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2. What is Social Security?
A United States federal program of social insurance and benefits developed in 1935
About 158 million Americans pay Social Security taxes
57 million collect monthly benefits in 2013
About one house hold in four receives income from Social Security

3. Social Security Provides A Safety Net
45%
16%
19%
17%
Social Security provides a safety net that’s guaranteed
Social Security is backed by the U.S. Government and is the only guaranteed, inflation-adjusted source of income available that doesn’t have to be purchased outside of your paycheck contributions. But, it can be a very complicated and deep program to understand.
There are many things you’ll need to learn about your personal social security benefits. To get us started, let’s think about how Social Security is a replacement for only some of your current income. It’s a safety net for you and your spouse throughout retirement to provide you with a base amount of income after you no longer draw a paycheck. However, it may not replace as much of your income as you thought it would, even though it’s the first income source we’ll want to consider when building your income plan.
Take a look at this slide. You can think about Social Security as your baseline guaranteed income as you enter retirement. This chart shows you how Social Security might contribute to your overall retirement income. For those who make about $58,000 or more in annual income, Social Security could replace somewhere between 17% and 25% of your paycheck. Policy and processing information changes often, so it’s critical you visit the Social Security Administration (SSA) website for the latest details – we’ll get into that a little bit more later. Most importantly, remember that Social Security it is an important foundational piece of any retirement income plan.
It’s the decisions you make about when and how you claim your Social Security benefit that will affect how much it actually contributes to your income. Let’s take some time to talk about these decisions.
Social Security safety net
*Source: Social Security Administration, Office of Policy, Income of the Aged Chartbook, 2010, issued March Key sources of retirement income for households with incomes of more than $57,957 per year. This chart is for illustrative purposes only.

4. Qualifying for Retirement Benefits
Eligibility:
You need 40 credits (10 years of work) 1 credit a quarter
Quarters do not need to be consecutive
In 2014, you receive one credit for each $1,200 of earnings, up to the maximum of four credits per year
Benefits are calculated based on average of the 35 highest years of earnings
$0 used in all years less than 35, which will result in a lower benefit
Reference: (How You Earn Credits brochure)
How are credits Earned?
In 1978, employers started reporting your earnings just once a year. Credits are now based on your total wages and self-employment income during the year, no matter when you did the actual work. You might work all year to earn four credits, or you might earn enough for all four in a much shorter length of time. In 2014, you receive one credit for each $1,200 of earnings, up to the maximum of four credits per year.

5. What is Your Full Retirement Age (FRA)
Year of Birth
Full Retirement Age
1937 or earlier 65
1938
65 and 2 months
1939
65 and 4 months
1940
65 and 6 months
1941
65 and 8 months
1942
65 and 10 months 66
1955
66 and 2 months
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 8 months
1959
66 and 10 months
1960 and later 67
Source:
If you were born on January 1st of any year you should refer to the previous year. (If you were born on the 1st of the month, SSA will figure your benefit (and your full retirement age) as if your birthday was in the previous month.)

6. 84 86 Life Expectancy? Male age 65 Female age 65
Can expect to live on average until 84 86
Female age 65
Can expect to live on average until
The Social Security Administration website has a Life Expectancy Calculator that you can use to get a rough estimate of how long you may live. If you are interested the website link is:

7. The Longevity Challenge
Those are just averages from the previous slide. As a result of our medical advances, we are, as a nation living longer. And more power to us. So long as we remember that with a longer life comes the responsibility to pay for it.
One out of every four 65-year-olds today will live past age 90. One out of every 10 will live past age 95. Chances of living to age 100 has gone up dramatically. (read slide).What are the chances you can afford to live to 100?
The Social Security Administration website has a Life Expectancy Calculator that you can use to get a rough estimate of how long you may live. If you are interested the website link is:

8. When To Start Receiving Benefits
When is the right time for you to receive retirement benefits?
The answer: It depends
Factors to Consider:
How long do you need or want to work?
What is your health status?
How long do you anticipate living?
Do you have other income sources?

9. Cost of Collecting Early
Age
Full Retirement 66
Full Retirement 67 62
25% Reduction
30% Reduction 63
20% Reduction 64
13.3% Reduction 65
6.7% Reduction 66
Full Benefits 67
Under Full Retirement Age
(FRA)
Give up $1 in benefits for every $2 you earn
above a $15,120 limit
In the year you reach Full
Retirement Age (FRA)
Give up $1 in benefits for every $3 you earn
above a $40,080 limit
When determining if you should take Social Security Benefits before FRA you need to be aware of two factors when taking benefits before FRA. First, your benefits will be reduced. Let’s say your FRA benefit would be $1000 a month, if you decided to take benefits starting at age 62, you would only receive $750 a month. Secondly, if you decide to continue working and earn over $15,120 a year, you will give up $1 in benefits for every $2 you earn working. Then when you reach FRA, if you earn over $40,080, you will give up $1 in benefits for every $3 you earn.

10. Benefits of Collecting After
Full Retirement at 66 Full Retirement at 67
Age Income Amount Age Income Amount
% %
% %
% %
% % %
If a person were born in 1943 or later and they decide to wait to collect benefits until age 70. They will get an increase to their benefits of 8% per year beyond FRA up to age 70.
For those who have a FRA of 66 this could be an increase of 32% by age 70.
For someone with a FRA of 67, if they wait until age 70, they would also get an 8% increase up to age 70, but for them the increase would be an additional 24% up to age 70.

11. Benefit Payments Will Differ
Age 62: $750
Age 66: $1,000
Age 70: $1,320
The following chart provides an example of how your monthly benefit amount can differ based on the age at which you decide to start receiving benefits. Based on FRA at age 66, you can see the difference and impact on your social security benefits if you decided to take them earlier than your FRA or if you decided to wait and start taking your social security benefits at age 70. (
You can estimate benefit amounts and find more information to help you decide when to start receiving retirement benefits by going online to

12. Spousal Benefits
Spouse is entitled to greater of the benefit based upon his or her own benefits or 50% of the spouse’s benefit.
Example #1: Dawn and Adam both have reached FRA. Adam’s benefit is $1200 and Dawn’s benefit is $1400. Both would receive their own benefit amount.
Example #2: Jerry and Mary both have reached FRA. Jerry’s benefit is $800 and Mary’s is $1800. Since half of Mary’s benefits equals $900 that is greater than Jerry’s benefit of $800. In this example Jerry would be entitled to $900 instead of his own benefit of $800.
Example #3: Steve and Sue have been married for 35 years. Steve never worked and does not qualify for Social Security. Betty’s benefits is $1800. At FRA, Steve’s spousal benefit would be $900. Steve could begin receiving benefits at age 62, but would be reduced since he is not at FRA.

13. Spousal Benefits Mary’s Benefit $1800 Half of Mary’s Benefit $900
Mary can take her benefit of $1800
Mary could increase her benefit amount be deferring up to age 70. At age 70 her benefit amount would be $2448
Mary’s Benefit
$1800
$1800 divided by 50% = $900
Half of Mary’s Benefit
$900
Jerry’s can either take his benefit of $800
Jerry can take half of Mary’s benefit which is $900
Jerry’s Benefit
$800
If your like me I like to be able to visualize things. So here is a simplistic visual using example 2 from the previous slide to help understand just one strategy when it comes to spousal benefits.
Mary’s Benefit at FRA of 66 is worth $1800. She can either take her benefit of $1800 or if she wanted to continue to work until age 70, she could defer her benefit and let it increase to $ Jerry decides he is retiring at age 66 and wants to start receiving benefits. Jerry has two options available to him. He can either take his full benefit amount of $800 or because half of Mary’s benefit is greater than Jerry’s full benefit, Jerry would be available for spousal benefits and could receive $900 instead of his own $800 in benefits
This is just a one approach to the spousal benefit strategies available. To determine how you the spouse or your spouse could maximum your benefit by using this strategy I am available to better help you determine what the best approach is for you.

14. Survivor Benefits
Widows and widowers can begin taking benefits based on their own earnings history and later switch to survivors benefits or vice versa.
Survivor benefits can be taken even if the surviving spouse files before full retirement age.
This allows the survivor to take a benefit at age 60 based on the deceased’s earning history and allow their own benefit to grow until age 70.
Survivor benefits are equal to full retirement benefit the deceased would have received.
In order to take advantage of survivor benefits, the survivor must be age 60 or over, have not remarried prior to age 60, the deceased died fully insured (40 quarters of coverage) and you were married to the deceased for at least the nine months just before the deceased passed away.

15. Survivor Benefits Widow or Widowers Earliest to Begin (Reduced)
Widow or Widowers
Earliest to Begin (Reduced)
Benefits
60 50, if disabled
Maximum Benefit
100% of deceased worker’s Benefit
If Spouse Has Not Reached Full
Retirement Age, Takes Benefits
And Continues Working
Benefits will reduce by $1 for every $2 you earn over that
year's limit
If Deceased Worker Started
Benefits Prior To Full Retirement
Age
The maximum benefit is limited to what the deceased was
receiving if they were alive

16. Survivor Benefits Widow or Widowers Typical Situations
Widow or Widowers
Typical Situations
A widow or widower, at full retirement age or older, generally
receives 100 percent of with deceased worker's basic benefit
amount
A widow or widower, age 60 or older, but under full retirement
age, received about percent of the deceased worker's
basic benefit amount
If You Re-Marry
Must be unmarried when you file for (widow or widower's
benefits or your new marriage must be one that Social
Security can disregard
Can continue to receive benefit if re-marry after age 60 or
age 50 if disabled

17. File & Suspend
An option that married couples might find valuable is “file and suspend”
Example:
Kris and Katie have just turned 66. Katie wants to retire, but Kris wants to continue working until 70. Kris’ monthly benefit would be $2,000 and Katie’s would be $900. If Katie can claim spousal-benefits, her monthly benefit would be $1,000.
Taking advantage of the file and suspend option. Kris can file for benefits at age 66 and immediately suspend receipt of those benefits. His monthly benefit as a result will continue to grow until at 70.
Katie can then claim spousal benefits of $1,000 a month while letting her own retirement benefits grow until age 70. At age 70 her monthly benefits, because of delayed retirement credits will be $1188. At age she can claim the higher benefits on her own record.
What is the File and Suspend Option:
At full retirement age the primary wage earner would file for his or her own benefit and then immediately suspend the benefit. This filing allows the other spouse with a lower benefit or no benefit on their own work record, to collect a spousal benefit. It also allows the primary wage earner to continue to work and collect delayed retirement credits at an additional 8% per year until benefit is unsuspended at age 70 or earlier.

18. Social Security Online Resources
Social Security Administration Website:
SSA Website Resources/Calculators:
Earnings Test Calculator
Retirement Age Calculator
Estimate Your Retirement Benefits
Estimate Your Life Expectancy
Other Benefit Calculators
If you would like to go out to the social security website and look at the information, the resources and the calculators that are available for you to look over, the Social Security Administration website link is
When you go to SSA website there is a wealth of information for individuals. It also provides a lot of different calculators to help you know if you have earned enough credits, when is your full retirement age, help you estimate your retirement benefits and provide you with a statistical idea of your life expectancy as well as other calculators you may find useful if you go online to the SSA website.

19. Social Security Online Resources
Here is an example of one of the calculators/tools that is available for you as a resource to estimate your monthly benefit. Based on the information provided by the benefits calculator if your birth date was on 06/15/1950 and currently you were earning $40,000. Your estimated benefit amount, beginning at age 66 and 1 month in 2016, would be $1, Remember this is just an estimate.

20. What is the Best Approach for Me?
It really depends on your situation:
Can you afford to delay taking benefits?
When do you plan to retire?
How much income do you need in retirement?
What other sources of income are available to you in retirement?
45%
16%
19%
17% 2%
There is a lot to know about social security benefits and there are many strategies when it comes to utilizing your social security benefits. Today we just went through an overview of social security benefits and touched on some of the basic information you should know and some different strategies that are available to you. One of the last things you should take away from this presentation today is that you have earned those benefits so do not leave dollars on the table that you are eligible to receive.
(Optional Comments for Producers)
What is the best strategy/approach for you? Social Security is a part of your retirement and if you remember what we discussed earlier back on slide 3, it is a portion of your retirement. If you would like to learn more about the rules and strategies around social security benefits, how they can help you during retirement, I am can help answer those questions and help design the approach that works best for you when it comes to your social security benefits and retirement benefits.

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