smart ways to get more social security income

When To Take Social Security 1

Smart Ways to Get More Social Security Income

• Your Name, Your Pic• 111.111.1111 (office)• j.smith@xyzadvisor.com• www.xyzadvisor.com

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Choose Your Income Election Wisely!

• Choose wisely• Hundred’s of combinations• More important than ever

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Your Name, Your Pic Advisor

NOTE: This Presentation is not endorsed by Social Security Administration, nor are we affiliated with Social Security

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What you will learn…

• When filing for social security, do it right the first time

• 6 strategies for more income

• Your best-fit claiming method

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Basics…

• The “Octopus”

• Terms

• Solvency

• Benefit calculation

• Life expectancy

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The Octopus

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Assumptions & Terms

• Rules, case studies presented herein apply to those of us born between 1943 - 1954

• SS - Social Security• FRA - Full Retirement Age, age 66.

You get 100% of PIA• PIA – Primary Insurance Amount,

monthly SS income if begun at FRA

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Assumptions & Terms

• COLA – Cost of Living Adjustments• Primary Wage Earner - Spouse with

higher PIA• Secondary Wage Earner - Spouse

with lower PIA• LE - Life Expectancy

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IS IT SOLVENT?

Social Security Trust Fund

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How is Income Calculated?

• SS takes your highest 35 years earnings (zeros included) and applies wage index factor to adjust forward and translates to current dollars

• The sum of these index adjusted earnings are divided by the total months (12 X 35=420) which generates your AIME (Averaged Index Monthly Earnings)

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How is Income Calculated?

90% of first $816 = $73432% of the next $4,101 = $1,31215% of amount over $4,917 = $162PIA = $2,208

For example, if your AIME is $6,000, your PIA is:

2014 bend point formula

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Life Expectancy

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Life Expectancy Statistics

Age-80: per 1000 females born in 1927, 620 remain

Source: Social Security, Actuarial Publications, 2007 Period Life Table

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Six Strategies

• Claim & get it right the first time• Don’t elect too early• If married, use your living

spousal income benefit

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Six Strategies

• If married, leverage the survivor benefit income stream

• Compute your optimal benefit• Align your election strategy with

your overall portfolio

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Strategy #1: Claim Correctly the 1st Time

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Strategy #2: Don’t Elect too Early

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Strategy #2: Don’t Elect too Early

Claimant Age Benefit Amount % of PIA Claiming Zone

Benefit Adjusted 2.8%

for Inflation

62 1725 75Actuarial

Reduction “Penalty Zone”

1725

63 1840 80 1891

64 2001 87 2114

65 2139 93 2323

66 2300 100 PIA Income Amount 2568

67 2484 108Delayed

Retirement Credits

“Bonus Zone”

2851

68 2668 116 3148

69 2852 124 3460

70 3036 132 3786

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Strategy #2: Don’t Elect too Early

• Monthly benefit by age, adjusted for inflation

62 66 70

- Wait to claim, with inflation

- Wait to claim, no inflation

When To Take Social Security

Strategy #2: Don’t Elect too Early

Life Expectancy:50% Chance of Living to . . .

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Women88

One of a Couple92

Break Even

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Strategy #2: Don’t Elect too Early

• Social Security best-fit discussion• Consider life expectancy, single,

married, needs…

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Strategy #3: Spousal Income Benefit

Harness the powerof little-known

spousal incomebenefit

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Strategy #3: Spousal Income Benefit

Spousal Benefit =½ your spouse’s PIA at your FRA

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Strategy #3: Spousal Income Benefit

John’s PIA =Jane’s PIA =

Jane’s spousal benefit at FRA =

$2200$ 300$1100

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Strategy #3: Spousal Income Benefit

Spousal Income Benefit Rules…

• Spouse at FRA gets 50% of other spouse’s PIA

• Benefit reduced pro-rata, between 62 & 66

(35% at age 62)

• One spouse must claim (or file and suspend @ FRA)

for other spouse to collect

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Strategy #4: Survivor Income Benefit

Plan for your surviving Partner’s income stream

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Strategy #4: Survivor Income Benefit

Jim & Linda Heartland

$2,300$300

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Strategy #4: Survivor Income Benefit

$2,300

Jim passes on… Linda gets…

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Strategy #4: Survivor Income Benefit

Jim dies at 77 and Linda collects for 16 years to age 93

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Strategy #5: Compute Your Optimal Benefit

Compute your optimal benefit with our social security maximization software

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Strategy #5: Compute Your Optimal Benefit

Timing…

• PIA• Life expectancy• Relationship history,• Financials

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Strategy #5: Compute Your Optimal Benefit

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Strategy #5: Compute Your Optimal Benefit

www.ssa.gov

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Case Study 2:The Heartlands

“File and Suspend”

Case Study 1:The Metros

“Claim Some Now, More Later”

Strategy #5: Compute Your Optimal Benefit

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Case Study 1: The Metros

Bob Metro age 63 (LE = 82)

Secondary Earner------------------------------------------

PIA $2,000

Mary Metro age 61 (LE = 86)

Primary Earner------------------------------------------

PIA $2,200

Strategy #5: Compute Your Optimal Benefit

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Claims age 68$2307 for life(Bob’s PIA = $2000)

Collects $1000 between 66-70,Full benefit at 70$2904 for life

Case Study 1: The Metros

Strategy #5: Compute Your Optimal Benefit

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Case Study 1: The Metros

Strategy #5: Compute Your Optimal Benefit

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Case Study 2: The Heartlands

Jim Heartland

age 66(LE = 77)

Primary Earner------------------------------------------

PIA $2,300

Linda Heartland

age 61 (LE = 93)

Secondary Earner------------------------------------------

PIA$300

Strategy #5: Compute Your Optimal Benefit

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Age 66, files and suspendsAge 70, collects $3,036 for life...Age 77, dies

Case Study 2: The Heartlands

Strategy #5: Compute Your Optimal Benefit

Age 63, collects $825After Jim dies...Ages 73-92, Collects $3,036

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Strategy #5: Compute Your Optimal BenefitCase Study #2: The Heartlands

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Strategy #5: Compute Your Optimal Benefit

Case 3a: Sally Solo, Single

Sally Solo age 60 (LE = 88)

PIA $1,600

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Strategy #5: Compute Your Optimal Benefit

When To Take Social Security

Strategy #5: Compute Your Optimal Benefit

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How Sally Single Maximizes Her Social Security Income

LE = age 88, age 70 = $481,536, age 62 = $376,584

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Strategy #5: Compute Your Optimal Benefit

Case 3b: Sally Divorced

• Married > 10 years

• Ex-husband PIA = $2,000

• Takes ex-spousal income benefit then switches to own

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Strategy #5: Compute Your Optimal Benefit

$1,000 monthlyex-spousal income

Switch to own benefit at 70

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Strategy #5: Compute Your Optimal Benefit

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Strategy #5: Compute Your Optimal Benefit

Case 3c: Sally Widowed

• Married > 9 months

• Deceased husband’s PIA = $2,000

• Takes survivor benefit then switches to own

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Strategy #5: Sally PIA = $1,600deceased spouse PIA = $2,000

Switch to own benefit at 70

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Strategy #5: Compute Your Optimal Benefit

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Strategy #5: Compute Your Optimal Benefit

•Sally Single•Sally Divorced•Sally Widowed

Case 3 Summary

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Strategy #5: Compute Your Optimal Benefit

$376,584

$481,536

$529,536

$653,136

$350,000

$400,000

$450,000

$500,000

$550,000

$600,000

$650,000

$700,000

Total

Life

time

Bene

fit

Sally Solo Income Benefit ScenariosSally PIA = $1,600 Husband’s PIA = $2,000

Sally Single, Age 62

Sally Single, Age 70

Sally Divorced, 66 SP, 70Own

Sally Widowed, 60 Survivor,70 Own

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Strategy #6: Align Your Election Strategy

Align yourelection strategy

with youroverall portfolio

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Strategy #6: Align Your Election Strategy

• Income• Investment accounts• 401(k)• IRA• Life insurance• Annuities

When To Take Social Security

Strategy #6: Align Your Election Strategy

INTELLIGENCE OF DECISIONSocial Security Choice Asset Placement Sequence of Withdrawal

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Strategy #6: Align Your Election Strategy

Optimize Your Retirement Income With The Best Social

Security Income Strategy

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Summary

•We teach you how to file correctly so you can gain $100,000 or more in social security income

•We work with you one-on-one and run our social security maximization report to generate the best strategy for income

•Use the 6 strategies you’ve learned today

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Next Steps

Personalized One-HourSocial Security and

Retirement Check-Up

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Next Steps

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John/Jane Smith, Advisor 111 Main StreetCity, State111.111.1111 (office tel)Jane.smith@xyzfinancial.com

www.xyzfinancial.com

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