{
EDM
Social Security Workshop
Presented by:
Rick Scruggs
CLU,ChFC
September 18, 2013
1. Benefits
2. Spousal Benefits
3. Survivor Benefits
4. Divorce Benefits
5. Disability Benefits
Agenda
If you’re married
there are 567
options to claiming
your spouse
Tax Employee Employer
Social
Security
6.2% 6.2%
Medicare 1.45% 1.45%
Total 7.65% 7.65%
Maximum Taxable
Earnings
2013
Socia...
Average Benefit
Maximum
Average Benefit in 2013: $1,231
Maximum Benefit: $2,500
If you are younger than age
60, you can access your
statement online
and
Set-up your own Social
Security Website at:
www.s...
Eligibility 40 quarters of work
How Are Social Security
Benefits Calculated?
Calculation Look at average of
35 highest ear...
When Can I Receive Social Security
Benefits?
Year of Birth Age 62 Benefit Full Retirement
Age (FRA)
1943-1954 75% 66
1955 ...
Reasons to Start
Benefits Early:
• You’d rather have the
money to spend now.
• You may be in poor
health and/or have a
sho...
You are in good health and/or have a
long life expectancy, and you want an
increased benefit later.
Reasons to Delay
Benef...
Impact of Receiving Benefits Before (and
After) Full Retirement Age
Source: http://us.pioneerinvestments.com/lfa/frontdoor...
Contemplating Early
Retirement
Joint Income Example
James and Denise
• James is contemplating retirement at age
of 62 vers...
Joint Income Example:
Early Retirement Reduces Annual
Household Benefit
$11,880
$18,000
$0
$4,000
$8,000
$12,000
$16,000
$...
Robert and Maria
• Both worked
• Both are 66
• Both are collecting
Social Security benefits this
year for the first time
•...
Source: “Frequently Asked Retirement Questions” socialsecurity.gov/planners/faqs.htm accessed July 20, 2011
Full Retiremen...
John and Barbara
• John just turned 66 and reached his
Full Retirement Age
• His wife Barbara is 65. She never
worked, but...
Claim Now, Claim More Later
• David just turned 66 in 2013. Due to
health concerns, he wants
to retire and start collectin...
{
• Receive the greater of:
- Benefits based on your earnings history; OR
- Benefits based on your spouse’s earnings
histo...
Example:
If both spouses start
collecting benefits at
age 62, and the
husband dies at age 82
If the wife collects at
age 6...
Divorced Spouses
• If you are divorced, but your marriage lasted 10 years or longer, you
may be able to receive benefits o...
{ {What is Social Security’s
Definition of disability?
• The “inability to engage
in any substantial gainful
activity (SGA...
{
• Choose one of the three methods
• www.socialsecurity.gov/applyforbenefits
• Call 1-800-772-1213
• Make an appointment to...
Social Security
Explorer
• MyRetirementPaycheck.org
• SSA.gov
• Financial Designs
• Lynchburg’s Social Security Administration
• Social Security Li...
UnifiedPlan
Quarterly
Statements
View from the top of page 4
View from the top of page 1
 Average man turning 62 today
can expect to live to 81*
 Average woman turning 62
today can expect to live to 84*
 One ...
{
Social security workshop 9.18.13
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Social security workshop 9.18.13

  1. 1. { EDM Social Security Workshop Presented by: Rick Scruggs CLU,ChFC September 18, 2013
  2. 2. 1. Benefits 2. Spousal Benefits 3. Survivor Benefits 4. Divorce Benefits 5. Disability Benefits Agenda
  3. 3. If you’re married there are 567 options to claiming your spouse
  4. 4. Tax Employee Employer Social Security 6.2% 6.2% Medicare 1.45% 1.45% Total 7.65% 7.65% Maximum Taxable Earnings 2013 Social Security (OASDI only) $113,700 Medicare Unlimited Social Security Tax Rate for 2013 http://www.ssa.gov
  5. 5. Average Benefit Maximum Average Benefit in 2013: $1,231 Maximum Benefit: $2,500
  6. 6. If you are younger than age 60, you can access your statement online and Set-up your own Social Security Website at: www.ssa.gov Security Statements
  7. 7. Eligibility 40 quarters of work How Are Social Security Benefits Calculated? Calculation Look at average of 35 highest earning years of work.
  8. 8. When Can I Receive Social Security Benefits? Year of Birth Age 62 Benefit Full Retirement Age (FRA) 1943-1954 75% 66 1955 74.2% 66 and 2 months 1956 73.3% 66 and 4 months 1957 72.5% 66 and 6 months 1958 71.7% 66 and 8 months 1959 70.8% 66 and 10 months 1960 and later 70.0% 67 * If you choose to delay receiving benefits you’ll receive an 8% compound for every year after NRA, but capped at age 70.
  9. 9. Reasons to Start Benefits Early: • You’d rather have the money to spend now. • You may be in poor health and/or have a short life expectancy. • You may be out of work and need the income now to make ends meet.
  10. 10. You are in good health and/or have a long life expectancy, and you want an increased benefit later. Reasons to Delay Benefits:
  11. 11. Impact of Receiving Benefits Before (and After) Full Retirement Age Source: http://us.pioneerinvestments.com/lfa/frontdoor.jsp?navid=168&navvr=166
  12. 12. Contemplating Early Retirement Joint Income Example James and Denise • James is contemplating retirement at age of 62 versus waiting until full retirement age of 66. • • His wife Denise never worked. • How will retirement at 62 impact the annual Social Security Benefits James and Denise receive?
  13. 13. Joint Income Example: Early Retirement Reduces Annual Household Benefit $11,880 $18,000 $0 $4,000 $8,000 $12,000 $16,000 $20,000 Began at 62 Began at 66 Assumptions: Began at Age 62: Assumes husband retires early at age 62, wife is also age 62; he receives reduced monthly benefit of $750/month and she receives reduced spousal benefit of 32% Began at 66: Assumes husband retires at full retirement age of 66 and collects full retirement benefit of $1,000 per month; wife is 66 or older on date of retirement and receives 50% of husbands benefit
  14. 14. Robert and Maria • Both worked • Both are 66 • Both are collecting Social Security benefits this year for the first time • His monthly benefit is $1500 • Her monthly benefit is $900 • What is the household maximum Social Security benefit? Both Spouses Worked, Retire at Full Retirement Age Joint Income Example:
  15. 15. Source: “Frequently Asked Retirement Questions” socialsecurity.gov/planners/faqs.htm accessed July 20, 2011 Full Retirement Age Who Max Benefit Calculation Husband $1500 His benefit higher than her benefit Wife $900 Her benefit ($900) > half of his benefit ($750) Total $2400 Sum of Husband and Wife’s Benefit Joint Income Example: Robert and Maria
  16. 16. John and Barbara • John just turned 66 and reached his Full Retirement Age • His wife Barbara is 65. She never worked, but could receive a Social Security Spousal Benefit based on John’s work history. • John plans to keep working, but would like a little extra money to do the things he enjoys now while he is still healthy Claim & Suspend Solution: Barbara collects Spousal Benefits, while John continues to accrue delayed credits on his benefits
  17. 17. Claim Now, Claim More Later • David just turned 66 in 2013. Due to health concerns, he wants to retire and start collecting SS • His wife Susan is 64 and worked most of her life. Her choices are: • Receive reduced benefits • Wait until 66 to collect her full Social Security retirement benefits • Wait until 70 to collect her Social Security plus delayed credits • Susan likes her job; wants to maximize their income and Social Security benefits Alternate Solution: Susan starts Spousal Benefits at 66, while accruing Delayed Retirement Credits on her benefits http://us.pioneerinvestments.com/lfa/frontdoor.jsp?navid=168&navvr=166
  18. 18. { • Receive the greater of: - Benefits based on your earnings history; OR - Benefits based on your spouse’s earnings history • Spousal benefit is discontinued Delaying Social Security not only increases an individual’s own benefit, but can also increase the benefit to a surviving spouse. Upon the death of an individual, the spouse will receive the greater of these two. Loss of SpouseSurviving Spouse Will Still Receive Some Benefits
  19. 19. Example: If both spouses start collecting benefits at age 62, and the husband dies at age 82 If the wife collects at age 62, the husband delays benefits to age 70, and he dies at age 82. Initial benefit for husband $12,000 $26,751 Initial benefit for wife (on her own work record) $12,000 $12,000 Benefit that will continue for surviving spouse $21,673 $38,133 How delaying Social Security can benefit a surviving spouse
  20. 20. Divorced Spouses • If you are divorced, but your marriage lasted 10 years or longer, you may be able to receive benefits on your ex-spouse’s record (even if he or she has remarried ) if: • Your are unmarried; • You are 62 or older; • Your ex-spouse is entitled to Social Security retirement or Disability benefits and • The benefit you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse’s work.
  21. 21. { {What is Social Security’s Definition of disability? • The “inability to engage in any substantial gainful activity (SGA) by determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a period of not less than 12 months.” What are Social Security’s Disability Programs? • Social Security Disability Insurance (SSDI) • Supplemental Security Income (SSI)
  22. 22. {
  23. 23. • Choose one of the three methods • www.socialsecurity.gov/applyforbenefits • Call 1-800-772-1213 • Make an appointment to visit any Social Security office to apply in person • Bring (some or all) • Social Security number/card for you and spouse • Birth certificate • W-2 forms or self-employment tax return for last year • Military -discharge papers • Name of your financial institution, routing number and account number How To Apply For Benefits
  24. 24. Social Security Explorer
  25. 25. • MyRetirementPaycheck.org • SSA.gov • Financial Designs • Lynchburg’s Social Security Administration • Social Security Literature Tools
  26. 26. UnifiedPlan Quarterly Statements View from the top of page 4 View from the top of page 1
  27. 27.  Average man turning 62 today can expect to live to 81*  Average woman turning 62 today can expect to live to 84*  One out of four 65 year olds will live to 90**  One out of ten 65 year olds will live to 95** What Will You Be Doing on Your 80th or 90th Birthday? * Source: Social Security Administration Periodic Life Table **Source: socialsecurity.gov/planners/lifeexpectancy.htm accessed August, 2011
  28. 28. {

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