TRANSCRIPT

Speech-to-text transcription can look a little quirky. Please excuse any grammar or spelling errors.

#53 - Q&A: Living Trusts, Social Security, and Protecting Your Retirement

Eric Blake: On today's show, we answer your questions on, do I need a living trust? If I get divorced, can I get a higher social security benefit based on the spouse's record? We have a few other interesting retirement planning questions, and I'll also touch on a somewhat rare but important topic. Children receiving Social Security retirement benefits.

Welcome to another episode of the Simply Retirement Podcast, where we want to educate and empower women. To live your retirement on your terms. I'm your host, Eric Blake. Today we have another Q&A episode. A couple of questions that we have from the Simply Retirement Podcast Facebook group. I also pulled a few questions that we got during our Women's Retirement Success webinar series.

We're about halfway through that. We had a couple of really great questions that I wanted to touch on. If you happen to be interested in checking out the replays of the first two webinars or if you wanna register for the next two. The first two we covered building a retirement income plan.

Then we did Savvy Social Security Planning for women. But if you wanna check those out or register for the next two webinars, go to www.blakewealthmanagement.com/womensretirementsuccess. In May, our topic is going to be how tax planning changes through the four stages of retirement. Lastly, there's a great Facebook group I wanted to share called Social Security Intelligence.

It's where people can go and post issues and questions about social security. I actually hop on from time to respond to questions, and there were a couple of really good questions that I thought might be helpful for our audience as well. Joining me as always to get through all the questions is Wendy McConnell.

Wendy, how are you?

Wendy McConnell: I'm good. Thank you for having me.

Eric Blake: Of course. Before we get to the questions, I wanted to just quickly say Happy birthday to my grandmother. She turned 90 years old on April 22nd. That was yesterday. I was actually with her over this past weekend, and as she says, when you turn 90 years old, you get to celebrate as much as you want.

Wendy McConnell: All week long, all month long,

Eric Blake: all week long, all month long. Whatever you wanna do, go for it.

Wendy McConnell: She calls the shots, man.

Eric Blake: She does. Mema, happy birthday. She actually does get to check out a few of the episodes. Somebody asked to help her out with that a little bit, but hopefully she'll hear this one.

Oh, good. Yeah. 90 years old and she she still not as mobile as she was, but she's still amazing. And she's still the center of the family, that's for sure.

Wendy McConnell: Great. Oh, that's so good. Such good news.

Eric Blake: Absolutely. So let's get to some questions.

Wendy McConnell: Alright, so we have a question from Elizabeth.

She says, I live in Florida. I have a will and beneficiaries on bank accounts 4 0 1 Ks and property. Should I have a trust too? I'm hearing that I should,

Eric Blake: So that is one that I would probably say I have changed my tune on just a little bit, and I would say I would thank Susan Barnett, who we had on episode 22 who did a great job of explaining why you might consider a living trust over a will.

And it really comes down to what you want. What kind of privacy do you feel like you want? Now a couple of things that she points out in her question is that she has beneficiaries on her bank accounts 4 0 1 Ks. She references property as well, but I'm not sure if that means she has beneficiaries on her property.

There are ways to do that but I'm gonna kinda go with the assumption that she's talking about beneficiaries on her bank accounts and 4 0 1 Ks. So keep in mind that the whole idea between a will versus a living trust is that a will gets probated. Which means it becomes public record. And many people, especially in the day where we've got security issues, we've got identity theft concerns, that's where Will could be troublesome.

A living trust avoids probate. And so that's where that can be definitely advantageous when you're talking about the differences between the two. Now, keeping in mind of course, that when we're talking about beneficiary designations on bank accounts or 4 0 1 Ks, those don't go through probate anyway.

So I think that really the big thing for her would be understanding what the property situation is. So if she's got a lot of properties, a lot of real estate, something maybe besides her primary residence, maybe some rental properties and things like that could be another reason why you want to think about the living trust.

So definitely always advise not providing any type of legal advice here. Just giving you some considerations. I would definitely go back and check out episode 22 with Susan Barnett. To get some better insight on which of those might make the most sense. But I think it really comes down to, do you wanna keep things as private as possible to avoid, again, identity theft after you're gone.

That's where, again, living trust could definitely be advantageous in those circumstances as well,

Wendy McConnell: because the trust would be more expensive to set

Eric Blake: The best way I've heard it explained, and I think we've had a couple of attorneys on past episodes, is yes, it's gonna be more expensive upfront.

More than likely, but it might actually save on the backend. So that's where you gotta look at the trade offs, the advantages and disadvantages side by side. And I would choose the level of privacy that you want before thinking about the cost. It doesn't mean the cost is not important, but I would always say, look at what you want to have happen.

How easy do you want it to be on your beneficiaries? Probably question number one you want to answer is, do I wanna make it as smooth as possible I have to worry about them going through the probate process or not?

Wendy McConnell: from the Facebook page, I'm already drawing widows benefits and I know now that I can also draw my full benefit along with my widows benefit.

But when I retire, does any of my widows reduce once I turn 65 or because I never paid enough to draw Social Security in my name?

Eric Blake: So this is getting back to, and we've talked about this a few different times, but this refers back to the Social Security Fairness Act, where as she was in at some point in the teacher's retirement system.

Administrator or teacher or whatever the case might be. And now again, just as a quick refresher, not only can you receive your TRS benefit, your TRS pension for work that you did not pay into social Security for, but if you're eligible for a social security benefit, whether that's a benefit on your own record, a benefit off of a spousal's record, whether that's spousal benefits or survivor benefits, you can now receive the full amount that you're eligible for.

So now that she understands that what she's worried about is there a reason why that benefit might get reduced when she turns 65? And the answer would be no. The only situation where your social security benefit might get reduced if you're below full retirement age. And 65 at this point, would be below full retirement age for anybody across the board.

So again, keeping in mind that full retirement age is somewhere between 66 and 67, depending on your year of birth. So the only reason why your benefit might potentially get reduced would be if you're still working. From what she's saying, I don't think that's probably the case, but again, just one of those things we wanna make sure we cover all the bases.

If she happened to be still working and she exceeds the earnings test, that might be a scenario where her benefit could get reduced. But as far as age specifically, there's nothing that would end up reducing her benefit simply because of turning 65.

Wendy McConnell: Okay. Another question is, what might the current administration do that will impact my retirement over the next 20 years?

Now that's a loaded question.

Eric Blake: I thought you might like this one too.

Wendy McConnell: Yeah, please tell me.

Eric Blake: So I'm gonna do my best to steer around the political part of this and talk about it more from a true retirement planning perspective. Hopefully that's okay. Hopefully I don't want step on any toes, push any buttons.

Wendy McConnell: not

Eric Blake: anything like that. So the answer to the question is gonna be, there's really no way of knowing any one activity or multiple activities that might be going on in the year 2025 that would impact you 20 years from now. However, what I would say is.

Anything that does impact you is probably something that planning could have at least minimized the impact of. So what I mean by that is right now we've seen, we had the tariffs going on, we've had a lot of market volatility, seen a lot of ups and downs on the market. huge swings both ways.

as we're talking today, the s and p is probably down about 15% ish or so. Maybe a little bit less than that. Maybe a little bit more by the time people are actually listening to this, we'll just see what happens. One of the things you want to do, especially if you're in your retirement income years, is you want to build a safety net.

You wanna have a safety net that will help you minimize the impact of market volatility. So let's talk about what that potentially means. So depending on the size of your portfolio or how, from an income perspective, how much income you're drawing from your portfolio, above and beyond social security or pensions or anything else you might have.

The best thing you can do is typically have somewhere between three to five years of income outta the market altogether.

Wendy McConnell: Okay?

Eric Blake: So that's gonna help you avoid those swings. So what the biggest thing that happens when you see go through periods of volatility like we're seeing right now, is that you have no choice.

You don't have a good place to get income or get money from other than having to sell something that has decreased in value. So you don't really want to have to sell stocks if they're down 15% or 20%. If you don't have to, but if that's the only place you can get income, your only place you can get money.

If you limited yourself, that can create a problem. So we talk about typically having at least five years in your war chest. That's the way we typically refer to it with clients and say, okay, how much do we have in our war chest? We usually want to have at least five years of income in portfolio income.

Again, social security, it's not going anywhere. There's a whole nother conversation that could be had about that and concerns about that. But from the standpoint of how do we manage your investments. Five years of income, typically at a minimum that you could get to if things really did go sideways, right?

So we think about what happened in, let's call it the financial crisis again. It took about five and a half years, end of 2007 into 2012 to kinda get back from where we were at the top of the market to the end of oh seven, to where we got back to break even in 2012. So that's kinda where that five year number comes from.

Now, you might be more aggressive, maybe you only feel like you need three years. You might be more conservative. Maybe you need seven to 10. So based that on your individual situation, what kind of buffer do you want? Because it, whenever we get through whatever this is, however long it's gonna take, there's gonna be another one right down the way, five years from now, seven years from now, 10 years from now.

So you want to be prepared going into it. So whatever the administration might do, you wanna look at your individual situation and figure out how you would handle it.

Wendy McConnell: When you talk about the five year war chest, does that mean money that you need in addition to social security or without social security

Eric Blake: Let's use a math example and say, okay, let's say we got a million bucks. We got a million bucks in our various retirement accounts, IRAs, brokerage accounts, so on and so forth. And maybe that's enough to generate 50,000 a year. Okay. So if you said, okay, if I can get 50,000 a year from my investments and I want to establish my war chest, that means I probably need about $250,000 in my war chest.

And we're talking about war chest, that means safer stuff. Some 'em out in cash, some 'em out in bonds, fixed income, things that are less volatile that aren't gonna have all the swings up and down. So actually we know the market, if we look at it on a single day, you just say, what's the market gonna do tomorrow?

50 50 chance? It's gonna be up 50 50 chance it's gonna be down. And when we're talking about certainty, we want to have more certainty Than that. Of course. So using that example, if you said, Hey, I'm drawing 50,000 for my investments to live on in retirement, I probably will have somewhere around $250,000.

Wendy McConnell: In my war chest that could get me through the next five years without having to really worry about if the market were to be down 25, 30% or whatever it might be. I'm not selling those stock assets while they're down 30%. That's not including social security then is saying not including Social Security.

Exactly. Yeah.

Eric Blake: Was a very long way to answer.

Wendy McConnell: question.

Eric Blake: Answer. I took that a whole nother direction. So yeah, so social security, because again, we assume Social security is gonna be, that's your baseline income. So if you've got whatever your fixed income sources are, so if you do have a pension, you do have social security.

That kind of establishes what your baseline income is, and then above that, what is your portfolio gonna provide? I gotcha. Your war chest consists of the withdrawals from your portfolio, not the other income sources.

Wendy McConnell: Oh, okay. now I understand.

Eric Blake: I could have done a better job of that, couldn't I?

Wendy McConnell: No. maybe I'm not understanding, but along the same lines, how do I preserve retirement funds while drawing social security benefits?

Eric Blake: So this is a, there, there's a couple different ways we want to think about this question. The first one would be the timing of your social security decision.

one of the things you have to be aware of is if you, let's say you start social security early, you start at 62 because you don't want to rely on your retirement assets for whatever reason. That's where you're, you made the decision to start early, which means you're gonna get a reduced benefit. So yes, that might preserve your assets, but that also limits your lifetime guaranteed income.

So you might want to think about that decision first is, what is the appropriate time to start benefits? Then again, when you're talking about how to preserve retirement funds, it really gets back to just like you said, very similar to what we just talked about in terms of preserving assets. It's building a retirement income portfolio, and that is very different than a retirement accumulation portfolio.

So we're talking about accumulation. You may not, you probably don't need five years in your war chest. You might still need a year or two in case you, we lost a job or something along those lines. But you don't necessarily need five years of income if you're not even taking money out. So that would be again, back to how do we structure your income portfolio around what your other income sources are.

And so in that case, again, you'd want to have, call it a five year war chest. I would also caution you to say, okay, we can't have everything. We're talking about preserving retirement funds. That doesn't mean put everything in CDs or cash or really safe stuff because the other issue is thinking about, again, I'll use my age 62.

Example of filing for social security at 62, you might still have another 20, 25, 30 years to live. So we need those retirement assets to last, and we need those retirement assets more importantly, to help you keep up with inflation.

So when you're talking about preserving retirement funds, I want you to think about saying, okay, having a war chest, but not completely giving up any future growth.

Again, we need those dollars to last. We need 'em to keep up with inflation. We need to maintain purchasing power, which is huge. And we've seen, I've seen the last handful of years, we've seen years of eight plus percent, seven plus percent inflation. Putting your money into a cd. Yes, CD rates have been better, but if you're getting 4% on a CD and inflation is 8%, you're still losing.

You're just, it's a different type of risk. And that's what I find a lot is people are willing to exchange, they don't like market risk. They're willing to give up market risk, but in return they take on more inflation risk, right? So that's one of the things you have to be aware of, is just, again, how do I structure my portfolio to provide the income that I need above what security's gonna provide without giving up those longer term earnings to help me keep up with inflation.

Wendy McConnell: So I have a longer question. Your social security, is there a certain percentage that it goes up each year?

Eric Blake: It's about 8%. Okay. Again, depending on your actual full retirement age and some other factors that would go into that, but in general it's about 8%.

Wendy McConnell: If I start taking it at 62, what is the cost of living increase per year?

Eric Blake: So the cost of living is announced every year. it is the same regardless of when you start, whether you start at 62 or 67 or 70 each year, the cost of living is going to be the same. The issue is that you're getting a cost of living added to a smaller amount, okay?

If you start at 62 Let's say your full retirement age benefit is two grand. That means if you start at 62, your benefit's probably gonna be closer to 1400 or so. This year the cost of living adjustment for social security was 5%.

Now you're getting on $1,400 versus 2.5% on two grand.

Wendy McConnell: I understand.

Eric Blake: a lifetime, over a 20, 30 year retirement life, that can make a significant difference.

Wendy McConnell: So how can annuities help one spend more in retirement and how to manage the inflation risk that comes with them?

Eric Blake: So that's a great question. And with annuities, they can be very complex. And so that's always the first part when it comes to annuities, you wanna make sure you understand the details. Now, whether that's you doing the research. Or Working with a financial advisor a financial planner that can explain those.

But make sure you have a good understanding of what the costs are, what the investment options are. 'cause they typically fall into three categories. You've got fixed annuities, which provide just exactly as it sounds. A fixed rate of return might be 3%, 4%, 5%, whatever it might be.

But it's a fixed return typically for some guaranteed period of time. So if you get a five year guarantee, you're gonna get the same rate for five years. Then you have what's called an index annuity. So that typically gives you some level of principal protection, but allows some participation in the market.

So using a simple example of an S and P 500 index, a fixed index annuity, and we'll use a 5% cap, for example. So the market goes up 10%, you'll get five. If the market goes up five, you get five. If it goes up three, you get three. But if it goes down 20, you get zero. So you might not lose anything, but you're not gonna earn anything either, right?

Then you have variable annuities, and that's very much, think of it like a basket of mutual funds in an annuity wrapper. So you can be as aggressive as you feel like you need to, or as conservative as you feel like you need to, but the value is going to fluctuate. Throughout every year. So that's the first three.

The different types. You wanna understand what your investments are in the option that you're going to go with. Then you get into different rider that provide guaranteed income. So to get to the answer of the question, in many cases, if you have a guaranteed amount of income, let's call it above something, above social security, there's studies that show that a guaranteed income helps people feel more comfortable spending.

And that's what I think she's referring to here, where you think, okay, if I've got a level amount of income, I feel more comfortable spending that rather than if I know my income could be more volatile with ups and downs of the market, I might be more hesitant to spend what I actually could spend.

So that's the first part of it. Then also, when you're talking about income, I talked about this a little bit ago in terms of preserving purchasing power. You wanna understand if you have an annuity that provides an income benefit, or if you annuitize that, that asset, you take the annuity, you give up the asset in return for an income.

Is that a flat income over the remainder of your life or does it have some level of inflation protection? 'cause again, people feel more comfortable saying if it gives me this much, it gives me a lot more income now if I don't get inflation protection, but 20 years from now. It's lost purchasing power, so maybe I've got a $10,000 annual guaranteed income for the rest of my life, but it stays $10,000 forever.

20 years from now, that $10,000 is really only worth about five, right? Just assuming it's standard 3% inflation rate. So do you think about, okay, does that mean I just need to adjust other sources of income to combat that? There are also annuities that provide some level of inflation protection.

They have cost of living adjustments that you can incorporate into those. They're increasing income benefits. So that's where annuities can play a great role. But you really wanna understand. What you've got, what you're getting yourself into, what are the costs, what are the investment options and what are the income options and is it a flat income or is it an increasing income?

Wendy McConnell: Do you think the spousal benefit will be eliminated in the future? The time period when a couple apparently could draw at 150% of one person's input. It doesn't seem prudent to pay benefits to someone that hasn't paid into the fund.

Eric Blake: There's definitely an argument that you can try to make with that.

Because again, you gotta think about that we're still under basically the same social security system that got established in 1935, and if we think back to 1935, most women did not work. So that's why the spousal benefit was incorporated in the first place. Now, obviously we know times have changed, and for the most part, most households are dual income.

So you could say, yeah. Does it, make sense to have a spousal benefit option. The issue is, again, in thinking more about our audience of women that are in that retirement phase, so many have gone through periods where they weren't in the workforce. Was that because they were a stay at home mom earlier on in their life?

Was it because they were staying at home to care for parents later in life? Whatever the circumstances are, that significantly impacts their livelihood. in many cases if there was not a spousal benefit option available. So there's so much of those variables that are still in play that I don't see it ever being a situation where they're gonna do away with spousal benefits.

I just don't think it's gonna happen.

Wendy McConnell: And women typically make less money than men.

Eric Blake: you have the wage gap. So if you're on average earning less than men your social security benefit's lower? Your pension. If you happen to be lucky enough to have a pension, it's more than likely gonna be lower.

You're gonna have lower retirement savings on average. So all those variables come into play. So I just don't see that's ever gonna be the solution to saving the social security system when there's so many other options that are probably gonna be more viable, whether that's. raising the tax rates on, how much you pay into social security adjusting the cost of living adjustments for higher earners.

extending the retirement age. I know nobody really wants to hear that. but for our audience, if you're over 55, most likely that's not gonna impact you anyway. It's gonna impact your children. Those are in their twenties or thirties. But as far as, so many other options that are gonna be more viable to solving the social security problem, I just don't see spousal benefits ever really beingaway with at any time.

In the near future, at least maybe way down the road.

Wendy McConnell: All right, another question. I'm 63 and a half. Started collecting at 62 at $1,060 a month. Spouse, FRA at 29 50. If we divorce, is there any way I can increase my amount?

Eric Blake: So I included this question because we see, and actually just had coffee with a family law attorney yesterday as a matter of fact, and we were talking about the increased rate of grade divorce.

And so the reason I included this is because this is, unfortunately, what are those decisions that I think you at least need to be aware of If you're making that decision, what is gonna be the impact on your retirement income and social security, of course being a very important part of that.

I just did a little bit of math, see if I could ballpark what her full retirement age benefit might have been, because that comes into play in this case, so the maximum that she could receive. At any point as far as a spousal benefit would be 50% of his full retirement age benefit. And that's if she filed at full retirement age, which of course she did not.

So if I estimated her full retirement age benefit, it's about $1,500, I would say, based on 1,060 that she's receiving now. If his full retirement age benefit is 29, 50, 1500 is more than 50%. So that immediately. Results in her not being eligible to file for a spousal or maybe potentially an ex spousal benefit.

So that's the first thing she has to be aware of. Also, again, the fact that she filed early, so she filed at 62 for her own benefit, she's receiving the 1,060. Even if she could file for a spousal or ex spousal benefit, it's going to be reduced from that 50% because she filed for her own benefits early.

So again, what I think in terms of what she's thinking she might be able to get just isn't gonna happen in this particular case.

Wendy McConnell: But in the reverse, if you're not planning to divorce, that's actually what we're encouraged to do is to have the person with a lower benefit, take it while the other one waits till the 70 and a half age, right?

Eric Blake: Potentially, yes. But again, that's where understanding the 50% value comes in is saying, okay, is my own benefit, more or less than 50% of my spouses. Full retirement age benefit that's critical is that full retirement age amount. So that's where strategically you might say, okay, let's say it is less, maybe it's a, let's say my benefit instead of 1,060, it was, seven 50.

There are definitely situations where you might have the lower earning spouse file at 62 if it's an income situation. There could be any number of scenarios where that might make sense. The key then, if you are staying married and saying, okay, when the spouse does file. At that point, if there's a gap, if my benefit, my personal benefit is still less than 50% of what he's getting, you then can get that increase when he files.

Oh, and again, he has to have filed for that increase to happen.

Wendy McConnell: Gotcha. But

Eric Blake: that might be a very viable strategy of filing one person filing early to get some income started, if that's needed, and then getting an increase when he actually files. But again, that delaying. Now is also not only increasing his benefit, but it's also increasing that survivor benefit, which again.

Crucial. Okay.

Wendy McConnell: Another question is, my mom was told she is two quarters short of the minimum. She worked to be able to collect social security. The social security years were before she worked for the school district teaching for 36 years. I think she has been retired from the school the last five years.

She's 70. She would like to know if she works for two future quarters, can she then file for social security? She mentioned that somebody may have told her you have to have 10 years in.

Eric Blake: Yeah, so I think back to the Social Security Fairness Act, that's what they're referring to here. So in her case, she's short, so she doesn't have her full 10 years.

And this is really, it confuses a lot of people. And again, a lot of women face these issues. whether it's because of being the workforce for caregiving, going back to school, whatever the reason might be, and not realizing, thinking that it's gotta be the 10 most recent years. And that's just not the case.

It does not matter when you earn those 10 years. Early in your life, later in your life spread out. You work a year, take off a year, work a year, take off. It doesn't matter as long as you get those 10 years. So again, we don't know, the marital situation, if there's any potential survivor benefits or spousal benefits, but that would be really critical to know as well.

But yeah, if she's two quarters short, so in 2025, an earnings quarter is $1,810. So if she earns $3,620. This year or next year, whenever she might decide to work that would get her to that 10 full years of eligibility and qualify her for a retirement benefit. In addition to, in her case, TRS.

So that's really where, before the Social Security Fairness Act, it probably wouldn't have made sense for her to do that. But now that's been eliminated, yes. If she works those two extra quarters, she's gonna now get whatever she might be eligible for from Social Security on top of whatever her TRS amount is.

Wendy McConnell: Okay. So you're saying 10 years, but at the same time you're talking amounts. So is it based on years or the amount of money?

Eric Blake: So it's based on quarters, so the most you can get is four quarters in any particular year. So even

if she earns $7,500 in a month's time. She still only gets four quarters. Okay? So she might earn, take a job making $20,000 a year doing whatever it might be. You could still only get four quarters in any one particular calendar year. So that's where you gotta look at how you qualify for a quarter.

You have to earn $1,810 in earnings to get one quarter.

Wendy McConnell: Okay?

Eric Blake: You have to have 40 quarters. I know that it's always referred to as 10 years, but it's really 40 quarters. the easier way to look at it.

Wendy McConnell: This is why I have a financial advisor.

Eric Blake: Yes.

Wendy McConnell: Alright. A couple of questions about grandparents.

What happens with survivor benefits for minor children when grandparents are the custodian?

Eric Blake: So this is a I want to throw this in here because it's there's a tax advisor that we work with, AKA also my mom that, but she came across this issue and so it's from time to time and she'll email me and say, Hey, I came across this situation.

Not sure exactly what to do about it or what their options are. So it's a situation where unfortunately it happens probably more often than we all realize, where, it's a grandparent that is taking care of their grandchildren now because parent passed away or whatever the circumstances might be.

And what's interesting is that the child themselves, if it is a situation where a parent passes away, they could actually be eligible for a survivor benefit based on that parent. Even if the grandparents are taking care of it. So that's the first part. And because depending on the circumstances, that might be very valuable in helping provide care for that child.

So that's the first part there is the potential that could be a source of income. Then we get to the situation where children can actually be eligible for retirement benefits based on a parent or a grandparent's record. So if parent, if the children later in life and now the child is under 18 years old, but the parent is 62 or older.

If the parent files for retirement benefits, that child is actually eligible for the same benefit as a spouse would be. So it's the same calculation. It's up to 50% of. The parent or the grandparent's record. Now, if a grandparent, it's important to point out that the grandparent needs to be the custodial parent, so they have to have adopted them.

So it's not just as simple as saying, oh, I spent a lot of times with my grandparents when I was young. It's not just spending the summers with your grandparent. That doesn't count. They have to actually have adopted them and now be the custodial parent for the grandparents to be able to utilize that,

Wendy McConnell: can you be the custodial parent without actually adopting?

I just happen to have a friend who is raising her grandson, the mother is fine and living somewhere else, she is raising this boy.

Eric Blake: I. So in most cases it would have to be a legal adoption. Okay. In which case it may be a situation where the parent has to give up parental rights.

Okay. For under those circumstances. So it's definitely worth exploring. So actually I'm glad we brought up the topic 'cause it's at least worth looking at and depending on the circumstances, maybe that's something to explore. a couple other things that we had to point out here is that, if the grandparent or the older parent.

Is filing for retirement benefits and they do have a spouse and then they also have a child that qualifies. We also have to be aware of what's called the family Maximum benefits. So in general, it's somewhere between 150 to 180% of the retirees. Full retirement age benefit. So you want to be aware of those things.

So if the spouse is getting 50% and the child that they're taking care of is getting 50%, there is potentially a maximum total benefit that the family can receive. So you'd wanna understand how those implications fall into line as well. Now as far as the child themselves, they can receive those benefits up until they're 18.

Or 19 if they happen to still be in high school being unmarried. Again, it's biological, adopted, or dependent stepchild. Actually, that's another circumstance that pops up from time to time where we got more, children from previous relationships, previous marriages, so that might come into play as well.

So it's just one of those areas that doesn't happen a lot, but it is definitely something worth being aware of because again, it's one of those things, in many cases people just wouldn't think about that. You'd never think about a child being eligible to receive. Retirement benefits based on a parent or a grandparent.

But it does happen. Okay. Thank you so much for joining me, Wendy. helping me get through the questions. As always, don't forget to ask a question or if you even wanna suggest a topic for the podcast, feel free to visit www.thesimplyretirementpodcast.com/ask Eric. Thank you for tuning into this episode of the Simply Retirement Podcast.

If you enjoyed today's conversation. Please don't forget to subscribe. Share it with a family member. Share it with friends. Again, for all the links and resources, go to the Simply Retirement podcast.com. We talked about these questions. Hopefully this was helpful, but if you're ready to answer those three big retirement questions for yourself, how do I coordinate retirement withdrawals and maximize my income?

What can I do to lower my tax bill now and in retirement? How can my investments be optimized for retirement? Visit, get my simply retirement roadmap.com to find out how we can help you get on the right path to the retirement you deserve.

Until next time, please remember, retirement is not the end of the road. It's the start of a new journey.

Content here is for illustrative purposes and general information only. It is not legal, tax, or individualized financial advice; nor is it a recommendation to buy, sell, or hold any specific security, or engage in any specific trading strategy.

All investing involves risk including loss of principal. Results will vary. Past performance is no indication of future results or success. Market conditions change continuously.

Information here is provided, in part, by third-party sources. These sources are generally deemed to be reliable; however, neither Blake Wealth Management nor RFG Advisory guarantee the accuracy of third-party sources. The views expressed here are those of Blake Wealth Management. They do not necessarily represent those of RFG Advisory, their employees, or their clients.

This commentary should not be regarded as a description of advisory services provided by Blake Wealth Management or RFG Advisory, or performance returns of any client. The views reflected in the commentary are subject to change at any time without notice.