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Social Security Maximization

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  • The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. The two Social Security trust funds, those for Old-Age and Survivors Insurance (OASI) benefits and for Disability Insurance (DI) benefits, are special. Along with the Hospital Insurance (HI) Trust Fund of the Medicare program, the OASI and DI Trust Funds have the important feature that benefits can only be paid to the extent that the trust funds actually have assets to draw on to pay the benefits. Unlike the rest of federal government operations, these three trust fund programs do not have the ability to borrow in order to continue paying benefits when the dedicated taxes and trust fund reserves are not sufficient. When there is a “net surplus,” this gets put into the trust fund. This surplus is invested in special issue government bonds… think of it as a loan to the government for the government to use on other expenditures and programs. As of the end of calendar year 2010, the accumulated surplus stood at just over $2.6 trillion.[8] Projections are that current receipts will continue to exceed expenditures until 2017. Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund, although the Trust Fund will continue to show net growth until 2025 because of the interest generated by its bonds. Let’s take a closer look at this.
  • This is a busy chart, but it is a helpful one to understand where the Social Security system has been, as well as where it currently is. This chart shows a history of the NET cash flow into the system as a percentage of GDP. It is helpful to relate it to GDP because this helps to keep the figures relative, in light of a continually growing system. The NET cash flow is the amount +/- after all tax revenues have been generated from the current working force and benefits have been paid out to the beneficiaries.
    Historically, the OASI and DI Trust Funds have reached times where dedicated tax revenue fell short of the cost of providing benefits and also times where the trust funds have reached the brink of exhaustion of assets. For years 1973 through 1983, the combined OASI and DI Trust Funds were operating with a negative cash flow that was depleting the trust fund reserves toward exhaustion. The Social Security Amendments of 1977 and 1983 made substantial modifications to the program that reversed the cash flow of the program to positive levels and caused the substantial buildup of assets to the $2.5 trillion that exists today. The 1977 amendments included a fundamental change in the indexation of benefits from one generation to the next. The 1983 amendments included increases in the normal retirement age (NRA) from 65 to 67 and the introduction of income taxation of Social Security benefits with revenue credited to the trust funds.
    A cash flow shortfall is only a problem if it is large and persistent enough to cause the trust fund reserves to decline over time toward exhaustion. This is why many anticipate a potential reform in the system in the near future. We’ll discuss that on the next slide.
  • As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2033, when the trust fund reserves are projected to become exhausted. At the point where the reserves are used up, continuing taxes are expected to be enough to pay 77 percent of scheduled benefits. Between 2013 and 2036, the trust funds are redeemed to pay benefits and are replaced by publicly held debt. As of 2033, benefits will not be payable under current law.
  • You may recognize these front pages. These are published annually, and are now available electronically. They used to be sent via postal mail, but the Social Security Administration is now making them available via ssa.gov. You should be getting them annually. They appear to look the same, but there is some variance.
  • Let’s summarize the past two charts simply. The “system” has a positive net cash flow through 2016. After that, we will be paying out more benefits than income received into the system. When that happens, we will be tapping into the trust fund to pay the obligations. It has been argued that the trust has no funds…that the money in there is essentially an IOU from the government. Either way you look at, by law, the system will not be able to pay scheduled benefits after 2037. This puts lawmakers in a position today to address these concerns. There is no way to tell exactly what might happen, since there isn’t a crystal ball to tell what might happen. But, it’s likely safe to say that those under 60 will be impacted more than those over 60 at the moment. Let’s talk about what might happen in the future…
  • If you qualify for retirement benefits, certain members of your family may also be eligible for family benefits. There is a maximums on the total benefits a family can get, but here are is a list of the family members that would also qualify. We’ll discuss this a little more later.
  • If you qualify for retirement benefits, certain members of your family may also be eligible for family benefits. There is a maximums on the total benefits a family can get, but here are is a list of the family members that would also qualify. We’ll discuss this a little more later.
  • Your full retirement, according to the SSA, is based upon your year of birth. If you begin to take Social Security benefits between 62 and your full retirement age, your benefit will be reduced to take into account the fact that you will theoretically be receiving income longer. We will discuss that in a moment.
  • Hold on tight…understanding how your benefit is calculated can be confusing.
    READ SLIDE
    Let’s know look at an example…
  • Hold on tight…understanding how your benefit is calculated can be confusing.
  • In true government style, this calculation can be pretty convoluted.  You start off with your Average Indexed Monthly . Then it gets a little confusing. Don’t worry…they do this calculation for you, but it might be helpful to know. 
    READ SLIDE
  • Determining the PIA is tricky. There is, in essence, a three step process.
  • If you’ll recall, we discussed how you can take early retirement benefits. Taking benefits before you reach your full retirement age will result in a permanent reduction of your benefits. That reduction gets less and less each month closer to your full retirement age that you get. This example of Ronald assumes that Ronald retires at different ages. If you’ll recall from our previous example, this hypothetical case suggested that Ron’s PIA was $2,196. But, if he chooses to retire before reaching age 66, his social security benefit would be reduced according to this chart.
  • On the flipside, if he waits until AFTER his full retirement age, his benefits will continue to earn delayed credits, until he reaches age 70. Let’s take a look at how that works. This is the reason why many people will encourage you to delay taking Social Security, as it will provide more income to you during your retirement years, and reduce the amount you may need to take from personal assets.
  • The next topic of discussion is about spousal benefits. The FIRST item we’d like to point out is that Social Security benefits are gender neutral. As most of you likely know, women have a longer life expectancy than men. Social Security does not care about this fact when calculating benefits. The calculation numbers we explored earlier are the same regardless of whether you are male or female. Likewise, spousal benefits are gender neutral. Husbands or wives receive the same treatment under the system.
  • The Claim and suspend strategy is the first strategy to explore. <READ STEPS>The lower earner cannot receive spouse's benefits until the higher earner files for retirement benefits. Workers who have reached their full retirement age may apply for retirement benefits and then request to have the payment suspended. Claiming and suspending payments allows the lower earner to claim a spousal benefit and the higher earner to continue working and earn delayed retirement credits until age 70. This would tend to maximize their lifetime benefits and more importantly maximizes the survivor's benefit. You will ensure you will have a higher benefit when you need one, which is when you are a widow or widower later in life. Social Security checks increase by 7 to 8 percent for each year of delayed claiming between your full retirement age and age 70. After age 70 there is no additional benefit for waiting to collect your due.
  • Dual-earner couples who have reached their full retirement age can claim Social Security twice: first as a spouse and later using their own work record. A person may choose to sign up for only a spouse's benefits at their full retirement age and continue accruing delayed retirement credits on their own Social Security record. The worker may then file for benefits based on their own work at a later date and receive a higher monthly benefit due to delayed retirement credits. For example, a man planning to retire at age 70 could claim a spouse's benefit based on his wife's earnings at age 66 and then claim again based on his own working record when he exits the workforce at age 70. High-income couples with relatively equal earnings gain the most using this strategy
  • Transcript

    • 1. The Financial Wellness Initiative® Examining Your Financial Health Through the Financial Wellness Experience! “Understanding Social Security Keys to Maximizing Your Retirement Income” Will you get the most out of Social Security? ©2011-2013 USA Financial Plug-N-Run ®. Use without license or reproduction without express, written permission from USA Financial Plug-N-Run® is strictly prohibited.
    • 2. Exclusively brought to you by Name of Representative Here of Company Name Here Securities Offered Through Broker/Dealer Name Here Enter B/D Required Disclaimers Here (e.g. Member FINRA / SIPC / Registered Investment Advisor) www.RepresentativeWebsiteHere.com 1-888-888-8000 (Office) 111 Anywhere Street ©2011-2013 USA Financial 49123 Somewhere, MI Plug-N-Run®
    • 3. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Important Disclosure • The information and strategies we will share during this presentation are believed to be accurate. • To get specifics about your particular situation, it is recommended that you speak directly with the Social Security Administration offices near you. • The information shared is based upon the current rules and regulations of the Social Security system. It is VERY possible that these rules may change in the future.
    • 4. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Items We Will Discuss About Social Security • Will it be there for me? • What should I know or do BEFORE applying for Social Security? • Who is eligible for Social Security? • How is my Social Security Income calculated? • How do spousal and survivor benefits work? • When should I take Social Security? • Are there strategies to maximize my income? • What other items should I consider as it relates to my social security?
    • 5. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Will Social Security Be There for Me? In order to start answering this question, it may help to understand the size/scope of the system. According to the Social Security Administration, almost 58 million Americans will receive approximately $816 billion in Social Security benefits in 2013.
    • 6. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Will Social Security Be There for Me? 2013 Beneficiary Data Social Security Beneficiaries Totals by Group Monthly Average Paid Out by SSA Monthly Averages Retired workers 37 million $46.3 billion $1,262 - dependents 2.9 million $1.8 billion Average Monthly Benefit Disabled workers 8.8 million $10 billion $1,130 - dependents 2.1 million $.69 billion Average Monthly Benefit Survivors 6.3 million $6.6 billion $1,215 Average Monthly Benefit SOURCE: Social Security Administration website: www.ssa.gov/cgi-bin/currentpay.cgi
    • 7. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? How it Works A “Pay-As-You-Go” System Current “workers” pay in to the system in order to provide payments to current “Social Security recipients.” A total of 12.4% of a workers’ income (up to a maximum) gets paid into the Social Security trust. For normal W-2 employees, they pay 6.2% and the employer pays the other half (6.2%) of their wages.
    • 8. OASDI (Old-Age, Survivors, Disability Insurance) Operational Cash Flows as a Percentage of GDP Payroll tax rate rises from 6 percent in 1961 to 9 percent in 1971 as program matures 1972 amendments Formed SSI (Disability) & Introduced Cost of living adjustments (COLA) 2013 & Beyond - ????????? 1977 amendments Changed the formula for compensation calculations 1983 amendments Taxation on SS benefits Introduced benefits for divorcees Increased payroll tax rate Changed the earnings test Increased Normal Retirement Age (NRA) *Income from individual years excludes interest on the trust funds and is based upon intermediate assumptions. Source: Social Security Administration, Office of the Chief Actuary.
    • 9. OASDI (Old-Age, Survivors, Disability Insurance) Operational Cash Flows as a Percentage of GDP 1957-2012: Actual Data 2013-2085: Projected data under the intermediate assumptions Where we are today. In 2033, the scheduled benefits would not be payable under current law. All reserves would be exhausted, and the taxes would be enough to pay 77 percent of scheduled benefits. *Income from individual years excludes interest on the trust funds and is based upon intermediate assumptions. Source: Social Security Administration, Office of the Chief Actuary.
    • 10. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Can 5 Years Make a Difference? 2007 2012
    • 11. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? 2007 Verbiage 2012 Verbiage About Social Security’s future… About Social Security’s future… Social Security is a compact between generations. For decades, America has kept the promise of security for its workers and their families. Now, however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today’s younger workers are ready for retirement. Social Security is a compact between generations. Since 1935, America has kept the promise of security for its workers and their families. Now, however, the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today’s younger workers are ready for retirement. In 2017 we will begin paying more in benefits than we collect in taxes. Without changes, by 2041 the Social Security Trust Fund will be exhausted* and there will be enough money to pay only about 75 cents for each dollar of scheduled benefits. We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations. Without changes, in 2033 the Social Security Trust Fund will be able to pay only about 75 cents for each dollar of scheduled benefits. We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations.
    • 12. TO SUMMARIZE The system is projected to see a deficit between revenue and income for the foreseeable future. What might happen???
    • 13. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? What Might Happen? (How can we correct the problem?) Current Reform proposals being studied/considered: • Reduce cost-of-living adjustments • Increase the maximum earnings subject to SS taxation • Reduce benefits for future retirees • Increase the payroll tax percentage • Invest some of the trust fund in marketable securities • Raise the normal retirement age (Currently 66 for those born between 1943 & 1954; 67 for those born in 1960 and later)
    • 14. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Now on to the IMPORTANT Items… You and YOUR Benefits!
    • 15. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? What Should I Know or Do BEFORE Applying for Social Security?  Verify your earnings history  Estimate your benefits at different ages  Refer to your SS statement  Visit www.SSA.gov and use the benefits estimator calculators  Evaluate strategies to maximize your benefits  Consider and plan out ALL of your retirement income sources
    • 16. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Who is Eligible for Social Security? Be an employee or a self-employed worker who has earned at least 40 credits… •Generally looked at as 40 quarters, or 10 years. •To earn a credit, you must make a certain amount of money (at least $1,160 per “credit”). Be at least age 62… •Age 62 is currently referred to as “early retirement.” •Your full retirement age depends upon the year you were born (more on this in a moment).
    • 17. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Who is Eligible for Social Security? Certain members of your family may be eligible for family benefits based on your record… •A spouse who is 62 years of age or older. •A spouse who is under 62 years if he/she is caring for a child under 16 years or disabled. •Unmarried children under 18 years. •Unmarried children age 18-19, if they are full time students in high school.
    • 18. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Who is Eligible for Social Security? Certain members of your family may be eligible for family benefits based on your record… •Children of any age, if they are disabled from a disability that started before age 22. •A divorced spouse, unmarried, age 62 or older, and married to you for at least 10 years (payments to a divorced spouse are not counted toward the family benefit limit).
    • 19. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Full Retirement Age (FRA) Your Year of Birth Full (Normal) Retirement Age 1943-1954 66 1955 66 and 2 months 1956 66 and 4 months 1957 66 and 6 months 1958 66 and 8 months 1959 66 and 10 months 1960 and later 67
    • 20. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? How Much Will You Receive? Benefits depend on: • How much you earned over your working career. • The age at which you apply for benefits.
    • 21. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? How Your Benefit is Calculated • Formula includes your highest 35 years of earnings (Any missing years are counted as zeroes in the average) to find the AIME • AIME (Average Indexed Monthly Earnings) goes through a calculation to determine your PIA, or Primary Insurance Amount.
    • 22. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? How Your Benefit is Calculated • Your PIA is the amount you will receive at full retirement age (remember the chart we just showed). • Your benefit will be calculated according to your PIA and any reductions or enhancements based upon what age you elect to retire.
    • 23. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? AIME (Average Indexed Monthly Earnings) • The first $791 of your AIME is multiplied by 90% • The amount between $791 and $4,768 is multiplied by 32% • Any amount in excess of $4,768 is multiplied by 15%
    • 24. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Example… Meet Ronald Retiree • Ronald was born in 1946. • His AIME (Average Indexed Monthly Earnings) are $6,500. Formula is Applied… • $711.90 ($791 * 90%) • $1,272.64($4,768 – $791 = $3,977 * 32%) • Excess = $259.80 ($6,500 – $4,768 = $1,732 * 15%) • For a Total PIA of $2,244.34 ($711.90 + $1,272.64 + $259.80) How’s that for complicated???
    • 25. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? What if Ronald Wanted to Apply for Early Benefits? If Ronald Applied Early… At AGE: Benefit Will be % of PIA: If PIA is $2,244, His Benefit Will be: 62 75% $1,683 63 80% $1,795 64 86.7% $1,945 65 93.3% $2,094 • Ronald’s full retirement age is 66 since he was born between 1943-1954. • Since his PIA was calculated to be $2,244/mo, that is what he would receive at age 66.
    • 26. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? BUT… What if He Applied for Benefits After Reaching His Full Retirement Age? If Ronald Applied After Reaching FRA… At AGE: Benefit Will be % of PIA: If PIA is $2,244, His Benefit Will be: 66 (FRA) 100% $2,244 67 108% $2,424 68 116% $2,603 69 124% $2,783 70 132% $2,962 • Ronald would earn delayed credits. • *ONCE YOU REACH AGE 70, YOUR DELAYED CREDITS NO LONGER INCREASE • Please Note: cost of Living adjustments are not included, these figures are hypothetical only.
    • 27. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? How Do Spousal Benefits Work? • A spouse is eligible for ½ of his/her spouse’s full PIA at FRA, that would then be adjusted depending upon when elected. • If spouse qualifies for SS on his/her own record, they will receive the higher of their own benefit or the spousal benefit. • Spouse must be at least age 62 for the reduced benefit, or 66 for their full spousal benefit. • A spouse can NOT earn delayed credits on spousal benefits after age 66. IMPORTANT POINT: Social Security benefits are Gender neutral
    • 28. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Let’s Look at an Example • Dave’s benefit is $2,200. • Diane’s benefit (on her own earnings history) is $900. • Diane’s spousal benefit is 50% of Dave’s benefit, which is $1,100 ($900 from her own record + $200 of spousal benefit) • Diane will receive the higher of the two, which is $1,100. KEY POINT: Dave (the primary worker) must have applied for benefits in order for Diane to receive any spousal benefits. However, he can suspend his payments after he applies in order to build delayed credits if over FRA). We’ll discuss this in a moment.
    • 29. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Understanding Social Security and Divorce Some General Rules •Divorced spouse benefits cease upon remarriage. •Multiple ex-spouses can receive benefits and the benefits of one ex-spouse have no impact on the benefits of another. •Exactly the same as spousal benefits provided the marriage lasted at least 10 years. (The higher of your benefits or ½ your spouse’s benefits.)
    • 30. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? When a Spouse Dies… (Understanding Survivor Benefits) The surviving spouse receives the higher of the two benefits. The lower of the two benefits goes away. Some Basic Rules: •Except in the case of accident, marriage must have been for at least 9 months at date of death. •Surviving spouse must be at least age 60 for reduced benefits.
    • 31. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Something to Consider Let’s look at an example… •Dean and Margaret have been married for 35 years. •Margaret’s benefit is $2,100/mo and Dean’s benefit is $1,500/mo. •Margaret passes away. •Dean will receive the higher of the two benefits ($2,100/mo). He will no longer receive his benefit of $1,500/mo. Represents a loss of $1,500/month in household income!
    • 32. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? When Should I Take Social Security? GAO study issued in June 2011 and concluded that: • Those that can delay taking benefits should do so. • For the average 65+ year old, SS makes up approximately 37% of household retirement income.
    • 33. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? The REAL Life Factors to Consider… • Do you plan to work in retirement? • REMEMBER: o If you are under the Full Retirement Age (FRA), you may be penalized for working. o In 2013, you would be penalized $1 for every $2 you make over $15,120 ($1,260/mo). • Your NEED for the income. • The short term and long term needs of your spouse. • Health. • Life expectancy.
    • 34. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? 1st Tip for Getting the MOST From Social Security Live a Long Time… (Statistics suggest that those that celebrate the most amount of birthdays live the longest.)
    • 35. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Ready for Some Real Tips? (That You Have Some Control Over)  Confirm your earnings record and explore whether or not it can be improved… • Do you have missing years? • Are you certain it is accurate?  Avoid garnishments that reduce your benefits… • SS benefits are GENERALLY protected from debt collection actions. This is true except in the case of: o Back taxes o Outstanding federal student loans o Child support o Alimony
    • 36. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? More Tips  Consider structuring income to reduce or eliminate taxation on your benefits.  If you are a single filer, you will have to pay taxes on your SS benefits if your total income is more than $25,000.  If you are a joint filer, the number is $32,000. It is possible that up to 85% of your Social Security benefit is taxed.
    • 37. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Strategy #1 To Maximize Benefits (Involves Spousal Coordination) CLAIM and SUSPEND… •Step 1: At Full Retirement Age (FRA), the spouse with the higher earnings record applies for SS benefits, but immediately suspends benefits. •Step 2: The spouse with lower earnings files for spousal benefit. •Step 3: The spouse with higher earnings record claims their benefit at age 70 (“un-suspends” their benefit). KEEP IN MIND… This strategy may not be done before FRA!
    • 38. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Let’s Explore… Dick and Jane Dick and Jane are both 66… • Dick’s benefit at age 66 would be $2,196. • Based on Jane’s working record, her benefit would only be $700, so the spousal benefit is higher at $1,098. • If Dick elects to wait to file, his benefit would be $2,899. • Dick decides to “claim & suspend”.
    • 39. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Let’s Explore… Dick and Jane BENEFITS… • Jane is able to receive spousal benefits. • Dick’s benefits continue to grow. • Survivor benefits will be higher.
    • 40. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Strategy # 2 To Maximize Benefits (Involves Spousal Coordination) “The DOUBLE DIP” Step 1: At Full Retirement Age, the spouse with the higher earnings record applies for spousal benefits. (Spouse must be receiving benefits on his/her record). Step 2: At age 70, the spouse with the higher earnings record switches to his/her own record.
    • 41. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Let’s Explore… Sam and Susie Sam is 66 and Susie is 62… •Sam’s benefit (PIA) is $2,196. •Susie’s benefit (PIA) is $1,000. •Susie applies for benefits. She receives a reduced amount of $750/mo. •Instead of filing on his own record, Sam files for a spousal benefit on Susie’s record. He begins receiving $500/mo. •At age 70, Sam’s benefit will be $2,899. Meanwhile, he received an additional $500/mo from 66-70.
    • 42. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Let’s Explore… Sam and Susie BENEFITS… • Sam gets benefits from age 66-70. • Sam’s benefits continue to grow. • Sam receives ½ of his spouse’s FULL PIA ($500/mo). • Survivor benefits will be higher as a result of him deferring HIS benefits.
    • 43. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Caution • The “DOUBLE DIP” strategy cannot be done before Full Retirement Age. In this example, Sam had attained FRA. • Only one spouse is allowed to claim a spousal benefit. • This is known as “restricting” application to a spousal benefit (not formally known as the “DOUBLE DIP”).
    • 44. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? What ELSE is There to Consider?  Coordinate when and how you draw Social Security benefits with your overall financial plan.  Have a plan that considers how to maximize your Social Security benefits to their fullest potential.
    • 45. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? Have Questions About Your Situation? Our Retirement Income Maximization Consultation carefully considers: How taxes may impact your Social Security benefits. Strategies you may wish to consider in maximizing your benefits. Coordinating spousal benefits. How your overall income plan works with your SS benefits. How to incorporate Social Security into your overall financial plan.
    • 46. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? 3 Types of People Who Could Benefit From the Retirement Income Maximization Consultation Person Potential Benefit Those under age 62 Opportunity to coordinate in advance SS benefit elections and begin thorough income planning while exploring potential tax savings opportunities with current accounts. Those age 62-70 who have not elected Social Security yet. Opportunity to strategically plan SS benefit decision and coordinate with overall income plan. Those over age 62 who have already made Social Security election Opportunity to explore the “do-over” or one-time voluntary suspension of SS benefits and coordinate with overall retirement income plan.
    • 47. Take a moment to reflect and evaluate your current financial situation as it relates to the topic we just covered that started with the following question… Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security?
    • 48. Understanding Social Security Keys to Maximizing Your Retirement Income… Will You Get the Most Out of Social Security? The Financial Wellness Initiative® Examining Your Financial Health Through the Financial Wellness Experience! The Financial Wellnes Initiative® PLAN OF ACTION! © USA Financial Plug-N-Run®. Use without license or reproduction without express, written permission from USA Financial Plug-N-Run®. is strictly prohibited.
    • 49. The Financial Wellness Initiative® Plan of Action 1.Please seek help from a qualified financial services professional – don’t try and “self-diagnose” or operate on yourself. 2.Please take the time to meet with that individual for a financial physical or check-up. 3.Remember that a proper “diagnosis” always comes before any proper “prescription”. 4.A proper “diagnosis” should help identify the problem(s) not just the symptom(s).
    • 50. The Financial Wellness Initiative® Plan of Action 5.Help the “doctor,” or financial services professional, by being open and honest – explaining any potential allergies. In other words, if you’ve had prior bad experiences let them know that… there are often other remedies or solutions. There could also have been a simple misdiagnosis or incorrect prescription made previously. 6.If a “prescription” is the best course of action, focus on what the prescription does and not on what it is called. 7.Understand the circumstance and the method for which the prescription is to be used. 8.Consider my “definition of insanity”… “To change nothing and continually do the same thing(s) over and over, yet expect the results to be better than they were before.”
    • 51. My Final TWO Parting Questions… that will indicate to you the value of the Financial Wellness Consultation!
    • 52. Important Question #1 “Do you plan on living another 5 or 10 more years…?” Whether or not you’re planning on it, Uncle Sam IS!
    • 53. Here are the government’s life expectancy numbers* based on age… Age 55 Today Expect to live 29.6 years Age 75 Today Expect to live 13.4 years Age 60 Today Expect to live 25.2 years Age 80 Today Expect to live 10.2 years Age 65 Today Expect to live 21.0 years Age 85 Today Expect to live 7.6 years Age 70 Today Expect to live 17.0 years Age 90 Today Expect to live 5.5 years *Source: Department of Treasury Internal Revenue Service, Publication 590 (2011)
    • 54. Important Question #2 Would you be better off today if you had known 5 or 10 years ago all the things that you know now…? (Including what you just learned in today’s session.) If you are like most people… Then the obvious answer is… “…YES, of course I’d be BETTER OFF TODAY!”
    • 55. Here is the Purpose for Asking This Question My Job is to help make sure that In 5 or 10 years from now you don’t have to look back over those next 5 or 10 years and come to that same realization!
    • 56. …And Here is The Secret! The next 5 or 10 years begins today! Exclusively with the Free Financial Wellness Consultation!
    • 57. Please Do Not Let Procrastination and Fear of Change Become Your Worst enemy! Similar to how a doctor may keep specific time open for “new patients only”… I’ve set aside specific time open for you to take advantage of my… Financial Wellness Consultation!
    • 58. Exclusively brought to you by Name of Representative Here of Company Name Here Securities Offered Through Broker/Dealer Name Here Enter B/D Required Disclaimers Here (e.g. Member FINRA / SIPC / Registered Investment Advisor) www.RepresentativeWebsiteHere.com 1-888-888-8000 (Office) 111 Anywhere Street ©2011-2013 USA Financial 49123 Somewhere, MI Plug-N-Run®

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