What You Need to Know to Help Maximize Your Retirement Income

Choosing when to start Social Security payments may be one of the most important decisions you make in the retirement income planning process It can have a significant impact on how much guaranteed income you and your spouse receive for life!

For example, if you were 60 years old with maximum career earnings and started benefits at age 66, you could receive more than $600,000 over the next 20 years—and that’s not even including annual cost of living adjustments or spousal benefits if you’re married! Source:

Understand Your Choices 1.Take early payments (age 62-64) 2.Start benefits at Full Retirement Age (age depending on your year of birth) 3.Delay and get even more (from Full Retirement Age to age 70) 4.Capitalize on spousal benefits 5.Enhance survivor income The later you claim, the more you can receive! Year of Birth Full Retirement Age months months months months months 1960 and later67 Source: Social Security Administration

Option 1: Take It Early If you begin benefits at age 62 and your Full Retirement Age is: Your $1,000 benefit will be reduced to: That’s a percentage decline of: 66$750-25% 66 and 2 months$741-26% 66 and 4 months$733-27% 66 and 6 months$725-27% 66 and 8 months$716-28% 66 and 10 months$708-29% 67$700-30% Social Security can begin as early as age 62, but benefits will be reduced by as much as 30% Source: Social Security Administration

Option 2: Start at Full Retirement Age You’ll receive at least 100% of your Social Security benefits if you claim at Full Retirement Age or later Plus, you’ll have the opportunity to add more earnings to your work record Social Security benefits are based on the average of your 35 highest years of earnings Work longer and potentially increase your average earnings

Option 3: Delay and Get Even More Year of Birth Yearly Rate of Increase % % % % 1943 or later +8.0% Waiting until after your Full Retirement Age to begin payments can increase your benefits by up to 8% a year The yearly rate of increase depends on your year of birth Increases end after you reach age 70, even if you continue to delay taking benefits Source: Social Security Administration

Option 4: Capitalize on Spousal Benefits Married individuals can claim the greater of their own benefit or 50% of their spouse’s benefit at Full Retirement Age (FRA) Spousal benefit is reduced up to 35% if claimed prior to the recipient’s FRA Divorced spouses can receive spousal benefits if marriage lasted at least 10 years and recipient is currently unmarried

Option 5: Enhance Survivor Income Widow(er)s can keep their own benefit or switch to the deceased spouse’s benefit if it is higher Survivor benefits are available as early as age 60 (age 50 if disabled) but they will be reduced by up to 28.5% if claimed before the recipient’s Full Retirement Age

5 Keys to Deciding When to Start 1.Estimate your Social Security benefits 2.Consider how long your retirement will last 3.Determine if you want to continue working 4.Look at the tax consequences 5.Evaluate spousal opportunities

Estimate Your Benefits Determine how much income you’ll need to retire Use the online calculator at to see how much you’ll receive from Social Securitywww.ssa.gov/estimator PLANNING TIP: Use the results to help you determine if it makes sense to delay or start right away

Consider How Long Your Retirement Will Last PLANNING TIP: Investors who expect a shorter retirement may want to claim early, even with reduced benefits Longevity plays a key role in determining which option is best AgeBegin at Age 62Begin at FRA of 66Begin at Age 70 62$21,600$0 67$129,600$57,600$0 70$194,400$144,000$38,016 75$302,400$288,000$228,096 78$367,200$374,400$342,144 80$410,400$432,000$380,160 82$453,600$489,600$494,208 Total Benefits by Age and Start Time ◄ Breakeven Note: This illustration assumes a monthly benefit of $2,400 at Full Retirement Age.

Determine If You Want to Continue Working If you work and take benefits prior to your Full Retirement Age (FRA), some of your benefits may be withheld Note: The income threshold in this table is for Source: “How Work Affects Your Benefits,” 2012, (Publication No ), Social Security Administration PLANNING TIP: Any amounts withheld are only temporary. They’re added back to your benefits after you reach Full Retirement Age, so there’s no penalty for working longer. Benefits are reduced $1 for every Earned over $2$14,640In calendar years before FRA is reached $3$38,880In the calendar year in which FRA is reached (until the month of FRA)

Look at the Tax Consequences Depending on how much you earn, you could pay tax on up to 85% of your Social Security benefits! PLANNING TIP: To help minimize taxes, make sure your total income doesn’t exceed the threshold amounts.

Evaluate Spousal Opportunities Coordinate benefits between both spouses to help increase overall income Each spouse has the opportunity to receive both spousal benefits AND their own benefits at different times. For example: PLANNING TIP: Combine early and delayed benefits to help maximize retirement income for married couples

Don’t Overlook Survivor Benefits When you begin Social Security payments can increase the survivor benefit for your spouse A surviving spouse should consider which option would provide a higher benefit—their own earnings or the survivor benefit PLANNING TIP: If the survivor benefit is higher, avoid taking it prior to your Full Retirement Age or your benefit will be reduced by up to 28.5%.

1. Start Now and Get More Later Combine early and delayed benefits for married couples to generate more income With this strategy, the low-earning spouse starts income right away at age 62 The high earner takes spousal benefits at Full Retirement Age (age 66), delaying his or her own benefits for maximum income At age 70, the high earner takes his or her own benefits and the low earner switches to spousal benefits to generate higher income!

Example: Generate $215,016 More Income Over 28 Years! Note: Illustration does not reflect any cost of living increases. Start Now and Get More Later Assumptions: Fred and Jane are married; they are 62 years old with Full Retirement Age (FRA) at 66; and their Social Security benefit at FRA is $2,400 for Fred and $1,000 for Jane That’s $215,016 more than if Fred and Jane had both elected early benefits at age 62! Fred takes his full delayed benefit ($3,168) Jane elects spousal benefits to generate more income ($950) Jane takes a reduced early benefit ($750) Fred elects spousal benefits and receives half of Jane’s benefit ($500) Jane continues her own benefit ($750)

2. File and Suspend This strategy allows the low-earning spouse to receive payments equal to 50% of the high earner’s benefit Plus, the high earner continues to delay payments, accruing credits for more guaranteed income at age 70 Help maximize income by filing for benefits at Full Retirement Age and then suspending receipt until age 70

Example: Generate $78,336 More Income Over 24 Years Note: Illustration does not reflect any cost of living increases File and Suspend Assumptions: Charlie and Mary are married; their Full Retirement Age (FRA) is 66; and their Social Security benefit at FRA is $2,400 for Charlie and $1,000 for Mary That’s $78,336 more than if Charlie had not suspended his benefit at age 66! Charlie takes his own benefit ($3,168) Mary continues spousal benefits ($1,200) Charlie files and suspends his benefit ($0) Mary elects spousal benefits and receives half of Charlie’s benefit ($1,200)

3. Claim Survivor Benefits Early This strategy provides the surviving spouse with additional income from age 60 to 69 Plus, by delaying payments until after Full Retirement Age, the high earner can receive the maximum amount of Social Security benefits based on his or her own earnings at age 70! For high-earning widow(er)s, consider starting survivor benefits at age 60 to help increase overall income

Example: Receive an Additional $85,800 in Survivor Benefits Survivor Benefits Strategy Assumptions: Bob and Cindy are married; they are 60 years old with Full Retirement Age (FRA) of 66; their Social Security benefit at FRA is $2,400 for Bob and $1,000 for Cindy; and Cindy dies at age 60. That’s $85,800 in survivor benefits that would have been lost if Bob did not take advantage of these benefits! Bob claims survivor benefits and receives 71.5% of Cindy’s benefit ($715) Bob takes his own benefit from age ($3,168) Note: Illustration does not reflect any cost of living increases

4. Build an Income Bridge to Help Increase Future Benefits If you decide to retire later, you may need to bridge the potential income gap with retirement sources other than Social Security Possible solutions: –Fixed annuities –Variable annuities with optional income benefits –Retirement accounts like IRAs or 401(k)s –Mutual funds –Earnings from work

Choosing the Right Option for You Carefully think through your Social Security strategy before submitting your benefit claims Be sure to ask yourself: –When do I really want to retire? –How do I want to spend my retirement? –Do I have the right investments to achieve my goals? I’m always available to answer questions and to make sure your retirement income strategy remains consistent with your long-term financial goals.

Make the Most of Your Social Security Benefits Today! Investments involve risk, including the possible loss of principal. Please ask me about the risks and fees associated with your current investments and any investments that may be recommended in the future. Securities offered through [company name] [Insert additional BD required disclosures] M5170SS2 (4/12) Not FDIC or NCUA/NCUSIF Insured May Lose Value No Bank or Credit Union Guarantee Not a Deposit Not Insured by Any Federal Government Agency Variable annuities are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges, expenses and other information regarding the contract and underlying funds, which should be considered carefully before investing. Prospectuses will be available at the end of this presentation. Please read the prospectus carefully before investing Thank you for attending!