1. WHAT YOU NEED TO KNOW BEFORE YOU CLAIM Strategies to Maximize Your Social Security Income Visit us at www.SeamanRetirement.com 4327 Executive Circle NW Canton, OH 44718

2. DISCLAIMER The views presented today are provided by Social Security Solutions, Inc. The information was taken from sources believed to be reliable but cannot be guaranteed. They do not necessarily represent the views of the Social Security Administration. The information presented today does not constitute financial, legal or tax advice and should be used for informational purposes only. Since individual circumstances vary, you should consult your legal, tax, or financial advisors for specific information. Neither Seaman Retirement Planning & Associates, LLC nor Social Security Solutions, Inc. is affiliated in any way with the Social Security Administration. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 2

3. AND Out of courtesy for your neighbor, please keep conversations to a minimum.

5. Don’t Let Social Security Just Happen… 41.4 % take the benefits as soon as they're eligible at age 62, according to Social Security Administration. In 2011, consistent with prior years, 74% of all social security claimants started benefits before Full Retirement Age. (Annual Statistical Supplement to Social Security Bulletin) Retirement DOES NOT EQUAL Social Security. By law the Social Security office cannot advise you on optional claiming strategies.

6. We are a team of Independent Investment Advisors and Insurance Agents specializing in preparing our clients financially for their retirement and then successfully guiding them through their retirement journey. Who is ?

7. Associations: Accredited Member BBB, TD Ameritrade, Alphastar CM, Social Security Solutions, Local Attorneys and CPA’s Pat: Vice President, Degree in Math, Actuary & manager at Progressive Ins. & Mercer Actuarial Consulting, Over 11 Years as a investment advisor Jim: President, Degree in Industrial Management & Accounting Over 16 Years as investment advisor Who We Are Tom Seaman: Founder of SRP, est. 1957, Graduated from the University of Notre Dame Jim & Pat Seaman: Investment Advisors Independent Insurance Agents: Life, Accident, Health, LTC, Medicare

8. Phases of Financial Planning Accumulation vs. Distribution/Legacy Retirement Legacy Accumulation Distribution This is the demographic that Seaman Retirement Planning specializes in working with.

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10. “As important as Social Security is to many people's post-retirement finances, it's given little thought in retirement financial planning” - according to Jeff Bucher, president of Citizen Advisory Group in Perrysburg, Ohio (as quoted in USA Today, May 7, 2013) Don’t Let Social Security Just Happen…

11. A Little History  President Roosevelt signed into law in 1935  To help senior citizens avoid poverty during the Great Depression.  First Social Security taxes were collected in 1937  Millions of Americans use as their primary source of retirement income.

12. Major Benefits of Social Security Lifetime Income Predictable, Steady Income Inflation-adjusted Income Survivor Benefits

13. Social Security Eligibility Work for at least 10 years Need 40 credits You can earn up to 4 credits per year

14. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 14 Full Retirement Age Primary Insurance Amount Delayed Retirement Credits File and Suspend Restricted Application Earnings Test and Taxes Marital Status S OCIAL S ECURITY I S N OT S IMPLE

15. COMMON QUESTIONS Will Social Security be there for me when I’m ready to claim? Will Social Security be enough to live on in retirement? Can I still receive benefits if I’m working? How much will I receive? How can I maximize my benefits? Will it be taxed? Can you avoid it? Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 15

16. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 16 WILL SOCIAL SECURITY BE THERE FOR ME? IN SHORT, YES!

17. WILL SOCIAL SECURITY BE THERE? Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 17 Social Security has been running surpluses for the past 25 years. It is likely to continue to run surpluses until 2021. Then reserves will gradually be drawn down to pay benefits. By 2033, reserves are expected to be depleted. After 2036, funds (FICA and taxes on benefits) will cover 75% of scheduled benefits if nothing is done. History indicates that benefits for those at least age 60 and older will not be altered. Source: National Academy of Social Insurance, SSA, Congressional Budget Office, 2012

18. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 18 WILL SOCIAL SECURITY BE ENOUGH TO LIVE ON? PROBABLY NOT

19. RETIREMENT SPENDING FOR THE AVERAGE RETIREE* Shelter/Utilities$14,650 Transportation$6,918 Clothing$1,221 Healthcare$4,883 Food$6,104 Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 19 $33,776 Source: U.S. Consumer Expenditure Survey, U.S. Bureau of Labor Statistics, 2009: Retirees aged 65 to 74 with a reported spending average of $40,685 Journal For Financial Planning from Article from Financial Post http://business.financialpost.com/2012/08/04/how-much- money-will-you-really-spend-in-retirement/ Expenses drop on average 20% for retirees age 65 to 75 According to the Journal for Financial Planning

20. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. Can I Still Receive Benefits if I am Working? Maybe…

21. An individual’s Social Security Benefits can be reduced if they are working and collecting benefits under their Full Retirement Age (FRA). This is called the Earnings Test and only earned income counts. In any full year under FRA, there is a reduction of $1 of benefits for every $2 of earnings over the annual limit of $15,720 (2015). In the year FRA is reached, there is a reduction of $1 of benefits for every $3 of earnings over the annual limit of $41,880 (2015). Once FRA is reached there is no loss of benefits regardless of income. Source: Social Security Solutions, Inc. Copyright 2012 Working and Collecting Benefits Can I work & still collect benefits?

22. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 22 HOW MUCH WILL MY BENEFIT BE? IT DEPENDS…

23. HOW MUCH WILL I RECEIVE? Your benefits are determined by a combination of factors: How much you earned (max in 2015 is $2,685) The age at which you apply for benefits Your marital status How well you use the rules to maximize your benefits Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 23 Source: Social Security Administration, 2013

24. HOW MUCH ARE BENEFITS WORTH? At age 66, Joe claims his $2,100/month benefit At age 66, Mary claims her $1,500/month benefit If both live for 20 more years, the couple would collect $864,000 in benefits * *(2,100 + 1,500) x 12 months x 20 years=$864,000 Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 24

25. HOW BENEFITS ARE CALCULATED Your highest 35 years of earnings (years with no earnings are averaged in as zero) Earnings are indexed for inflation and averaged Your benefits are based on your Primary Insurance Amount FULL RETIREMENT AGE Born between 1943-1954 ~ Age 66 Your Benefits increase: 1. if you wait or 2. in some years by cost- of-living adjustments (COLAs) Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 25 www.SSA.gov/mywww.SSA.gov/myaccount

26. IMPACT OF FILING EARLY Apply at AgeBenefit will be % of PIAMonthly Benefit 6275.0%$1,672 6380.0%$1,784 6486.7%$1,933 6593.3%$2,080 Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 26 If you apply when you first become eligible at 62, your benefit will be 75% of your PIA IF your PIA is $2,230, then Example assumes you were born between 1943 and 1954. Source: Social Security Administration, 2013

27. DELAYED RETIREMENT CREDITS If you wait to apply until your 70, your benefit will be 132% of your PIA (Called Delayed Retirement Credits) IF your PIA is $2,230, then Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 27 Apply at AgeBenefit will be % of PIAMonthly Benefit 66100%$2,230 67108%$2,408 68116%$2,363 69124%$2,765 70132%$2,943 Example assumes you were born between 1943 and 1954. Source: Social Security Administration, 2013

28. To be “Eligible” for a Spousal Benefit you must: Be Married to your current spouse for at least 12 months or be divorced and have had a qualifying marriage (marriage lasted at least 10 years). You are age 62 or over. Your spouse has filed for their “Retirement Benefit” or Your ex-spouse is eligible for their “Retirement Benefit” Source: Social Security Solutions, Inc. Copyright 2012 Spousal Benefit How Much Will My Benefits Be?

29. The “Spousal Benefit” amount is 50% of your spouse’s PIA REGARDLESS of when your spouse started collecting benefits. If YOU file for “Spousal Benefits” before YOUR FRA then the “Spousal Benefit” is further reduced below the 50%. Source: Social Security Solutions, Inc. Copyright 2012 How Much is the Spousal Benefit???

30. SPOUSAL BENEFIT - Example His PIA1200 Times 50%X.50 Spousal base (FRA) =600 At age 6270% or 420 Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 30 *Primary Insurance Amount, or full retirement benefit. His PIA* $1200, her PIA* $400

31. Who is Eligible?  You are a widow or widower.  You are age 60 or over.  If widowed, you did not remarry before age 60. Source: Social Security Solutions, Inc. Copyright 2012 Survivor/Widow(er) Benefits

32. How much is the survivor benefit? The survivor’s monthly benefit amount depends on the deceased worker’s PIA, what age the deceased worker started collecting benefits and also at what age the surviving spouse starts collecting benefits. A survivor does not collect both their own retirement benefit and the deceased’s benefit. The lesser benefit amount will essentially go away. Source: Social Security Solutions, Inc. Copyright 2012 Survivor/Widow(er) Benefits

33. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 33 HOW CAN I MAXIMIZE BENEFITS? WITH A GOOD CLAIMING STRATEGY

34. WHAT IS A CLAIMING STRATEGY? Analyzing the rules of Social Security and creating a plan to claim benefits for a particular outcome specific to a situation. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 34

35. WHEN SHOULD I START BENEFITS? Depends on a lot of factors: Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 35 Marital status Age Health outlook Likely longevity Need for income Desired standard of living Planning to continue work Survivor needs You need a STRATEGY that considers all of these factors! Total assets available Liquid assets

36. What if you Lived Longer?

37. CRITERIA TO CONSIDER IN SELECTING START DATES Criterion 1 : Which starting date(s) will maximize your benefits over your lifetime? Criterion 2 : Which starting date(s) will minimize longevity risk, that is, the risk of outliving their retirement savings? Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 37

38. COMMON CLAIMING STRATEGIES AT FULL RETIREMENT AGE File and suspend One earner files for benefits & immediately suspend payment Makes the spouse eligible to collect a spousal benefit Allows own benefits to accrue delayed retirement credits File a restricted application for only spousal benefits Means that one can collect only spousal benefits while their own benefits accrue delayed retirement credits Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 38

39. REMEMBER JOE AND MARY? Joe: PIA of $2,200 ~ Mary: PIA of $1,500 If each begins own benefit at 66, lifetime cumulative = $864,000 Here’s a better option: The lifetime cumulative payout is $962,910 -- $98,910 more! Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 39 This is general and hypothetical. It is not a guarantee of specific results. Individual circumstances vary. At age 66 Joe “Files & Suspends” his benefit Monthly Benefit $0 At age 66 Mary files a “Restricted Application” claims her “Spousal Benefit” $1,100 Vs. $1,500 At age 70 Mary “Switches” to her own benefit $1, 980 Vs. $1,500 At age 69 & 9 months Joe “Claims” his own benefit $2,730 Vs. $2,200

40. Maximizing Your Benefits When you claim matters! The rules are complicated and voluminous. There are many combinations of options that can help you maximize your benefits. Your decision is irrevocable beyond 12 months after you begin benefits. You should seek expert tax, legal and/or financial advice. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 40

41. Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. 41 WILL SOCIAL SECURITY BE TAXED

42. What About Taxes? This is all great, now you know some of the important aspects of Social Security but what you did not know: The hidden tax consequence that FEW people know about Income tax on Social Security benefits can reduce an already-small amount of monthly benefits

43. Social Security benefits may be subject to federal income taxes. (In Ohio benefits are exempt from State Income Tax) Up to 50% of benefits may be taxable if “Provisional Income” is greater than: $25,000 for single taxpayers and $32,000 for married filing jointly Up to 85% of benefits may be taxable if ‘provisional income’ is greater than: $34,000 for single taxpayers and $44,000 for married filing jointly Source: Social Security Solutions, Inc. Copyright 2012 Since individual circumstances may vary, you should consult your own legal, tax, accounting, and/or investment advisors if you have questions on the tax treatment. Citizen Advisory Group is not a tax or legal advisor. Taxation of SS Benefits

44. Protect Yourself Techniques to potentially reduce taxation on Social Security Benefits Get Professional Advice

45. Social Security Taxation

46. The WEP affects workers who receive Social Security benefits based on their own work and are also entitled to a pension based on non-covered work (meaning they did not pay into Social Security while in that job). For this individual, A WEP adjusted PIA is calculated which reduces your Social Security benefits. If someone has 20 -30 years of ‘substantial earnings’ that were subject to Social Security Taxes the WEP adjustment can be reduced or eliminated. Source: Social Security Solutions, Inc. Copyright 2012 Windfall Elimination Provision (WEP)

47.  This GPO provision applies to Spousal and Survivor’s benefits only and reduces or eliminates the spousal or survivor Social Security benefit amount by 2/3 rd of the government pension amount. Source: Social Security Solutions, Inc. Copyright 2012 Government Pension Offset (GPO)

48. You Are On Your Own! c. Do not ask leading questions; i.e., worded in such a way as to suggest the proper or desired answer. d. Provide enough information so that claimants can make informed choices, but do not give advice. e. Aim at completing all documentation at first contact via a complete interview. f. Explain the importance of returning forms promptly whenever documentation is not completed at first contact. A Page From Social Security Administration Guide

49. Our Back Office "Of all the calculators I tested, this one was the easiest to manipulate." "If you want more comprehensive number crunching, try social security solutions " "Maximizing Social Security" "This site says 'We get you more' and I believe they do." "The simplest one to use and the most graphically clear."

50. HOW SEAMAN RETIREMENT PLANNING CAN HELP 50 Copyright Social Security Solutions. All rights reserved. Revised 2.22.13. Full Social Security Analysis Personalized report Recommended claiming strategy to maximize benefits Compare other strategies Specific claiming instructions Colorful graphs Educational information about benefits ANSWERS

51. 1.Consultation to review your Social Security Analysis 2. One Hour Strategy Session - complimentary session to discuss how to incorporate your Personalized Filing Strategy into your overall retirement plan 3. Take Action Three Step Process oneone twotwo threethree