New laws and Social Security: What it means for your retirement webinar

Video Duration: 46 minutes 30 seconds

Intro: Elapsed time 0 seconds [00:00]

Hello, everyone, and welcome to today's webinar session: New Laws and Social Security: What it Means for your Retirement. My name is Drew Disher, and I'm the Director of Retirement Income at USAA. And I'm joined today by three of my colleagues, the first of which is Mikel Van Cleve.

Mikel is an Advice Director here at USAA, and in that capacity, he leads our advice strategy. He shapes and creates content related to retirement life and complex financial planning. Mikel has a PhD in personal financial planning and an MBA and is a Certified Financial Planner. And he also served our country in the United States Coast Guard. And for that, Mikel, thank you for your service.

We're also joined today by Tony Garcia. Tony is a 13-year veteran here at USAA and serves as a Senior Retirement Income Specialist. As a Senior Retirement Income Specialist, he provides financial and retirement income planning and solutions for our members who are approaching or who are already in retirement. Tony is also a Certified Financial Planner and a Retirement Income Certified Professional.

And last but certainly not least, we're joined by Thomas Sovereign. Thomas is a product management director supporting our USAA annuity solutions and leads many of the initiatives that support the development, launch, and ongoing management of our suite of annuity solutions. Thomas has an MBA from Texas A&M and is also a Certified Financial Planner. So gentlemen, welcome. Now, before we jump in, we do have some housekeeping items that we want to take care of.

We will be emailing a link of this recorded session after today's session so you have an opportunity to review the content that we present here today. Our session is going to last approximately 25 to 30 minutes, and we will have a portion of Q&A at the very end. That said, please feel free to use the Q&A function within Zoom to submit your questions throughout the session today, as we do have specialists who are monitoring those questions, and we'll be answering those as we progress through the webinar today.

If an answer back from our specialists includes a message to call us back, it's probably going to be due to the info that we're going to cover with you needs to be delivered over the phone and not shared over Zoom. And as always, please do not share any personal information. So let's get right in and dive into the topic at hand.

Recent laws like the Social Security Fairness Act and the One Big Beautiful Bill act are impacting retirees today. And in today's webinar, we hope to achieve two things. One, to identify who's impacted by these changes and second, what to do about it. Then we will do a deep dive into Social Security specifically and address the most common questions for various scenarios that we hear from our members.

So let's jump in. And for that, Mikel, I'll turn it over to you.

Yeah. Thanks, Drew. So I am excited to dive into these two topics today.

So really, one of the most challenging financial aspects for those living in retirement is how legislative changes can impact their retirement income. These changes can be hard to predict or forecast, and depending on the significance of the changes, can have lasting effects on your retirement outlook. Today, we'll be venturing into these two new laws: the Social Security Fairness Act and the One Big Beautiful Bill Act, helping you understand how each could potentially impact your retirement picture.

Yeah, this is awesome, Mikel. I speak with members every day who have questions about what impact these laws are going to have on them.

Yeah, that's exactly why we're doing this webinar, Tony. So hopefully this helps.

So let's start with the Social Security Fairness Act. So public law 118-273, more commonly referred to as the Social Security Fairness Act, repealed the Windfall Elimination Provision, or WEP and the Government Pension Offset, or GPO, which were Social Security rules that reduce benefits for individuals with pensions from non-Social Security covered employment.

This repeal allows affected retirees to receive their full Social Security benefits. This also means that spouses and surviving spouses, who also receive a government pension are now entitled to their full Social Security, spousal or survivor benefits. The repeal of WEP and GPO corrects an imbalance that disproportionately affected public sector workers, which should help with more equitable retirement income for these individuals.

And although this law doesn't impact those who served in the military, sometimes their second career or their spouse’s career could be in the public sector and could be impacted.

Yeah, that's a really good point, Tony. Now let's move on to the One Big Beautiful Bill Act, which is a bit more nuanced. So kind of bear with me as we go through this.

So the One Big Beautiful Bill Act, which is officially Public Law 119-21, is a tax and spending law that reshapes parts of the tax code. This includes provisions such as an additional $6,000 deduction available to eligible taxpayers ages 65 and older from 2025 to 2028, which could offer tax relief during retirement when many are on fixed incomes.

However, the benefit is phased out for higher income taxpayers. The bill also extends and modifies the Alternative Minimum Tax or AMT exemption amount, which could benefit those with investment income, capital gains or other non-wage income sources. However, the AMT phaseout rate increased from 25% to 50%, meaning the exemption is reduced twice as fast once income exceeds certain thresholds.

AMT is essentially a parallel federal tax system designed to ensure high income taxpayers pay at least a minimum amount of tax. Another key aspect of the act is that it created a temporary tax deduction for vehicle loan interest from 2025 to 2028. Eligible taxpayers can write off up to $10,000 per year in interest on loans for new American made vehicles, subject to qualification requirements.

Another key aspect is the $10,000 cap on state and local taxes, also referred to as SALT, that eligible taxpayers could deduct from their federal taxable income. That is increased to $40,000 for the 2025 tax year, or $20,000 for those married filing separately. This includes increases of 1% a year beginning in 2026 until 2030, before reverting back to the $10,000 cap.

So, for example, a $40,000 deduction in 2025 would increase to $40,400 in 2026.

And then finally, as far as the provisions we're going to cover here today, the act contained sections that could affect those who rely on Medicare or Medicaid, primarily when it comes to eligibility for these services. Now, the centers for Medicare and Medicaid or CMS, is implementing this section of the act.

So CMS will be your best source for trusted information on how these provisions could affect your health care planning and retirement. Now, that's a lot of information to absorb all at once. So let's look at each law one at a time and talk about what you need to know and do.

What to do about the new laws: Elapsed time 7 minutes 49 seconds [7:49]

Thanks, Mikel. So what do you need to do about Social Security Fairness Act?

The SSFA impacts about 3 million people, including teachers, firefighters, hospital workers, police officers in many states, some federal employees and a few others. For most people, you won't be impacted, so you don't need to do anything. However, you should be on the lookout for scams. Scammers may try to take advantage of the new law. The Social Security Administration won't be proactively reaching out to you, so make sure you never pay money to anyone offering assistance to start, increase, or retroactively pay benefits.

It's important to note, however, that the Social Security Administration is transitioning users from the old Social Security usernames to new login.gov or ID.me accounts in order to simplify sign-in and improve security. So those notifications may be legitimate. Now if you believe you might be impacted by the Social Security Fairness Act, visit SSA.gov to learn more.

One easy way is to type “Social Security Fairness Act” in the search bar at the top of the home page. We also have an advice article on this topic that you can read at your own pace. Check out the resources section of your zoom toolbar. We'll also have a link to it at the end of the webinar.

Back to you, Mike.

All right. Now let's talk about the One Big Beautiful Bill Act and what you need to know. The new law created a complex landscape for retirees that can impact everyone differently. So there's really no one-size-fits-all answer. Instead, you can follow this three-step process.

Step one: work with a tax professional to understand how the act may affect your specific financial situation.

Step two: consider adjusting your retirement income plan as the enhanced deduction for seniors, higher SALT tax limit, AMP changes, etc. may impact your net cash flow.

Step three: consider adjusting any retirement income plan withdrawal strategies, such as withdrawals you are making from a 401K Plan or Thrift Savings Plan. Also, consider if Roth conversions might make sense if your tax burden has decreased as a result of the new law, but keep in mind the overall impact of increasing your taxable income as a result of the conversions, which could affect the taxation of your Social Security benefits.

Now, be sure to remember many of the provisions are temporary, not permanent, such as the additional $6,000 deduction and the increased SALT cap. We do recommend talking to your tax advisor to understand how this new law could impact you.

When you're ready to talk about how you might want to adjust your retirement income strategy call me or one of the other capable Retirement Income Specialists here at USAA. And we wouldn't do be doing our job if we didn't have a USAA advice article on this topic. So check out the resources section on your Zoom toolbar, and there will also be a link at the end of the webinar.

Scenario: Senior tax deduction: Elapsed time 11 minutes 13 seconds [11:13]

Now let's try to bring this information to life with our first scenario of the webinar. I hear many scenarios very similar to this from our members. I'm 67. My wife is 66, and we have a joint retirement income of $130,000. I think that our taxes might be impacted by the One Big Beautiful Bill Act. What should I know and how do I determine the impact to me?

Okay, Tony, in this specific scenario, you and your wife are both over age 65 and living in retirement. So the first thing to do is work with a tax professional to determine the impact to your specific tax situation. You could each qualify for the additional $6,000 senior tax deduction totaling $12,000 since you're married as long as you're filing your taxes jointly.

And keep in mind that this deduction is phased out for higher income earning couples with modified adjusted gross income over $150,000. Also, this new deduction could mean a decrease in your taxable income for the year, putting more money back into your pocket or opening the door to other strategies. For example, if your taxes are reduced, then your net income could be higher and you may consider lowering your withdrawals from your retirement savings. This can further reduce your taxable income. Or you could consider converting some of your retirement savings from pretax dollars, as with a traditional IRA, into after tax dollars, as with a Roth IRA. The idea here is that you could increase your taxable income in the year you do the conversion, but you can plan on converting an amount that will be offset by your reduced taxes.

As an example, if you're in the 22% marginal tax bracket, the additional $12,000 deduction could reduce your federal income taxes by up to $2,600. You might look to then convert an amount that would generate $2,600 of taxable income from your traditional IRA to your Roth IRA. In this case, that would be $11,800 at a 22% marginal tax rate.

Once your savings are in a Roth IRA, not only will you have already paid taxes on them, but you may also lower your required minimum distributions later on since Roth IRAs are not subject to RMD rules like the traditional IRAs are. Keep in mind you must wait five years after a conversion to a Roth IRA, regardless of being over age 59.5, to benefit from tax free withdrawals on any earnings related to the conversion amount.

And I think the key thing to keep in mind here is there's really no one-size-fits-all answer with the changes from the One Big Beautiful Bill Act. Differences in age, income, how you file your taxes, what taxes you pay, and other factors can impact what this legislation means for you, so reach out to a qualified tax professional to determine how your specific situation is impacted.

Great insights Mikel, Tony. Powerful information. So we're going to wrap up this section on legislative updates with our first polling question. All right. So based on what Mikel and Tony shared today, the question is how likely are you to reach out to a financial professional to discuss the potential impacts this recent legislation might have on your retirement?

Highly likely. Somewhat likely. Not likely. Or you may not be sure. Please take a few moments to submit your responses.

Okay, thanks for answering folks and participating in our poll. We're going to take a few seconds to actually pull those results together, and we'll pull those up for us to see. What I would always say is, your insights always help us learn a little bit more about you, kind of what you're thinking and overall how some of this information might impact you to take action, which is ultimately very, very important. So thanks for participating in that.

Social Security basics: Elapsed time: 15 minutes 33 seconds [15:33]

Okay. No matter what you've answered, we've got some great additional information on Social Security. Now that we've covered legislative updates. So to share some of those insights we're going to dive right in. And for that Mikel I'm going to turn the ball back over to you.

Yeah thanks, Drew. So certainly new laws can impact many retirees. But Social Security in general is also super important. And obviously Social Security is extremely nuanced. In fact, the decision on when to claim Social Security is one of the most important retirement decisions that many people make. Why, you might ask? Well, according to the Social Security Administration, a substantial portion of retirement income generally comes from Social Security. In fact, Social Security represents about 31% of the income of older Americans.

Among Social Security beneficiaries, approximately 40 to 45% rely on Social Security for at least half of their income, and approximately 12 to 15% rely on it for nearly all of their income. For military veterans age 65 plus, Social Security provides about 53% of median personal income. And almost one quarter of Americans claim benefits at their earliest eligible age, which we're about to talk more about that, potentially losing out on higher lifetime Social Security benefits.

Yeah. Thanks for that, Mikel. This is actually such an important point that I bring up with members. You can claim right away and receive a lower amount or delay claiming all the way up until the age of 70 and receive a higher amount. Members often ask me, how long will I have to live to make up the difference?

I introduce them to a concept known as their breakeven point. This is the age at which your cumulative lifetime benefits for delaying claiming catch up to the total benefits you receive from claiming early. For most people, their breakeven point is between 78 and 82. If you plan to live longer than your breakeven point, it might make sense to delay claiming.

The decision on when to claim Social Security benefits is one of the most critical and potentially irrevocable choices that retirees make will make. So let's take a look at some of the most common scenarios.

Spousal and survivor benefits: Elapsed time 18 minutes 1 second [18:01]

Okay. In this Social Security scenario, we have a married couple with an age difference who ask, “I'm 18 months older than my wife, can she start taking benefits before I do?If I take Social Security at my full retirement age, 66 and ten months, do they use my dollar amount and her timeline to her full retirement age to compute her benefits?”

This is a two-part question. We will break it down and answer them separately. Okay, the first question is “can she start taking benefits before I do?” Spousal benefits cannot begin before the worker has filed. In this scenario, if we assume his wife is not eligible for benefits on her own record, she would not be eligible to begin her benefits until he is receiving his.

However, if she is eligible for benefits based on her own work history, she could file before he does and receive her own benefit. Once he files, Social Security will automatically pay her the higher of her own benefit or the spousal benefit.

All right. Thanks, Tony. And the second part of the question is “how are spousal benefits calculated?” Spousal benefits are calculated using the worker's Primary Insurance Amount, also referred to as PIA, and the spouse's age when she files for the spousal benefit.

The PIA is the benefit a person would receive if they elect to begin receiving retirement benefits at their normal retirement age. In this example, the husband has a full retirement age, or FRA, of 66 and ten months. We will assume he plans to file at his full retirement age. Let's say his birthday is December 1959. If he's 18 months older than his wife, then she would be born in June 1961.

If she files for her spousal benefit when he does, October of 2026, then her benefit would be approximately 43% of his PIA amount, because she is filing about 20 months before her full retirement age. She would need to wait until June 2028 to receive the full spousal benefit of 50% of his PIA. Now, exceptions could apply in some circumstances, so it's important to talk to a professional about your unique situation.

Now, in our second scenario for Social Security, we have a different couple. Here we have a married couple with an earnings difference. And they are asking, “hey, 50% of my Social Security benefit will be more than 100% of my wife's benefit. Should she start taking the spousal benefit of 50% of my PIA? Is it true that she will never be able to get more than half of my PIA even if I wait until age 70 to start taking my Social Security benefits?”

Yeah. So there are two timelines and two benefits that come into play in this question, and we're going to cover all of them. For starters, with the timelines they are when you file for your retirement benefits and when your spouse files for her retirement benefits.

And the benefits are spousal benefits and survivor benefits, let's cover the spousal benefit first.

Spousal benefits are subject to deemed filing, which means that when an individual applies for either their own retirement benefit or a social security or spousal benefit they are treated as having applied for both. If they are eligible for both at that time, Social Security will then pay the higher benefit amount of variable while both spouses are alive and assuming an age difference, your wife may begin by claiming her own retirement benefit first.

Spousal benefits generally cannot be paid until the higher earning spouse has filed for their own benefit.

Once the higher earner files, Social Security will evaluate the other spouse's eligibility for spousal benefits and, if applicable, increase their total benefit to the higher amount. This consists of their own retirement benefit plus any spousal excess, not two full benefits. Bear in mind that you'll have to proactively reach out to the Social Security Administration for this kind of change.

If she has not yet reached her full retirement age when you do, her benefit will be reduced, as we discussed in the last scenario.

Therefore, provided you have other resources, she may benefit from delaying her filing until her full retirement age if she is younger than you.

Since you stated that half of your benefit is larger than 100% of her benefit, then it is true that she would never get a higher spousal benefit even if you delay. But delaying could benefit her survivor benefit.

If you predecease her, she may then switch to a survivor benefit equal to up to 100% of your benefit, including any delayed retirement credits, provided she has reached her full retirement age for survivor benefits.

So now let's discuss survivor benefits.

Survivor benefits are based on the benefit amount the deceased worker was receiving, including any delayed retirement credits.

A surviving spouse at full retirement age is eligible for 100% of the deceased workers benefits.

If you were to delay to age 70, your wife would then be eligible for the higher benefit amount if you predecease her. She would receive the higher of the two benefits, her own or the survivor benefit, but not both.

If your goal is to maximize your lifetime benefits and survivor’s benefit, the best result may be achieved when the higher earning spouse delays claiming up to until age 70.

Claiming strategies summary: Elapsed time 24 minutes 24 seconds [24:24]

So USAA definitely has a perspective on Social Security. Here's a summary of our guidance.

It's important to understand how the Social Security claiming rules may affect your overall retirement income and various strategies that may be available to you, especially as a married couple.

Assuming a couple has the financial resources to enable them to delay claiming, it may be better for the higher earning spouse to delay receiving their benefit as long as possible, up to age 70.

Doing so usually provides the highest total lifetime benefit and highest benefit to the surviving spouse. In fact, your benefits will increase by about 8% for each year that Social Security benefits are delayed past your full retirement age, up to age 70.

In addition, cost of living adjustments are applied during that period, so your eventual benefit reflects both delayed retirement credits and the cost of living adjustments.

However, Social Security is a very personal decision, and couples should consider making the decision jointly. We recommend evaluating different claiming scenarios to know what your options are. And some of the important factors that can impact your decision include health status and life expectancy, age differences for couples, the Social Security benefit amount, and any other available resources or assets that may be available to you.

Yeah, Mikel. And one tool that I tell many of our members about is our USAA Social Security calculator. You can use this for yourself or for you and your spouse to help you evaluate different options. Just enter some basic information about your income, life expectancy, and retirement age, and the calculator will estimate your benefits. You'll see your total lifetime benefits along with your annual benefit and monthly benefit for each person.

The calculator will recommend when you should start claiming your benefits in order to maximize the amount you receive. You can also use the toggle buttons to change your inputs and explore different scenarios. Scan the QR code on the screen to use your Social security. Our social security calculator. You can also find a link in the resources tab in your zoom toolbar.

Please note that login is required to use this calculator.

Retirement income framework: Elapsed time 27 minutes 2 seconds [27:02]

Social Security is such an important consideration for so many retirees. But Tony can you help us understand how it fits into an overarching retirement income plan?

We do have an approach to retirement that we recommend, and it has three core components.

First is protected income. USAA believes that you should have enough guaranteed income to cover essential expenses. This includes Social Security. It also includes employer pensions like military retirement, and it could also include income annuities as well.

Second, you have your investment portfolio. This portion of your plan is a growth component. Typically, it is your diversified investment portfolio designated for long-term growth and providing for future needs.

Third is protection. This includes having the right savings or insurance in place to manage your retirement risks, such as emergencies or health care costs. It can also include having a trust or will in place.

USAA believes that a balanced approach between income planning, growth, and protection is the best way to manage the most common risks to retirement. It is important to review your financial plan at least annually, and manage ongoing risks to your plan. Remember, retirement can last over 30 years and we want you to have an awesome retirement.

Annuities as income solutions: Elapsed time 28 minutes 31 seconds [28:31]

Now, as we saw in the previous slide, USAA recommends having enough guaranteed income to cover your essential expenses. Now, common sources of guaranteed income, such as social security and employer pensions, including military pensions, are actually forms of annuity payments providing a steady stream of income over your lifetime. If these sources aren't enough to fully cover your needs, you might need to supplement them.

That's where additional annuities can help. An income annuity specifically, also called an immediate annuity, is one of the only financial instruments out there that can provide you guaranteed income for the rest of your life, no matter how long you live. So let's take a look at this short educational video to learn more.

You did the smart thing by putting away money all your life. But now that you're nearing retirement, you may be wondering how to make the best use of your hard-earned cash. Whether you're getting ready to retire or already enjoying retirement, a USAA Single Premium Immediate Annuity, or SPIA, may be the right choice for you. A USAA SPIA works like a paycheck. You pay in a lump sum, and in return, you get a series of guaranteed payments for life, for a set period, or both.

No matter how long you live, you can receive income to support you and your loved ones. After you're gone, remaining payments, if any, will pass down to your beneficiaries. A USAA SPIA can add to other retirement income, such as Social Security or pensions. You can spend on what you want, when you want. It can be an efficient way to generate income, and with USAA’s competitive rates, you can make the most of your hard-earned retirement savings.

Since a USAA SPIA is an insurance product and not an investment, you don't have to worry about losing your money or taking portfolio withdrawals during market downturns. Start living your best retirement with a USAA SPIA to get advice you can count on. Speak to a USAA retirement income specialist today.

Poll and Q&A intro: Elapsed time 30 minutes 48 seconds [30:48]

We've covered a lot of ground today. And Mikel, Tony, once again, thanks for your insights and the topics that you've highlighted for us here today.

We've got one final poll question. And the good news is it is the easiest one yet. So take a look at your screen and submit your answer to this question.

Would you like to receive a call from one of our Retirement Income Specialists?

Folks that call could touch upon some of the Social Security claiming strategies that Tony and Mikel highlighted, it could be discussing whether or not an income annuity can compliment Social Security but the bottom line is our specialists are here for you. So if you would like a call, please answer yes and you will be contacted by one of our specialists like Tony, within the next couple of days. If you realize and understand now, I need to talk to a specialist today because of what Mikel and Tony have shared, you can schedule that call simply by scanning the QR code, and schedule that call based on your availability.

And certainly the old school route of simply picking up the phone and giving us a call with the number that's on the lower right portion of your screen. All right Mikel, Tony, thank you again for your insights and what you shared today.

Immensely helpful. I know for all of us that are on the call and on this webinar session today, and with that, we're going to transition now into our Q&A session. And for that, I'm going to turn it over to our Q&A facilitator, Thomas Sovereign. Thomas, take it away.

Q&A session: Elapsed time 32 minutes 10 seconds [32:10]

Thank you. Drew. All right. This is our quickfire Q&A, where I'm going to fire off a bunch of questions. Mikel and Tony. Are y'all ready? Yes, indeed. All right. Mikel. Coming to you first, sir. Can you receive your Social Security benefits and still be employed?

So, yes, you can receive Social Security benefits or survivor benefits and still work. However, if you're below full retirement age, there is a limit to how much you can earn and still receive the full benefit. Depending on your age and how much you earn, your benefits could be temporarily reduced by the retirement earnings test. If you are under full retirement age for the entire year, Social Security will deduct $1 from your benefit payments for every $2 you earn above the annual limit.

For 2026, that limit is $24,480. In the year you reach full retirement age, Social Security will deduct $1 in benefits for every $3 you earn above a higher limit in 2026. That limit is $65,160. Social Security only counts your earnings up to the month before you reach full retirement age. Once you reach full retirement age, Social Security recalculates your benefit to give you credit for the months in which payments were withheld.

This increases your payments going forward, but it does not reverse the permanent reduction that applies when you claim early. So, for example, suppose you start Social Security at 62 and get $1,400 a month, a permanent reduction from filing early instead of $2,000 a month, which would have been your benefit at full retirement age. You keep working and earn more than Social Security’s yearly limit.

In that case, Social Security doesn't reduce each check, but instead they withhold whole checks until they held back the amount required by their earnings rules. If you earn enough that they need to withhold, for example, $4,200 for the year, they will simply hold back your first three monthly checks, which is three times the $1,400, which would give us the $4,200, and then start paying you again.

If this ends up being three checks per year for five years, that means a total of 15 monthly payments for withheld. When you reach your full retirement age, Social Security will adjust your benefit as if you had filed 15 months later. In other words, if you had started your benefits at age 63 and three months instead of age 62, this will raise your monthly check a bit, but you will not get the $4,200 withheld each year, and you will not be restored to your full retirement age benefit of $2,000 per month.

That makes sense. Thank you for that, Mikel. All right, Tony, coming to you for the next one. How can I find out what my ex-husband’s Social Security benefit will be so I can plan how much I will receive equal to half of his amount.

If you are divorced, you can receive benefits on your husband's record if your marriage lasted ten years or longer, you are unmarried, and your ex-spouse is 62 or older. If your ex has not applied for retirement benefits but is eligible for them, you can receive benefits on his record if you have been divorced for at least two years.

You do not need to know his earnings history or even where he is. You need to present proof of to the Social Security Administration that you were married to him and give enough identifying information such as full name, date of birth, social security number if you have it that they can look up his records.

Thank you for that. All right, Mikel, on our next one for married couples, is there a family limit on the combined Social Security payments? So thanks for the question. So there is no overall household limit on Social Security benefits. If each spouse is receiving benefits based on their own work history, two high earning spouses could each be eligible for the maximum Social Security benefit in a given year.

However, there is a family maximum that applies to the total benefits paid on a single workers earnings record. This applies when multiple family members, such as a spouse or children, are receiving benefits based on that record. The family maximum is determined by a formula and typically falls in the range of about 150% to 180% of the worker’s Primary Insurance Amount (PIA).

If total benefits on that record exceed the maximum, the worker's benefit is not reduced, but the benefits paid to family members are reduced proportionately. You can get an estimate of your family maximum benefit by logging into your My Social Security account at SSA.gov and reviewing the “Family or survivor benefit estimate”.

Got it. Thank you. All right, Tony, here's our next one. Will you talk about a former spouse benefit? Does the younger spouse need to be 62 before a former spouse can claim 50% of their benefit? Absolutely. Good question. The former spouse does not need to have filed in order to receive a spousal benefit on his or her record, but he or she does have to qualify. In other words, they have to at least be 62 years old.

Very clear. Thank you. All right, Mikel, on to the next one. My spouse is one year younger than me, can she receive spousal benefits if I am not receiving Social Security?

Yeah. So your spouse will not be eligible for spousal benefits until you file for your own Social Security retirement benefit.

Once you file, your spouse can then become eligible based on your earnings record. There are some exceptions which could apply to divorced spouses who may be able to claim, even if their ex-spouse has not yet filed under certain conditions.

All right, Tony, here's our next one. Is my same sex spouse eligible for Social Security's spousal benefits? Yes. Since the Supreme Court decision in 2015, the Social Security Administration recognizes same sex couples as marriages in all states and some non- marital legal relationships, such as civil unions and domestic partnerships. Surviving same sex partners and spouses previously excluded from receiving Social Security survivors benefits may now qualify for benefits.

If you were in a same sex relationship with a partner or spouse who passed away, you may qualify for benefits based on your partner's or spouse's record. You may qualify for survivor benefits if either of the following are true: you would have been married at the time of your partner's death, if unconstitutional state laws hadn't prevented you from doing so, or you would have been married longer if not for unconstitutional state laws that prevented you from marrying earlier.

If you think you may qualify based on the categories I've discussed, please contact the Social Security Administration to apply.

Thank you Tony. All right Mikel, for our next one. Do VA disability payments affect Social Security benefits? No. So good news there. VA disability payments do not impact Social Security retirement benefits, nor do they impact Social Security disability payments. Great. Pretty straightforward there.

All right, Tony, on the next one. Is there a fee for USAA retirement assistance?

No these services are complementary.

Great. Love that. All right. For the next one, Mikel, is Social Security taxable and what is the tax rate?

Depending on your income, you may have to pay income taxes on your Social Security benefits. This usually only happens if you have other income in addition to your Social Security benefits such as wages, self-employment interest, dividends and other taxable income that must be reported on your tax return.

Depending on that other income, you may have to pay tax at your marginal tax rate on up to 85% of your benefits. So again, just to clarify there, you're not paying a 85% tax rate. You're paying it your marginal tax rate but on up to 85% of your benefits. These thresholds are set by the IRS. So if you file a joint return and you and your spouse have a combined income that is below $32,000 a year, then 0% of your benefits would be taxable.

If that income is between $32,000 and $44,000 a year, you may have to pay income tax on up to 50% of your benefit. And if it's more than $44,000 a year, then up to 85% of your benefits may be taxable. The key here is to consult with your tax preparer for details specific to your situation.

Absolutely. All right, Tony, on the next one. For those members that may need an annuity to supplement Social Security, they often ask this one: How is an annuity funded?

Many of our members fund their annuities from other retirement savings that they've built up over the years. For example, using a portion of their 401K or IRA. You can also fund an annuity with many other sources, including a transfer from a bank account, an existing annuity, or a cash value life insurance policy.

You should consult your tax and legal advisers about your specific situation here, but our retirement income specialists can also help you understand your options and which one might be best for you.

Thank you. All right. We'll stick with you, Tony, on this one. If you are already in your 60s, is it too late to start an annuity?

Absolutely not. Many members start annuities in their 60s. A lot of the decision-making boils down to your needs and goals, your age and your life expectancy.

Deferred annuities could be a good choice when you have some time for accumulation, you want to dedicate a portion of your assets to a particular want or need, such as establishing a stable floor to generate retirement income, or you're seeking a degree of creditor protection. Immediate annuities might make sense if you need a stable source of retirement income or want to supplement other retirement income sources.

Very good. All right, Tony, sticking with you for the last question we have. All right. If I purchase an annuity and die suddenly, is all that money lost?

We encourage our members to select a payout method that includes a guaranteed element for their beneficiaries in the event of an early death.

All right that wraps us up for the Q&A. Drew back over to you, sir.

Closing remarks: Elapsed time 44 minutes 17 seconds [44:17]

You bet. Thanks so much, Thomas. Mikel. Tony. Your insights, the information that you shared, incredibly valuable for all of our members on the call here today. I'm going to transition now and wrap up our call.

There's a few things I want to highlight for all of you here at USAA. We recognize that everyone's situation is unique. We really want to equip you with the information and the tools to help you evaluate your own retirement income plan. Our team is here to help you with all of the factors that go into that.

If you'd like to speak to one of our specialists like Tony, you can call us at the number that's on your screen (800-531-3392). And you can also scan that QR code if you'd like to schedule a call that's convenient for you and to connect with one of our specialists. You can also go to our website, USAA.com/annuities, to learn more about our solutions and how to interact with a variety of the tools, including the Social Security calculator that we highlighted here today.

You can also learn more about some of the annuity solutions that we have available for you as members. All the resources that we have discussed today and highlighted are available on this slide. You can certainly download the webinar slides for yourself as a review, but we also have some resource links that you can leverage the ability to again, schedule a call with a specialist.

Leverage the Social Security Income calculator, as well as some of the advice, content and articles that Mikel and his team have created for us, along with some supporting webinars as well. I want to thank you for your time today and for attending our webinar. I want to thank our speakers and presenters. I do want to remind you that you there will be a short survey coming out of today's call, and we absolutely value your feedback.

It's how we get better at delivering meaningful content for all of you as members. And additionally, as I mentioned before, everyone will receive an actionable link to review and listen to this recording. Once again, thank you all for entrusting USAA. We look forward to partnering with you to create an amazing retirement, everybody. Have a great day.

End: Elapsed time 46 minutes 30 seconds [46:30]