For Presenter Use Only

Smart Ways to Get More Social Security Income

John/Jane Smith, Advisor 111.111.1111 (office)j.smith@xyzadvisor.comwww.xyzadvisor.com

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Choose Your Income Election Wisely!

• Choose wisely• 100’s of combinations• More important than ever

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John Smith, Advisor

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

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We’ll Learn…

• Why file correctly very first time• 6 strategies for more income• Your best-fit claiming method

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We’ll guide you, offer choices . . .

• Social Security knowledge for claiming

Choices:

A.Social Security election and the retirement financial “BIG PICTURE”

B.Social Security outside resources to self-direct your election.

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Wants NeedsTravel Hobbies Food Utilities Shelter

Phases of Retirement . . .In

com

e Re

liabi

lity

60 75 85+

“Go – Go”, Initial

“No – Go”, Mature

“Slow – Go”, Seasoned

Social Security

Other Assets

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An Important Decision . . .

$1,300,000

$500,000

Maximize SSTotal Retirement Income

$1,800,000

Claim SS EarlyTotal Retirement Income

$1,470,000

$970,000

Social Security Lost $330,000

$500,000

Social Security

Other Assets

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Social Security 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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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 PIA Income Calculated?

90% of $816 (816-0) = $ 734

32% of $4,101 (4,917-816) = $1,312

15% of $1,083 (6,000-4,917) = + $ 162

PIA = $2,208

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

2014 Bend Points are $816 and $4,917

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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

The 1-Year

“Get-it-Right Rule”

The

Voluntary Suspension

“Supersize” Opportunity

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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 #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 EarlyC

um

ula

tive

Lif

etim

e In

com

e

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

One of a Couple92

Women88

Men85

Break Even

79

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Strategy #3: Spousal Income Benefit

Harness the powerof little-knownspousal income

benefit

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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

Timing…PIA, life expectancy,relationship history,financials

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Strategy #5: Compute Your Optimal Benefit

www.ssa.gov

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Strategy #5: Compute Your Optimal Benefit

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Case 2: The Heartlands

“File and Suspend”

Case 1: The Metros

“Claim Some Now, More Later”

Strategy #5: Compute Your Optimal Benefit - Couples

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Strategy #5: Compute Your Optimal BenefitCase 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

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Strategy #5: Compute Your Optimal BenefitCase Study 1: The Metros

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

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

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Strategy #5: Compute Your Optimal Benefit

Case Study 1: The Metros

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Strategy #5: Compute Your Optimal Benefit

Case Study 2: The HeartlandsJim Heartland

age 66(LE = 77)

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

PIA $2,300

Linda Heartland

age 61 (LE = 93)

SecondaryEarner------------------------------------------

PIA$300

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Strategy #5: Compute Your Optimal Benefit

Case Study 2: The Heartlands

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

Age 63, collects $825Ages 73-92 after Jim dies,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

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Sally Single Maximizes Her Social Security Income

Strategy #5: Compute Your Optimal Benefit

Cu

mu

lati

ve L

ifet

ime

Inco

me

Begin at 70 = $481,536LE = 88

Begin at 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

$0

$1,000

$2,000

60 61 62 63 64 65 66 67 68 69 70 71 72-88

Mon

thly

Ben

efit

Age

Sally Solo Income Benefit ScenariosSally Single Sally Widowed

$1,430 monthly survivor 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

$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

tim

e B

enefi

t

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• Mortgage

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Strategy #6: Align Your Election Strategy

INTELLIGENCE OF DECISION

% R

ise

in S

tan

dar

d o

f L

ivin

g

Provisional IncomeSS Tax

Age 70 ½ RMD

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Social Security & The Big Picture

INTELLIGENCE OF DECISION

% R

ise

in S

tan

dar

d o

f L

ivin

g

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Summary

•Filing correctly you can gain $100s ofthousands of income•Get it right the first time (one year ruling)•Use the 6 strategies you’ve learned today•We look forward to helping you

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Next Steps . . . Make wise choices!

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Choice A: Get the big picture “edge”

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Choice B: SS Tools to Self-Direct

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John Smith, Advisor

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