Transcript MMSS Delivers. - Maximize My Social Security

Maximize Your
Social Security
GETTING THE MOST FROM THOUSANDS OF OPTIONS
Disclaimer
Maximize My Social Security and other products provided by Economic Security Planning, Inc. at
www.esplanner.com and www.esplanner.com/basic are educational calculators designed to give you or
your clients some input in mapping out your financial future, but should not be acted upon as a complete
financial plan. Maximize My Social Security and its derivative products' creators are not certified,
registered, authorized, or any other type of financial planners.
Maximize My Social Security and its derivative products are simply tools for helping you think through your
economic futures and those of your clients. Their "suggestions" should be viewed as informative inputs
into personal financial decision-making. Maximize My Social Security and its derivative products provide
neither economic, financial, nor tax advice, which can only be delivered by authorized professionals.
The Social Security benefit suggestions/estimates produced by Maximize My Social Security are just that –
suggestions and estimates. Only the Social Security Administration can specify precisely the benefits to
which anyone will be eligible and the amounts anyone will receive. The estimates provided here may differ
from the correct amounts due to mistakes in our computer code of which we are unaware or because of
legislated changes in Social Security provisions of which we are unaware or because of delays in our
updating our computer code for mistakes in our computer code or for changes in Social Security provisions.
Social Security may be your largest asset
Social Security is immensely complex
Making the right choices can mean
Tens to hundreds of thousands of $$$
You paid your SS taxes.
Time to get what’s yours!
We can help find your best SS strategy.
We Use Maximize My Social Security (MMSS)
• Co-ranked #1 SS tool by The Wall Street Journal
• Developed by Boston University renown economist Laurence Kotlikoff
• MMSS considers thousands of collection strategies
• MMSS finds the strategy that maximize your lifetime benefits
• We can compare MMSS’ top strategy with any other options
Laurence Kotlikoff, PhD
• William Fairfield Warren Professor of Economics, Boston University
• Fellow, American Academy of Arts and Sciences
• One of our nation’s leading experts in personal financial planning
• Social Security columnist for PBS NEWSHOUR
• Writes for The NY Times, The Wall Street Journal, The Financial Times,
Forbes, PBS NEWSHOUR, Time Magazine, Bloomberg, Huffington Post,
Yahoo, . . .
Every household is different.
But each needs Social Security advice
– the best advice.
MMSS considers all types of households.
• Married
• Divorced
• Widowed
• Single
• Partnered
• With minor and/or disabled children
MMSS consider all major SS insurance benefits
• Retirement
• Child’s
• Spouse’s
• Disabled Child’s
• Divorced Spouse’s
• Surviving Child’s
• Child In-Care Spouse’s
• Father’s and Mother’s
• Widow(er)’s
• Divorced Widow(er)’s
MMSS considers all Social Security provisions
• Recomputation of benefits
• Deeming rules
• Earnings Test
• Adjustment of reduction factor
• Family benefit maximum
• RIB LIM
• Windfall Elimination Provision
• Alternate widow(er)’s benefit calculation
• Government Pension Offset
• Restricted application
Three General Rules to Maximize Your SS
1. Be patient – wait to take higher benefits
2. Try to take all benefits you can
3. Time your benefit collection
Strategies to Follow the Three Rules
• Delay benefit collection
• Collect one benefit early while letting another benefit grow
• File and suspend to get lump sum option
• File and suspend to activate spousal benefit for spouse
• Suspend retirement benefit after FRA and restart at 70
• Start/stop/start retirement benefit to activate spousal benefit for spouse
• Retire early to activate child and child-in-care spousal benefits
• Take widow benefit before retirement benefit
• Take retirement benefit before widow(er) benefit
Delay Benefit Collection
• Retirement benefits at 70 are now 76% larger benefits than at 62
• Spousal benefit at 66 are now 43% larger than at 62
• Widow(er) benefit at 66 are now 40% larger than at 60
Collect One Benefit While Other Benefit Grows
Examples
• Take spousal benefit at FRA and retirement benefit at 70
• Take divorcee spousal benefit at FRA and retirement benefit at 70
• Take retirement benefit before FRA and then widow(er) benefit at or before FRA
File and Suspend Strategy
• Higher earner files for retirement benefits at FRA & immediately
suspends receipt of benefits till 70 to maximize benefits
• Lower earning spouse claims full spousal benefits on higher
earner’s record
• Lower earner accrues potentially significant increases to future
retirement benefits
• If higher earner is younger, it may be better for higher earner to
collect spousal benefits
File and Suspend to Get Lump Sum Option
• Even never married singles should file and suspend at FRA
• Their retirement benefit will continue to grow
• But they can request all suspended benefits in a lump sum if needed
• But taking suspended benefit in lump sum forfeits Delayed Retirement Credits
Start/Stop/Start strategy
• If you already started collecting retirement benefits before your
FRA, it might be beneficial to suspend them at FRA so you can
earn increases up to age 70
• The longer you can suspend after FRA, the more your benefit
increases, recovering reductions due to early receipt
• Early retirement at 62 = 75% of benefit at FRA
• 8% increase per year of suspension after FRA, up to 32%
• 132% * 75% = 99% of benefit at FRA
Suspend Retirement Benefit
at/after FRA and Restart at 70
• If you regret taking your retirement benefit early, …
• You can suspend it at/after FRA and restart at 70 at a 32% higher real value
File for Your Retirement Benefit to Activate
Children’s Child-In-Care Spousal Benefits
• You must file for retirement benefits to enable child’s benefits and
child in care spousal benefits on your record
• In some cases, it will be beneficial to claim early reduced
retirement benefits in order to enable these benefits
• Then, once you reach FRA, you suspend receipt of retirement
benefits and begin recouping part of, and in some cases potentially
nearly all, the early retirement reduction by continuing to suspend
receipt up to age 70
• If you are already receiving retirement benefits we tell you if this
strategy will result in increased lifetime benefits based on the data
you provide
Take Retirement Benefit
Before Widow(er) Benefit
• It may be best for a widow(er) to take retirement benefit early and
• Then take widow(er) benefit at or before FRA
• If decease spouse took retirement benefit early, widow(er) benefit is
subject to RIBLIM and may not grow after a given age before FRA
• Widow(er)’s benefit is limited to the higher of 82.5% of deceased
spouse’s full retirement benefit (PIA) or the amount deceased spouse
was collecting at time of death. This is the RIBLIM formula.
• If widow(er)’s benefit is limited, it can be advantageous to take
reduced widow(er)’s benefit as many as 51 months before FRA
Take Widow(er) Benefit
Before Retirement Benefit
• It may be best for a widow(er) to take widow(er) benefit early
• Take retirement benefit at 70 at its largest possible value
Some Big Social Security’s Gotchas
1. Take two benefits at once, you get, roughly speaking, just the largest
2. Before FRA, deeming can force you to take spousal & retirement benefits at once
3. Family benefit maximum limits auxiliary benefits
4. Allowable collection dates of spouses are interdependent
5. Taking retirement benefit early reduce widow(er) benefit
6. Only one spouse (but both exs) can get full spousal benefit