Social Security

iStock_000015142796XSmall-elderly-smilLast week we held two seminars focused on Social Security for Baby Boomers. If you did not get to attend it then be sure to look for our next opportunity. The subject matter is relevant if you are a “Baby Boomer,” timely if you are nearing retirement, and informative on decisions that will need to be made. I want to thank and congratulation our own Chris Hilliard for tag teaming with me in these presentations. He has a good grasp of the subject and is an added resource for our clients on this topic.

For those of you who could not attend and who are in that “Baby Boomer” generation, needing to decide on when to take social security, let me give you the highlights.

First, let me suggest if you have not already have go to www.socialsecurity.gov/mystatement and register on line. Here you can obtain the government information they have on you concerning earning history, D.O.B., and estimated Social Security benefits. If you are married get your spouse and do the same. If you are a widow or widower call the local office and inquire about his or her benefits and if you are divorced and were married for at least 10 years get your ex’s Social Security number and register.

With this information we can input the information in our software package and help you determine how to maximize your choices.

Second, understand the TWO determining factors that will determine your benefit estimate: how much money you earned over the last 35 years, and when should you elect to take your Social Security benefit.

The 35 year earning period is dropped into a government formula and creates an average monthly benefit called PIA. PIA stands for Primary Insurance Amount and is the benefit you receive at FRA, Full Retirement Age. This is typically thought of as age 66 or 67. There is a chart we can show you that will specifically give you your FRA. Also note that if you have some non-working years in your 35 year history then those years count as 0’s.

Third, one can take their entitled benefit as early as age 62 and 60 for a widow, but it is a reduced percent from the 100% PIA at full retirement age. That percent reduction is in the 75% range. One can defer taking their benefits until age 70 and have the benefit grow by 8% per year from 66/67 to 70. That is a 28%-32% higher benefit.

Fourth, with the above information here is where planning needs to occur and again with the data you can provide and with a full review of your total retirement picture we can help you make sound election decisions.

Fifth, Social Security benefits can be reduced partially or totally by the government, only temporarily, between ages 62-66/67 if you work and have earned income exceeding $15,000-$40,000. Plus, Social Security benefits are taxable above certain AGI (adjusted gross income) limits. Both of these factors are often overlooked and should be part of the planning process.

Finally, for the Baby Boomer Social Security is a real and viable benefit that needs planning for.

If you are interested in learning more about this topic and would like to have a full retirement review including helping you understand your social security choices, get your statement and call us. The review and consultation is free and we look forward to helping you.

Thanks to all those who attended, your presence was appreciated and questions were great.