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CS Seminar Presentation 2018

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Able Financial

on 31 October 2017

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Transcript of CS Seminar Presentation 2018

Claiming Strategies:
Overview

1. Social Security Through Time
- Past - Present - Future

Social Security:
Changes

Your Host:
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PROFESSIONAL DESIGNATIONS

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My Social
Strategy

YOUR COMPANY Presents...
WELCOME!
Presentation will last 45 minutes
Please hold questions to the end
2. My Social Strategy
3. Income Planning
Social Security:
Past
Created in 1935 after the Great Depression and widespread bank failures
Originally called "Federal Old-Age, Survivors, and Disability Insurance"
Poverty rates for senior citizens exceeded 50% and Social Security was an attempt to limit the modern dangers of American Life (old age, poverty, unemployment, widows, orphans)
Social Security:
Past
The Three Legged Stool
1/3 Social Security
1/3 Employer Pension
1/3 Personal Savings
Social Security:
Present
20 Yr Difference
1935 Life Expectancy: 59 Years
SS Benefits: Age 65
Average Benefit: -6 Years
SS Benefits: Age 67
Average Benefit: 14 Years
Social Security:
Present
The Impact of the Baby Boom
Baby Boom marked by a surge in birth rates between 1946 and 1964
More then 76,000,000 babies born
Today Boomers make up more than 28% of the US population, were 40% of the population in 1964
In 1964 30% of the population was under 19 yrs old
First Boomers turned 65 in 2011
10,000 Boomers reached retirement age every day
Created an imbalance of contributors to recipients
Social Security:
Present
The Impact of Negative Cash Flow
16.5
1
1950
2005
3.3
1
Social Security:
Present
Did you know that this is NOT the first time Social Security has run a deficit...?
Social Security:
Future
The Echo Boom will help correct current imbalances (80 million new contributors)
Recent changes passed by Washington may affect your claiming strategies
Bottom Line:
Can you take your time to help maximize your benefit without fear of losing out?
The 2015/2016 Budget Bill made significant changes to Social Security.
The intent was to remove “unintended loopholes” that lawmakers claimed only benefited the wealthy.
As we will see in the next slide, these changes are far-reaching and will impact everyone in one way or another.
Social Security:
Changes
Group 1:
Affected the least
"Some Now More Later" Strategy Still Available
Must request before May 2016
Group 2:
Moderately Affected
"Some Now, More Later" strategy NOT available
Additional changes to spousal benefits
Group 3:
Affected the most
"Some Now More Later" strategy NOT available
Additional changes from deeming provisions
Before May 1, 1950
Age 66 before May 2016
Between May 2, 1950 and January, 1 1954
Age 62 by end of 2015, but not yet 66 before May 2016
After January 2, 1954
Younger than 62 as of 2016
Claiming Social Security benefits is complicated
There are hundreds of ways for a married couple to claim benefits
Who can you turn to for help?
Can the
Social Security Administration
Help?
Quote from a survey of married couples age 60-66 in 2011:
“We found that 77% of people expect to receive advice from the Social Security Administration (SSA) on how to maximize their Social Security Retirement benefits. In reality, most SSA personnel are not trained or equipped to dispense anything more than monthly benefit amounts at different election ages, and the SSA actually prohibits its representatives from dispensing advice.”

My Social
Strategy
Can My Financial Professional Help?
Only 22% of financial advisors describe themselves as very knowledgeable about Social Security.
The vast majority of financial professionals are not capable to give advice to their clients on strategies to help maximize their benefits.
Social Security:
Overview

Important terms to know:

Average Index Monthly Earnings (AIME)
AIME is calculated by indexing the workers 35 highest earning years.

IMPORTANT: Any years not on record with the Social Security Administration are calculated as 0’s.
Primary Insurance Amount (PIA)
PIA is the sum of 3 separate % of portions of the AIME
PIA is the starting point for calculating benefits at Full Retirement Age (FRA)
Bend Point Formula
Used to calculate your PIA
Social Security:
Overview
How Bend Points Are Used to Calculate Primary Insurance Amount (PIA)
First $896 x .90
Next $4,503 x .32
Over $5,399 x .15
Total
YOUR BENEFIT
Max for 2018
PIA Formula
PIA
AIME
Finding Your PIA
Check Box #1
If you would like to learn how your earnings history translates into your Primary Insurance Amount (PIA)

Claim Early or Claim Late?
66
67
68
69
70
62
63
64
65
-25%
-20%
-13.3%
-6.67%
+8%
+16%
+24%
+32%
Early: Less income over more years
Reduction of your Primary Insurance Amount
Late: More income for fewer years
Benefit from Deferred Retirement Credits
AGE:
% of PIA:
Now Or Later?
Check Box #2
If you would like to review the impact of taking benefits at age 62, at full retirement age or age 70
When is Your Full Retirement Age?
My Social Strategy
Can I continue to work AND draw benefits before FRA?
Yes but… all income over $17,040 is subject to the Earnings Test
THE EARNINGS TEST:
$1 will be withheld in benefits for every $2 of earnings over $17,040 (exempt amount)
What happens when I reach Full Retirement Age?
My Social Strategy
Monthly benefits will be permanently increased to account for months in which benefits were withheld
The exempt amount rises to $45,360 and the withholdings rise to $1 of benefits for every $3 of excess earnings
Choosing to Work
Check Box #3
If you would like your report to include the impact of working longer after you claim benefits.
My Social Strategy
Benefits For Your Spouse
Spouses can take either their own benefits or ½ of the other spouses benefit at FRA
Spouses do not benefit from your delayed retirement credits
Spouse Benefit Amount By Claiming Age
Spouses claiming before their FRA will receive a reduced benefit based on the number of months left till they reach FRA

Chart data based on a spouse with a full retirement age of 66. Percentages in table have been rounded.
Benefits for Your Spouse
Check Box #4
If you would like to explore the different ways you and your spouse can coordinate and maximize your benefits.
My Social Strategy
Other Benefits And Strategies
Survivor Benefit
Similar to spousal benefit but percentage of benefits is higher and claiming age can be as young as age 60
Ex-Spouse Benefit
If married for more than 10 years and did not remarry - divorced spouse could be entitled to a benefit if greater than his or her own.

Restricted Application
Primary worker can file for a spousal benefit based on the spouse’s working record , while letting primary benefits based on workers record to grow until age 70.
Switch Techniques
Spouse’s can claim a spousal benefit for a period of time and then later file on his or her own benefits.
Advanced Strategies
Check Box #5
If you would like to explore the various advanced claiming strategies like divorced benefits, survivor benefits, and timing your benefit to get maximum dollars!
My Social Strategy
Recap of Social Strategy
The date you choose to retire is not necessarily the date you should draw Social Security Benefits
The best time to draw benefits will be different for every person
In addition to the hundreds of different ways you can elect to receive benefits, there are dozens of lifestyle variables to consider when planning to maximize Social Security income
Remember who CAN and who CANNOT help you benefit most…
Most advisors cannot or will not provide advice
Social Security does not give claiming advice
We are here to help!
First Page Summary of Optimized Benefits
Detailed Feature Explanations
Household Benefit Details
"What If..." Scenarios
My Social Strategy
Your Personalized Report
See a comparison of your current plans vs. our maximized recommendations
22 pages of detailed information tailored to your situation
Easy to read report filled with visually illustrated graphics
Recommendations included for you and your spouse
The process is simple and offered to you at no cost
Personalized Optimization Report
Check Box #6
If you would like to receive your own custom maximization report that shows you exactly when and how to file for maximum lifetime income.
Income Planning
ROI:
Return On Investment
ROI:
Reliability Of Income
Climbing the mountain requires specific tools
This side of the mountain represents accumulation
Descending the mountain requires different tools
This side of the mountain represents distribution
Many advisors focus exclusively on accumulation with no planning for distribution. As your goals and lifestyle change, your approach must change along with them
Income Planning
Layers of Income
Using your maximized social security and other assets to create an income plan for retirement
-- Filling the Income Gap --
Layers of Income
Age
Income
Personal Assets
Social Security
Retirement
Filling The Income Gap
Check Box #7
If you would like to your report to include ways to receive lifetime income to supplement your Social Security income.
Income Planning
We can help you maximize your Social Security Income
But Social Security is only one piece of the pie
What are your plans in retirement to maximize the income your other assets generate?
How can you be sure you will not run out of income in retirement?
Other
Social Security
Personal Savings
What do we love about
Social Security?
Longevity Protected
50%
25%
Will your income last as long as you do if you live to age 94?
Volatility Protected
Market volatility has doubled in the last 50 years.
Inflation Protected
$50,000 Income 3.5% annual inflation
After 20 Years:
$99,489 Income
Increase of 99%
Do you have a plan in place to double your income in retirement?
Cycle of Returns
Cycle of Returns
Do you have a plan in place that insulates you from a down year?
How long will $1M last?
1 million dollar nest egg
Withdraw 5% ($50k)/year assuming 3.5% inflation

If the account averaged 6% it would last 30 years
Averages are just numbers, what did the money do?
It depends what the market did???
My Philosophy
Income Planning
Our Process
Create your personal Social Security Maximization plan – FREE REPORT
Build a comprehensive income plan to maximize other income sources
Cultivate a relationship based on your values designed to last
Current Life Expectancy: 81 Years
THANK YOU!
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What's The Next Step?
Full transcript