7. 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
8. Eligibility 40 quarters of work
How Are Social Security
Benefits Calculated?
Calculation Look at average of
35 highest earning
years of work.
9. 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.
10. 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.
11. You are in good health and/or have a
long life expectancy, and you want an
increased benefit later.
Reasons to Delay
Benefits:
12. Impact of Receiving Benefits Before (and
After) Full Retirement Age
Source: http://us.pioneerinvestments.com/lfa/frontdoor.jsp?navid=168&navvr=166
13. 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?
14. 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
15. 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:
16. 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
17. 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
18. 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
19. {
• 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
20. 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
21. 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.
22. { {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)
24. • 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
28. 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
