WHAT YOU NEED TO KNOW BEFORE YOU CLAIM Strategies to Maximize
Your Social Security Income Visit us at www.SeamanRetirement.com
4327 Executive Circle NW Canton, OH 44718
Slide 2
DISCLAIMER The views presented today are provided by Social
Security Solutions, Inc. The information was taken from sources
believed to be reliable but cannot be guaranteed. They do not
necessarily represent the views of the Social Security
Administration. The information presented today does not constitute
financial, legal or tax advice and should be used for informational
purposes only. Since individual circumstances vary, you should
consult your legal, tax, or financial advisors for specific
information. Neither Seaman Retirement Planning & Associates,
LLC nor Social Security Solutions, Inc. is affiliated in any way
with the Social Security Administration. Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 2
Slide 3
AND Out of courtesy for your neighbor, please keep
conversations to a minimum.
Slide 4
Slide 5
Dont Let Social Security Just Happen 41.4 % take the benefits
as soon as they're eligible at age 62, according to Social Security
Administration. In 2011, consistent with prior years, 74% of all
social security claimants started benefits before Full Retirement
Age. (Annual Statistical Supplement to Social Security Bulletin)
Retirement DOES NOT EQUAL Social Security. By law the Social
Security office cannot advise you on optional claiming
strategies.
Slide 6
We are a team of Independent Investment Advisors and Insurance
Agents specializing in preparing our clients financially for their
retirement and then successfully guiding them through their
retirement journey. Who is ?
Slide 7
Associations: Accredited Member BBB, TD Ameritrade, Alphastar
CM, Social Security Solutions, Local Attorneys and CPAs Pat: Vice
President, Degree in Math, Actuary & manager at Progressive
Ins. & Mercer Actuarial Consulting, Over 11 Years as a
investment advisor Jim: President, Degree in Industrial Management
& Accounting Over 16 Years as investment advisor Who We Are Tom
Seaman: Founder of SRP, est. 1957, Graduated from the University of
Notre Dame Jim & Pat Seaman: Investment Advisors Independent
Insurance Agents: Life, Accident, Health, LTC, Medicare
Slide 8
Phases of Financial Planning Accumulation vs.
Distribution/Legacy Retirement Legacy Accumulation Distribution
This is the demographic that Seaman Retirement Planning specializes
in working with.
Slide 9
9
Slide 10
As important as Social Security is to many people's
post-retirement finances, it's given little thought in retirement
financial planning - according to Jeff Bucher, president of Citizen
Advisory Group in Perrysburg, Ohio (as quoted in USA Today, May 7,
2013) Dont Let Social Security Just Happen
Slide 11
A Little History President Roosevelt signed into law in 1935 To
help senior citizens avoid poverty during the Great Depression.
First Social Security taxes were collected in 1937 Millions of
Americans use as their primary source of retirement income.
Slide 12
Major Benefits of Social Security Lifetime Income Predictable,
Steady Income Inflation-adjusted Income Survivor Benefits
Slide 13
Social Security Eligibility Work for at least 10 years Need 40
credits You can earn up to 4 credits per year
Slide 14
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 14 Full Retirement Age Primary Insurance Amount
Delayed Retirement Credits File and Suspend Restricted Application
Earnings Test and Taxes Marital Status S OCIAL S ECURITY I S N OT S
IMPLE
Slide 15
COMMON QUESTIONS Will Social Security be there for me when Im
ready to claim? Will Social Security be enough to live on in
retirement? Can I still receive benefits if Im working? How much
will I receive? How can I maximize my benefits? Will it be taxed?
Can you avoid it? Copyright Social Security Solutions. All rights
reserved. Revised 2.22.13. 15
Slide 16
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 16 WILL SOCIAL SECURITY BE THERE FOR ME? IN SHORT,
YES!
Slide 17
WILL SOCIAL SECURITY BE THERE? Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 17 Social Security
has been running surpluses for the past 25 years. It is likely to
continue to run surpluses until 2021. Then reserves will gradually
be drawn down to pay benefits. By 2033, reserves are expected to be
depleted. After 2036, funds (FICA and taxes on benefits) will cover
75% of scheduled benefits if nothing is done. History indicates
that benefits for those at least age 60 and older will not be
altered. Source: National Academy of Social Insurance, SSA,
Congressional Budget Office, 2012
Slide 18
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 18 WILL SOCIAL SECURITY BE ENOUGH TO LIVE ON?
PROBABLY NOT
Slide 19
RETIREMENT SPENDING FOR THE AVERAGE RETIREE*
Shelter/Utilities$14,650 Transportation$6,918 Clothing$1,221
Healthcare$4,883 Food$6,104 Copyright Social Security Solutions.
All rights reserved. Revised 2.22.13. 19 $33,776 Source: U.S.
Consumer Expenditure Survey, U.S. Bureau of Labor Statistics, 2009:
Retirees aged 65 to 74 with a reported spending average of $40,685
Journal For Financial Planning from Article from Financial Post
http://business.financialpost.com/2012/08/04/how-much-
money-will-you-really-spend-in-retirement/ Expenses drop on average
20% for retirees age 65 to 75 According to the Journal for
Financial Planning
Slide 20
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. Can I Still Receive Benefits if I am Working?
Maybe
Slide 21
An individuals Social Security Benefits can be reduced if they
are working and collecting benefits under their Full Retirement Age
(FRA). This is called the Earnings Test and only earned income
counts. In any full year under FRA, there is a reduction of $1 of
benefits for every $2 of earnings over the annual limit of $15,720
(2015). In the year FRA is reached, there is a reduction of $1 of
benefits for every $3 of earnings over the annual limit of $41,880
(2015). Once FRA is reached there is no loss of benefits regardless
of income. Source: Social Security Solutions, Inc. Copyright 2012
Working and Collecting Benefits Can I work & still collect
benefits?
Slide 22
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 22 HOW MUCH WILL MY BENEFIT BE? IT DEPENDS
Slide 23
HOW MUCH WILL I RECEIVE? Your benefits are determined by a
combination of factors: How much you earned (max in 2015 is $2,685)
The age at which you apply for benefits Your marital status How
well you use the rules to maximize your benefits Copyright Social
Security Solutions. All rights reserved. Revised 2.22.13. 23
Source: Social Security Administration, 2013
Slide 24
HOW MUCH ARE BENEFITS WORTH? At age 66, Joe claims his
$2,100/month benefit At age 66, Mary claims her $1,500/month
benefit If both live for 20 more years, the couple would collect
$864,000 in benefits * *(2,100 + 1,500) x 12 months x 20
years=$864,000 Copyright Social Security Solutions. All rights
reserved. Revised 2.22.13. 24
Slide 25
HOW BENEFITS ARE CALCULATED Your highest 35 years of earnings
(years with no earnings are averaged in as zero) Earnings are
indexed for inflation and averaged Your benefits are based on your
Primary Insurance Amount FULL RETIREMENT AGE Born between 1943-1954
~ Age 66 Your Benefits increase: 1. if you wait or 2. in some years
by cost- of-living adjustments (COLAs) Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 25
www.SSA.gov/mywww.SSA.gov/myaccount
Slide 26
IMPACT OF FILING EARLY Apply at AgeBenefit will be % of
PIAMonthly Benefit 6275.0%$1,672 6380.0%$1,784 6486.7%$1,933
6593.3%$2,080 Copyright Social Security Solutions. All rights
reserved. Revised 2.22.13. 26 If you apply when you first become
eligible at 62, your benefit will be 75% of your PIA IF your PIA is
$2,230, then Example assumes you were born between 1943 and 1954.
Source: Social Security Administration, 2013
Slide 27
DELAYED RETIREMENT CREDITS If you wait to apply until your 70,
your benefit will be 132% of your PIA (Called Delayed Retirement
Credits) IF your PIA is $2,230, then Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 27 Apply at
AgeBenefit will be % of PIAMonthly Benefit 66100%$2,230
67108%$2,408 68116%$2,363 69124%$2,765 70132%$2,943 Example assumes
you were born between 1943 and 1954. Source: Social Security
Administration, 2013
Slide 28
To be Eligible for a Spousal Benefit you must: Be Married to
your current spouse for at least 12 months or be divorced and have
had a qualifying marriage (marriage lasted at least 10 years). You
are age 62 or over. Your spouse has filed for their Retirement
Benefit or Your ex-spouse is eligible for their Retirement Benefit
Source: Social Security Solutions, Inc. Copyright 2012 Spousal
Benefit How Much Will My Benefits Be?
Slide 29
The Spousal Benefit amount is 50% of your spouses PIA
REGARDLESS of when your spouse started collecting benefits. If YOU
file for Spousal Benefits before YOUR FRA then the Spousal Benefit
is further reduced below the 50%. Source: Social Security
Solutions, Inc. Copyright 2012 How Much is the Spousal
Benefit???
Slide 30
SPOUSAL BENEFIT - Example His PIA1200 Times 50%X.50 Spousal
base (FRA) =600 At age 6270% or 420 Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 30 *Primary
Insurance Amount, or full retirement benefit. His PIA* $1200, her
PIA* $400
Slide 31
Who is Eligible? You are a widow or widower. You are age 60 or
over. If widowed, you did not remarry before age 60. Source: Social
Security Solutions, Inc. Copyright 2012 Survivor/Widow(er)
Benefits
Slide 32
How much is the survivor benefit? The survivors monthly benefit
amount depends on the deceased workers PIA, what age the deceased
worker started collecting benefits and also at what age the
surviving spouse starts collecting benefits. A survivor does not
collect both their own retirement benefit and the deceaseds
benefit. The lesser benefit amount will essentially go away.
Source: Social Security Solutions, Inc. Copyright 2012
Survivor/Widow(er) Benefits
Slide 33
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 33 HOW CAN I MAXIMIZE BENEFITS? WITH A GOOD
CLAIMING STRATEGY
Slide 34
WHAT IS A CLAIMING STRATEGY? Analyzing the rules of Social
Security and creating a plan to claim benefits for a particular
outcome specific to a situation. Copyright Social Security
Solutions. All rights reserved. Revised 2.22.13. 34
Slide 35
WHEN SHOULD I START BENEFITS? Depends on a lot of factors:
Copyright Social Security Solutions. All rights reserved. Revised
2.22.13. 35 Marital status Age Health outlook Likely longevity Need
for income Desired standard of living Planning to continue work
Survivor needs You need a STRATEGY that considers all of these
factors! Total assets available Liquid assets
Slide 36
What if you Lived Longer?
Slide 37
CRITERIA TO CONSIDER IN SELECTING START DATES Criterion 1 :
Which starting date(s) will maximize your benefits over your
lifetime? Criterion 2 : Which starting date(s) will minimize
longevity risk, that is, the risk of outliving their retirement
savings? Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 37
Slide 38
COMMON CLAIMING STRATEGIES AT FULL RETIREMENT AGE File and
suspend One earner files for benefits & immediately suspend
payment Makes the spouse eligible to collect a spousal benefit
Allows own benefits to accrue delayed retirement credits File a
restricted application for only spousal benefits Means that one can
collect only spousal benefits while their own benefits accrue
delayed retirement credits Copyright Social Security Solutions. All
rights reserved. Revised 2.22.13. 38
Slide 39
REMEMBER JOE AND MARY? Joe: PIA of $2,200 ~ Mary: PIA of $1,500
If each begins own benefit at 66, lifetime cumulative = $864,000
Heres a better option: The lifetime cumulative payout is $962,910
-- $98,910 more! Copyright Social Security Solutions. All rights
reserved. Revised 2.22.13. 39 This is general and hypothetical. It
is not a guarantee of specific results. Individual circumstances
vary. At age 66 Joe Files & Suspends his benefit Monthly
Benefit $0 At age 66 Mary files a Restricted Application claims her
Spousal Benefit $1,100 Vs. $1,500 At age 70 Mary Switches to her
own benefit $1, 980 Vs. $1,500 At age 69 & 9 months Joe Claims
his own benefit $2,730 Vs. $2,200
Slide 40
Maximizing Your Benefits When you claim matters! The rules are
complicated and voluminous. There are many combinations of options
that can help you maximize your benefits. Your decision is
irrevocable beyond 12 months after you begin benefits. You should
seek expert tax, legal and/or financial advice. Copyright Social
Security Solutions. All rights reserved. Revised 2.22.13. 40
Slide 41
Copyright Social Security Solutions. All rights reserved.
Revised 2.22.13. 41 WILL SOCIAL SECURITY BE TAXED
Slide 42
What About Taxes? This is all great, now you know some of the
important aspects of Social Security but what you did not know: The
hidden tax consequence that FEW people know about Income tax on
Social Security benefits can reduce an already-small amount of
monthly benefits
Slide 43
Social Security benefits may be subject to federal income
taxes. (In Ohio benefits are exempt from State Income Tax) Up to
50% of benefits may be taxable if Provisional Income is greater
than: $25,000 for single taxpayers and $32,000 for married filing
jointly Up to 85% of benefits may be taxable if provisional income
is greater than: $34,000 for single taxpayers and $44,000 for
married filing jointly Source: Social Security Solutions, Inc.
Copyright 2012 Since individual circumstances may vary, you should
consult your own legal, tax, accounting, and/or investment advisors
if you have questions on the tax treatment. Citizen Advisory Group
is not a tax or legal advisor. Taxation of SS Benefits
Slide 44
Protect Yourself Techniques to potentially reduce taxation on
Social Security Benefits Get Professional Advice
Slide 45
Social Security Taxation
Slide 46
The WEP affects workers who receive Social Security benefits
based on their own work and are also entitled to a pension based on
non-covered work (meaning they did not pay into Social Security
while in that job). For this individual, A WEP adjusted PIA is
calculated which reduces your Social Security benefits. If someone
has 20 -30 years of substantial earnings that were subject to
Social Security Taxes the WEP adjustment can be reduced or
eliminated. Source: Social Security Solutions, Inc. Copyright 2012
Windfall Elimination Provision (WEP)
Slide 47
This GPO provision applies to Spousal and Survivors benefits
only and reduces or eliminates the spousal or survivor Social
Security benefit amount by 2/3 rd of the government pension amount.
Source: Social Security Solutions, Inc. Copyright 2012 Government
Pension Offset (GPO)
Slide 48
You Are On Your Own! c. Do not ask leading questions; i.e.,
worded in such a way as to suggest the proper or desired answer. d.
Provide enough information so that claimants can make informed
choices, but do not give advice. e. Aim at completing all
documentation at first contact via a complete interview. f. Explain
the importance of returning forms promptly whenever documentation
is not completed at first contact. A Page From Social Security
Administration Guide
Slide 49
Our Back Office "Of all the calculators I tested, this one was
the easiest to manipulate." "If you want more comprehensive number
crunching, try social security solutions " "Maximizing Social
Security" "This site says 'We get you more' and I believe they do."
"The simplest one to use and the most graphically clear."
Slide 50
HOW SEAMAN RETIREMENT PLANNING CAN HELP 50 Copyright Social
Security Solutions. All rights reserved. Revised 2.22.13. Full
Social Security Analysis Personalized report Recommended claiming
strategy to maximize benefits Compare other strategies Specific
claiming instructions Colorful graphs Educational information about
benefits ANSWERS
Slide 51
1.Consultation to review your Social Security Analysis 2. One
Hour Strategy Session - complimentary session to discuss how to
incorporate your Personalized Filing Strategy into your overall
retirement plan 3. Take Action Three Step Process oneone twotwo
threethree