Getting the Most from Social Security Social Security Workshop Stephanie Farrar, Regional Director for Principal Funds Distributors Quantum Financial Planning Services, Inc. April 24,

Agenda Know Your Benefit Understand Your Options Maximize Your Benefit Getting Started 2

Know Your Benefit 3 Sources for retirement income for average income earners to sustain 80% – 100% of pre-retirement income Employer-Sponsored Retirement Plan and Personal Savings Social Security Source: Social Security Administration, Office of Policy. Office of Research, Evaluation Statistics, Fast Facts and Figures About Social Security, 2010.

Know Your Benefit 4

5 Social Security Full Retirement Age Birth YearFull Retirement Age months months months months months 1960 and later67 Source: 2011 Social Security Administration, ssa.gov/retire2/. Know Your Benefit Full Retirement Age

6 Receive benefits earlier Higher monthly check No penalty for employment Highest monthly paycheck No penalty for employment Smallest monthly check Potential reduction penalty for employment No interim benefits Receive benefits later 6270 AGE PROS CONS Full Retirement Age Know Your Benefit Your Age and Your Benefit

Electing your benefit — early vs. late Working while collecting your benefit Examining your tax situation Considering your spouse’s benefit 7 Understand Your Options

Early vs. Late 8 130% 120% 110% 90% 80% 70% Early vs. Late Benefit Election Assuming Full Retirement Age at 66. Source: Social Security Administration. 100% Take Benefits Earlier Take Benefits Later Retire at age 66 with full monthly benefit

Working While Collecting 9 Understand Your Options AgeEmployment Income 2013 Limits Considerations Under Full Retirement Age $15,120 For every $2 over the limit, $1 is withheld from benefits In the year Full Retirement Age is reached $40,080 For every $3 over the limit, $1 is withheld from benefits until the month in which full retirement age is reached At Full Retirement Age or older* No limits on earnings None * At FRA your benefit amount is adjusted to accommodate for the earlier reduction.

Examining Your Tax Situation 10 Understand Your Options Filing Single Provisional Income Benefits Subject to Tax Under $25,0000% $25,000 - $34,000Up to 50% Over $34,000Up to 85% Note: State and local taxes may differ. Married Filing Jointly Provisional Income Benefits Subject to Tax Under $32,0000% $32,000 - $44,000Up to 50% Over $44,000Up to 85% Source: September 2012 Social Security Administration,

Consider Spousal Benefits 11 Understand Your Options Option 1 Individual Benefit Option 2 Spousal Benefit Option 3 Survivor Benefit Lower-earning spouse collects his or her own individual benefit Lower-earning spouse may collect a higher spousal benefit (up to 50% of their spouse’s full benefit) if the spouse has filed A widowed spouse may collect survivor benefits (up to 100% of their deceased spouse’s benefit)

Consider Spousal Benefits 12 Understand Your Options Social Security Benefits NameAge 62Age 66Age 70 Ann$675$900$1,180 Sam$1,562$2,071$2,733 Spousal Benefit$724$1,035 Sam and Ann, both age 62 Full Retirement Age: 66

Maximize Your Benefit 13 Social Security Strategy DefinitionBenefit Claim and Suspend Individuals at FRA or later who have claimed benefits then suspend the benefits. When benefits are reinstated down the road, they will receive a higher benefit amount. Allows spouse to claim spousal benefit, while the higher wage earner can continue to accrue benefits. Can increase the overall lifetime benefits. Claim Now, Claim More Later A FRA individual may claim one- half of their spouse’s benefit, delay taking their own benefit. Earn delayed credits and then claim their higher personal benefit at a later age or may help spouse to receive greater survivor benefit. Do-Over Individuals are allowed to change their earlier claiming decision. Provides flexibility to cease taking benefits if life situation changes.

Evaluate what you expect to receive from Social Security Determine when to start taking benefits Apply for retirement benefits 14 Getting Started Maximize Your Benefit

15 An estimate of your Social Security benefits Most recent tax return Most recent pay statement from employer Latest statements from all retirement plans Latest statement from mutual funds Life and disability insurance policies Annuity contracts Wills and trust document(s) Bring Getting Started Maximize Your Benefit

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