THE BASICS: WHAT YOU MIGHT EXPECT

KEEP IN MIND:

ENACTED 1935

SOCIAL SECURITY VIABILITY: WILL IT BE THERE FOR ME?

SOCIAL INSURANCE

FUNDED BY CURRENT WORKERS

CURRENT WORKERS FUND THE BENEFITS OF TODAY’S RETIREES

NOW(2015: 2.7 WORKERS)

THEN(1965: 4 WORKERS)

VS.

HAVE A “PLAN B”

Could Social Security benefits

be reduced?

LOWER POSSIBILITY

IN YOUR

60s

HIGHER POSSIBILITY

IN YOUR

50s

THE NUMBERS MAY SURPRISE YOU

• Sources: Social Security Administration. Social Security Fact Sheet, 2017. Annual Statistical Supplement to the Social Security Bulletin, 2015 (released April 2016). Income of the Aged Chartbook, 2014, published 2016.

$17,856 (MEN)$14,004 (WOMEN)

AVERAGE ANNUAL SOCIAL SECURITY BENEFIT?

MAXIMUM MONTHLY

BENEFIT IN 2017?

$2,687

VERY IMPORTANT

INCOME SOURCE:• Guaranteed payment each month• Covers your spouse• Cost of Living Adjustments

THE BASICS: USING THE SOCIAL SECURITY WEBSITE

YOUR STARTING POINT: SSA.GOV

YOUR STARTING POINT: SSA.GOV

YOUR STARTING POINT: SSA.GOV

YOUR STARTING POINT: SSA.GOV

YOUR STARTING POINT: SSA.GOV

YOUR STARTING POINT: SSA.GOV

Do not have to be consecutive quarters

HOW YOU QUALIFY FOR RETIREMENT BENEFITS

EARN 40 CREDITS

EARN UP TO 4 CREDITS

PER YEAR

1 CREDIT = $1,300

in wages (in 2017)

Your employer must pay into the system.

Source: Social Security Administration, 2017

On a deceased spouse’s work record

On a spouse’s work record

WHAT IF I DON’T HAVE 40 CREDITS?

An ex-spouse

Your current spouse

OR Survivor benefits

Current spouse

Ex-spouse

THE BASICS: CALCULATING YOUR BENEFIT

CALCULATING YOUR RETIREMENT

BENEFITS:• Full Retirement Age (FRA)• Your work history

YOU ARE ELIGIBLE FOR FULL SOCIAL SECURITY BENEFITS WHEN YOU REACH YOUR FRA

66 67

YEAR YOU WERE BORN

YOUR FULL RETIREMENT AGE

1943–1954

1960 or later

662 months

1955

664 months

1956

666 months

1957

668 months

1958

6610 months

1959

YOUR CALCULATED BENEFIT: HIGHEST 35 YEARS OF EARNINGS

Social Security stopped mailing most paper statements in 2017.

MAKE YOUR WORK HISTORY WORK FOR YOU

AIME = AVERAGE INDEXED MONTHLY EARNINGS

PIA = PRIMARY INSURANCE AMOUNT

AIME PIA

CLAIMING EARLY LOCKS IN A PERMANENT PENALTY

FRA66 and 4 months

52 months early60 months early

27%Permanent reduction 30%

Permanent reduction

FRAAge 67

62Claiming Early

CLAIMING LATER INCREASES YOUR BENEFIT

70Claiming Age

32%Increase 24%

Increase

IF YOUR FRA IS 67

IF YOUR FRA IS 66

A detailed plan that can help you determine how to use your financial resources to generate income to last the rest of your life.

CREATE A RETIREMENT INCOME PLAN THAT’S UNIQUELY YOURS

CONSIDER THE CONSEQUENCES OF WHEN YOU CLAIM

SOCIAL SECURITY $1,800 $1,260 $2,232WORK OR SAVINGS $2,200 $2,740 $1,768

77%$972

62 70FRA

Assumes FRA is 67

THE FIDELITY EXPERIENCE: BUILDING YOUR RETIREMENT INCOME PLAN

?

401(k)403(b)457(b)

AnnuitiesTraditional IRA

Roth IRAPension

Military PensionSmall Business

Retirement PlansTaxable Investment

AccountsSocial Security

CLAIMING STRATEGIES: OVERVIEW

HOW SOCIAL SECURITY

SEES YOU:• A wage earner• A non-wage earner• The higher-wage earner• The lower-wage earner

WE BELONG TO AT LEAST 1 OF 4

CATEGORIES:• An individual• A spouse• An ex-spouse• A surviving spouse

CLAIMING STRATEGIES: IF YOU’RE SINGLE

SCENARIOS TO CONSIDER

WAIT TILL 70 TO MAXIMIZE BENEFITS?

OTHER RESOURCES TO USE?

CONTINUE WORKING?

70

CLAIMING STRATEGIES: IF YOU’RE MARRIED

SPOUSAL BENEFITS:• 2 calculations – which is higher?• Your own work record• Your spouse’s work record

GENERAL RULE FOR SPOUSES

Cannot exceed

50%of spouse’s

PIA

Reduced payment if you claim before

your FRA

ALWAYSA PENALTY WHEN YOU CLAIM EARLY.

A TRADITIONAL SCENARIO

SPOUSE’SPIA

YOUR BENEFIT

$2400

$120050%

TOTAL BENEFIT IS

OF YOUR SPOUSE’S PRIMARY INSURANCE

AMOUNT (PIA)

CLAIMING ON A SPOUSE’S WORK RECORD

SPOUSE’SPIA

50% OF SPOUSE’S PIA

YOUR PIA IS PAID FIRST

$2000

$800

$200

$800

ADDED PAYMENT

YOURBENEFIT

Dually Entitled:• Qualifies on own work

record (earned 40 credits)• Also qualifies as a spouse• At FRA, receives larger of 50% of spouse’s PIA amount or own PIA

CLAIMING STRATEGIES: IF YOU’RE DIVORCED

EX-SPOUSES MUST MEET

CERTAIN CRITERIA:• Were married 10 consecutive

years or longer• Divorced for 2 years or longer• You have not remarried• Both you and your ex are

at least age 62

CLAIMING ON AN EX-SPOUSE’S WORK RECORD

SPOUSE’SPIA

50% OF SPOUSE’S PIA

YOUR PIA IS PAID FIRST

$2000

$800

$200

$800

ADDED PAYMENT

YOURBENEFIT

Ex-spouse benefits applywhether you are the ex-wifeor the ex-husband

EX-SPOUSE CONFIDENTIALITY:• Between you and the SSA• Marriage certificate• Divorce decree• Ex’s SSN• Other required proof and

documentation

CLAIMING STRATEGIES: IF YOU’RE A SURVIVING SPOUSE

SCENARIO: SURVIVING-SPOUSE BENEFITS

Your spouse dies

Only when the higher-earning spouse dies first

You “step into his/her shoes”

SURVIVOR BENEFIT

CONSIDERATIONS:• Survivor benefits available

as early as age 60, reduced• Can switch between survivor

and individual benefits• You are responsible for

notifying the SSA

SCENARIO: SURVIVING-SPOUSE BENEFITS

Your ex-spouse dies

Only when the higher-earning spouse dies first

You “step into his/her shoes” if you were married 10 years or longer and you have not remarried (before age 60)

KEY CONSIDERATIONS

IT DEPENDS ON HOW MUCH YOU MAKE

Age Earn up to: Benefit reduced:

Younger than FRA $16,920/yr.$1,410/mo. $1 for every $2 over the limit

Reach FRA during year $44,880/yr.$3,740/mo. prior $1 for every $3 over the limit

Reach the month of FRA No limit on earnings No reduction

Adjusted Gross Income+ Nontaxable Interest+ Half of Social Security Benefits

IT DEPENDS ON YOUR “COMBINED INCOME”

Tax Filing Combined Income % of Benefit

Joint $32,000–$44,000> $44,000

Up to 50%Up to 85%

Tax Filing Combined Income % of Benefit

Individual $25,000–$34,000> $34,000

Up to 50%Up to 85%

GOVERNMENT PENSION

OFFSET (GPO)• Reduces or eliminates spousal

benefits if you have a pension• Public workers receive full pension

benefits first, and may receive some spousal benefits after offset is applied

WINDFALL ELIMINATION

PROVISION (WEP)• Applies if you’ve earned 40 credits

and have a pension from a non–Social Security employer

• A different formula is used to calculate PIA

• Reductions are not reflected on your statement

LET’S SUMMARIZE

START AT THE BEGINNING

• Review your Social Security statement• Check your topics at SSA.gov• Take your time

YOUR FIDELITY REPRESENTATIVES

• Ready to answer your specific questions• Can help you build your retirement

income plan

YOUR NEXT STEPS:

1. Sign up at SSA.gov/MySocialSecurity2. Organize your financial picture3. Contact Fidelity today

1-800-Fidelityfidelity.com/branchlocator

Investing involves risk, including risk of loss.

Views expressed are as of the date indicated and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the speakers and not necessarily those of Fidelity Investments.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917 © 2017 FMR LLC. All rights reserved.

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