social security maximization your guide to maximize your social security benefits

Social Security Maximization

Your Guide to Maximize Your Social Security Benefits

As a full-service retirement planning firm, we offer:

• IRA/401(k) rollovers• Asset protection• Income planning• Wealth management• Long-term care solutions• Wealth transfer strategies

Today’s topics

1.Finding your Primary Insurance Amount2.Deciding now or later3.Understanding the divorce factor4.Learning total benefits over your lifetime5.Determining the best option for you6.Protecting the survivor’s benefit7.Managing the impact of taxes 8.Choosing to work9.Uncovering the bottom line10.Filling the income gap

The retirement cliff …

The moment when your “working” income ceases and you start living off the money you set aside.

Your retirement roadmap

62Early

RetirementJune, 2018

66FRA

June, 2022

70Late


FILE

The foundationSocial Security planning

The foundation of income planning for anyone who is about ready to retire!

*Source: http://www.ssa.gov/pressoffice/basicfact.htm

112233

Case StudyCase Study: :

Mary BaileyAge: 56

PIA: $900

George BaileyAge: 60

PIA: $1,900

The Baileys

What’s at stake?By using strategies illustrated in the Social Security Maximization report, they can increase their lifetime benefits as much as $170,000.$170,000.

This illustration represents a hypothetical situation and is for informational purposes only.

Importance

• How can you maximize maximize your lifetime benefit?

• WhoWho will provide reliable advice for making these decisions?

• Will Social Security Social Security provide the advice you need?

How many total credits do you need to qualify for Social

Security?

40 Credits40 Credits

http://www.ssa.gov/retire2/credits3.htm

http://www.ssa.gov/retire2/credits3.htm

Understanding your monthly benefit

Finding your PIADeciding now or later

Understanding the divorce factorLearning total benefits over your lifetime

Finding your PIAFinding your PIA

• Check Box #1… Check Box #1…

• If you would like to find out how your lifetime of earnings translates into your Primary Insurance Primary Insurance Amount (PIA)Amount (PIA)

Deciding nownow or laterlater

The question everyone should be asking,

"WhenWhen… should I start

taking Social Security?”

Your full retirement age

Year of Birth Full Retirement Age

1937 or earlier 65

1938 65 and 2 months





1943-1954 66






1960 and later 67

Your full retirement age (FRA) (FRA) is dictated by your year of birth.

FRAFRA is the age at which you can begin your full monthly benefit.

In our examples, we will be working with people whose FRAFRA is age 66.

Source: http://www.ssa.gov/retire2/retirechart.htm

62

63

64

656666 67

6869

70

71

720 7 58 069 31 0 081 62 43 2% of PIA

Age 62: Retirement benefits available.For each month you take benefits prior to FRA, the monthly amount is reduced.

Full Retirement Age (FRA):100% of PIA is available as a monthly benefit.

Age 70: the last month that your monthly benefit will increase.

After age 70: the Monthly benefit will no longer increase.

Age

62 75.0%

64 86.7%

66 100.0%

68 116.0%

70 132.0%

Source: http://www.socialsecurity.gov/retirement/1943.htmlhttp://www.socialsecurity.gov/retire2/delayret.htm


Filing Age Factor Monthly Income

62 75.0% $750

63 80.0% $800

64 86.7% $867

65 93.3% $933

66 100.0% $1,000

67 108.0% $1,080

68 116.0% $1,160

69 124.0% $1,240

70 132.0% $1,320

The factor changes each month you wait.

Between age 62 and 70, there are 96 months you could file.

Each would result in a different benefit amount.


File immediately if you:•Find your job is unbearable•Are willing to sacrifice retirement income•Are not healthy

Delay filing if you:•Want to maximize retirement income•Want to increase retirement benefits for spouse•Are still working•Are healthy

Deciding now or laterDeciding now or later


• If you would like to review the impact of taking your benefit at age 62, full retirement age, or age 70 or any month in between

How many years do you have to be

married to receive Social Security benefits from a former spouse?

You need to be married for 10 10

yearsyears.

http://www.ssa.gov/retire2/divspouse.htm

http://www.ssa.gov/retire2/divspouse.htm

Understanding the divorcedivorce factorfactor

If you have gone through a divorce…

It might affect the retirement benefit to which you are entitled.

Understanding the divorcedivorce factorfactor


• If you would like to find out how a past divorce might impact your Social Security benefits

Learning total benefits total benefits over your lifetime

How much will your check be each month?

For how many months will you receive it?

Lifetime Benefits


Monthly benefit x Number of expected months Lifetime benefit

Every month Every month you wait…you wait…

Your monthly check goes up.

But, you would get one less monthly check.



• If you would like to learn about getting the maximum benefit over your lifetime, not just about a monthly check

Since 1993, up to what percentagepercentage of your Social Security

benefit has been subject to income

tax?

Up to 85%85%

http://www.ssa.gov/planners/taxes.htm

http://www.ssa.gov/planners/taxes.htm

Strategies to maximize your lifetime benefit

Determining the best option for youProtecting the survivor’s benefit

Determining the best option for you

For married couples, a simple break-even analysis will usually give the wrong answer, costing you benefit dollars.

Because Social Security offers multiple benefits and strategies!

Retired Worker Benefit:

This is your “own” benefit based on your earnings history and

when you trigger benefits.

Spousal Benefit:

Once your spouse has filed for benefits and you have reached 62,

you are eligible to begin receiving a

reduced portion of his/her Primary

Insurance Amount (PIA).

Survivorship Benefit:

When one married person passes away, the

surviving spouse is eligible to receive the

higher of the two monthly benefits he/she

was receiving.

File and Suspend:

This concept allows for a lower-earning spouse to receive up to 50 percent

of theother’s PIA amount if both spouses file for

benefits at the right time.

Restricted Application:

The higher-earning spouse may be able to

start collecting a spousal benefit on the

lower-earning spouse’s benefit while allowing

his/her benefit to continue to grow.

There are tens of thousands of

calculations that go into finding the precise combination that will give you the largest lifetime benefit.

The Social Security Maximization report

will show exactly what to do.


Through more than 20,00020,000 calculations:

The Social Security Maximization report calculates the lifetime benefit for each strategy and combination

Result:Result: A specific strategy for the highest expected lifetime benefit


By using the Social Security Maximization report, George and Mary can increase their lifetime benefits as much as $170,000$170,000.




• If you would like to have a personalized report that shows the best strategy for you … 20,000 calculations to figure it out!

At what age can a surviving spouse begin receiving

Survivorship benefits?

6060 years old

http://www.ssa.gov/survivorplan/survivorchartred.htm

http://www.ssa.gov/survivorplan/survivorchartred.htm

Protecting the survivor’s benefit

The death of a spouse during retirement can be a significant financial strainfinancial strain.

More than 70% 70% of all elderly persons with incomes below the poverty level are womenwomen.

More than half of elderly widows now living in poverty… ……were not poor before the death of their were not poor before the death of their husbandshusbands.

http://assets.aarp.org/rgcenter/ppi/econ-sec/2010-03-poverty.pdf

George and Maryretirement scenario

AssetsAssetsSavings $150,000CDs $200,000Investments $ 50,000Life Insurance Death Benefit $ 25,000Total Assets $425,000$425,000

IncomeIncome George MaryPension $14,400 $ 6,000Social Security $30,096 $ 7,790Income $44,496 $13,790Total Retirement Income $58,286$58,286


Mary’s survivorship scenarioIncome Income George MaryPension $14,400 $ 6,000Social Security $30,096 $ 7,790

Total Retirement Income $58,286$58,286

Household income is reduced by:Household income is reduced by:$22,190 / year$22,190 / year38%38%

Is this a concern for you? Is this a concern for you?

$36,096$36,096


Mary’s income solution

Reposition the money from the CD: $200,000$200,000

Income Base:7% for 20 years

Guaranteed Income For Life*

Example:Fixed Indexed Annuity

Year AgeIncome

BaseWithdrawal Percentage

Annual Income

1 70 $200,000

3 72 $228,980 5.50% $12,594

6 75 $280,510 6.00% $16,831

9 78 $343,637 6.00% $20,618

12 81 $420,970 6.50% $27,363

15 84 $515,707 6.50% $33,521

20 89 $723,306 7.00% $50,631

This chart is for illustrative purposes and not intended to be representative of any specific investment vehicle.*Guarantee based on the claims paying ability of the insurance carrier

Protecting the survivor’s benefit

• Check Box #6…Check Box #6…

• If you would like to find out how to protect the survivor’s income

Which vice president had the deciding vote

to increase Social Security taxation to

85%?

Al GoreAl Gore

http://www.ssa.gov/history/InternetMyths2.html

http://www.ssa.gov/history/InternetMyths2.html

Taxation and working

Managing the impact of taxes Choosing to work

Managing the impact of taxes As much as 85 percent of your benefits may be subject to income taxation.

Nearly every source of income is included:•Wages•Pensions•Dividends•Capital gains•Business income•Tax-exempt interest

YOURSYOURS

NOT YOURSNOT YOURS

Before After

Social Security $10,000 $10,000

Pension $18,000 $18,000

Taxable interest $20,000

Deferred interest $20,000

Income taxes paid $5,536 $801

Managing the impact of taxes

Repositioning her rainy day funds into an annuity saves Mary $4,735 in income taxes!

An annuity is a long-term investment vehicle and may not be suitable in every situation.

Managing the impact of taxes Managing the impact of taxes


• If you are interested in minimizing (or eliminating!) the taxation of your Social Security benefits

Choosing to work

• AARP found that 80% of baby boomers plan to work during retirement.*

• What effect will that have on your net income?

• Depending on your age, it could cost you up to 50% of your benefits.

*http://assets.aarp.org/rgcenter/econ/boomers_envision_1.pdf

Choosing to work


• If you would like your report to include the impact of working … in dollars and cents, personalized just for you

You already elected Social Security benefits

and now realize you made a mistake. What

are your options?

If you change your mind within the first 12 months 12 months of electing benefits, you

can withdraw the application and pay back

any benefits.

http://www.ssa.gov/retire2/withdrawal.htm

http://www.ssa.gov/retire2/withdrawal.htm

Uncovering the bottom line

Uncovering the bottom line

By using the Social Security Maximization report, you will know exactly how to capture your highest possible lifetime benefit.

+ $170,000+ $170,000


Your retirement timeline

62Early


66FRA

June, 2022

70Late


FILE

Uncovering the bottom lineUncovering the bottom line


• If you want to learn how to increase your lifetime benefits

Foundation of retirement

Many who retired in the past thought they had enough money saved for retirement!

“I hope so…” or “I know so…”Volatility Index – or Fear GaugeExpected Market Volatility

10-Year TreasuryLong-term Fixed Rates

1990 1995 2000 2005 2010 2013

Source – Yahoo Finance – 1-1-2014VIX is a trademarked ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index or the fear gauge, it represents one measure of the market’s expectation of stock market volatility over the next 30 day period. (wikipedia.com)The CBOE 10-Year Treasury Note (TNX) is based on 10 times the yield-to-maturity on the most recently auctioned 10-year Treasury note.This chart is for illustrative purposes and not intended to be representative of any specific investment vehicle. Past performance is not indicative of future results.

Traditional trade-offs

No Acceptable Alternatives

You can either expose yourself to an acceptable amount of risk…

Or find an acceptable fixed

rate.

Risk

Safety

1993

Risk

Safety

2014

Acceptable Range

AgeAnnual Return

Portfolio A Year End Balance

Annual Return

Portfolio B Year End Balance

66 32% 633,450 -37% 290,000 67 -3% 588,000 5% 280,171 68 30% 740,641 16% 298,028 69 8% 769,759 5% 285,343 70 10% 819,213 11% 288,250 71 1% 801,045 29% 341,938 72 38% 1,072,227 -22% 236,519 73 23% 1,287,663 -12% 177,673 74 33% 1,685,558 -9% 129,818 75 29% 2,134,671 21% 124,513 76 21% 2,550,208 29% 126,500 77 -9% 2,283,278 33% 134,095 78 -12% 1,976,381 23% 129,239 79 -22% 1,502,887 38% 141,094 80 29% 1,896,101 1% 105,142 81 11% 2,063,447 10% 76,791 82 5% 2,124,645 8% 42,524 83 16% 2,419,867 30% 14,160 84 5% 2,510,157 -3% 0 85 -37% 1,537,562 32% 0

Sequence of returns Starting principal: $500,000Income: 5% of first-year principal Inflation: 3%

If you averaged 8.43%8.43% return over 20 years, does the sequence of the gains and losses matter?

The only difference is the order of returns is reversed!

Sequence risk Sequence risk is real, and you should be aware of it!This illustration represents two hypothetical

investments, are not actual portfolios and are for informational purposes only.

Foundation of retirement

Whether we are rich, poor, or somewhere in between, we all want a happy and successful

retirement.

Knowing where your INCOMEINCOME is coming from is the foundationfoundation of retirement.

$5,607Monthly Income Goal

George and Mary’s income gap

Mary BaileyAge: 56

PIA: $900

George BaileyAge: 60

PIA: $1,900

Solution: Solution: Reposition $130,952

into an income- producing option

$3,157Social Security

$1,700Pension

$750 Gap


1

2

3

45 6

78

9

10

11

Provides a lifetime income

Offers increases for every year you wait

to start income

Allows you to save as much as you

want into the plan

Potentially leaves a legacy to your family – unlike Social Security

Years

1

3 1000

5 1134

Creating a lifetime income

7 1415

9 1605

Filling the income gapFilling the income gap


• If you think maximizing your Social Security isn’t enough and you need the rest of your assets to be optimized to fill the income gap

Feedback & Consultation form

• One decision may impact your retirement by tens of thousands of dollars.

• Simple opportunity to help make the most informed RETIREMENT INCOME decision possible.

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Thank you for attending our Social Security event!

social security maximization your guide to maximize your social security benefits

Documents

social security benefitsas

income gapthe retirement

working income ceases

mary baileyage

george baileyage

lifetime benefits

best option

survivors benefitmanaging