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AGENDA Social Security Basics Claiming Options SSI Maximization Strategies Real-Life Case Scenarios Maximizing Your SS Benefit Questions/Comments

INITIAL THOUGHTS This presentation is designed to assist you in exploring the available options you have to maximize your Social Security. This presentation is not intended to be a retirement, benefit, or estate plan nor is it a specific recommendation for a retirement, benefit, or estate plan. This material is for informational purposes only. Many of the topics presented may also involve legal, tax, accounting or other issues, which there is absolutely no intention of offering such advice, and this presentation and any other oral or written communication should not be construed as such. Maximization strategies can be complicated and vary depending on individual situations so individuals interested in this topic should consult a Social Security representative. As you explore your Social Security situation, we hope that you find this presentation useful.

THE SIGNIFICANCE OF SS For Americans age 65 and older with a household income of $57,957 or more, SS provides about 42% of incomeⁱ The four most important sources of retirement income for Seniors age 65 and olderⁱⁱ are: ⁱ Income of the Population 55 or Older, 2010, Social Security Administration, 2012 ⁱⁱ The 4 Most Important Sources of Retirement Income: US News, Emily Brandon, March 22, 2012

WHO IS ELIGIBLE? A worker who has accumulated a minimum of 40 work credits (approx. 10 years of work) Benefits based on average of the 35 highest years of earnings A spouse or someone married for at least 10 years to an eligible worker

WHEN CAN YOU CLAIM? The benefits are on the age when they are claimed Earliest age is 62 Latest age is 70 Full Retirement Age – an important concept also known as “FRA” Currently 66 to 67 - depending on your year of birth

HOW CAN YOU CLAIM? Create an Account on:

CLAIMING AGE AFFECTS MONTHLY BENEFITS Age 62 – monthly benefits will be reduced by 25%-30% depending on your year of birth FRA (66-67) – entitled to 100% of full benefit Age 70 – monthly benefit could be as much as 132% of full benefit

CLAIMING AGE AFFECTS MONTHLY BENEFITS

OPTIMIZING BENEFITS BY DELAYING START DATE Benefits at Age Start Benefit Age $144,000$234,000$324,000$414,000$504,000 64$124,776$228,756$332,736$436,716$540,696 66$96,000$216,000$336,000$456,000$576,000 68$55,680$194,880$334,080$473,280$612,480 70$0$158,400$316,800$475,2000$663,600 *FRA of 66 with full retirement benefits of $2,000/ month and no COLA. For Illustrative purposes only

WORKING IN RETIREMENT A portion of your Social Security benefits could be reduced if you claim before your FRA and continue to work For 2016, if you claim between age 62 and FRA, your benefits will be reduced by $1 for every $2 above $15,720 earned Example: If someone earns $20,720 ($5,000 over limit), their benefits would be reduced by $2,500

HOW IS SS TAXED? Depends on your “combined income” or “provisional income” Combined income is: Your adjusted gross income (AGI) Any tax-exempt interest you earned 50% of your SS benefits Taxable portion of Social Security is the minimum of three amounts 85% of Social Security benefits 50% of benefits plus 85% of combined income beyond second threshold amount 50% of combined income beyond first threshold plus 35% of combined income beyond the second threshold

THE TAX THRESHOLDS

Recent Changes 2015 Bipartisan Budget Bill signed Nov. 2nd 2015 Eliminated “file and suspend” and “restricted application” These strategies gave clients an additional 3-4 years of spousal benefits File and Suspend Current clients can continue strategy and new filers need to act before April 29 th 2016 Restricted Application Clients that turned 62 before Jan 1 st 2016 can still file a restricted application

SSI MAXIMIZATION STRATEGIES

SPOUSAL BENEFIT Spouse must be age 62 or older to qualify Worker must first file for Social Security benefits If spousal benefits are claimed at spouses FRA, the spousal benefit is half of the spouse’s primary insurance amount (PIA) Spousal benefits are permanently reduced if claimed before reaching FRA If you elect to take your spousal benefit at your FRA, you can delay receiving your worker based benefits on your work history and switch to your benefit later to increase the monthly benefit you will receive

“FILE AND SUSPEND” STRATEGY This strategy can be done when the higher earning – or older – worker reaches FRA You file for Social Security benefits to enable your spouse to receive the spousal benefits The higher earning – or older – worker immediately suspends their own benefits and they can continue to earn additional retirement credits until age 70

Filing a Restricted Application You can file for a restricted application if you are at FRA and your spouse has already filed for benefits You take a spousal benefit and let your own benefit continue to grow 8% each year to age 70 Most common when both spouses have a significant Primary Insurance Amount

SOCIAL SECURITY BENEFITS AND DIVORCE As a divorced spouse, you may be entitled to Social Security benefits based on the ex’s work record if: You were married for at least 10 years You are unmarried (doesn’t matter whether ex has remarried) Your own worker benefit would be lower than your ex- spouse’s benefit

SURVIVOR BENEFIT The earliest a widow(er) can start to receive Social Security benefits is age 60 If you receive survivor benefits starting between age 60 and your FRA, the benefits are reduced by a percentage If your own benefits are more than your survivor benefits, you can select your own benefits instead, but not both

OTHER SOCIAL SECURITY TOPICS There are many other factors not discussed dealing with Social Security. Some include: If you work for a federal, state or local government agency and don’t pay into Social Security your personal, spousal and survivor benefits may be reduced. We can help you estimate this reduction Primary Insurance Amount (PIA) calculations Cost of Living adjustments you will receive Disability benefits

REAL-LIFE CASE SCENARIOS

Example where delaying makes sense EXAMPLE 1 - CLIENT SUMMARY

EXAMPLE 1 - SUGGESTED STRATEGY David files for his benefits at age 70 Julie begins to take her benefits at age 70 Lastly, Julie receives survivor benefits

EXAMPLE 1 - STRATEGY COMPARISON 29% Increase!

Importance of Survivor Benefits EXAMPLE 2 - CLIENT SUMMARY

EXAMPLE 2 - SUGGESTED STRATEGY Heather begins her benefits at age 62 Ryan files for a restricted application at age 66 (he can still do this since he is 62) Ryan switches to his benefits at age 70 Lastly, Heather receives survivor benefits

EXAMPLE 2 - STRATEGY COMPARISON 36% Increase!

Maximizing Your Social Security Benefits

IMPORTANCE OF STARTING PLANNING EARLY There isn’t one correct way to take Social Security benefits. Every situation is different and needs to be analyzed separately Knowing your approximate Social Security income, you can plan so that your retirement savings lasts through your lifetime We can provide you a free Social Security and Retirement income analysis based on your situation

SSI MAX - SIMPLE FORM We offer a FREE analysis of your Social Security Strategies with our SSIMax report

SSI MAX - SAMPLE REPORT

A SIMPLE PROCESS Pick up form before you leave, or ask us to it to you Detailed SSIMax report available in days Identifies strategy to maximize your lifetime Social Security benefits Identify if you are fully prepared for retirement

Are you Prepared for These Retirement Risks? 1.Longevity Risk – Too long or too short? 1 in 4 people age 65 live at least to age 90 2.Inflation Risk 3.Health Care and Long Term Care costs 4.Investment and Sequence of Return Risk 5.Increasing taxes risk

How do we Minimize These Risks? Maximizing Social Security benefits Identifying fixed income and types of retirement assets Identifying necessary and desired expenses in retirement Putting together a plan

RESULTS OF CLAIMING AT FRA (DO NOTHING) VS. SSI MAX ANALYSIS 36

37 RESULTS OF CLAIMING AT FRA (DO NOTHING) VS. SSI MAX ANALYSIS

Results of Claiming at FRA (do nothing) vs. RetirementMAX Analysis 38

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Questions/Comments?