Smart Ways to Get More Social Security Income

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: 2014 bend point formula

12. Life Expectancy 12

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 20

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 www.ssa.gov

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 43

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