Social Security Maximization

1. Social Security Maximization Your Guide to Maximize Your Social Security Benefits

2. As a full-service retirement planning firm, we offer: • IRA/401(k) rollovers • Asset protection • Income planning • Wealth management • Long-term care solutions • Wealth transfer strategies

3. Today’s topics • Finding your Primary Insurance Amount • Deciding now or later • Understanding the divorce factor • Learning total benefits over your lifetime • Determining the best option for you • Protecting the survivor’s benefit • Managing the impact of taxes • Choosing to work • Uncovering the bottom line • Filling the income gap

4. The moment when your “working” income ceases and you start living off the money you set aside. The retirement cliff …

5. Your retirement roadmap FILE 70 Late Retirement June, 2026 62 Early Retirement June, 2018 66 FRA June, 2022

6. The foundationSocial Security planning The foundation of income planning for anyone who is about ready to retire! 1 2 3 *Source: http://www.ssa.gov/pressoffice/basicfact.htm

7. The Baileys Case Study: George Bailey Age: 60 PIA: $1,900 Mary Bailey Age: 56 PIA: $900

8. What’s at stake? By using strategies illustrated in the Social Security Maximization report, they can increase their lifetime benefits as much as $170,000. This illustration represents a hypothetical situation and is for informational purposes only.

9. Importance • How can you maximize your lifetime benefit? • Who will provide reliable advice for making these decisions? • Will Social Security provide the advice you need?

10. Money Question How many total credits do you need to qualify for Social Security? 40 Credits http://www.ssa.gov/retire2/credits3.htm

11. Understanding your monthly benefit Finding your PIA Deciding now or later Understanding the divorce factor Learning total benefits over your lifetime

12. Finding your PIA • Check Box #1… • If you would like to find out how your lifetime of earnings translates into your Primary Insurance Amount (PIA)

13. Deciding nowor later The question everyone should be asking, "When… should I start taking Social Security?”

14. Yourfull retirement age Your full retirement age (FRA) is dictated by your year of birth. FRA is the age at which you can begin your full monthly benefit. In our examples, we will be working with people whose FRA is age 66. Source: http://www.ssa.gov/retire2/retirechart.htm

15. Full Retirement Age (FRA): 100% of PIA is available as a monthly benefit. Age 70: the last month that your monthly benefit will increase. 67 66 68 65 69 Age 64 70 71 63 Filing Age Factor 67 64 62 68 69 70 66 63 65 93.3% 132.0% 124.0% 116.0% 108.0% 100.0% 75.0% 80.0% 86.7% 72 62 % of PIA 1 0 7 8 1 9 0 3 2 2 4 6 8 0 3 6 0 5 After age 70: the Monthly benefit will no longer increase. Age 62: Retirement benefits available. For each month you take benefits prior to FRA, the monthly amount is reduced. Source: http://www.socialsecurity.gov/retirement/1943.html http://www.socialsecurity.gov/retire2/delayret.htm

16. Deciding nowor later The factor changes each month you wait. Between age 62 and 70, there are 96 months you could file. Each would result in a different benefit amount.

17. Deciding nowor later File immediately if you: • Find your job is unbearable • Are willing to sacrifice retirement income • Are not healthy Delay filing if you: • Want to maximize retirement income • Want to increase retirement benefits for spouse • Are still working • Are healthy

18. Deciding now or later • Check Box #2… • If you would like to review the impact of taking your benefit at age 62, full retirement age, or age 70 or any month in between

19. Money Question How many years do you have to be married to receive Social Security benefits from a former spouse? You need to be married for 10 years. http://www.ssa.gov/retire2/divspouse.htm

20. Understanding the divorcefactor If you have gone through a divorce… It might affect the retirement benefit to which you are entitled.

21. Understanding the divorcefactor • Check Box #3… • If you would like to find out how a past divorce might impact your Social Security benefits

22. Learning total benefits over your lifetime & How much will your check be each month? For how many months will you receive it? Lifetime Benefits

23. Learning total benefits over your lifetime Every month you wait… Your monthly check goes up. But, you would get one less monthly check. Monthly benefit x Number of expected months Lifetime benefit

24. Learning total benefits over your lifetime • Check Box #4… • If you would like to learn about getting the maximum benefit over your lifetime, not just about a monthly check

25. Money Question Since 1993, up to what percentage of your Social Security benefit has been subject to income tax? Up to 85% http://www.ssa.gov/planners/taxes.htm

26. Strategies to maximize your lifetime benefit Determining the best option for you Protecting the survivor’s benefit

27. Determining the best option for you For married couples, a simple break-even analysis will usually give the wrong answer, costing you benefit dollars. Because Social Security offers multiple benefits and strategies! Why?

28. Retired Worker Benefit: This is your “own” benefit based on your earnings history and when you trigger benefits. Spousal Benefit: Once your spouse has filed for benefits and you have reached 62, you are eligible to begin receiving a reduced portion of his/her Primary Insurance Amount (PIA). Survivorship Benefit: When one married person passes away, the surviving spouse is eligible to receive the higher of the two monthly benefits he/she was receiving. File and Suspend: This concept allows for a lower-earning spouse to receive up to 50 percent of the other’s PIA amount if both spouses file for benefits at the right time. Restricted Application: The higher-earning spouse may be able to start collecting a spousal benefit on the lower-earning spouse’s benefit while allowing his/her benefit to continue to grow. There are tens of thousandsof calculations that go into finding the precise combination that will give you the largest lifetime benefit. The Social Security Maximization report will show exactly what to do.

29. Determining the best option for you Through more than 20,000 calculations: The Social Security Maximization report calculates the lifetime benefit for each strategy and combination Result: A specific strategy for the highest expected lifetime benefit

30. Determining the best option for you By using the Social Security Maximization report, George and Mary can increase their lifetime benefits as much as $170,000. This illustration represents a hypothetical situation and is for informational purposes only.

31. Determining the best option for you • Check Box #5… • If you would like to have a personalized report that shows the best strategy for you … 20,000 calculations to figure it out!

32. Money Question At what age can a surviving spouse begin receiving Survivorship benefits? 60years old http://www.ssa.gov/survivorplan/survivorchartred.htm

33. Protecting the survivor’s benefit The death of a spouse during retirement can be a significant financial strain. More than 70% of all elderly persons with incomes below the poverty level are women. More than half of elderly widows now living in poverty… …were not poor before the death of their husbands. http://assets.aarp.org/rgcenter/ppi/econ-sec/2010-03-poverty.pdf

34. George and Maryretirement scenario IncomeGeorgeMary Pension $14,400 $ 6,000 Social Security $30,096 $ 7,790 Income $44,496 $13,790 Total Retirement Income$58,286 Assets Savings $150,000 CDs $200,000 Investments $ 50,000 Life Insurance Death Benefit $ 25,000 Total Assets$425,000 This illustration represents a hypothetical situation and is for informational purposes only.

35. Mary’s survivorship scenario Income GeorgeMary Pension $14,400 $ 6,000 Social Security $30,096 $ 7,790 Total Retirement Income$58,286 $36,096 • Household income is reduced by: • $22,190 / year • 38% • Is this a concern for you? This illustration represents a hypothetical situation and is for informational purposes only.

36. Mary’s income solution Reposition the money from the CD: $200,000 Income Base: 7% for 20 years Guaranteed Income For Life* Example: Fixed Indexed Annuity This chart is for illustrative purposes and not intended to be representative of any specific investment vehicle. *Guarantee based on the claims paying ability of the insurance carrier

37. Protecting the survivor’s benefit • Check Box #6… • If you would like to find out how to protect the survivor’s income

38. Money Question Which vice president had the deciding vote to increase Social Security taxation to 85%? Al Gore http://www.ssa.gov/history/InternetMyths2.html

39. Taxation and working Managing the impact of taxes Choosing to work

40. Managing the impact of taxes As much as 85 percent of your benefits may be subject to income taxation. Nearly every source of income is included: • Wages • Pensions • Dividends • Capital gains • Business income • Tax-exempt interest YOURS NOT YOURS

41. Managing the impact of taxes Repositioning her rainy day funds into an annuity saves Mary $4,735 in income taxes! An annuity is a long-term investment vehicle and may not be suitable in every situation.

42. Managing the impact of taxes • Check Box #7… • If you are interested in minimizing (or eliminating!) the taxation of your Social Security benefits

43. Choosing to work • AARP found that 80% of baby boomers plan to work during retirement.* • What effect will that have on your net income? • Depending on your age, it could cost you up to 50% of your benefits. *http://assets.aarp.org/rgcenter/econ/boomers_envision_1.pdf

44. Choosing to work • Check Box #8… • If you would like your report to include the impact of working … in dollars and cents, personalized just for you

45. Money Question You already elected Social Security benefits and now realize you made a mistake. What are your options? If you change your mind within the first 12 months of electing benefits, you can withdraw the application and pay back any benefits. http://www.ssa.gov/retire2/withdrawal.htm

46. Uncovering the bottom line

47. Uncovering the bottom line By using the Social Security Maximization report, you will know exactly how to capture your highest possible lifetime benefit. + $170,000 This illustration represents a hypothetical situation and is for informational purposes only.

48. Your retirement timeline FILE 70 Late Retirement June, 2026 62 Early Retirement June, 2018 66 FRA June, 2022

49. Uncovering the bottom line • Check Box #9… • If you want to learn how to increase your lifetime benefits

50. Foundation of retirement Many who retired in the past thought they had enough money saved for retirement!