Exploring your best options Social Security What well cover today Things to consider before collecting Social Security retirement income Claiming strategies Taking action Unless otherwise noted the Social Security statistics and numbers presented are from ssagov and are current as ID: 794760
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William Stark
12/13/2017
Exploring your best options
Social Security
Slide2What we’ll cover today
Things to consider before collecting
Social Security – retirement income Claiming strategies
Taking action
Unless otherwise noted, the Social Security statistics and numbers presented are from ssa.gov, and are current as of December 2016.
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Consider these before collecting
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Longevity
Chances of living beyond age 65
Assumes a person is in good health. 2015 Individual Annuity Mortality Basic Table projected for mortality improvement from base year 2015, American Academy of Actuaries.
Slide5Marital status
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Will you work in retirement?
Slide7Other retirement income sources
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Cornerstone of retirement income
Slide9Social Security beginnings
Created in 1935
During the Great DepressionAmerican retirement safety net
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Slide10Social Security today
Estimated 165 million workers covered
Important income source for recipients9 of 10 individuals over age 65 receive benefits
Provides
more than half of income
for elderly beneficiaries 3 out of 4 singles 1 of 2 couples
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Slide11What Social Security Retirement Benefits provide
Lifetime retirement income
Cost of living adjustments for inflation
Spousal and survivor benefits
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Slide12How to qualify
40 credits required to qualify
Credits earned during working yearsApproximately 10 consecutive years of work
$1,300
$5,200
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Slide13Know the terms
Full Retirement Age (FRA)
Age at which a person becomes entitled to receive full Social Security Retirement benefits. Between 65 and 67 depending on birth year.
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Slide14Know the terms
Primary Insurance Amount (PIA)
The full monthly Social Security benefit you are entitled to receive at FRA. Determined by your averaged indexed monthly earnings.
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Slide15Know the terms
Delayed Retirement Credit (DRC)
If you delay collecting Social Security retirement benefits beyond FRA, benefits are increased annually for each year you delay claiming benefits until age 70 by 7-8%, depending on your FRA.
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Slide16Collecting
early
Age 62 is earliest for individual or spousal benefits
Decreases monthly benefit by as much as 30%
Benefits remain reduced – future COLA based on lower benefit amount
Reduces survivor benefits
Potentially
more
payments at
lower
amounts
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Slide17Early
claiming example
Born: 1953 FRA: 66 Monthly benefit:
$2,000
Reduction at 62: 25% Monthly benefit at 62:
$1,500
Hypothetical example for illustrative purposes only. Does not factor in cost of living adjustments.17
Slide18Collecting
later
If past FRA, will receive DRC of 7-8% annually (depending on your FRA)Benefits increased up to age 70
Fewer
payments,
greater
payment amounts18
Slide19Delayed claiming example
Born: 1953 FRA: 66 Monthly benefit:
$2,000
DRC: 8% Monthly benefit at 70:
$2,640
Hypothetical example for illustrative purposes only. Does not factor in cost of living adjustments.
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Slide20The trade off
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Slide21Impact of working
If collecting benefits prior to FRA
Some benefits may be withheld
Income limit changes each year
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Tax considerations
Step 1:
Calculate your
Combined Income
Combined = Adjusted + nontaxable + ½ of Social Security
Income Gross Income interest payments received
Step 2:
Determine how much is taxed
based on your Combined Income by using the table below
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Claiming strategies
Slide24Strategies for spouses…
If you are
married
you need not be eligible for individual benefits to claim a spousal benefit. A spousal benefit is up to 50% of your spouse’s PIA.
You can claim a spousal benefit if…
You are age 62 or olderYou have been married for at least one yearYour spouse has filed for benefits. If your spouse has suspended benefits, they must have suspended them prior to April 30, 2016.24
Slide25Advanced strategies for spouses
One spouse collects and other defers
Possibly due to one spouse still working
Legislation passed in the 2015 Budget Act sought to “close loopholes” affecting two advanced claiming strategies you may have heard of:
File and suspend (voluntary suspension)
Restricted application
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Slide26File and suspend strategy has changed
New rules
Rules depend on date of birth
Those who have already
filed and suspended
Benefits are unaffected.
Those born on or
before April 30, 1950
“File
and Suspend” strategy is available IF request for benefit suspension
submitted before April 30, 2016.
Those born after
April 30, 1950
No spousal or family benefits based on a filer’s earning record will be
paid to anyone else while benefits are suspended.
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This strategy changed for benefits suspended after 4-29-16
May voluntarily suspend retirement benefit payments up to age 70
May earn delayed retirement credits during suspension
Others will not be able to receive benefits during suspension
Exception: divorced spouse will be able to continue receiving benefits.
Part B Medicare premiums cannot be deducted from suspended benefits.
Claiming strategy
File and suspend
Slide28Restricted application strategy has changed
New rules
Rules depend on age
Those who have already
filed a restricted application
Benefits are unaffected. (Unless the other spouse suspends after April 29, 2016.)
Those born on or before
January 1,
1954
“Restricted Application” strategy available when
Full Retirement Age is reached. (Unless the other spouse suspends after April 29, 2016.)
Those born after
January 1, 1954
“Restricted Application” strategy no longer available. Upon filing, will be “deemed” to have filed for ALL benefits to which entitled.
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Restricts your claim for Social Security retirement benefits to spousal benefits only
This strategy recently changed and may be unavailable for some retirees
If born on or before 1-1-54, only available at FRA
If born after 1-1-54, this strategy is not available
Claiming strategy
Restricted application
Slide30Strategies for former spouses
If you are
divorced
you can claim a spousal benefit on your ex-spouse’s earnings if …
Your marriage lasted 10 years or more
You (the claimant) have not remarriedYou (the claimant) are not entitled to a higher individual benefitBoth you and your ex-spouse are age 62 or olderYour former spouse has already filed for benefits OR you have been divorced for at least two years. 30
Slide31Strategies for widows / widowers
Surviving spouses can receive:
Reduced benefits as early as age 60 orFull benefits at FRA or older
If survivor qualifies for benefits on own earnings record, may switch from survivor to own retirement benefit
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Slide32Social Security tomorrow
Much press about future of Social Security
Currently 2.8 workers for each beneficiaryBy 2035 it will be 2.1 workers
Tax and benefit changes most likely to affect younger workers
Bipartisan Budget Act of 2015 changed rules for couples
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Taking action
Slide34Learn even more
Visit
ssa.gov for benefit and program info
Create an account to view your earnings and estimated retirement benefits
Access a benefits application form
Find an office near you
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Slide36It helps to have a guide
Social Security is an important source of retirement income
Many options and additional strategies for collecting benefits
Your story and circumstances are unique to you
We can prepare a simple or comprehensive estimate for you
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Slide38Securian Financial Group, Inc.
www.securian.com
Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York, products are issued by Securian Life Insurance Company, a New York authorized insurer. Minnesota Life is not an authorized New York insurer and does not do insurance business in New York. Both companies are headquartered in St. Paul, MN. Product availability and features may vary by state. Each insurer is solely responsible for the financial obligations under the policies or contracts it issues. Variable products offered through Securian Financial Services, Inc. Member FINRA/SIPC. 400 Robert Street North, St. Paul, MN 55101-2098 • 1-800-820-4205
©2016 Securian Financial Group, Inc. All rights reserved.
F80607-6 Rev 2-2017 DOFU 2-2017
(29163)
93590
This is a general communication for informational and educational purposes. The materials and the information are not designed, or intended, to be applicable to any person's individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in (or refrain from) a particular course of action. If you are seeking investment advice or recommendations, please contact your financial professional.
This information is a general discussion of the relevant federal tax laws provided to promote ideas that may benefit a taxpayer. It is not intended for, nor can it be used by any taxpayer for the purpose of avoiding federal tax penalties. Taxpayers should seek the advice of their own advisors regarding any tax and legal issues specific to their situation
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