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About Us Tri-Star Advisors is a Houston-based fixed income focused wealth manager dedicated to providing customized financial guidance. By contacting.

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Presentation on theme: "About Us Tri-Star Advisors is a Houston-based fixed income focused wealth manager dedicated to providing customized financial guidance. By contacting."— Presentation transcript:

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2 About Us Tri-Star Advisors is a Houston-based fixed income focused wealth manager dedicated to providing customized financial guidance. By contacting us you may be offered information regarding the purchase of various financial products or advisory services Westheimer Rd. Ste 950a Houston, TX 77057

3 Disclosures  William Payne & Jon Swanburg offer securities through Tri-Star Financial (TSF), a registered Broker Dealer, member FINRA & SIPC, and advisory services through Tri- Star Advisors, Inc. (TSA), an SEC registered investment advisor..  Neither TSA or TSF provide accounting, legal, or tax advice. Seek competent accounting, tax, and legal counsel for your specific needs, including guidance on which Social Security option makes sense for your situation. Not affiliated with the U.S. government or governmental agency.  This program is for informational purposes only and does not consider your particular investment objectives or financial situation.  All investments carry risk and may be subject to specific restrictions and limitations such as minimum holding periods and additional costs. Any underlying guarantees, principal protection, and rates are subject to the claims paying ability of the issuer. Any strategies contained in this presentation do not assure a profit.  Please review the product specific disclosure, prospectus, Product Placement Memorandum (PPM), or Statement of Understanding (SOI) prior to purchase.  By contacting us you may be offered information regarding the purchase of various financial products or advisory services.

4 Your Plan Inflation Pension Social Security ` Investments Legacy Rate of Return Market Risk Lifestyle IRA/401(k) Taxes Health Care LTC Roth Social Security

5 Total Value of Your Social Security Benefits Social Security Hypothetical illustrations are for informational purposes and are not indicative of your specific situation. Assumes $2,000 monthly Social Security benefit at full retirement age and average life expectancy of 82.5 for a man and 85.1 for a woman.

6 Advice on Social Security Social Security representatives can’t give guidance on your particular situation. Social Security main number: Social Security Source: Social Security Administration

7 FR /E

8 Can You Repeat That?

9 Social Security Reality 74% of those collecting Social Security retirement benefits are receiving reduced amounts They begin taking their benefits early (age 62) 76% of all women 71% of all men Source: Social Security Administration’s Annual Statistical Supplement, Social Security

10 Social Security – Life Expectancy SSA assumes the following longevity for a 66 year old: Male: 82 Female: 85 Social Security Source: Social Security Actuarial Life Table.

11 92Male Healthy At Age Female Healthy At Age We’re Living Longer Wharton Financial Institution Center, August 14, 2007 Social Security % Chance of Living Beyond 25% Chance of Living Beyond 50% Chance of Living Beyond 50% Chance of Living Beyond 25% Chance of Living Beyond 25% Chance of Living Beyond 25% Chance of Living Beyond Couple Both Healthy At Age 65 92

12 Source: Social Security Administration Social Security Calculators Social Security

13 Your Plan Inflation Pension Social Security ` Investments Legacy Rate of Return Market Risk Lifestyle IRA/401(k) Taxes Health Care LTC Roth

14 Social Security Basics Primary Insurance Amount (PIA) Full Retirement Age (FRA) Eligibility Entitlement Spousal Benefits (and ex-spouse) Survivor Benefits Social Security

15 Primary Insurance Amount Primary Insurance Amount (PIA) is the basis of most Social Security Benefits PIA is derived from a worker’s lifetime earnings record It is the benefit a person would receive if he/she begins to elect receiving benefits at full retirement age Social Security Source: Social Security Administrationhttp://www.ssa.gov/oact/cola/piaformula.htmlhttp://www.ssa.gov/oact/cola/piaformula.html

16 Full Retirement Age Source: Social Security Administration: Full Retirement Age (last modified or reviewed 10/18/2012) Social Security Social Security Full Retirement Age Birth YearFull Retirement Age months months months months months 1960 and later67

17 Eligible and Entitled To be eligible for benefits a worker must… Have worked long enough (10 years) to earn the required credits Be age 62 or over To be entitled to benefits a worker must… Have met the eligibility requirements above Have filed a claim (established an account) or have filed and suspended the claim Note: think of “entitled” as the account being “opened” Social Security Source: Social Security Administration:

18 Social Security Statement

19 This hypothetical example is for illustrative purposes only and is not a representation of your specific situation.

20 $321,382

21 The spousal benefit is based on 50% of the other spouse’s PIA (Primary Insurance Amount) As the spouse (or ex-spouse) of an insured worker, you are entitled to a spouse's benefits if you meet the conditions below: Your spouse is entitled to retirement or disability benefits. You are not entitled to a benefit based on your own wage history/PIA which equals or exceeds one-half your spouse’s PIA. You have filed an application for spousal benefits. You are age 62 or over Spousal Benefits Social Security Source: Social Security Administration

22 If you are divorced, you can receive benefits based on your ex-spouse’s wage history (even if he/she has remarried) If collecting as an ex-spouse of an insured worker, you must meet the conditions below: The marriage must have lasted 10 years; and You must not currently be married. You are age 62 or older. You do not have to wait for your ex-spouse to file for benefits. Spousal Benefits – Divorced Social Security Source: Social Security Administration

23 When you die, members of your family could be eligible for benefits based on your earnings. Your unmarried children who are under 18 can be eligible to receive Social Security benefits Your Widow or Widower can receive your benefits: If you have young children under 16 your spouse can receive a benefit. If neither of you have started social security, your spouse can receive reduced survivor benefits as early as age 60 and switch to their benefit at full retirement age or delay up to age 70. If you are both receiving benefits the surviving spouse will receive the larger benefit and forfeit the smaller. Survivor Benefits Social Security Source: Social Security Administration

24 Social Security Survivor Benefits Women Collecting Benefits Source: Social Security Administration’s Annual Statistical Supplement,

25 Maximize Your Benefit Year of birthFull retirement ageReduction at age 62Spouse reduction at age or earlier %25.00% & 2 months20.83%25.83% & 4 months21.67%26.67% & 6 months22.50%27.50% & 8 months23.33%28.33% & 10 months24.17%29.17% %30.00% & 2 months25.83%30.83% & 4 months26.67%31.67% & 6 months27.50%32.50% & 8 months28.33%33.33% & 10 months29.17%34.17% 1960 and later %35.00% Early Retirement (Age 62) Reduction Amounts Social Security Source: Social Security Administration

26 Total Value of Your Social Security Benefits Social Security Hypothetical illustrations are for informational purposes and are not indicative of your specific situation. Assumes $2,000 monthly Social Security benefit at full retirement age and average life expectancy of 82.5 for a man and 85.1 for a woman.

27 Total Value of Your Social Security Benefits Social Security Hypothetical illustrations are for informational purposes and are not indicative of your specific situation. Assumes $2,000 monthly Social Security benefit at full retirement age and average life expectancy of 82.5 for a man and 85.1 for a woman.

28 Year of BirthYearly Rate of Increase % % % % % 1943 or later8.0% Increase For Delayed Retirement Social Security Source: Social Security Administration

29 Early vs. Late 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 Early vs. Late Social Security -25% +32% $2,000 $1,500 $2,640

30 Working While Collecting Age2013 Earned Income* 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 * Income from work, W-2, and self-employment income. ** At FRA your benefit amount is adjusted to accommodate for the earlier reduction. Working While Collecting Social Security Source: Social Security Administration

31 Examining Your Tax Situation Single Filing Provisional* Income Benefits Subject to Tax Under $25,0000% $25,000 - $34,000Up to 50% Over $34,000Up to 85% Note: Converting a traditional IRA to a Roth IRA is a taxable event and could result in additional impacts to your personal tax situation, including the taxation of current Social Security benefit payments. Consult with a qualified tax advisor before making any decisions regarding your IRA. 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% * Provisional Income is Adjusted Gross Income including any tax-exempt interest plus 50% of Social Security benefits. Examining Your Tax Situation Social Security Source: Social Security Administration

32 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 their spousal benefit, delay taking their own benefit. 1 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 2 Individuals are allowed to change their earlier claiming decision. Provides flexibility to cease taking benefits if life situation changes. 1 Benefit will be reduced if not at Full Retirement Age. Both individuals must have filed for Social Security benefits. 2 Effective December 2010, the Social Security Administration published new rules that recipients may only cancel once and can do so only within the fist 12 months of receiving benefits. Visit ssa.gov for the most current information. Social Security Strategies Social Security Source: Social Security Administration

33 Understanding 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 Understanding Your Options Social Security $2,286 $3,106 $3,251 $3,913 Survivor = $2,733 Hypothetical illustrations are for informational purposes. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

34 Age Sam Ann Spousal Benefit Total Monthly Total Annually Survivor Monthly Lifetime (to 82.5 & 85.1) Both 62 $1,562 $675 $724 $2,286 $27,432 $1,562 $611,090 Both 66 $2,071 $900 $1,035 $3,106 $37,272 $2,071 $679,603 Sam 66 Ann 70 $2,071 $1,180 $1,035 $3,251 $39,012 $2,071 $701,353 Ann 66 Sam 70 $2,733 $1,180 $1,035 $3,913 $46,956 $2,733 $721,900 Comparing Benefits at Different Ages Ann 66 Sam 70 $2,733 $900 $1,035 $3,633 $43,596 $2,733 $695,020 Hypothetical example is for illustrative purposes only. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

35 Age ScottEarned benefit$1,550$2,214$2,922 Spousal benefit$613$1,252$1,252 JoanneEarned benefit$1,752$2,503$3,304 Spousal benefit$542$1,107$1,107 Comparing Benefits at Different Ages Hypothetical example is for illustrative purposes only and is not representative of your specific situation. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

36 Age ScottEarned benefit--$2,922 Spousal benefit--$1,252 JoanneEarned benefit--$3,304 Spousal benefit-- Total$1,252$6,226 Survivor benefit$3,304 Comparing Benefits at Different Ages Hypothetical example is for illustrative purposes only and is not representative of your specific situation. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

37 Age Total Scott$60, 072$350,698--$410,770 Joanne--$396,475$198,238$594,713 Total$60,072$747,173$198,238$1,005,482 Comparing Benefits at Different Ages Hypothetical example is for illustrative purposes only and is not representative of your specific situation. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

38 Age ScottEarned benefit$2,214$2,214 Spousal benefit JoanneEarned benefit$3,304 Spousal benefit$1,107 Total$3,321$5,518 Survivor benefit$3,304 Comparing Benefits at Different Ages Hypothetical example is for illustrative purposes only and is not representative of your specific situation. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

39 Age Total Scott$106,272$350,698--$410,770 Joanne53,136$396,475$198,238$594,713 Total$159,408$662,155$198,238$1,019,801 Comparing Benefits at Different Ages Hypothetical example is for illustrative purposes only and is not representative of your specific situation. Assumes full retirement age of 66; average life expectancy of 82.5 for a man and 85.1 for a woman; early/late benefit calculations found at:

40 Inflation Pension Social Security ` Investments Legacy Rate of Return Market Risk Lifestyle IRA/401(k) Taxes Health Care LTC Roth

41 Thank You ! Westheimer Rd. Ste 950a Houston, TX 77057


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