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Smart Ways to Get More Social Security Income

Smart Ways to Get More Social Security Income. Your Name, Your Pic 111.111.1111 (office) j.smith@xyzadvisor.com www.xyzadvisor.com. Choose Your Income Election Wisely!. Choose wisely Hundred’s of combinations More important than ever. Your Name, Your Pic Advisor.

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Smart Ways to Get More Social Security Income

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  1. Smart Ways to Get More Social Security Income • Your Name, Your Pic • 111.111.1111 (office) • j.smith@xyzadvisor.com • www.xyzadvisor.com

  2. Choose Your Income Election Wisely! • Choose wisely • Hundred’s of combinations • More important than ever

  3. Your Name, Your Pic Advisor NOTE: This Presentation is not endorsed by Social Security Administration, nor are we affiliated with Social Security

  4. What you will learn… • When filing for social security, do it right the first time • 6 strategies for more income • Your best-fit claiming method

  5. Basics… • The “Octopus” • Terms • Solvency • Benefit calculation • Life expectancy

  6. The Octopus

  7. 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

  8. Assumptions & Terms • COLA – Cost of Living Adjustments • Primary Wage Earner - Spouse with higher PIA • Secondary Wage Earner - Spouse with lower PIA • LE - Life Expectancy

  9. Social Security Trust Fund IS IT SOLVENT?

  10. 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)

  11. How is Income Calculated? For example, if your AIME is $6,000, your PIA is: 2013 bend point formula

  12. Life Expectancy 13

  13. Life Expectancy Statistics Age-80: per 1000 females born in 1927, 620 remain Source: Social Security, Actuarial Publications, 2007 Period Life Table

  14. Six Strategies • Claim & get it right the first time • Don’t elect too early • If married, use your living spousal income benefit

  15. Six Strategies • If married, leverage the survivor benefit income stream • Compute your optimal benefit • Align your election strategy with your overall portfolio

  16. Strategy #1: Claim Correctly the 1st Time

  17. Strategy #2: Don’t Elect too Early

  18. Strategy #2: Don’t Elect too Early

  19. Strategy #2: Don’t Elect too Early • Monthly benefit by age, adjusted for inflation - Wait to claim, no inflation - Wait to claim, with inflation 62 66 70

  20. Strategy #2: Don’t Elect too Early Life Expectancy: 50% Chance of Living to . . . One of a Couple 92 Women 88 Men 85 Break Even 79 Cumulative Lifetime Income 21

  21. Strategy #2: Don’t Elect too Early • Social Security best-fit discussion • Consider life expectancy, single, married, needs…

  22. Strategy #3: Spousal Income Benefit Harness the power of little-known spousal income benefit

  23. Strategy #3: Spousal Income Benefit Spousal Benefit = ½ your spouse’s PIA at your FRA

  24. Strategy #3: Spousal Income Benefit

  25. 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

  26. Strategy #4: Survivor Income Benefit Plan for your surviving Partner’s income stream

  27. Strategy #4: Survivor Income Benefit Jim & Linda Heartland $300 $2,300

  28. Strategy #4: Survivor Income Benefit Jim passes on… Linda gets… $2,300

  29. Strategy #4: Survivor Income Benefit Jim dies at 77 and Linda collects for 16 years to age 93

  30. Strategy #5: Compute Your Optimal Benefit Compute your optimal benefit with our social security maximization software

  31. Strategy #5: Compute Your Optimal Benefit Timing… • PIA • Life expectancy • Relationship history, • Financials

  32. Strategy #5: Compute Your Optimal Benefit

  33. Strategy #5: Compute Your Optimal Benefit

  34. Strategy #5: Compute Your Optimal Benefit Case Study 1: The Metros “Claim Some Now, More Later” Case Study 2: The Heartlands “File and Suspend”

  35. Strategy #5: Compute Your Optimal Benefit Case Study 1: The Metros

  36. Strategy #5: Compute Your Optimal Benefit Case Study 1: The Metros Claims age 68 $2307 for life (Bob’s PIA = $2000) Collects $1000 between 66-70, Full benefit at 70 $2904 for life

  37. Strategy #5: Compute Your Optimal Benefit Case Study 1: The Metros

  38. Strategy #5: Compute Your Optimal Benefit Case Study 2: The Heartlands

  39. Strategy #5: Compute Your Optimal Benefit Case Study 2: The Heartlands Age 66, files and suspends Age 70, collects $3,036 for life...Age 77, dies Age 63, collects $825 After Jim dies... Ages 73-92, Collects $3,036

  40. Strategy #5: Compute Your Optimal Benefit Case Study #2: The Heartlands

  41. Strategy #5: Compute Your Optimal Benefit Case 3a: Sally Solo, Single

  42. Strategy #5: Compute Your Optimal Benefit

  43. Strategy #5: Compute Your Optimal Benefit How Sally Single Maximizes Her Social Security Income LE = age 88, age 70 = $481,536, age 62 = $376,584 Cumulative Lifetime Income 44

  44. 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

  45. Strategy #5: Compute Your Optimal Benefit $1,000 monthly ex-spousal income Switch to own benefit at 70

  46. Strategy #5: Compute Your Optimal Benefit

  47. 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

  48. Strategy #5: Sally PIA = $1,600deceased spouse PIA = $2,000 Switch to own benefit at 70

  49. Strategy #5: Compute Your Optimal Benefit

  50. Strategy #5: Compute Your Optimal Benefit Case 3 Summary • Sally Single • Sally Divorced • Sally Widowed

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