Social Security Planning

A WISE STRATEGY FOR CLAIMING SOCIAL SECURITY BENEFITS MAY RESULT IN ADDITIONAL RETIREMENT INCOME.

 

 

 

 

 

 

 

 

 

 

 

 

 

About Social Security

 

Social Security retirement benefits help provide lifetime, inflation-adjusted income. Combined with your retirement savings, plus any pension benefits you may receive, Social Security may serve as an important component of your overall plan for retirement income.

When Can You Claim Social Security?

Eligibility for Social Security begins "early", at age 62. However, claiming early will reduce your monthly check -permanently. There are many issues to consider when deciding to claim benefits.

Two Key Terms: PIA and FRA

Your Primary Insurance Amount, or PIA, is the amount of monthly income you will receive at your normal retirement age, also known as your Full Retirement Age (FRA). Depending upon when you were born, your FRA will range from age 65 to age 67. People born between 1943 and 1954 have an FRA of 66. Click here to see your FRA.

Your PIA, which is based upon your lifetime earnings, may be reduced or increased, depending upon when you decide to claim retirement benefits. You may claim benefits before reaching your FRA, as early as age 62, and you may delay claiming until after your FRA, as late as age 70.

Claiming after you've reached your FRA offers benefits. Your monthly check will be increased by 8% for each year that you delay, up to age 70. For example, if your FRA is 66, and you delay four years until you're 70, your monthly check will be 32% higher than at age 66, and 75% higher than at age 62. Over time, one might receive significantly more dollars depending upon when benefits are claimed.

How can I get Social Security claiming help

 

 

 

 

Have You Thought about How Long You May Live in Retirement?

 

Have you ever thought about how many years you might spend in retirement? While we can't know for certain, we should think about how life expectancy has increased in the decades since Social Security began.

In 1935, life expectancy in the U.S. was 61.7 years.

By 2010 it had increased to 78.7 years. *

Consider a married couple age 65. There's a 50% chance that one spouse will live to age 92. And a one-in four chance that one spouse will live to age 97. **

As of December 2010 ***, 5.8 million Social Security beneficiaries were at least age 85. Some much older. 

 

 

 

 

 
 

 

 

Source: * National Center for Health Statistics, National Vital Statistics Reports
Source: ** Annuity 20000 Mortality Table, Society of Actuaries
Source: *** Social Security Administration Facts and Figures about Social Security, 2011

 

 

 

But Collecting Social Security Benefits Well Into Old Age Is Nothing New.

The very first person to collect Social Security retirement benefits was named Ida May Fuller.

A resident of Vermont, Ida May retired in 1939 after paying into Social Security for just three years. Ida May received her first Social Security payment on January 31, 1940. She then went on to collect from Social Security for thirty-five years. 

Ida May passed away in 1975... at the age of one hundred.

 

 

How Delaying Social Security May Boost Your Total Income

Let's assume that your age 66 projected monthly retirement benefit is $2,400. Claiming benefits at age 62 reduces the monthly check from $2,400, to $1,800.

That's a reduction of $7,200 per year. Again, that reduction is not for a year, or a few years. It's PERMANENT.

 

 

 

 

 

 

 

 

 

 

Over the 38 years from age 62 until age 100, this means giving up two-hundred-seventy-three-thousand dollars!

 

 

Now, you may feel that living to age 100 is unrealistic. If so, then back that up by 20 years. If you were to live to age 80, the loss in retirement income is still $29,000.

 

 

 

 

 

 

 

 

 

 

DON'T AUTOMATICALLY THINK THAT CLAIMING SOCIAL SECURITY BENEFITS EARLY IS YOUR BEST DECISION.

It may have been the right choice for your parents, but it could be the wrong choice for you.

In fact, if you feel that you are likely to live to age 80, or, 85, you should think carefully about delaying benefits until even after your full retirement age. This is because for every year that you wait beyond full retirement age, your monthly check will be increased by an additional 8%.

Waiting until age 70 means receiving 32% more retirement income versus age 66, and 75% more income compared to age 62. That's $1,800 per month at age 62, versus $3,168 at age 70.

 

 

 

 

 

 

 

 

 

 

 

Although the difference in these two numbers is dramatic, it's only one factor in choosing the Social Security claiming strategy that's best for you.

 

The opportunity to receive a higher monthly income helps explain why proper retirement income planning is important. It also points out why a well-designed retirement income plan shouldn't overlook how to maximize Social Security benefits.

Common Investor Mistakes

How We can Help

 

Underestimating the critical role Social Security benefits can play in retirement income planning

 

 

Integrate your Social Security benefits election choices within your personal retirement income for life strategy plan

 

 

Being eager to collect benefits---filing at a younger age with a reduced benefit.

 

 

Show you how much more of your Social Security you could receive by delaying your election

 

Approaching the decision solely on individual benefits, and not considering your spouse

 

Teach you how to collectively approach your election decision. Calculate the best time for each of you to make your election, and how it impacts the other

 

Not considering the earning limitations and tax effects on Social Security when planning withdrawals from all income sources

 

 

Maximize your income by calculating the tax implications in your retirement income plan

 

Feeling entitled to their money and how it is invested

 

By delaying your Social Security, you can provide a 7-8% increase per year after Full Retirement age, and it may be adjusted for inflation

 

 

Consider these statistics, gathered from a survey of 532 married people age 60-66 conducted by Senior Market Sales and MarketTools:

Only 27 percent of people are aware of unusual election strategies like file and suspend and restricted application. A Boston College study estimated that Americans leave $10 billion in Social Security benefits on the table by not taking advantage of these strategies.

77 percent of people think they can go to the Social Security office for advice, when in fact 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.

At Anthony Capital, LLC we can help you maximize your social security benefits, and properly integrate them within your larger Retirement Income for Life Strategy plan.

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