Social Security: Unlock Its Potential

Social Security Trivia Mr. Ernest Ackerman Miss Ida May Fuller First recipient of Social Security retirement benefits Contributed $24.75 to Social Security Received $0.17 Received $22,888.92 Source: Historical Background And Development Of Social Security, www.ssa.gov/history

Social Security Snapshot Income of Americans Age 65+1 For 2016:2 Average monthly payments: Retired worker = $1,341 Retired couple = $2,212 Maximum monthly Social Security retirement payment to someone retiring at age 66: $2,639 1Income of the Aged Population, Fast Facts & Figures About Social Security, 2016 www.ssa.gov 22016 Social Security Changes, ssa.gov/news/press/factsheets/colafacts2016.html

Timing Work Taxes Awareness Agenda Timing Work Taxes Awareness

Timing

What’s Your Full Retirement Age (FRA)? Timing What’s Your Full Retirement Age (FRA)? Eligible for 100% of Benefits Birth Year FRA 1943-1954 66 1955 66 + 2 mos. 1956 66 + 4 mos. 1957 66 + 6 mos. 1958 66 + 8 mos. 1959 66 + 10 mos. 1960-Later 67

Early vs. Delayed Filing: How it Affects Your Social Security Benefit Timing Early vs. Delayed Filing: How it Affects Your Social Security Benefit Amount of full Social Security benefit received (2016)1 1ssa.gov, 2016

How Delaying Benefits May Reduce Your Clients’ Tax Burden1 Timing How Delaying Benefits May Reduce Your Clients’ Tax Burden1 Age 62 Age 70 1This chart is hypothetical and for illustrative purposes only.

Work

How Will Working Impact My Benefit?1 Before FRA At FRA After FRA 1How Work Affects Your Benefits, ssa.gov, 3/17

Work How Will Working Impact My Benefit?

Taxes

How Will Your Clients’ Social Security Benefits be Taxed? Taxes How Will Your Clients’ Social Security Benefits be Taxed? Benefits may be taxable based on “Combined Income” *Modified Adjusted Gross Income is also referred to as “MAGI.”

if married, filing jointly) Taxes How Will My Social Security Benefits be Taxed?1 Less than or equal to $25,000 if you file as an individual ($32,000 if married, filing jointly) $25,001 - $34,000 ($32,001 - $44,000 if married, filing jointly) ($44,000 if married, filing jointly) If Combined Income is… % of Social Security that’s taxable More than $34,000 1Benefits Planner: Income Taxes And Your Social Security Benefitsssa.gov, retrieved 3/17

Possible Ways to Reduce Combined Income Taxes Possible Ways to Reduce Combined Income Tax-free retirement income Roth IRAs & Roth 401(k)s

Awareness

The Bipartisan Budget Act of 2015: Effects on Social Security Awareness The Bipartisan Budget Act of 2015: Effects on Social Security What’s changed What’s the same No more double-claiming Dependents can’t claim payments if you suspend your payments Although file-and-suspend benefit is still an option—it has changed Married individuals are still eligible to claim payments worth up to 50% of the higher-earning spouse’s benefit All workers have the option to increase their monthly benefits by delaying their claim of payments until age 70

Your Social Security snapshot Awareness Your Social Security snapshot Use this worksheet to assess your individual situation MAI035

Questions to ask before taking benefits: Awareness Questions to ask before taking benefits: do I plan to stop working? Do I need this extra income? Will I have to pay taxes on my income? How long will I live? When

Main Idea To make the most of your Social Security benefits, consider all the factors. 20

Social Security Timing Work Taxes Awareness 21

1 2 3 Next Steps Next Steps Download your social security statement by logging on to ssa.gov/myaccount Estimate what your monthly income needs will be in retirement using the client worksheet. Meet with your financial advisor & tax professional to evaluate your overall portfolio and create an income plan. 22

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