This document provides information about when to start claiming Social Security retirement benefits. It discusses that 35 years of earnings is the magic number used to calculate benefits, and that working longer can increase your monthly payment. Taking benefits as early as age 62 is possible but will result in reduced monthly payments. Waiting until full retirement age or age 70 can significantly increase your lifetime benefits. Factors like taxes, earnings limits, and spousal benefits must also be considered when deciding when to start receiving Social Security.

1. When to Start
Social Security Benefits
Presented by:
Robert L. Wolff, Esq.
P.O. Box 381
Dumaguete City, Negros Oriental
Philippines 6200
wolff2000@earthlink.net
NY (518) 325-6015
PH 09266485273

2. Disclaimer
I am not an attorney admitted to practice law in the
Philippines. I am an attorney admitted to practice law in
New York. Forunately I have a friend who is a Philippine
lawyer that can give advice.
•The following is not a legal advice, but rather comments
and observations.
•For answers to legal issues raised by this presentation,
you need to consult an attorney admitted to practice law
in the Philippines.

3. When to Start
Social Security Benefits
You say to yourself, I have earned my Social
Security by working all my life.
What’s the best way to get the most money out
of my contributions to Social Security?
Answer - Take the time to understand Social
Security rules.

4. 35 Years is the Magic Number
Your Social Security payment is figured using a complex calculation
based on a 35-year average of your covered wages. Each year’s
wages are adjusted for inflation before being averaged.
•If you worked longer than 35 years, the government will use the
highest years.
•If you worked for less than 35 years, they’ll average in zeros for the
years you are lacking. You don’t have to be math genius to figure out
the impact of that – it drags down your average. If you can avoid zeros
by working a couple years longer, you’ll increase your Social Security
payment.

5. Social Security
• Who is eligible for benefits?
Applicant – worker
Spouse- living, divorce and decease
Qualified children and parents

6. The Skinny on Social Security
Social Security is
basically a Joint Life
Annuity, with a Cost of
Living Adjustment
(COLA)
For spouses, this is
important for retirement
planning, particularly
for the surviving
spouse.

7. Social Security - Retirement
• Eligibility – Age
Full Retirement Age varies depending on year
of birth
 For Individuals born between 1943 – 1954
the full retirement age is 66.
 Born after 1960 – full retirement age is 67

8. A question individuals nearing retirement often
ask themselves is, “What is the earliest age I can retire
and receive benefits?” Age 62, (age 60 if you are a
surviving spouse) but if you take early retirement,
your Social Security benefit will be reduced.
The question should be asked – Should I.
Earliest Retirement Age

9. Three Factors To Consider If You
Take Social Security At 62
1. If you were born between 1943 and 1954, Your Social
Security benefit will be reduced by 25 percent. 30
percent if born after 1960.
2. Your Social Security benefit may be reduced by earned
income.
3. 50 or 85% of your Social Security could be subject to
income taxes.

10. If you were born in 1953, your Social Security benefit
increases by approximately 7 % each year you delay
taking it from age 62 to 66 and by 8 % a year until age 70.
From 75 % to 132% increase at age 70- that is close to a
doubling of the monthly retirement income for the rest of
your life.
 Plus the cost-of-living adjustments (COLA) to keep up
with inflation will be based on a larger amount if you wait.
 If you can wait, Social Security is one of the best annuity
buys in town.
Born In 1953

11. COLA
1975 8.0% 1984 3.5% 1993 2.6% 2002 1.4%
1976 6.4% 1985 3.1% 1994 2.8% 2003 2.1%
1977 5.9% 1986 1.3% 1995 2.6% 2004 2.7%
1978 6.5% 1987 4.2% 1996 2.9% 2005 4.1%
1979 9.9% 1988 4.0% 1997 2.1% 2006 3.3%
1980 14.3% 1989 4.7% 1998 1.3% 2007 2.3%
1881 11.2% 1990 2.5% 1999 2.5% 2008 2.3%
1982 7.4% 1991 3.7% 2000 3.5% 2009 5.8%
1983 3.5% 1992 3.0% 2001 2.6% 2010 0 %
2011 0 % 2012 3.8% 2013 1.7% 2014 1.5%

12. Gross Over Age
• The gross over age is that point in time you will receive
the same amount of Social Security payments no matter
what age you started taken benefits age 62-66-70 or
some age in between.
• What is different is the amount of your monthly payment
after you have reached your gross over age.
• The longer you wait to take social security benefit up to
the age 70, the bigger your monthly payment and maybe
that of your spouse.

13. Betting Against Death
The cross over age or break-even point for a person who
earned the inflation-adjusted equivalent of $70,000 per year
for 35 years.
•If this person waits until 70 to claim Social Security and
lives until at least age 90, he’ll accumulate almost $162,000
more in benefits than he would if he had claimed at 62.
•But there’s a possibility of losing the bet and getting
nothing.
•But if you are married, your spouse can claim your benefit
if it is bigger than theirs.

14. Betting Against Death If You Or
Your Spouse Live To Age 90
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
62 66 70 74 78 82 86 90
Start Age=62 Start Age=66 Start Age=70
$764,820
$669,552
$603,064

15. CROSS OVER AGE
No Adjustments For The COLA
Social Security benefit
at 62
Social Security benefit
at 66 (NRA)
Social Security benefit
at 70
$13,860 $18,372 $24,252
$55,440 ($13,860 x 4 years) $55,440 ($4,512 x 12.3
years)
Increased benefit by $4,512 per
year by waiting until age cross
over age - 78.3
$110, 880 ($10,392 x 10.7
years)
Increased by $10,392 per year
by waiting until age 70 cross
over age – 80.7

16. Meet Bill, Bob and Buck
Bill took his benefits at age 62, Bob at age 66, and
Buck at age of 70.
Assume that their yearly benefit will increase by
3% due to the COLA adjustment.
Bill - Age 62 Bob - Age 66 Buck - Age 70
$13,860
$20,292
$30,805

17. Compare the Three At Age 80
Bill Bob Buck
$23,595
$30,694
$41,399

18. Compare the Three At Age 90
Bill Bob Buck
$31,710
$41,250
$55,637

19. Sam and Mary’s Benefits Adjusted for COLA (3%)
$13,860
$23,595 $23,595
$30,805
If both start collecting benefits
at 62, and Sam dies at 80
If Mary collects at 62 and Sam
delays to 70, then dies at 80
 Initial
benefit for
Sam
 Benefit that
will continue
for Mary

20. Sam and Mary’s Benefits Adjusted for COLA (3%)
$13,860
$31,711 $31,711
$55,637
If both start collecting benefits
at 62, and Sam dies at 90
If Mary collects at 62 and Sam
delays to 70, then dies at 90
 Initial
benefit for
Sam
 Benefit that
will continue
for Mary

21. Watch Out For Income Limits
If you start taking Social
Security before your full
retirement age, you may lose
some of your Social Security
benefits if you work.

22. Social Security - Retirement
Earning Limits
Full retirement age – no limit on earnings
Under full retirement age - $15,720/year for 2015
Penalty: For $2 over limit, reduce benefit by $1
Year of reaching full retirement age - $41,880/year for
2015
Penalty: For every $3 over limit, reduce benefit by $1,
until you hit the month of actual full retirement age

23. What if Your Spouse is Still Working?
 If your spouse has not reached full retirement
age and is still working – their income may
reduce your benefit.
 For married couples, taking Social Security
before full retirement age needs to be a family
decision.

24. Caution -Your Social Security
Benefits May Be Taxable!

25. Provisional Income
Revenue Reconciliation Act of 1993
 Increased marginal tax rates on your
Provisional Income
 Earned income
 Pensions, 401(k)s, traditional IRAs
 Taxable interest and gains
 Tax-exempt interest
 50% or 85% of Social Security retirement
benefit can be taxable

26. Determining Taxation
Provisional Income
Bracket #1
•Single Filers: Income
less than $25,000
•Joint Filers: Income
less than $32,000
Social Security benefit
is not taxable.
Provisional Income
Bracket #3
•Single Filers: Income
more than $34,000
•Joint Filers: Income
more than $44,000
Up to 85% of your
Social Security benefit
is taxable.
Provisional Income
Bracket #2
•Single Filers: Income
between $25,000 and
$34,000
•Joint Filers: Income
between $32,000 and
$44,000
Up to 50% of your
Social Security
benefit is taxable.
Provisional Income

27. Caution
If you take Social Security at age 62, and your spouse has
not reached full retirement age, and if you or your spouse
are still working, three bad things can happen:
1. Your Social Security benefit will be reduced.
2. Plus, your Social Security benefit will be reduced by $1
for every $2 of earned income over $15,720 by you or your
spouse until full retirement age.
3. 50 or 85% of your Social Security could be subject to
income taxes.

28. Dependent Spouse’s Age
62
63
64
65
Full Retirement Age
Percent of Worker’s Benefits
35.0%
37.5%
41.7%
45.8%
50.0%
Spousal Dependent Benefits
The Social Security benefit at full retirement age, whether the dependent is a
spouse, or divorced spouse, is 50% of the worker’s retirement or disability
benefit amount.
The amount of your dependents benefits depends on your age when you
claim the benefits. At each of the ages listed below, a dependent whose full
retirement age is 66 receives a benefit as follows:

29. Spousal Dependent Benefits
Example
If you and your spouse have reached full
retirement age. Your benefit is $500 per month,
your spouse’s benefit is $2,000 for a total of
$2,500 per month.
• Your total benefit will be $1,000 – 50% of your
spousal benefit. The household benefit will be
$3,000, rather than $2,500.
• If you are 62, your total benefit will be $650.00 -
$500 from your benefit, plus $150 allocation
from your spouse’s benefit.

30. Spousal Dependent Benefits
If the high-earning spouse is not taken Social
Security benefits, then he or she must have
applied for benefits before the other spouse can
claim spousal benefits, but the higher earner has
the option to “file and suspend”– file for benefits,
so his or her spouse can claim spousal benefits,
and then suspend the application so that his or her
own benefits can continue to grow.

31. Some Good News If Married
At Full Retirement Age, Social Security
gives a person two choices:
• You can take your own benefit, or
• If eligible – you can collect just your spousal
benefit, let your benefit grow, and then claim your
own benefits at a later date - say age 70.

32. Social Security – Survivor Benefits
• Certain members of a decedent’s family
can collect benefits
– Surviving spouse, if married at least nine
months, unless an exception applies.
– Some divorced surviving spouses
• Marriage lasted at least 10 years
• OR caring for minor or disabled child of decedent
– Children
– Dependent parents

33. Surviving Spouse Under Full
Retirement Age
A surviving spouse at age 60 will receive 71.5% of what
their spouse’s full retirement benefits would have been.
Each year a surviving spouse delays claiming benefits
after age 60, those benefits will rise 4.1% to 5.7% per
year, depending on the year of birth, until the survivor
reaches full benefits age.

34. Surviving Spouse at
Full Retirement Age
A surviving spouse who waits until full
retirement age to claim benefits as a surviving
spouse, will receive 100% of what the
deceased spouse’s full retirement benefit would
have been.
For example, if the surviving spouse benefit is
$1,000 per month and the decease spouse’s
benefit is $2,000, the surviving spouse can
claim the $2,000 benefit

35. Widows and Widowers Can Switch From
Retirement to Survivors Benefits
or From Survivors to Retirement Benefits
Claiming early retirement benefits permanently reduces your
retirement benefits based on your earning record, but not your
survivors benefits. Who is eligible?
1. A surviving spouse age 60 or older (age 50 if disable)
2. A divorced surviving spouse age 60 (age 50 if
disable) or older, if the marriage lasted at least
10 years

36. More Flexibility for Widows and
Widower
A widow/ widower can begin benefits based on based on his
or her own earnings record and later switch to survivors benefits or
begin with survivors benefits and later switch to benefits based on his
or her own record – even if the surviving spouse is filing before full
retirement age. You can not do that with spousal benefits.
•In other words, a widow or widower can begin drawing Social Security
based on his or her late spouse’s Social Security when he or she is as
young as 60(50 if disabled). To get the full benefit, one must wait until
the full retirement age.
•Then he or she can choose to leave his or her own Social security
alone, allowing it to grow in value until their full retirement age or even
age 70.

37. Can a Surviving Spouse Lose Survivor
Benefits by Working?
• Yes – if under full retirement age for the entire year and
earnings exceed $15,720 in 2015.
• Except for year you reach full retirement
age, the cap is $41,880 in 2015.

38. What Counts as Earnings?
• Wages received as an employee and net earnings from
self-employment
• Income excluded – interest and dividends, rental
income that is not treated as self-employment income,
distributions for IRA and retirement accounts, capital
gains, etc.
• The above list does not include all items that are
excluded.

39. Widow(er)s Remarrying Before Age 60
A widow or widower who remarries before
age 60 loses the right to collect survivors benefits
through the deceased spouse, even if he or she
still cares for the former spouse’s minor or
disabled child.
If marriage ends, may be entitled to benefits

40. A widow or widower who remarries after
reaching age 60 does not lose survivors
benefits from the deceased former spouse.
New spouse’s income will not affect benefits
Widow(er)s Remarrying After Age 60

41. Divorced Spouses
You are eligible for dependents benefits if
both you and your former spouse have reached age 62,
your marriage lasted ten years, and you have been
divorced two years.
This two-year waiting period does not apply if your former
spouse was already collecting retirement benefits before
the divorce.
You can collect benefits as soon as your former spouse is
eligible for retirement benefits at age 62. He or she does
not actually have to be collecting those benefits for you to
collect your benefits. Note, this not the rule for married
spouses.

42. Earnings of Ex-Spouse
• The excess earnings of an ex-spouse do
not cause deductions of benefits of an
entitled divorced spouse.

43. Remarried – Then Divorces or Widow(er)
If you are collecting dependents benefits on your former
spouse’s work record and then marry someone else, you
lose your right to continue those benefits.
If you divorce again or your new spouse dies, you can
collect benefits again on your first former spouse’s record,
or on your second spouse’s record if you were married for
ten years the second time as well.
Whether your former spouse remarries does not affect your
eligibility.

44. Receiving Your Payments While
Outside the United States
• If you are a U.S. citizen, you may receive your Social
Security payments in the Philippines as long as you are
eligible.
• There are certain countries where Social Security will not
be sent, such as North Korea.

45. Not a U.S. Citizen
• If you are not a U.S. citizen, the ability to receive Social
Security benefits depends on the country you are living
in.
• If living in the Philippines you will receive your Social
Security benefits unless you are receiving your benefits
as a dependent or surviving spouse. In that case there
are additional requirements that have to be meet.

46. Non-U.S. Citizen Spouse and
Dependents
To qualify for Social Security benefits in the
Philippines as a non-U.S. citizen dependent or
surviving spouse, as a general rule, you must
have lived in the U.S. in a family relationship for
at least five years.
There are exceptions, such as those
related to military service, etc.

47. Social Security Benefits for
Children
• Children of a retired, disabled or deceased worker living
in the Philippines, if they QUALIFY, may collect a child’s
benefit up until age 18.
• The Social Security benefit to surviving child is 75% of
the deceased parent’s PIA subject to reduction due to
the family maximum limit.

48. When Do Benefits For a Child Stop
• Benefits stop when a child reaches age 18,19 if
the child is a full time student or disabled
• Benefits will continue after age 18 to a child who
is disabled. If the disability began before age 22.

49. Adopted Children
• Adoption, if a child is adopted after the death of their
natural parent, may be able to collect Social Security on
the deceased parent’s account. Adoption before the
parent’s death, child is no longer a dependent and can
not collect.
• Children adopted outside the U.S. will not be paid
outside the U.S., even if the residency requirement is
met.

50. Eligibility For A Spouse To Become A
U.S. Citizen – General Rules
• Must be 18, legally permanent resident that has resided
continuously for 5 years in the U.S. If married to a U.S. citizen – 3
years.
• Must be physically present in the U.S. for at lease one-half of the
5 or 3 year period.
• Must reside for at least 3 months within the state in which petition is
filed.
• There are other requirements and exceptions, such as related to
military service.

51. Eligibility For A Child To Become A U.S.
Citizen – General Rules
• Generally a child born in the U.S. is automatically a U.S. citizen.
• A child born in the Philippines generally will qualify to be a U.S.
citizen if his or her parents are married and one is a U.S. citizen..
• A child born out of wedlock may qualify to be a U.S. citizen, where
one parent is a U.S. citizen, depending on numerous factors.
• The rules for children born outside the U.S. are complex.

52. Remember, Social Security is the foundation
upon which you can build your retirement
plan.
When planning for retirement, think of Social
Security as a joint life survivor annuity with a
COLA.
If your spouse in not a U.S. citizen, he or
she may not qualifly for your Social Security
benefit.

53. If you are thinking about taking Social Security,
you should also be thinking about estate planning
and such documents as:
• Power-of-Attorney
• Health Care Proxy
• Living Will
• Last Will and Testament
• Living and Asset Protection Trusts
You should also be thinking about protecting your
estate from catastrophic illness.

54. IRS Circular 230
Pursuant to Internal Revenue Service Circular 230,
we hereby inform you that the advice set forth herein
with respect to U.S. federal tax issues was not intended
or written by the law firm of Robert L. Wolff to used, and
cannot be used, by you or any taxpayer, for the purpose
of (i) avoiding any penalties that may be imposed on you
or nay other under the Internal Revenue Code or (ii)
promoting, marketing or recommending to another party
any transaction or matter addressed herein. Taxpayer
should seek advice based on the taxpayer’s particular
circumstances from an independent tax advisor.