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I HAVE A QUESTIONThe Keys to Unlocking Social Security and

Making Your Benefits Work for You

Annuities are issued by Transamerica Life Insurance Company in Cedar Rapids, Iowa and Transamerica Financial Life Insurance Company in Harrison, New

York and Transamerica Funds are mutual funds advised by Transamerica Asset Management, Inc. Variable annuities and mutual funds are distributed by Transamerica Capital, Inc. References to Transamerica pertain either individually or collectively to these Transamerica companies. Transamerica Financial Life Insurance Company is licensed in New York.

Annuities may lose value and are not insured by the FDIC or any federal government agency. They are not a deposit of or guaranteed by any bank,

bank affiliate, or credit union.

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IMPORTANT DISCLOSURE

This material is provided for educational purposes only and does not constitute investment advice. The information contained herein is based on current tax laws, which may change in the future. Transamerica cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided or from any other source mentioned. The information provided does not constitute any legal, tax or accounting advice. Please consult with a qualified professional for this type of advice.

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HOW IT STARTED

Social Security Administration, “A Brief History of Social Security,” August 2000.

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WHY IT’S IMPORTANT

Social Security is still a major source of incometo those 65 or older.

Social Security Administration, "Fast Facts & Figures About Social Security, 2010"

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I HAVE A QUESTION

We’ll address common concerns about:

•Filing for Social Security

•Utilizing spousal benefits

•Taxes and Medicare

You’ll learn:

•How to determine your Full Retirement Age

•Simple strategies to maximize your benefits

•To better understand the nuances of Social Security

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WHEN SHOULD I FILE FOR BENEFITS?

Social Security Administration, “Retirement Planner − Retirement Benefits by Year of Birth, 2011," SSA.gov

AGE TO RECEIVE 100% OF MONTHLY BENEFIT

In order to understand when you are eligible to begin benefits, you need to know your Full Retirement Age.

Your Full Retirement Age is based on the year you were born*. The younger you are, the older you’ll have to be to reach it.

*If born Jan. 1, the SSA figures your benefit as if you were born the previous year.

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WHEN SHOULD I FILE FOR BENEFITS?

Social Security Administration, “Retirement Benefits, 2010,” SSA.gov

You may elect to receive:

•Full benefits at Full Retirement Age

•Reduced benefits as early as the first full month you reach age 62

•Increased benefits, if benefits are delayed beyond Full Retirement Age (up to age 70)

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WHEN SHOULD I FILE FOR BENEFITS?

Social Security provides yearly increases for those who delay thestart of benefits.

Delaying benefits until age 70* represents a 32% increase in monthly payments.

Social Security Administration, “When to Start Receiving Retirement Benefits, 2008,“ and “Retirement Planner: Delayed Retirement Credits, 2010,” SSA.gov

INCREASE FOR DELAYED RETIREMENT

WHAT THIS MEANS FOR MONTHLY BENEFITS

*If born Jan. 1, the SSA figures your benefit as if you were born the previous year.

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WHEN SHOULD I FILE FOR BENEFITS?

Other considerations include:

• Health

• Life expectancy

• Marital status

• Lifestyle expectations

• Years in the workforce

• Other retirement assets

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CAN I STILL WORK AND RECEIVE BENEFITS?

Working beyond Full Retirement Age may actually increase your benefits.

But, if you elect to begin benefits prior to reaching Full Retirement Age, you must be aware of earnings limits. Surpassing these will result in a reduction of benefits.

Social Security Administration, “Retirement Benefits 2010,“ and “How Work Affects Your Benefits 2011,” SSA.gov

UNDERSTANDING THE EARNINGS LIMITS

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CAN I ESTIMATE WHAT MY BENEFITS WILL BE?

Your annual Social Security Statement provides an estimate of what your future benefits will be.

•Avoid potential conflicts laterby making sure the informationis accurate.

•Review your statement with your financial professional.

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WHAT IS THE MAXIMUM BENEFIT AVAILABLE?

• The maximum monthly Social Security benefit for a worker retiring at age 66 in 2011 is $2,366.

• However, most retirees do not receive anything close to the maximum benefit, mostly because they begin receiving payments early.

Social Security Administration, “Understanding the Benefits, 2011,” and “Frequently Asked Questions, 2011,” SSA.gov

HOW ARE MY BENEFITS CALCULATED?

• In order to be eligible, you must have enough credits. Generallyspeaking, this translates to 10 years in the workforce for a 62-year-old filing today.

• Credits only determine eligibility – not the amount of payments.

• Payment amount is based on earnings history calculated using monthly earnings during the 35 years in which you earned the most.

• You can calculate your benefits yourself by visiting the Social Security Administration website (SSA.gov).

13Social Security Administration, “Your Retirement Benefit: How It Is Figured , 2010,” and “Understanding the Benefits, 2011,” SSA.gov

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HOW CAN I UTILIZE SPOUSAL BENEFITS?

Rules to keep in mind*

• You must be age 62 or older to qualify.

• You cannot collect a spousal benefit until your spouse files for their own benefit.

• If you file for spousal benefits at Full Retirement Age, spousalbenefit will be equal to 50% of your spouse’s Primary Insurance Amount (PIA).

• These rules also apply for divorced-spouse benefits, as long as the marriage lasted at least 10 years and the non-filing spouse has not remarried.

• Benefits stop for a divorced spouse upon remarriage.

Social Security Administration, “Retirement Benefits, 2010,” and “Retirement Planner – “Benefits for Spouses, 2008,” SSA.gov

*Rules applicable in most situations. Some exceptions exist. .

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HOW CAN I UTILIZE SPOUSAL BENEFITS?

“File and Suspend” strategy:

•Makes it possible for married taxpayers who retire at different ages to suspend and collect benefits optimally.

•Higher-earning spouse (in this case, the husband) files at Full Retirement Age and immediately suspends his benefits. His wife is entitled to 50% of husband’s Primary Insurance Amount (once she’s 62) and he can wait to receive higher benefit at age 70.

•Not only can this strategy increase monthly benefits down the road, it ensures a higher benefit if the husband dies first. His wife will still be entitled to receive 100% of husband’s entitlement at the time of his death.

Educated Investor Featured Article, “File and Suspend,” July 2009.

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HOW CAN I UTILIZE SPOUSAL BENEFITS?

“Claim Now, Claim More Later” strategy:

•Allows married couples to begin receiving benefits now and still receive larger delayed benefits later.

•Higher-earning spouse (in this case, the husband) claims spousal benefit at Full Retirement Age (wife must have already filed for her own benefits) and then husband switches to his own benefit at age 70.

Center for Retirement Research, “Strange But True: Claim Social Security Now, Claim More Later,” April 2009

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WHAT ABOUT TAXES?

Uncle Sam will not cut you a break in retirement

The Social Security Administration defines “combined income” as adjusted gross income + nontaxable interest + ½ of Social Security benefits.

Social Security Administration, “Taxes and Your Social Security Benefits, 2010,” SSA.gov

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WHAT ABOUT TAXES?

Tax strategies to consider:

•Delay benefits (and potential taxes on the benefits) while generating income from other assets.

•Generate retirement income with Roth IRA distributions. Distributions are not taxable, and can help lower income.

•Utilize a tax-qualified professional to customize a strategy based on your individual needs.

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WHEN WILL I BE ELIGIBLE FOR MEDICARE?

• Most have to be 65 years of age or older. Those with certain disabilities may qualify for Medicare regardless of age.

• Enrollment is automatic for some who receive Social Security benefits. However, many must apply on their own. Late enrollment may result in costly penalties.

• Must contact the SSA to opt out of Part B coverage.

Centers for Medicare & Medicaid Services, “Medicare & You, 2011,” Medicare.gov

THE FOUR PARTS OF MEDICARE

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UNLOCKING SOCIAL SECURITY

What we’ve learned:

• What you need to consider when deciding when to file

• How you and your spouse can work together to optimize benefits

• What to expect with Taxes and Medicare

Visit SSA.gov to learn more

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TRANSAMERICA’S “I HAVE A QUESTION” CLIENT GUIDE

The “I Have A Question” Client Guide will provide additional insight into the topics covered today.

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TRANSAMERICA’S UNLOCKING SOCIAL SECURITY KIT

Comprehensive kit that your financial professional can share with you