? We cover your benefits, your taxes, college planning. Stackingbenjamins.com/guides gets you Scout, where you can look up your exact question, and Scout will give you the answer specifically from the guide so there isn’t any of this hallucinating that we hear out of social media.
[00:04:41] Joe: Educate yourself. When you’re ready to learn more as well, stackingbenjamins.com/guides. We got a couple more sponsors. We’re gonna hear from them, and then, OG, Doug, and I getting into the Promise Act. What’s that all about? We promise we’re gonna talk about it in just a minute
[00:04:58] headlines: Hello, darlings. And now, it’s time for your favorite part of the show, our Stacking Benjamins headlines.
[00:05:05] Joe: All right, guys, I was reading this, uh, CNBC piece last week. Reporter Lori Konish talked about big moves in Social Security, potentially. It’s called the PROMISE Act, and I thought immediately, Doug, I thought, “Oh Congress is promising to do something finally.”
[00:05:25] Doug: And they always follow up on that. They’re good for it.
[00:05:29] Joe: Promises from Congress, those are- Yeah … those always happen, yeah. But that’s not actually what the bill is. It’s a promise to fix Social Security something different. The latest Social Security trustees report says the retirement trust fund used to supplement payroll taxes, well, that’s projected to run short around the fourth quarter of 2032 if Congress does absolutely nothing.
[00:05:52] Joe: They’re pretty good for that, Doug.
[00:05:56] Doug: You’re asking me? Doug, what are your thoughts? Do you think Congress does a lot and works really hard? Yes,
[00:06:03] Joe: Joe. But if Congress does absolutely nothing, the system could pay only about 78% of scheduled retirement benefits. So Congress has a problem. Well, it’s all of our problem, right?
[00:06:14] Joe: Here’s what’s interesting. The PROMISE Act doesn’t tell Congress how to solve it. It creates a process that a group of Republicans and Democrats have agreed on could lead Congress on the way how to fix it. It’s a process to force Congress to debate and vote on solutions. So today we’re gonna spend a few minutes talking about what the process actually looks like, but then we’re gonna spend most of our time talking about something even more important, how you can maximize your own Social Security benefits.
[00:06:44] Joe: So OG, I think this is where people are getting confused. People hear Social Security Reform Act and immediately think Congress has decided what they’re gonna do, but that isn’t what this bill says. It actually says, “Hey, we’re actually gonna finally take this seriously.” You and I, we’ve been talking about Social Security for the past, what, 14 years that we’ve been on?
[00:07:02] Joe: And 14 years later-
[00:07:03] OG: This isn’t the government taking it seriously …
[00:07:05] Joe: you don’t think so? We got Republicans and Democrats saying we
[00:07:09] OG: have to take this seriously. Co-sponsored by half the people… Hold on, co-sponsored by half the people who are retiring at the end of this term, who want to be able to say, “Oh, I did something for Social Security.”
[00:07:17] OG: You’ve only had 25 effing years to do something about it, and so now you’re going to pass a… Well, it’s, it’s so f- early in the stage that none of this is actually gonna happen. This is, like, just some proposal by some senators, um, handful of senators, to create another government process to fix the government process.
[00:07:40] OG: Like, how frigging stupid is this? Like, I know. But how far have we gotten to this point? Here’s the s- hold on, here’s the solution to Social Security, everybody. What we really need, what we really need is another meeting. That will s- totally solve it, and if we put it in f- if we put it in writing that we actually have to have a meeting, then by God we’ll actually solve this problem.
[00:08:00] OG: What a bunch of frigging dumbasses. This is stupid. Nice
[00:08:04] Doug: job, Joe. Way to get ’em all
[00:08:05] Joe: wound up. But you don’t think the fact… Well, no, that’s good. No,
[00:08:08] OG: I don’t.
[00:08:09] Joe: That is good. You don’t think the fact that we finally ha- how many times have we reported on it even being an agenda item? We haven’t. We never do. We keep hearing about what the problem is, but we don’t even hear about it on the agenda.
[00:08:20] Joe: I think it’s a progress that at the very least we’re finally actually talking about, well, guess what? Something’s gonna have to change.
[00:08:28] OG: Yeah. I, uh, would bet dollars to donuts that, um, even the stupidity of this bill won’t pass. Like, there’s no logic behind it. Why don’t we actually spend the frigging energy, like, trying to solve the problem to begin with, as opposed to having a committee…
[00:08:48] OG: Like, I know, here’s an idea. We have this major problem, everybody. What do you think we should do about it? Well, I’ll tell you what we should do, ’cause we’re about to get the F outta here. We should force people to have a committee, and like, have… We should force them to solve it. That’s how we’re gonna solve this.
[00:09:04] OG: We’re gonna force other people to solve this when we exit stage left, ’cause we’ve only had a combined how many hundreds of years of government time to solve this problem? This is… Golly. And people wonder why they hate politicians. This is a, this is a prime example.
[00:09:19] Joe: Well, well, two
[00:09:21] OG: things- And I can’t wait to read…
[00:09:22] OG: I’ve read absolutely nothing about this, but I cannot wait to see some A-hole senator get on TV and be like, “Oh, we’re, we’re proposing this plan, and you know, if the senator from Maine would get off his ass and, like, actually come to the meeting, we could get this thing solved.” No, you’re proposing to propose to have a frigging meeting.
[00:09:42] Joe: But let’s talk about where we’re at, where we’re at in Washington, which clearly, by the way, for us, that’s not our forte. The second half of this argument is gonna be our forte, which is who cares about what Congress does? Let’s talk about what you do about it. But while we’re on this topic, I think number one, the status of Washington, that we can’t even have the discussion, number one, to have a framework to go, “You know what?
[00:10:03] Joe: We’re gonna vote on the fact that yes, we are gonna talk about this.” And then number two, this is how we’re actually gonna talk about it. I agree that if you put away the fact that we don’t talk about this at all, the fact that we’re proposing a thing that we’re actually gonna have a meeting that gives us guidelines for that meeting is ridiculous.
[00:10:21] Joe: The reason I think it’s not ridiculous is because of the fact that we don’t even talk right now. If somebody is seen with somebody across the aisle from them currently, it’s suicide. So if, if we put together a framework that goes, “Hey, I got forced into the… You, you know what? Constituents that don’t read enough about this stuff to understand what’s really going on, I was forced into the arena because of this thing, so we had to talk about it.
[00:10:46] Joe: No, guess what? This is the framework of how we had to talk about it.” So if we finally agree on the fact that A, we have to talk about it, and then B, this is the way we have to talk about it, we actually do something even more ridiculous. We finally get to the freaking table and we start talking about it, because it’s been a problem for how long?
[00:11:06] Joe: And they’re finally saying they’re gonna do something? And by the way, to, to take the stank off of, yeah, these are a bunch of people that retire at the end of their, their term. Well, why? Why? You know why? You know why they haven’t talked about it until now? I’ll give you the stank on the other side, which is if I’m gonna be reelected If I wanna be reelected and I got caught talking to somebody across the aisle about this, you know what happens?
[00:11:31] Joe: I get attacked from either the farther left or the further right. I get attacked by my own base, ’cause guess what? “Hey, Doug was talking to the guy across the street. We can’t reelect Doug ’cause he can’t be, he can’t be trusted to stay inside his own camp.” So I feel like you almost have to be a congressperson or a senator who is leaving, who’s going bye-bye, to even propose that we talk to somebody across the street, ’cause that crap ain’t happening right now
[00:12:01] OG: Be a lot easier if we just had term limits
[00:12:04] Doug: Okay.
[00:12:04] Doug: Guys, take a CBD-
[00:12:09] Doug: Big old drink of your water, and let’s get back on track here.
[00:12:13] Joe: Well, I think we are on track. I think it’s a healthy debate. I think the debate that this is ridiculous, I think OG’s 100% right. I think it is ridiculous. I also think if we look at the battleground and where we’re at now, that’s why I think this is a plus.
[00:12:27] Joe: I think it’s a plus that we’re actually gonna talk about it. Call me crazy. Let’s talk about some of the ways, though, that we’ve seen people talk about change. Some of this is … None of this, obviously, is a part of the PROMISE Act. All the PROMISE Act is, is the fact that A, we’re gonna sit down, B, we’re gonna have a meeting.
[00:12:41] Joe: Here’s the way the meeting has to go. We’re gonna shackle people to this process so that they actually have to talk about it. But let’s talk about some of the ideas. Number one idea to fix Social Security, OG, raise the retirement age.
[00:12:54] OG: Yeah, it’d be great. Totally solves the problem. I think the last data that I saw on this, don’t know where it was, so don’t quote me on it, but, um, if they change the full retirement age from 67 to 70 for people under the age of 40, so ostensibly you’ve got three decades to, you know, figure out how to cover those three years, it totally solves the problem.
[00:13:19] Joe: Which means, Stackers, and the reason why this is important for us to talk about, is not that we’re gonna solve the problem with Social Security, but because this is on the table so much, OG, I think that in your own financial plan, showing the retirement age going up could be a wise move when you’re doing your projections.
[00:13:39] OG: Well, I think for a lot of people it makes sense to plan on Social Security at age 70 anyway. But if you’re relying on it to, like, get you across the finish line at 67 or 65, uh, I think it’s certainly reasonable to … A- and you’re a young person, and by young, I mean under 40, I think it’s totally reasonable to, you know, to make some adjustments there.
[00:14:01] OG: And frankly, you have way more control over this anyway 30 years out, you know, 25 years out. Like, this is a … This seems like a, “Oh, they’re pulling the rug out from underneath me,” but, but honestly, you know, if you wanna be done at an early re- I don’t know a lot of people in our community that are pining for retirement at 67 and are gonna be frustrated by having to wait to 70 If they’re the type of people that are saying, “No, I’m, you know, I love, I love what I do.
[00:14:32] OG: I don’t ever see myself not working,” this is a non-event to you, right? Like, 67, 70, I don’t give a crap, I’m still gonna be earning income. And then secondly, if you’re on a early retirement track and you’re like, “I can’t wait to be done with work,” I don’t see a lot of people going, “Ah, early retirement. Once that bug hits at 67, then I’m totally out.”
[00:14:50] OG: That
[00:14:50] Joe: screws me over.
[00:14:52] OG: You know, it’s like you’re planning on being done at 55 or 58 or 60 or something, and so, you know, you’re having to fund that just little bit of that, um, you know, that gap potentially. That’s even if they changed it, which,
[00:15:04] Joe: you know. You’re t- you’re taking matters into your own hands is what you’re saying.
[00:15:06] Joe: You’re not, you’re not focused- Yeah … on them, you’re focused on what I gotta do. I think that makes sense. Second thing, and this has been senators on the left and the right have both said this, remove or raise the payroll tax cap. Yeah. So, so the payroll tax cap, for people that don’t know how this works, in your paycheck, when you see that FICA line, that is your payroll tax.
[00:15:29] Joe: That’s your Social Security tax, and you pay part of it, your employer pays part of it. But they’re saying to either raise or remove that. That could help fix it, OG.
[00:15:39] OG: You know how sometimes, you know, your day is going on just totally peachy keen, and then you get in a room with somebody and everything derails because of that little conversation? Like today, everything was fine. I was having my coffee, was taking care of little stuff around the house. There’s not a lot going on here.
[00:15:59] OG: Um, check my phone. I say, “Hey, I gotta record this podcast.” Okay, cool. I’ll get on, you know. And then Joe starts talking about political stuff, which drives me crazy. That’s not even the… So that, that, like, kinda pointed me in that direction. This is unrelated to everything that we’re talking about, but this is just a little insight into OG for a second, okay?
[00:16:16] OG: So then my idiot brother, this is State brother- … frigging texts me this photograph. I’m gonna show it on the screen, and I want your immediate reaction. And Doug, you in particular are gonna know how this, like, just on tilt this makes me. So whatever comes out, I, I bear no responsibility whatsoever for what comes out from here on out.
[00:16:46] OG: Do you know how ma- this makes me feel? So my idiot brother just texted me, “Hell yes,” a congratulations email from the Masters Tournament- Unbelievable … that he got picked for, for, for tickets. I have entered the frigging Masters thing- … since I knew it was a thing to enter.
[00:17:05] Joe: You think, you think-
[00:17:06] OG: And I’m gonna be effing 50 next year, and this a-hole goes like, “Oh, I’ll just check online real f- oh, hey, I’m gonna enter this thing.”
[00:17:15] OG: Eh, okay. So now he gets to now- I don’t
[00:17:17] Doug: even know what it really is.
[00:17:17] Joe: You think talking politics makes OG mad? Not getting into the Master- y- you know what’s funny, Doug? Is that if I were OG’s brother, I would totally have AI make me that
[00:17:30] OG: picture. I said that to him. I wrote him back and I said, “This is AI.”
[00:17:33] OG: And he goes, “It’s not. I wish it was.” And then he sent me another screenshot that showed that it wasn’t.
[00:17:37] Doug: Guess what he’s gonna do next. He’s gonna ask you to borrow money to pay for the tickets that he has the privilege of buying.
[00:17:44] Joe: Just
[00:17:44] OG: tell him to take it out of the money he already owes me.
[00:17:48] Joe: All right, number two was to remove the tax cap.
[00:17:50] Joe: Number three- Oh,
[00:17:51] OG: by the way, so r- removing the tax cap- Yes … I actually think that’s a probably a pretty fair idea. Um, removing is maybe a strong word. Uh, maybe increasing.
[00:18:00] Joe: Raising, yeah … ‘
[00:18:01] OG: cause right now it’s 176K, it, uh, roughly. It goes up a little bit every year, and this seems like a pretty rational thing to, to say, like, you know, I can just kinda-
[00:18:11] Doug: You gotta, you gotta explain this.
[00:18:14] Joe: Why?
[00:18:14] Doug: Tell people- Well, m- Well, tell people what’s the tax cap, why is it 176, and why should we raise it? I don’t have any idea- ‘Cause I don’t think most people know …
[00:18:21] OG: why it’s 176.
[00:18:23] Doug: Okay. It’s because some- But, but just, but tell, tell us-
[00:18:25] Joe: So we explained earlier, this is the FICA line on your- Yes … on your taxes.
[00:18:30] Joe: That number is capped. You only are, are taxed this tax up to a cap, where they no longer tax it. Now part of your income no longer goes towards Social Security. It now-
[00:18:42] Doug: Does this mean if my gross salary, let’s say, is 176,000, they cap it there? Or my salary, uh, the amount they pull out maxes at 176?
[00:18:55] Joe: No, if your salary’s 176.
[00:18:58] Doug: Okay. So if I make- Yes … 180, I’m only having FICA pulled out on the first 176.
[00:19:03] Joe: That’s right. The last- Okay … 4,000 is y- you’re skipping every day ’cause you don’t have to pay FICA- Boom … on that. Well- And
[00:19:09] OG: that’s not entirely true either. You’re skipping out on the Social Security side of FICA. You still have to pay the Medicare side.
[00:19:16] OG: Right. So sometimes they line item it together, but anyways.
[00:19:20] Doug: You’re saying raise it to 250 or something.
[00:19:23] Joe: Yes, yes. Change that number. Okay. Next up is, uh, Bill Cassidy has an idea, OG, not of giving people, privatizing your Social Security, which people have talked about before, but just having the government invest it in a diversified fund that would grow faster so that the investment returns of the Social Security money actually then does a better job of keeping pace with and maybe outpacing inflation.
[00:19:53] OG: I’m far from an expert on Social Security, but o- one of the things that I understand that it provides is it provides the government the ability to borrow money against it. It’s an asset that it’s borrowing against, which arguably has a pretty profound impact on the economy already and helps buoy the economy when needed and, you know, all that sort of stuff.
[00:20:15] OG: So if that money was no longer sitting there in cash, does that affect the government’s lending, borrowing rates, I should say? I know there’s some accounting gymnastics that happens in those accounts that’s far beyond my comprehension. But, um, I think on paper it makes a heck of a lot of sense, especially when you back test it, when you say, you know, “If I’d have just put my own Social Security money in the frigging S&P, you know, for my entire life, I’d have way more money,” which is true for most people.
[00:20:48] OG: But, um, what other downstream effects are there?
[00:20:52] Joe: Yeah. I don’t
[00:20:52] OG: know.
[00:20:53] Joe: Yeah. I think there’d be a lot of debate there, but at least getting in the room and debating it. Uh, so let’s play a game Doug …
[00:21:02] OG: is OG pissed or not
[00:21:03] Doug: pissed? Yeah, whenever- … it’s a game, I get put under the interrogation spotlight.
[00:21:08] Joe: We do. Are you getting the theme- Well-
[00:21:10] Joe: here lately, Doug? That Doug plays the game. All the
[00:21:11] Doug: smoke in my face.
[00:21:12] Joe: But just to make sure that everybody gets what we got, and the game is, we’re gonna call this game Is It In the Act? Is it in the act? So-
[00:21:21] Doug: So in other words, I’m the lowest common denominator, and if I get it, and everybody
[00:21:25] Joe: gets it- Then hopefully everybody else gets it If not, then we’ve gotta…
[00:21:29] Joe: ‘Cause if Doug don’t get it. All right. I’m gonna read the line and, Doug, you tell me whether it’s actually inside of the PROMISE Act, or whether it’s simply an idea people have suggested.
[00:21:39] Doug: Okay.
[00:21:39] Joe: Here we go. Round one: the PROMISE Act raises the retirement age.
[00:21:45] Doug: Nope. Not in it.
[00:21:47] Joe: It’s been proposed by a lot of people, but it’s not inside the legislation.
[00:21:51] Joe: Round two: the PROMISE Act removes the payroll tax cap.
[00:21:56] Doug: Nope. Not in it.
[00:21:58] Joe: Separate proposal. Not in it. Dude, you’re doing good. This is great. Round three: the PROMISE Act creates a separate investment fund.
[00:22:08] Doug: No.
[00:22:09] Joe: Not in it. Not in it. Senator Cassidy’s idea. Round four: the PROMISE Act creates a process requiring- Yes
[00:22:17] Joe: Congress to debate and vote.
[00:22:19] Doug: Yes.
[00:22:20] Joe: Bingo. ‘
[00:22:21] Doug: Cause that’s what- Round- … they’re really good at. Is setting up processes to talk about processes.
[00:22:27] Joe: But the fact that we haven’t even gotten that far.
[00:22:30] Doug: Right.
[00:22:30] Joe: We’re actually that far.
[00:22:31] Doug: Well, and here, the reason I was so qui- well, let’s just finish the game, and I’ll tell you why I am doing well so far.
[00:22:37] Joe: Round five: the PROMISE Act, we didn’t talk about this one, it’s the first one we didn’t talk about, requires recommendations aimed at 50 years of solvency for Social Security.
[00:22:49] Doug: Yes, it’s in there.
[00:22:50] Joe: It’s in there. It is in there. You can’t talk about it unless it’s gonna solve the problem for at least 50 years.
[00:22:56] Joe: Bonus question. We got one more. This is for extra credit, Doug, ’cause you got 100 on this deal, so let’s see if you can raise your overall score on the entire season. Your idea, is this in there, your idea of paying Social Security with scratch-off lottery tickets. Is that a part of the act?
[00:23:14] Doug: Despite all of my letters to my, to my congressman, no, it did not
[00:23:19] Joe: make it.
[00:23:19] Joe: And, and Stackers, you thought, you thought OG was angry earlier? Every time- Yeah … Congress doesn’t answer the scratch-off idea. The scratch-off idea- I lost my shizzle … in fact, we didn’t even talk about it earlier today, Doug.
[00:23:30] Doug: The reason that I was so quick to say yay or nay on all of your questions, and I was right about it, is because all of the first three that you- offered and three out of the four that you offered up were all very definitive changes.
[00:23:48] Doug: And this is such a third rail in politics that nobody wants to be that black or white or that definitive in recommendation. It’s too risky to do that. And so it’s easy to take a guess on whether or not those things were in or out of this bill.
[00:24:04] Joe: It’s so frustrating. But I love this because now we’ve separated the process from the possibilities, and the PROMISE Act is just about process.
[00:24:12] Joe: And I, I tend to agree with OG. All right. Probably not going anywhere, but the fact that we’re talking about it- You know what
[00:24:17] OG: process I wanna talk about? Is the process for getting 30 straight years of rejections from the Masters. Like, what… That is the thing we need to investigate.
[00:24:29] Doug: We- welcome to short attention span theater, ladies and gentlemen.
[00:24:34] Joe: Okay, we spent enough time talking about Congress. They certainly have work to do, but let’s talk about us, Stackers. If somebody listening today is maybe gonna s- get Social Security in the future, what should they start doing today? First thing, OG, create an SSA account
[00:24:52] OG: Yeah, I mean, if you’re working and you have any work history, which is, you know, you got a W-2 or you get a paycheck, like legitimately, you need to, um, you need to make sure that that’s being recorded correctly.
[00:25:04] OG: For those of you who have been working for a while but haven’t created this login yet, it’s also a fun trip down memory lane. Go back and be like, “Oh man, in ’96 I made $1,800.” Right. Like, what were you doing in ’96? Like…
[00:25:16] Joe: Well, and that is the important thing, ’cause that memory lane could be, could have discrepancies.
[00:25:21] OG: Well, good luck trying to remember what the real number should have been in 1996, but-
[00:25:25] Joe: Sure, right …
[00:25:25] OG: you should check it every year, you know. Right about this time, kind of in the summertime I think is when they mo- mostly post your prior tax year information, so while it’s fresh you should double-check it.
[00:25:36] Joe: And the key here is to get comfortable with, uh… Well, before I even say that, people are wondering, “Well, wait a minute, how do I create this?”
[00:25:43] OG: Yeah, it’s just an id.me login, ssa.gov, and it’ll walk you through it. It’s pretty straightforward.
[00:25:50] Joe: Yep, id.me is, is where you go. And the calculation, though, you wanna start getting comfortable with, okay, how is Social Security calculated?
[00:25:59] Joe: It’s a 35-year calculation. Can you go into that, OG, a little bit?
[00:26:04] OG: Absolutely not. No human person can calculate this.
[00:26:08] Joe: But it’s based on 35 years of work experience, I think is the point.
[00:26:12] OG: Well, it’s based on, it’s based on your top 35 years of work, and it’s indexed for inflation, except for years ages 60 through 67 or 60 and beyond, which is just the actual number.
[00:26:25] OG: The important thing to remember is this: if you’re looking at your Social Security estimate, let’s say you’re 45 years old, and it says, you know, “Hey, we estimate your Social Security as gonna be $2,200 a month,” da, da, da, da, da, what they’re assuming with that estimate is that you continue working in the same capacity, plus a little inflation, until you get to that age.
[00:26:46] OG: So if you’re like, “I’m 45, but I’m gonna retire when I’m 52”- You’re probably gonna have a bunch of zeros that get factored into that calculation that aren’t factored into their estimate. So when you see, when you see online that it says your estimate’s 2,200 bucks, and you’re, you know, 63 years old, it’s like, okay, that’s a pretty legitimately close number.
[00:27:09] OG: If you look at it, it says 2,200 bucks and you’re 41, but you’re planning on retiring at 55, well, you’re gonna have 10 years, 12 years, maybe 15 years if they go to 70, of zeros against that 35-year calculation because, you know, I mean, you probably haven’t worked 35 years total in your life yet. So understand that that number, and there’s really not a f- process, at least that I’m aware of, to be able to go in and estimate your earnings in the future to say like, “Well, let me plug in a bunch of zeros to see what it does.”
[00:27:41] OG: You’re just gonna have to know that that number’s BS by some order of magnitude.
[00:27:47] Joe: Yeah. If you’re an early retiree, you throw a lot of this out the window, a lot of what it tells you when you go to the, go to the website.
[00:27:53] OG: Yeah, 100%.
[00:27:55] Joe: You spent decades earning Social Security. You wanna make sure Social Security knows that you earned it.
[00:28:00] Joe: You wanna make sure that the numbers are right. I like the idea, love the idea of going in there once a year. All right, when we come back, we are going to talk about claiming mistakes. We’re gonna talk about some of the gotchas that people get caught by when it comes to Social Security. But before we get to that, Doug, you’re gonna help people impress their friends and neighbors with maybe the most, uh, hard-hitting part of the show, your trivia segment.
[00:28:24] Doug: That’s right, Joe. Hey there, stackers. I’m Joe’s mom’s neighbor, Doug, and today we’re talking about stacking money, which reminds me, there’s one financial advisor who’s been asking the same question since 1940. “Eh, what’s up, doc? Your expense ratio?” On this day, one of America’s greatest smart alecks officially made his debut.
[00:28:45] Doug: So riddle me this. What famous cartoon character first asked, “What’s up, doc?” I think I nailed that impression.
[00:29:00] Doug: Hey there, Stackers. I’m carrot lover and guy who took a wrong turn in Albuquerque and ended up in a basement, Joe’s mom’s neighbor, Doug. Mel Blanc was the voice of a bunch of cartoon characters, including today’s birthday boy who said, “What’s up, doc?” But before I tell you who said that famous line, there’s actually some cool money stories here.
[00:29:21] Doug: Most people assume the guy behind all these voices must have become fabulously wealthy from the character, but not exactly. Mel Blanc voiced not only the character to today’s question, but also Daffy Duck, Porky Pig, Tweety, Sylvester, Yosemite Sam, OG, and a whole cast of Looney Tune characters, yet he never owned the rights to any of these characters.
[00:29:44] Doug: According to biographical accounts, he never made more than about $20,000 in a single year from Warner Brothers, despite being the voice behind many of its biggest stars. But it’s not all bad. What he did negotiate was something almost unheard of at the time. After Warner Brothers turned down his request for a raise, Mel Blanc asked for, and got, an on-screen credit that read, “Voice characterizations by Mel Blanc.”
[00:30:10] Doug: That credit made him one of the first voice actors most audiences actually knew by name, and it helped launch decades of additional radio, television, commercial, and voiceover work. So here’s today’s money takeaway. Sometimes the most valuable thing you can negotiate isn’t a bigger paycheck, it’s building a personal brand.
[00:30:29] Doug: But that brand was built primarily on the guy who said, “What’s up, doc?” And that was, of course, Bugs Bunny. Happy birthday, Bugs. And now back to two guys who are nearly as good-looking as Yosemite Sam and Daffy Duck, it’s Joe and OG.
[00:30:46] Joe: Thank you, Doug. And by the way, you’re the one that alerted me to the fact that Acquire podcast now is diving into another four hours, this time on Walt Disney.
[00:30:56] Joe: But Walt Disney had a similar problem early on in his career. I didn’t know that all of his animators got stolen. Yeah. Uh, he, he didn’t own the rights to the first, uh, to Oswald the- Right … rabbit. And, uh, so when he created Mickey Mouse, he made sure at the end of his shorts it said Walt Disney on the end.
[00:31:14] Joe: So when people tried to do it again, which they did, they stole his animators, everybody’s like, “No, no, no, I want the, I want the Walt Disney one.” So people wanted Mel Blanc. They’re like, “I want, I want Mel Blanc.” Yeah. Yeah. Pretty interesting. Make sure that you keep control of your assets. Well, let’s talk about one thing.
[00:31:32] Joe: Congress, we talked about in the first half of today, has plenty to figure out. OG’s not gonna figure out that. He’s gonna figure out the sy- another important system, how people get into the Masters. But let’s assume none of us is heading to Augusta, Georgia or to Washington this afternoon, and look at what we can actually control.
[00:31:49] Joe: And the question everybody asks, OG, this is the first question you hear people ask all the time, when should I take Social Security? And I have a feeling that might be the, the wrong first question. Is when should I claim actually the first question or where we head first, OG, when it comes to Social Security?
[00:32:07] OG: Ultimately, all of this kind of just boils down to your individual financial plan. The way that I evaluate Social Security from a planning standpoint, or the way that I encourage people to think about this is, it’s one of the buckets of money that you have, right? So you have this bucket of money that’s your Social Security bucket.
[00:32:24] OG: You have a bucket that’s your IRA. You have your 401brokerage account, real estate, whatever. Like, you have all these different buckets of money, and now you have to figure out the best way to take the money out. Let’s say that you’re gonna retire at 60. You can claim Social Security as early as 62 with a pretty substantial discount, you know, a reduction in benefits for your entire life.
[00:32:44] OG: And so you’re drawing from that bucket versus drawing from another bucket. Or you can wait on this bucket and draw from this bucket. It’s just all about the timing of what’s going on, you know, and l- like what the balances are in those different, in those different places and what the flexibility is. You know, there’s plenty of people out there who have limited resources in, you know, IRAs and 401s and that sort of thing, and it’s like, “Well, the only way I can actually retire,” especially since, as we’ve reported before, the vast majority of people retire before they’re ready because they get retired, right?
[00:33:16] OG: You know? Yeah. Yeah. The, the majority of people are like, “I’m p- I’m gonna work till I’m 65,” and then they have a health issue or lay off or something. They’re 61. If you’re in the situation where it’s like, well, I mean, I get that the optimal way to do it would be to do A, B, and C, but those aren’t the cards I’ve been dealt.
[00:33:33] OG: Well, then you just gotta play the game that you’ve been dealt, right? Which may be, “I have to take this at a suboptimal way because this is the only way that my plan works.”
[00:33:42] Joe: Yes. Then question number one might be, “Oh, gee,” then it might just be, “Do I need the money right now?” Yes, these other buckets aren’t ready, so I gotta have the money.
[00:33:49] Joe: Yeah. I gotta have this money right now. Even though I understand it might be suboptimal, I might wanna wait to get a bigger chunk, something in the hand now beats having, uh, you know, a bunch of money I can’t get to. I
[00:34:01] OG: think you have to evaluate your relationship status, like, you know, and I don’t mean, like, status in terms of like, are we gonna make it?
[00:34:08] OG: But more like, you know, is-
[00:34:09] Joe: Are you married?
[00:34:11] OG: Yeah. Are you married? Like, the health and wellness of your family. Again, you can be super healthy, you can still have an accident. You know, you never know what’s gonna happen. And put in your plan your spouse’s benefit pool themselves and how that kind of layers into it as well.
[00:34:28] OG: I mean, if you’re fortunate to be in a situation where you’ve worked hard and you’ve got money in all these buckets and you’re, like, literally just saying, “What’s the most optimal way?” I would present this as an idea for you. I would say you’ve got one bucket that has an account that is gonna grow at a varied rate of return, right?
[00:34:45] OG: So you’ve got your IRA, it’s invested, it’s gonna do whatever it does. Some years it grows by 30, some years it grows by negative 20. You have no control over that. You have another account that’s gonna grow at roughly 8 to 10% a year, virtually guaranteed until, you know, you’re 70. Well, which one of these do you want to keep growing for the foreseeable future?
[00:35:04] OG: Well, if you’re looking at it in the last 10 years, you’d say, “Well, I would want the S&P bucket to be there growing and compounding at 20-odd percent.” But if I asked you about the next 10 years, say, well, if you’re 60 today or you’re 62 today, and you’ve got one bucket that can grow at 8% a year guaranteed for the next eight years, I think you might want to let that one be, right?
[00:35:27] OG: You’ve got a pretty good return that’s gonna sit there and do its thing. I know it’s a simplistic way to look at it. It’s not exactly accurate. But it gives you a sense of what the difference is between claiming now versus, versus waiting until, you know, you’re 70 to do it.
[00:35:42] Joe: Yeah, ’cause the one thing that you did walk through was health, and obviously, if I pass away at an early age and I didn’t take that bucket, it’s not like the IRA bucket where somebody’s getting the whole bucket.
[00:35:53] Joe: Somebody might, a relative might, your spouse will get a portion of that Social Security m- money that you didn’t take. But if you’re not married and you end up deciding to wait on that bucket, it might never happen for anybody.
[00:36:08] OG: That’s, that’s the game we all play.
[00:36:10] Joe: Well, gee, we have these three different ages that we hear about with Social Security all the time.
[00:36:15] Joe: We have age 62, you mentioned is the earliest age we can get it. We have a full retirement age, and that depends on when your birthday is when that occurs. Or we’ve got age 70, right? So is… Y- you mentioned 8 to 10%. Does it grow at a different rate between 62 and our full retirement age than it does between full retirement age and 70?
[00:36:36] Joe: Or is that a straight line continuum all the way through?
[00:36:42] OG: Well, I’ve never thought of it that way. My guess is, is that it’s more of a curve because of the amount of money that you’re giving up by claiming early. So it’s not so much that it’s growing as it is that you’re not getting penalized. Mm-hmm. And the penalty is most profound the earlier that you go, and then it’s scaled in terms of how much.
[00:37:05] OG: It’s five-ninths of a percent per month that you claim it early from your full retirement age, and so that’s linear. But where it becomes a little bit more of a curved outcome is the earlier you take it and the longer you live So if you take it very early and you live a long time, you’ve given up lots of these little bits of percentages for a long, long, long, long, long time.
[00:37:31] OG: Versus waiting until your full retirement age where there’s no penalty, or waiting until you’re 70 where you earn credits for waiting, even if you have that for a shorter period of time, you know, if 62 versus 70 is eight years shorter, if you lived to the same age, generally speaking, the break even for most people is around age 79 to 80, 81-ish, somewhere in there.
[00:37:54] OG: But once you factor into the equation your surviving spouse’s benefit, so if you just use the standard situation, which there’s no stank on this, this is just how it’s been, the man works, the woman stays at home, right? That’s the standard baby boomer scenario that we can describe. Also, generally speaking, the man dies soon and the w- and grandma lives forever, right?
[00:38:22] OG: If that’s the case, and you add in the fact that the husband’s gonna die and then the wife’s gonna live some number of years beyond that, the benefit of waiting and ensuring that your spouse, surviving spouse, gets the greater of the benefit, statistically that’s the man who dies and then the woman who lives a little bit longer, it’s a pretty big difference in lifetime income.
[00:38:44] OG: But the reality is, is that you don’t spend lifetime income at 63 when you get canned from your job. So again, back to my original point about this, you can have the greatest plan in the universe at 51, but then just life is life at 62.
[00:38:59] Joe: The old Mike Tyson quote.
[00:39:01] OG: Yeah.
[00:39:01] Joe: Everybody has a plan.
[00:39:03] OG: Until OG punches you in the face-
[00:39:04] OG: then you have a plan.
[00:39:06] Joe: So waiting till 70 can pay these big dividends. But let’s take what some people might be thinking, “OG, all right, I don’t need the money at 70. I’m gonna wait till 72. I’m gonna wait till 73.” Like, I’m gonna wait longer. Why not wait past age 70 then?
[00:39:23] OG: Well, that’s just simply not an option.
[00:39:24] OG: They will start sending you money. Yeah.
[00:39:26] Joe: Yeah, you don’t get any more credits. There’s no such thing as
[00:39:29] OG: more credit. 70 is the latest you can, can. Yeah. The other thing I will tell people, too, about Social Security which is really interesting is if you still owe the government money when you go to file for Social Security, they will take it from the Social Security.
[00:39:42] Joe: Well What about tax strategies and, and Social Security? Is there any timing I need to think about with my taxes when it comes to how I take my Social Security payments?
[00:39:52] OG: Well, mostly has to do with your earnings. So if you’re taking Social Security before your full retirement age, you’re limited in the amount of money that you can make, in a sense.
[00:40:02] OG: You can do whatever you want, you’re just gonna be paying back Social Security for the amount of money that you earn over a certain amount. So really, you wanna think about that early retirement claiming or early Social Security claiming, that 62 to 67 period, as, like, worst case scenario. Because generally speaking, if you’re still working, you don’t want to also claim Social Security ’cause you’ll probably end up paying it back.
[00:40:26] OG: Um, it’s a really low threshold. Off the top of my head I can’t remember the number, but it’s, it’s something really small. Yeah. 25 to 30K, uh, of earnings, and you start paying back the Social Security that you received-
[00:40:38] Joe: So- …
[00:40:39] OG: basically …
[00:40:39] Joe: so if you decide to take Social Security at 62, and you’re still doing some work at 62, you have a penalty on top of just throwing back money.
[00:40:50] OG: Yeah, I mean, essentially how it works is you’re limited in the amount of money that you can make, and then for every dollar above that amount that you make, you know, gets credited back to your Social Security, and you also have to pay back. So it’s like it never happened, but it’s a big mess. Yeah. So if you’re still working in 62, just kind of cross off Social Security off your list.
[00:41:11] Joe: There’s a piece that truly isn’t a tax, but I think people think about it like a tax, which is this surcharge, which we can get added to Medicare Part B and Part D premiums. Does Social Security have anything to do with this IRMAA? They call it IRMAA surcharge. Can it affect our surcharge?
[00:41:31] OG: Well, it’s part of your income, so yeah.
[00:41:32] OG: I mean, ultimately, your total income is your total income. If you have Social Security, and you’re working, and you took a big IRA distribution or did a Roth conversion, all that shows up on your tax form, and then that, that affects your, uh, Medicare. ‘Cause your Medicare premiums are effectively means tested, right?
[00:41:53] OG: So people that have more money pay higher premiums.
[00:41:56] Joe: More means. More means.
[00:41:57] OG: Yeah,
[00:41:57] Joe: yeah. What’s another place where people get it wrong when they’re taking Social Security or thinking about their Social Security benefits and how they take them?
[00:42:05] OG: I would say that the biggest thing that happens for most people that make mistakes in Social Security is the combination of planning for taking it later, drawing down their portfolio intentionally, saying, “Hey, from 62 to 70, I’m intentionally gonna leave this bucket alone,” ’cause OG said, “Hey, this is a good 8, 10% bucket.
[00:42:25] OG: I’m gonna leave that be. I’m gonna intentionally draw down my portfolio so that at 70 I’ll switch.” And then they don’t switch. Then they turn on Social Security at 70 and keep spending from their other bucket at the same rate. And so people, because it’s a long period of time from that decision to the execution, they forget the rationale of the decision.
[00:42:46] OG: And so go, “Oh, it’s 70. Oh my gosh, this is great. I get, like, another four grand a month to spend. Hell yeah. Like, let’s go.” And it’s like, no, no, no, no, no. That’s the 50K a year that you’re not taking from your portfolio anymore. That was the plan. The plan was draw 50K for the next 10 years from your portfolio, stop, draw 50K for the next 10 years from your Social Security, you know, and then add the inflation that you need to, to top it up.
[00:43:12] OG: What we see happen a lot is they’ll do that 50K, limit themselves, do, do what they’re supposed to for the first 10 years, and then Social Security kicks on. It’s like, “Oh, finally. I get to do all the stuff I wanted to do.” And it’s like, well, now you’re drawing from both buckets. You’re gonna run out of this IRA one.
[00:43:28] OG: That’s probably the biggest cautionary tale is not, not remembering what the strategy was a decade ago.
[00:43:34] Joe: Everything we’ve talked about, I mean, you did talk about spousal scenarios. Besides that, everything we’ve talked about has been for whether you’re single, whether you’re married. But let’s talk specifically married people for just a few minutes.
[00:43:47] Joe: If you’ve got two people retiring at the same time, would it make sense strategically to think about these, taking them in unison? Or is there an upside to maybe taking one first? Like Cheryl and I, we look at our two numbers. Hers is bigger than mine ’cause I’ve been self-employed my whole time, so okay, we turn on Joe’s early to get a little extra income.
[00:44:06] Joe: And then when Cheryl’s comes around, bam, we get the bigger hit to, uh, offset that. Or maybe twist that around, get the bigger hit up front, and then, you know, Joe gets his later.
[00:44:16] OG: I just wonder what it’s like to actually be of age to be thinking about these decisions.
[00:44:20] Joe: There it is, Doug. Like
[00:44:21] OG: someday.
[00:44:22] Joe: People don’t know that before we even hit record, Doug’s like, “We’re gonna, we’re gonna hear this,” and it took him- We’re gonna
[00:44:27] Doug: take a beating on this
[00:44:28] Joe: one, Joe
[00:44:29] Joe: took him almost 45 minutes to get there.
[00:44:30] OG: I waited. I had to wait for the right opportune time.
[00:44:32] Joe: He did, yes.
[00:44:33] OG: Um Which is so weird ’cause Cheryl’s like 41, so I don’t understand how, uh- That’s
[00:44:39] Joe: right …
[00:44:40] OG: I don’t know why she’s thinking about Social
[00:44:41] Joe: Security. She likes the older men. And, and Cheryl likes you even more.
[00:44:43] Joe: She already did. I
[00:44:44] OG: know. I know. Now she- She already likes me more than everybody here. Um- That’s … no, I mean, it definitely goes into consideration. When you have two, two, uh, you know, a couple, um, same age, different age, different earnings history, different benefits, different timing, all of that has to be factored into your decision for how and when and who and all that sort of stuff.
[00:45:06] OG: There used to be a lot of really fun planning, gaming the system strategies. Most of those have largely gone away now or been kind of, um, um, what’s the word I’m looking for? Phased out, you know. Like- Yeah … like I said, well, once you’re this age you can’t do that anymore. Gone. So you guys are young enough that, um, in theory, those have been, uh, phased out.
[00:45:25] OG: Nice, Joe. Wow.
[00:45:27] Joe: But you’re saying there is some efficacy in thinking about not taking them at the same time, about, you know-
[00:45:32] OG: Well, perhaps … one takes
[00:45:33] Joe: one here. I
[00:45:34] OG: mean, you know, if you’ve got a spouse who has higher earnings, a lot of people say, “Well, I get half of my spouse’s.” It’s not entirely true. It’s a shorthand way of saying it.
[00:45:44] OG: Basically, you get all of yours and whatever is necessary to top you up to half of your spouse’s. And so if you think of it that way and recognize, well, I can take mine whenever I want, and then, you know, my spouse claims theirs when they want or when it’s advantageous, and then I get a little top-up. And the ages matter, who’s older, how much older or younger, you know, and like where that comes into play.
[00:46:07] OG: So I wouldn’t wander into the Social Security office or wander online to the Social Security page, ’cause you do most of this online now, you know, the day after you retire and go like, “All right. Let’s get this Social Security all squared away. Ooh, a lot of choices. Honey, which one should we pick?” You know, like, this, this probably requires a little bit of thought ahead of time.
[00:46:30] Joe: Do the survivor benefits work similarly? Uh, Cheryl passes away, then I get half of hers?
[00:46:37] OG: In a couple, um, spousal relationship, the s- spouse who survives gets the higher of the two. Whoever survives, you, you don’t get both, you get the higher of the two. So, you know, in your case, if Cheryl’s got a higher Social Security benefit than you, she predeceases you, you would get a, a step, y- like a top-up basically to be the full amount of whatever hers was.
[00:47:01] OG: If she passes away, or if you pass away before her, yours just goes away. She just keeps with hers.
[00:47:08] Joe: And then, uh, I wanna ask about divorce, because let’s say that somebody married and then gets divorced from a person, remarried to somebody else, does that affect it?
[00:47:21] OG: Yeah, it sure does. Um, it depends on how long you were married, it depends on what age you are when you remarry.
[00:47:29] OG: You know, same thing for widows or widowers, that, that matters, age at which that happens. Social Security, of course, um, most people- Oh, you
[00:47:37] Joe: mean for widow, for widower, widower, it matters how long until they get remarried to somebody else?
[00:47:42] OG: Yeah. That kind of thing? It can, yeah. Yeah. Or age you were when you get remarried, sure.
[00:47:47] OG: For people that have spouses that pass away early in life, there’s benefits for children to a certain age, and so on and so forth. There’s- Yeah … lots of other things for people that are in,
[00:47:58] Joe: that are in issues. And very specifically, Stackers, the number you wanna look at is 10 years. There’s a rule around, uh, if you were married at least 10 years before your divorce, you may then be eligible for, uh-
[00:48:09] OG: Yeah, it is, it’s 10 years for how long you had to have been married, and then you can use that spouse’s benefit for yours, depending on how long, depending on how old you were when you got remarried then, you know, and what that looks like also, so.
[00:48:22] Joe: And then let’s get away from people that are married, just people in general. Are there some employees of different places, OG, that might not get Social Security?
[00:48:32] OG: Th- there are some certain industries where, um, job situations where they don’t actually pay into Social Security, and you do some sort of private situation.
[00:48:40] OG: Comes to mind, uh, some teachers, some public service employees, things like firefighters and, uh, police officers potentially. Different counties and situations do it a little differently. Railroad employees are popular ones that have their own little thing But you’re probably… If you’re one of those people, you know you’re one of those people.
[00:49:01] OG: Yeah. And if you worked 40 quarters, which is basically 10 years of work in the Social Security system, like you’re still getting something. But you just have a bunch of zeros for the time that you were in your other career, so… And then there’s an offset depending on how much you get from the other.
[00:49:19] OG: Anyway. You know you’re a unique situation if you’re one of those people.
[00:49:23] Joe: That’s a big thing I wanted to point out because there were huge changes i- in January of 2024. So if you got… If you were people in one of two groups, and again, you’ll know who you are if you hear these. If you don’t understand what these letters mean, then it doesn’t apply to you.
[00:49:39] Joe: If you were eligible for WEP or GPO, those rules changed. Time to go revisit all this. All right, Doug, back to you then, man. Before we say goodbye, it’s time for Doug’s test.
[00:49:52] Doug: Oh, super.
[00:49:52] Joe: We’re gonna talk some basement myths. Is Social Security gonna disappear in 2032?
[00:49:58] Doug: Yes.
[00:49:59] Joe: No. It will not disappear. It’s gonna be a smaller number if Congress does nothing, potentially.
[00:50:06] Joe: But if Congress does nothing- It’s gone … uh, we’re looking at- It’s so gone … uh, s- 78%, able to fund it at 78%.
[00:50:11] Doug: Be afraid.
[00:50:12] Joe: Uh, number two, I should always wait till age 70
[00:50:16] Doug: Not always.
[00:50:18] Joe: Not always. But 70, OG nodded his head because I think you want to bias towards 70, but it truly comes down to when do you need the money.
[00:50:28] Joe: I should wait until 72.
[00:50:31] Doug: Well, no, ’cause they’re sending you money at 70 regardless. Yeah. Sorry, irregardless.
[00:50:39] Joe: We don’t get… We- There’s no extra credit for waiting past 70. Uh, my Social Security can never be taxed.
[00:50:46] Doug: Not true.
[00:50:47] Joe: Not true, correct. My spouse’s claiming decision doesn’t affect mine.
[00:50:53] Doug: Spouse’s claiming decision. It could.
[00:50:56] Joe: That’s correct. It is false. I’m like, is that f- The answer is yes, it could, which means that- I didn’t
[00:51:01] Doug: realize I was constrained to true or false answering
[00:51:05] Joe: conventions I should review my Social Security earnings history every few years.
[00:51:10] Doug: You should, which is equivalent to a true response.
[00:51:13] Joe: True, correct. Nice job. Good work. All right. So the CNBC story is about Congress, but as you Stackers know-
[00:51:21] Doug: Definitely going away in 2032. You heard it
[00:51:23] Joe: here first, folks Retirement doesn’t happen in Congress. It’s at your kitchen table. And after today, I hope your question isn’t, when should I t- take Social Security?
[00:51:32] Joe: I hope it’s, how do we build the smartest claiming strategy we possibly can? ‘Cause those are different questions, and, uh, a much better question than, when is Congress going to address this? Because as OG opened this up, a little fiery, Doug. He opened up a little fiery.
[00:51:47] Doug: That had nothing to do with the topic and everything to do with-
[00:51:51] Doug: golf tickets.
[00:51:52] OG: It turned into having golf tickets- … is the problem.
[00:51:56] Joe: We’re gonna go briefly out to the back porch because, Doug, I, I wanted to tell you something. We are… I am home for the next few weeks. I am actually sending out some books to people Who gave us reviews and sent them to me. Now, don’t send us a review of our show if you’re just looking for a book, but my goodness, if you do give us a review…
[00:52:17] Joe: And I know I often only review stuff when I’m not that happy with it. So if you love the show, we always are looking for other stackers to help other people with financial certainty, financial literacy, and certainly next month, by the way, we’re gonna be talking about financial action. More to come about that later on this week.
[00:52:37] Joe: We’re gonna be talking about taking action. Everybody wants financial literacy. Let’s talk about what you actually are going to do, and we’re gonna dedicate the entire month of August to financial actions. But if you leave us a review, write me, joe@stackingbenjamins.com, ’cause you’ll help somebody else, and you’ll also help me get off mom’s bad side ’cause she’s like, “This basement’s filling up with books.”
[00:52:59] Joe: People send us books, unsolicited by the way. Some people send us books because I’m prepping for an interview. Other people send me books hoping to get on the show, and, uh, the, they all gotta go. I just don’t have enough room for all these, so help me help you.
[00:53:13] Doug: You should unsubscribe from that adult book of the month club, Joe-
[00:53:16] Doug: then they’d stop sending them to you.
[00:53:18] Joe: You know, adult book of the month can mean two different things. It could mean an adult that’s, a book that’s not for kids. Or it could mean a book that’s not for kids.
[00:53:27] Doug: Yeah.
[00:53:28] Joe: That’s gonna do it for the Back Porch for today. Thank you so much for listening. We got a special week this week as we kick off financial action month next month.
[00:53:40] Joe: We are doing not one, not two, not three shows like we usually do. We got five shows this week. Dun, dun, dun. Special shows tomorrow and Thursday, yes. Da, da, da. But at the end of every show, we ask Doug what should we have learned from today’s episode?
[00:53:56] Doug: And you’re telling me I gotta do this five times next week?
[00:53:58] Joe: I said this week.
[00:54:00] Doug: This week? It’s not in my union contract. Well, Joe, first take some advice from our Social Security discussion. Find out your amounts ahead of time, pay attention to how Social Security is calculated, and file your paperwork on time and according to your plan. That way, the money is there when you need it and as you need it.
[00:54:22] Doug: Second, take some advice from OG. Learn how the Social Security system or the Masters tickets raffle works well ahead of time, just like OG’s brother apparently did, and you’ll be rewarded. Wait, that wasn’t the point of OG’s story? I should probably go back and listen. But the big lesson
[00:54:44] Doug: Don’t get excited about Warner Brothers cartoons around Joe’s mom. When you ask for seconds at dinner, she’s just gonna look at you and say, “Ipa-dee pa-dee pa-dee, that’s all folks.” Also nailed that one. Ready to celebrate financial action month? So are we. Grab your bingo sheet to play along with all the festivities in August at stackingbenjamins.com/bingo.
[00:55:08] Doug: And when we roll on Monday, you’ll be prepared. Coming up tomorrow in this special week of shows, she’s the CBS business expert and the host of Jill on Money. That’s right, Jill Schlesinger stops by, along with a woman who says companies aren’t offering the most needed benefits, and there’s an easy fix.
[00:55:28] Doug: Christy Talarico also joins us on a wild and wooly Tuesday in this special pre-kickoff week of shows. This show is the property of SP Podcast LLC copyright 2026 and is created by Joe Saul-Sehy. You’ll find out about our awesome team at stackingbenjamins.com, along with the show notes and how you can find us on YouTube and all the usual social media spots.
[00:55:55] Doug: Come say hello. And oh yeah, before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s mom’s neighbor, Doug, and we’ll see you next time back here at the Stacking Benjamins show.
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