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Brought to You By: TRAINING For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Simplified Presented by: Damon La Tanzi.

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Presentation on theme: "Brought to You By: TRAINING For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Simplified Presented by: Damon La Tanzi."— Presentation transcript:

1 Brought to You By: TRAINING For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Simplified Presented by: Damon La Tanzi Vice President – Sales & Marketing DMI Marketing, Inc.

2 Brought to You By: Introduction to Terminology Most Common Abbreviations Used in Social Security Planning For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

3 Brought to You By: FRA – Full Retirement Age Based on Date of Birth – Age When You Receive 100% of SSI  Minimum & Maximum Ages  Born After 1937  Minimum Age 62  Maximum Age 70  FRA - Full Retirement Age  Born  FRA Age 66  See Chart at SSA.gov For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

4 Brought to You By: COLA – Cost of Living Adjustment Used to Determine Increase in SSI – Set Each Year by CPI(W) For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

5 Brought to You By: Average COLA 4.1% Per Year Average COLA 4.1% Per Year Average COLA 2.7% Per Year Average COLA 2.7% Per Year For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 COLA – Cost of Living Adjustment Used to Determine Increase in SSI – Set Each Year by CPI(W)

6 Brought to You By: For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 COLA – Cost of Living Adjustment Used to Determine Increase in SSI – Set Each Year by CPI(W)

7 Brought to You By: AIME – Average Indexed Monthly Earnings Based on Your Entire Work History How to Calculate AIME  Top 35 Working Years  Adjusted for Inflation  Similar to COLA for SSI  AIME Helps Determine PIA  Primary Insurance Amount  3 “Bend Points”?  90% - 32% - 15% For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

8 Brought to You By: PIA – Primary Insurance Amount The Basis for Determining Full Retirement Age Benefits The PIA Formula  Step 1 - AIME  3 “Bend Points” – 2013 Figures 90% of First $ % of $792-$4, % Amount Over $4,768 Primary Insurance Amount For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

9 Brought to You By: The PIA Formula  Example  AIME = $8,000 -$791 * 90% = $ $3977 * 32% = $ $3232 * 15% = $ PIA = $2, For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 PIA – Primary Insurance Amount The Basis for Determining Full Retirement Age Benefits

10 Brought to You By: Longer Wait = More Benefits? Full Retirement Age  Benefit $2,000/mo.  $24,000/yr. Minimum Age – 62  Benefit $1,500/mo.  $18,000/yr. Maximum Age – 70  Benefit $2,640/mo.  $31,680/yr. For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

11 Brought to You By: Can I Work & Collect Benefits? If your begin collecting benefits before your Full Retirement Age, the amount of “Earned Income” you can make without penalty is significantly reduced Numbers Before FRA (62-65)  Exempt Amount $15,120  $1 Reduction/$2 Income During FRA (66)  Exempt Amount $40,080  $1 Reduction/$3 Income  Monthly Offset For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

12 Brought to You By: Introduction to SSI Taxes When will Social Security Benefits Become Taxable? Individual Filing 0% of Benefits Taxable Less Than $25,000 50% of Benefits Taxable Greater Than $25,000 Less Than $34,000 85% of Benefits Taxable Greater Than $34,000 Individual Filing 0% of Benefits Taxable Less Than $25,000 50% of Benefits Taxable Greater Than $25,000 Less Than $34,000 85% of Benefits Taxable Greater Than $34,000 Married Filing Jointly 0% of Benefits Taxable Less Than $32,000 50% of Benefits Taxable Greater Than $32,000 Less Than $44,000 85% of Benefits Taxable Greater Than $44,000 Married Filing Jointly 0% of Benefits Taxable Less Than $32,000 50% of Benefits Taxable Greater Than $32,000 Less Than $44,000 85% of Benefits Taxable Greater Than $44,000 For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

13 Brought to You By: Social Security Filing Strategies There are 3 different ways to file for Social Security Benefits No Special Filing No unique strategies are used to earn delayed retirement credits. No Special Filing No unique strategies are used to earn delayed retirement credits. File & Suspend One spouse files for benefits and does not collect any benefit payments File & Suspend One spouse files for benefits and does not collect any benefit payments File Restricted One spouse files for spousal benefits after the previous spouse files File Restricted One spouse files for spousal benefits after the previous spouse files From these 3 strategies and the different filing age combinations, we get several additional filing strategies… For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

14 Brought to You By: Both Spouses File for Benefits In Social Security Explorer, you will see 8 different filing combinations as shown in the illustration above… You Suspend Spouse Files Spouse Suspends You File You File Restricted Spouse Files Spouse Files Restricted You File Spouse Files Restricted You File You Suspend Spouse Files Restricted You Suspend Spouse Files Restricted Spouse Suspends You File Restricted Spouse Suspends You File Restricted No Benefits at this Age No Benefits at this Age For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Filing Strategies There are 3 different ways to file for Social Security Benefits

15 Brought to You By: Review of Switching Strategies The two most commonly used “Switching Strategies” are “File & Suspend” and “Filing a Restricted Application” File & Suspend At Full Retirement Age, one spouse files for benefits and immediately suspends payments. This spouse receives Delayed Retirement Credits of 8% per year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the larger amount. File & Suspend At Full Retirement Age, one spouse files for benefits and immediately suspends payments. This spouse receives Delayed Retirement Credits of 8% per year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the larger amount. Restricted Application At Full Retirement Age, one spouse files a restricted application and begins collecting benefits based on the other spouse’s benefit amount. The first spouse must have already filed for benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit. Restricted Application At Full Retirement Age, one spouse files a restricted application and begins collecting benefits based on the other spouse’s benefit amount. The first spouse must have already filed for benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit. For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

16 Brought to You By: Most Common Maximization Strategy By combining the two strategies, both spouses are able to receive 132% of their Full Retirement Age Benefit starting at age 70. File & Suspend At Full Retirement Age, one spouse files for benefits and immediately suspends payments. This spouse receives Delayed Retirement Credits of 8% per year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the larger amount. File & Suspend At Full Retirement Age, one spouse files for benefits and immediately suspends payments. This spouse receives Delayed Retirement Credits of 8% per year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the larger amount. Restricted Application At Full Retirement Age, one spouse files a restricted application and begins collecting benefits based on the other spouse’s benefit amount. The first spouse must have already filed for benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit. Restricted Application At Full Retirement Age, one spouse files a restricted application and begins collecting benefits based on the other spouse’s benefit amount. The first spouse must have already filed for benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit. COMBINE For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

17 Brought to You By: How Does the Strategy Work? By combining the two strategies, both spouses are able to receive 132% of their Full Retirement Age Benefit starting at age 70. For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Today’s Example Joe files and suspends at age 66 Benefit grows at 8%/yr Plus COLA at 3%/yr Benefits start at age 70 Grows from $2000  $3247/mo. Deborah files restricted at age 66 Collects 50% spousal benefit Her Benefit grows at 8%/yr Plus COLA at 3%/yr Grows from $1000  $1722/mo. Today’s Example Joe files and suspends at age 66 Benefit grows at 8%/yr Plus COLA at 3%/yr Benefits start at age 70 Grows from $2000  $3247/mo. Deborah files restricted at age 66 Collects 50% spousal benefit Her Benefit grows at 8%/yr Plus COLA at 3%/yr Grows from $1000  $1722/mo.

18 Brought to You By: Social Security Explorer Software In the first appointment, we use the Social Security Explorer Software to create the initial report and show the client what is at stake.  $349 Annual Subscription  How to Get a Copy for FREE!  Works on All Browsers  Including iPad and Android Tablets  Start ASAP vs. Using Our Recommended Strategy For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

19 Brought to You By: The Sales Process Using the Social Security Simplified System Seminar Or Direct Mail Seminar Or Direct Mail 1 st Appointment Walk client through the Social Security Explorer Report Process 1 st Appointment Walk client through the Social Security Explorer Report Process 2 nd Appointment Prepare Supplemental “Simplified Report” and discuss solutions to Income Gaps 2 nd Appointment Prepare Supplemental “Simplified Report” and discuss solutions to Income Gaps GENERATE THE LEAD MAXIMIZE SSI BENEFITS FILL THE INCOME GAPS For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

20 Brought to You By: The DOs & DON’Ts of SSI Planning Our goal is to provide the Maximization Report, not to act as an intermediary between the client and the SSA WHAT NOT TO DO Assist client in the filing process or fill out paperwork for the client when filing for benefits Call Social Security Administration with the client or on the client’s behalf Discuss or illustrate specific tax situations with clients unless you have proper licensing WHAT NOT TO DO Assist client in the filing process or fill out paperwork for the client when filing for benefits Call Social Security Administration with the client or on the client’s behalf Discuss or illustrate specific tax situations with clients unless you have proper licensing WHAT TO DO Educate yourself on Social Security Strategies for Married Couples Visit SSA.gov to learn about different filing strategies and how to file Purchase Social Security Explorer and become familiar with the interface Learn basic terminology and most commonly used acronyms Attend weekly training webinars WHAT TO DO Educate yourself on Social Security Strategies for Married Couples Visit SSA.gov to learn about different filing strategies and how to file Purchase Social Security Explorer and become familiar with the interface Learn basic terminology and most commonly used acronyms Attend weekly training webinars For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

21 Brought to You By: 1 st Appt: Fact Find  Prospect must bring:  SS Statements  Financial Statements  Complete Client Worksheet  Answer general questions  Prepare them for 2 nd appt For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

22 Brought to You By: Before 2 nd appt: Social Security Explorer Joe – Age 63 Deborah – Age 61 FILE ASAP VS. USING OUR RECOMMENDATION For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

23 Brought to You By: Joe – Age 63 Deborah – Age 61 FILE ASAP VS. USING OUR RECOMMENDATION File ASAP $1,134,036 File ASAP $1,134,036 Recommended $1,570,768 Recommended $1,570,768 For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Before 2 nd appt: Social Security Explorer

24 Brought to You By: Creating the “Simplified Report” We use the benefit values from the Social Security Explorer Report Information Needed: Agent Name(s) Spouse Names Spouse Ages Spouse FRA Benefit Investment Rate (0%) COLA Rate (3%) Desired Monthly Income Immediate Amount Recommended Strategy Estimated Benefits For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

25 Brought to You By: 2 nd Appt: SSE & Income Gap Joe – Age 63 Deborah – Age 61 FILE ASAP VS. USING OUR RECOMMENDATION Recommended $1,570,768 Recommended $1,570,768 For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

26 Brought to You By: Joe – Age 63 Deborah – Age 61 For agent use only. Terms and Conditions Apply. © Copyright –DMI nd Appt: SSE & Income Gap

27 Brought to You By: 2 nd Appt: Teeing up the Annuity Sale Using the Simplified Report to Make Lifetime Income Annuity Sales Joe – Age 63 Deborah – Age 61 Let’s Take a Closer Look… Years 1-7 In order to maximize Social Security, the client will need to use other assets or continue to work. This will start the conversation about existing retirement accounts, such as 401(k), IRA, Pension and brokerage accounts. For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

28 Brought to You By: Let’s Take a Closer Look… Years 1-7 In order to maximize Social Security, the client will need to use other assets or continue to work. This will start the conversation about existing retirement accounts, such as 401(k), IRA, Pension and brokerage accounts. Years 7-22 While both spouses are still living, there will be an income gap of approximately 20-27%. To fill this gap, we can use an Indexed Annuity with a lifetime benefit rider that defers for 7 years and provides a minimum of $20,000 in lifetime income. For agent use only. Terms and Conditions Apply. © Copyright –DMI nd Appt: Teeing up the Annuity Sale Using the Simplified Report to Make Lifetime Income Annuity Sales Joe – Age 63 Deborah – Age 61

29 Brought to You By: Joe – Age 63 Deborah – Age 61 Using Joe’s Age, we will need approximately $213,000 to guarantee $20,000/yr. income starting in 8 years 3 rd Appt: Making the Annuity Sale Using the Simplified Report to Make Lifetime Income Annuity Sales For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

30 Brought to You By: 3 rd Appt: The Life Sale Joe – Age 63 Deborah – Age 61 Let’s Take a Closer Look… Years When the first spouse dies, the income gap increases significantly due to a reduction in Social Security Income. Option 1: Insure 100% Buying a no lapse policy today for the full income gap at the death of the first spouse. Joe – Age 63 $415,000  $830/mo. Option 2: Insure 50% Buying a no lapse policy today that covers half of the income gap at the death of the first spouse. Joe – Age 63 $207,500  $430/mo. For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Using the Simplified Report to Make No Lapse Life Sales

31 Brought to You By: Call DMI Marketing at For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014


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