•         Welcome to this strategic Social Security benefits seminar, and thank you for coming. My name is James Mayer, and I am the Branch Manager of Huffman Mayer Paolo Wealth Management Group of WFA.

•         Today we want to take a look at some basics regarding Social Security, focus on some provisions recently enacted and then talk about why it’s more important than ever to be strategic in the decisions you make surrounding your retirement benefits.

•         Before we delve into today’s topic, I’d like to tell you a little about our firm.

 

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•         Well Fargo is represented by nearly 12,900 Financial Advisors in 5,000 U.S. locations, our firm is one of the largest investment firms in the United States.

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•         Here’s why it’s so important today for you, your spouse (if you are married), and I to have conversations about Social Security:

•         Married couples especially should talk to each other and their tax and financial professionals regarding the choices available to claim Social Security benefits. Structuring an appropriate strategy can make a substantial difference in the benefits received during retirement.

•         In addition, having these conversations earlier rather than later gives you time to evaluate a number of strategies in light of your personal situation and helps you optimize your decisions.

•         You can also then factor your anticipated Social Security benefits into a more comprehensive and overarching retirement income plan. 

•         Keep in mind that these discussions provide simplified explanations of a complex topic. We’ll look at some of the more common scenarios, but your situation is likely to differ. Be sure you explore all your alternatives thoroughly, perhaps talking with me, the team that backs me, and your local Social Security office, to help ensure you make educated, informed decisions

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•         Let’s start with some basics. Full retirement age is a very important concept to understand. Maybe some of you thought 65 was the age when you could receive the full amount of your Social Security benefit. But for many of us, that is no longer true. In fact, age 66 is now the more common full retirement age, and over the next few years, full retirement age for many people will approach age 67.

•         Here are more facts and resources regarding full retirement age. You may want to discuss some or all of these points.

•         Social Security benefits for retired workers:

•       You must have at least 40 quarters of coverage (about 10 years) of work to qualify for a benefit based on your own work history.

•       Benefit amount is calculated using best 35 years of earnings.

•       Minimum age to take benefits is 62, but age-62 benefits are reduced.

•       Benefits are subject to earnings limits until month of attainment of full retirement age.

•       Benefits may be taxable and there is no age limit.

•         Social Security estimates:

•       The best source of an estimate of your future Social Security benefit is your Social Security Statement.

•       The best thing to do now is create an account on ssa.gov. You’ll then be able to obtain a complete and accurate benefits estimate, which you’ll need for analyzing some of the more advanced strategies.

•       If you are planning for retirement but don't have a recent copy of your annual Social Security statement, you can use the calculator on ssa.gov.

•       You input your current age, the expected age you will stop working, last year’s earned income, and some identification information.

•       You will see your projected monthly Social Security benefit age 62, full retirement age, and age 70.

•       This estimator lets you scenario-play by changing a few basic assumptions.

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•         Why is full retirement age so important? When you reach your full retirement age, you are entitled to the full amount of your Social Security benefit. Let’s take a closer look at both the red and purple portions of these age brackets ― the before and after.

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•         If you elect to begin your Social Security benefits before reaching full retirement age, your benefit is reduced by 2/3 of 1% per month that you take it early.

•         How could this affect your benefit over a longer time period?

 

 

 

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•         You can elect early benefits at age 62, but the age-62 reduction is now more than 25%. In other words, a 62-year-old receives about 75% of his or her full retirement age benefit.

•         Remember that this reduction is permanent. For example, if your full retirement age is 66 and you take benefits at 62, your first Social Security check will be 75% of your full amount. Your last Social Security check — the one you get right before your death — will also be 75% of your full amount (adjusted for cost-of-living increases, as granted).

Be sure to check out Part 2 for a look at the benefits of Social Security after the FRA and look into Spousal benefits.