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AGENDA

•Social Security Basics

•Claiming Options

•SSI Maximization Strategies

•Real-Life Case Scenarios

•Maximizing Your SS Benefit

•Questions/Comments

INITIAL THOUGHTS

This presentation is designed to assist you in exploring the available options you have tomaximize your Social Security. This presentation is not intended to be a retirement, benefit,or estate plan nor is it a specific recommendation for a retirement, benefit, or estate plan.

This material is for informational purposes only. Many of the topics presented may alsoinvolve legal, tax, accounting or other issues, which there is absolutely no intention ofoffering such advice, and this presentation and any other oral or written communicationshould not be construed as such. Maximization strategies can be complicated and varydepending on individual situations so individuals interested in this topic should consult aSocial Security representative.

As you explore your Social Security situation, we hope that you find this presentation useful.

THE SIGNIFICANCE OF SS

•For Americans age 65 and older with a householdincome of $57,957 or more, SS provides about 42%of incomeⁱ

•The four most important sources of retirementincome for Seniors age 65 and olderⁱⁱ are:

ⁱ Income of the Population 55 or Older, 2010, Social Security Administration, 2012

ⁱⁱ The 4 Most Important Sources of Retirement Income: US News, Emily Brandon, March 22, 2012

WHO IS ELIGIBLE?

A worker who has accumulated aminimum of 40 work credits(approx. 10 years of work)

Benefits based on average of the35 highest years of earnings

A spouse or someone married forat least 10 years to an eligibleworker

WHEN CAN YOU CLAIM?

•The benefits are on the agewhen they are claimed

•Earliest age is 62

•Latest age is 70

•Full Retirement Age – animportant concept alsoknown as “FRA”

•Currently 66 to 67 - depending onyour year of birth

HOW CAN YOU CLAIM?

Create an Account on:

http://www.ssa.gov/myaccount/

CLAIMING AGE AFFECTSMONTHLY BENEFITS

•Age 62 – monthly benefits willbe reduced by 25%-30%depending on your year of birth

•FRA (66-67) – entitled to 100% offull benefit

•Age 70 – monthly benefit couldbe as much as 132% of fullbenefit

CLAIMING AGE AFFECTSMONTHLY BENEFITS

OPTIMIZING BENEFITS BYDELAYING START DATE

Benefits at Age

Start Benefit Age

$144,000

$234,000

$324,000

$414,000

$504,000

$124,776

$228,756

$332,736

$436,716

$540,696

$96,000

$216,000

$336,000

$456,000

$576,000

$55,680

$194,880

$334,080

$473,280

$612,480

$158,400

$316,800

$475,2000

$663,600

*FRA of 66 with full retirement benefits of $2,000/ month andno COLA. For Illustrative purposes only

WORKING IN RETIREMENT

•A portion of your Social Security benefits could bereduced if you claim before your FRA and continueto work

•For 2014, if you claim between age 62 and FRA, yourbenefits will be reduced by $1 for every $2 above$15,480 earned

•Example: If someone earns $20,480 ($5,000 over limit), theirbenefits would be reduced by $2,500

HOW IS SS TAXED?

•Depends on your “combined income” or “provisional income”

•Combined income is:

•Your adjusted gross income (AGI)

•Any tax-exempt interest you earned

•50% of your SS benefits

•Taxable portion of Social Security is the minimum of threeamounts

•85% of Social Security benefits

•50% of benefits plus 85% of combined income beyond second thresholdamount

•50% of combined income beyond first threshold plus 35% of combinedincome beyond the second threshold

THE TAX THRESHOLDS

SSI MAXIMIZATIONSTRATEGIES

SPOUSAL BENEFIT

•Spouse must be age 62 or older to qualify

•Worker must first file for Social Securitybenefits

•If spousal benefits are claimed at spouses FRA, the spousal benefitis half of the spouse’s primary insurance amount (PIA)

•Spousal benefits are permanently reduced if claimed beforereaching FRA

•If you elect to take your spousal benefit at your FRA, you can delayreceiving your worker based benefits on your work history andswitch to your benefit later to increase the monthly benefit youwill receive

“FILE AND SUSPEND”STRATEGY

•This strategy can be done when the higher earning– or older – worker reaches FRA

•You file for Social Security benefits to enable yourspouse to receive the spousal benefits

•The higher earning – or older – worker immediatelysuspends their own benefits and they can continueto earn additional retirement credits until age 70

SOCIAL SECURITYBENEFITS AND DIVORCE

•As a divorced spouse, you may be entitled to SocialSecurity benefits based on the ex’s work record if:

You were married for at least 10 years

You are unmarried (doesn’t matter whether ex hasremarried)

Your own worker benefit would be lower than your ex-spouse’s benefit

SURVIVOR BENEFIT

•The earliest a widow(er) canstart to receive Social Securitybenefits is age 60

•If you receive survivor benefitsstarting between age 60 andyour FRA, the benefits arereduced by a percentage

•If your own benefits are morethan your survivor benefits, youcan select your own benefitsinstead, but not both

OTHER SOCIAL SECURITYTOPICS

•There are many other factors not discussed dealingwith Social Security. Some include:

If you work for a federal, state or local governmentagency you may be eligible for a pension based onearnings not covered by Social Security. This can affectthe amount of your Social Security benefit

Taxation of your Social Security benefits

Disability benefits