Social Security: How to Get $250,000 More

23,032 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
23,032
On SlideShare
0
From Embeds
0
Number of Embeds
679
Actions
Shares
0
Downloads
56
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • Dispel common misconceptions – “always file early” – “always file late”. “social security is actuarially neutral.”Social Security = 41% of income for elderly (Employee Benefit Research Institute)Using stories
  • 3. Cash flow deficits start in 2016 and reserves exhaust in 20374. You become vested after earn 10 years worth of credit – or 40 credits.
  • Life expectancy: 82, 85.
  • $50,256 More in lifetime benefitsAdditionally – Assuming that Kate outlives William – she receives a benefit that is 60% greater because William waited (inherrits Delayed Retirement Credits)
  • $137,673 more than Option 1 (62/62) and $31,176 more than Option 2 (62/70)
  • ($4,517) less than optimalWorks well when spouse has little if any earnings record
  • In the case of Barack and Michelle – this doesn’t add income but it does front end load income – more in earlier years.Senior Citizens’ Freedom to Work Act of 2000– Primary Worker must be at Full Retirement Age• Files for worker benefits and immediately suspends• Spouse transitions from “eligible” to “entitled”File and suspend – when primary wage earner has short life expectancy. This allows the spouse to claim spousal benefit even when the primary earner continues to work and earn delayed retirement credits.
  • Start with $1MConservatively investedBreakeven age is 78Taking Early Runs out at 96
  • Life expectancy: 82, 85.
  • $112,027 more than Option 1 (62/62)
  • Additional $27,552 over optimal without FAASF (70,64)
  • Dispel common misconceptions – “always file early” – “always file late”. “social security is actuarially neutral.”Social Security = 41% of income for elderly (Employee Benefit Research Institute)Using stories
  • Social Security: How to Get $250,000 More

    1. 1. Social Security: How to get $250,000 More Matthew Illian Marotta Wealth Management www.eMarotta.com
    2. 2. Social Security Quiz True or False1. Social Security Income is never taxed □ □2. You should always file early for SS(age 62) □ □3. Earned income can penalize yourSocial Security income before age 66 □ □4. You need to have worked to get SS. □ □5. Social Security paychecks keep up withInflation □ □
    3. 3. -25% +32%
    4. 4. AGE: 64 AGE: 62Basic Benefit (AGE 66): Basic Benefit (AGE 66): $2300 $800
    5. 5. $800 X 75% = $600
    6. 6. Everything you need to consider before Filing for Social Security
    7. 7. Everything you need to consider before Filing for Social Security$2300 X 35% = $805
    8. 8. Everything you need to consider before filing for Social Security$2300 X 100% = $2300
    9. 9. Primary Income Homemaker AGE: 61 AGE: 60Basic Benefit (AGE 66): Basic Benefit (AGE 66): $2300 $400
    10. 10. Option 1: Primary Income at 62
    11. 11. Option 2: Primary Income at 70
    12. 12. Option 3: Homemaker at 66 and Primary at 68
    13. 13. Primary Income 62 63 64 65 66 67 68 69 7062 -$85,668 -$80,148 -$70,366 -$62,101 -$56,928 -$48,636 -$44,760 -$45,300 -$50,25663 -$82,908 -$77,388 -$61,546 -$53,731 -$49,008 -$41,166 -$37,740 -$38,730 -$44,13664 -$73,552 -$68,032 -$52,189 -$37,865 -$33,979 -$26,975 -$24,386 -$26,214 -$32,45865 -$66,955 -$61,435 -$45,593 -$31,268 -$20,035 -$13,846 -$12,072 -$14,714 -$21,77366 -$62,208 -$56,688 -$40,846 -$26,521 -$15,288 -$936 $0 -$3,480 -$11,37667 -$76,008 -$70,488 -$54,646 -$40,321 -$29,088 -$14,736 -$4,800 -$7,896 -$15,40868 -$89,808 -$84,288 -$68,446 -$54,121 -$42,888 -$28,536 -$18,600 -$13,080 -$20,20869 -$103,608 -$98,088 -$82,246 -$67,921 -$56,688 -$42,336 -$32,400 -$26,880 -$25,77670 -$117,408 -$111,888 -$96,046 -$81,721 -$70,488 -$56,136 -$46,200 -$40,680 -$39,576
    14. 14. Option 4: PrimaryIncome “File and Suspend”
    15. 15. “File and Suspend”1. Primary Earner Files at 66 and “Suspends” Benefit2. This makes Secondary earner “eligible” for spousal benefits3. Primary Earner Re-files at 704. Secondary Earner keeps lower spousal benefit even though Primary Earner has raised their personal benefit.
    16. 16. Charles “Chuck” Schwab Mrs. Schwab AGE: 66 AGE: 62 Basic Benefit (AGE 66): Basic Benefit (AGE 66): $1,930 $1,193
    17. 17. Option 1: Both File at 62
    18. 18. Option 2: Chuck at 70and Mrs. Schwab at 64
    19. 19. Option 3: FAASF
    20. 20. “File As A Spouse First”1. Lower wage earner files.2. Higher wage earner files for spousal benefits at age 66.3. Higher earner re-files at 70.4. Surviving spouse receives higher benefit amount.
    21. 21. Divorced Spouse Benefits1. Must have been married 10 years2. Must not be remarried.3. You can claim even if other spouses are claiming.
    22. 22. Taxable Portion of Social SecurityMAGI = ½ of SS Income + Income from all sources Filing Status Over Max Amount Taxed Single, HOH 25,000 34,000 50% over $25k 34,000 Unlimited 85% over $34k MFJ 32,000 44,000 50% over $32k 44,000 Unlimited 85% over $44k MFS Any 85% over $34k
    23. 23. CONCLUSIONS1. Joint Income Maximizationvs. Individual IncomeMaximization
    24. 24. 2. Social Security is verycomplicated
    25. 25. 3. Consider Longevity Insurance
    26. 26. RETIREMENT
    27. 27. Social Security: How to get $250,000 More Matthew Illian Marotta Wealth Management www.eMarotta.com

    ×