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As the New Year approaches, you find yourself thinking about changes you would like to make in your life….some that always come to mind are losing weight, getting in shape, daily devotionals, or whatever your situation involves.

May we suggest, if you are between the ages of 62 to 70, and have not taken your Social Security benefit, that you get that part of your life in order. What difference does that make? It can literally make a huge difference, from a monetary standpoint, regarding the quality of retirement you will experience.

When you are getting your tax receipts in order for your accountant, go online and register for your latest Social Security report (www.ssa.gov). It takes about 10 minutes of your time and there are things on that statement that should be reviewed each and every year. Mistakes are made and we have seen them. Compare your report with your W-2 form to make sure that your work history and reported earnings are accurate. It is very difficult to correct an error that was made in the past. These numbers make up the 35 years earnings history that your Social Security benefit is calculated from.

If an error is made on your tax return, it can be amended. A mistake in filing for your Social Security benefit is basically permanent. So why would you not have this benefit professionally reviewed as well? An online calculator does not take into consideration your desires for retirement, your health issues, your combined benefit with your spouse and what claiming strategies can improve your income stream, whether or not you want to continue working, and the list goes on.

Pillars, LLC, has a 5 step process for this review which includes the following:

1. Fact finding – after you fill out our application form, we call to verify the numbers and get to know you and your circumstances. What are your goals? Your future work plans? Your health status? Retirement lifestyle expectations? Current tax bracket? Your expected life expectancy?
2. Education – we share with your through our knowledge of the 2,728 rules and regulations what possible options are available to you.
3. Research and Analysis – we enter your information into our “best in the industry” software and look for options. This is quite a process, because you actually have hundreds of options not just the three listed on your Social Security report. We also work diligently to improve upon the Survivor Benefit in all cases. We determine the breakeven point and analyze whether or not collecting the Delayed Retirement Credits will benefit your situation.
4. Report presentation and discussions – next we meet with you (and your spouse when applicable) and review the report. We share all options and answer all questions for clarity of the report.
5. The Pillars, LLC Guarantee – for a full year after the report is completed, we will answer any questions you may have, and if your situation changes, we will run another report at no additional cost. You will be added to our database for updates in the Social Security laws.

Sounds like a winner to me as a New Year Resolution. Our webpage is being updated to include all new information based on the new law changes, effective November 2, 2015. A seminar is being held on February 2, 2016 at the Brandon Public Library for those interested in attending. Reservations are required as seating is limited. Email us at dthompson@pillarsllc.com or call at 601-954-0699 to reserve a seat.

Sweeping changes to the Social Security laws ushered in by the passage of the Bipartisan Budget Act of 2015 are creating a myriad of questions from our readers and clients. While the rules that were overturned are complicated, removing these claiming strategies does not simplify the Social Security claiming process. The legislation brings to an end some of the benefit claiming strategies that have been foundational parts of many Americans’ retirement planning process.

WHAT IS CHANGING WITH THE NEW LEGISLATION?

In a nutshell, the new legislation removes File and Suspend and Restricted application for those who will reach age 62 in 2016 or later. For those that reach age 66 by April 30, 2016 (Tier 1) and for those that turn 62 by December 31, 2015 (Tier 2), the rules are being changed. For those in Tier 1, you have been grandfathered in. For those in Tier 2, you will still be able to use the Restricted application process, but the other wage earner must file for their benefits first.

MY SPOUSE AND I HAVE ALREADY STARTED BENEFITS, AND WE USED THE FILE AND SUSPEND STRATEGY. WHAT WILL HAPPEN TO OUR BENEFITS?

The good news is that nothing will happen to your benefits! You are grandfathered in.

MY SPOUSE AND I WERE PLANNING TO FILE FOR BENEFITS IN THE NEXT FEW MONTHS – AND WE WERE GOING TO USE THE FILE AND SUSPEND STRATEGY. ARE WE OUT OF LUCK?

Not completely. The legislation allows for a brief window of 180 days after the bill was signed (November 2, 2015) into law for consumers to implement a File and Suspend strategy. Remember, don’t miss these deadlines, and make sure you know what you are doing before you file, as it is basically a permanent decision.

I HAVE NOT SEEN ANY SPECIFIC INFORMATION ABOUT WIDOW(er)’S BENEFITS.

There is nothing in the new legislation that mentions widow(er)’s benefits. Because a claim for widow(er)’s benefits does not require a File and Suspend or Restricted Application, you will remain eligible to claim your own benefit first, and switch to a widow(er)’s benefit later or vice versa. This benefit is tricky because there is a 28.5% reduction is taken early and sometimes with the proper advice, that is not necessary and will not benefit you.

WHAT ABOUT DIVORCED SPOUSE BENEFITS?

While there has been some discussion that the legislation created an unintended consequence for divorcees, the legislation is clear about the Restricted Application. Prior to now, divorcees have had the option to file a Restricted Application at Full Retirement Age and collect a divorced spouse benefit while his or her own retirement benefit accrued delayed retirement credits. It appears that this option is no longer available except for those who will have reached age 62 prior to December 31, 2015.

A seminar on this topic will be held on February 2, 2016 at the Brandon Library at 6:00 p.m. Reservations are required as seating will be limited. Call us to reserve a seat at 601-954-0699 or visit our website at www.pillarsllc.com or email us at dthompson@pillarsllc.com.

Roy and I were reflecting about our articles over the last two years, and we had to chuckle….when we first started this business, some put us in the same category as salesmen offering a 32% return on your investment. They just didn’t believe that Social Security claiming strategies were available and that we were pulling the wool over their eyes. Now that our government is taking away what we have been trying to educate our community about, the calls are coming faster than ever.

Some of you still have opportunities to improve your benefit status, but if you miss the deadline this time, I am afraid you will be out of luck. If you will turn 66 prior to April 30, 2016 (Tier 1), please pay attention. If you turn age 62 by December 31, 2015 (Tier 2), please pay attention. Even if you have already filed, there are options to improve upon your benefit.

File and Suspend will still be available for you folks in the first tier. This strategy allows a wage earner who is full retirement age or older to file for Social Security benefits and then immediately suspend them. In the meantime, it enables a spouse or minor dependent child to collect auxiliary benefits (Restricted application) worth up to half of the parent or spouse’s full retirement age benefit amount while the wage earner’s benefits continue to grow by 8% per year up to age 70.

In addition to triggering family benefits, the File and Suspend strategy also allows a wage earner to change his or her mind any time before age 70 and request a lump sum payment of all the suspended benefits instead of collecting the delayed retirement credits. This has been a valuable strategy for unmarried individuals who experience a change in their financial condition or health situation.

All of the above needs calculations as you need to know when to file, and coordinate with your spouse’s benefit amount and age. When one of you is in the first tier, and the other in the second tier, it becomes complicated. Please remember that utilizing these strategies will not only improve your individual benefit, but greatly improve the survivor benefit.

REMEMBER – when you file still matters, the rules are still complicated and voluminous, there are combinations of options available, grandfathering in on these options comes with a new deadline, and we can help.
A seminar on this topic will be held on February 2, 2016 at the Brandon Library at 6:00 p.m. Reservations are required as seating will be limited. Call us to reserve a seat at 601-954-0699 or visit our website at www.pillarsllc.com or email us at dthompson@pillarsllc.com.

As of November 2, 2015, Congress signed into law the B-Partisan Budget Act of 2015 that could affect your Social Security benefits. In order to better explain the changes, we have divided the new changes into two tiers. In four years these changes will be phased out, and the options that are available to those in the two tiers, will no longer be available.

TIER #1

This tier includes those individuals that will turn age 66 by April 30, 2016.  Some say May 1, 2016, but we choose to be on the safe side.  If you are born on May 1^st, call us and we will talk.  Anyway, if you fall into this category, you will still be able to File and Suspend and use the Restricted Application in filing for your benefits.  You must be Full Retirement Age to qualify for these benefits.  If you don’t know what we are talking about, go to our website at www.pillarsllc.com for a detailed explanation.  These tools are great avenues available to improve on your income through the rest of your life, as well as improving the survivor benefit for your spouse.

TIER #2

These tiers of individuals are those that will turn age 62 by the end of this calendar year (December 31, 2015).  These individuals may still file a Restricted Application for Spousal benefits, but the other party must have already filed and be receiving benefits.  These same exceptions apply to any Family Benefits that would be applied for.   So, only one of the couple may receive spousal benefits and allow their benefit to increase by 8% per year until they decide to file. You must be Full Retirement Age in order to file for these benefits.

How will this affect me?  It depends on the amount of your benefit, your age differences, and what flexibility you have in filing dates.  People that fall into one of the above categories certainly need professional advice about how to file, as these opportunities will probably never be available again in our lifetime.  DO NOT MISS THESE DEADLINES!!

Some other things you need to ponder….what if my wife and I are in different tiers?  What if I want to file prior to Full Retirement Age?  What if there is a large age difference?  How have benefits been changed for the Divorced individual?

We will try to touch on the above topics in our upcoming articles.  If you would like to talk to us about your situation, or have an analysis prepared based on the new laws, please feel free to contact Roy and Diane Thompson at 601-954-0699 or dthompson@pillarsllc.com.

As we talk to people in our state, we hear many frustrated people make the following comments like….okay then, we will both just wait until 70 and file for Social Security to get the best benefit we can. You would think this sounds good if you have the resources. But, actually, waiting until 70 may not be the best you can do!! This week follow this real life example and see what we are talking about.

Jack – born in 1949 – Full Retirement Age benefit at 66 is $2385

Leslie – born in 1950 – Full Retirement Age benefit at 66 is $1905

Estimated life expectancy for Jack is 85 and Leslie is 88 – good health for both.

Leslie has already retired as a school teacher and collecting her pension. Jack wants to wait until age 67 or 68, he is not sure yet. They could wait until age 70 to draw their SS to get those Delayed Retirement Credits, but want to get their options analyzed.

Option #1 – the early option is actually Options #2 because of their ages.

Option #2 – they could both draw starting at Full Retirement Age and their estimated lifetime expectancy would be $1,135,000 and their survivor benefit would be $2463.00 per month. Jack’s benefit would be $2384 per month and Leslie’s would be $1905 per month.

Option #3 – they could both wait until age 70 and their lifetime expectancy benefit would be $1,212,285 and the survivor benefit would be $3,147 per month. Jack’s benefit would be $3,147 per month and Leslie’s benefit would be $2,515 per month.

Please note the big difference in the survivor benefit between #2 and #3.

Option #4 – Jack decides to File and Suspend at age 66 and then take his benefit at age 68 drawing some of those Delayed Retirement Credits – his benefit would be $2,670. This allows Leslie to take a spousal benefit at age 66 which would be $1,192 per month. Then at age 68, Leslie draws her benefit which has been growing with Delayed Retirement Credits – her new benefit will be $2,197 per month. The survivor benefit will be $2,765.00. The lifetime expectancy benefit for this option is $1,212,540. (Note 1 : Because of the recent changes to social security laws, Jack must File and Suspend by May 2, 2016 ) NOTE 2– this option brings more to Jack and Leslie than is they had both waited to age 70

Options #5 – Jack decides to file a Restricted application for Spousal Benefits at age 66 and 7 months – his benefit amount will be $952 per month. This will allow his benefit to gain Delayed Retirement Credits. Leslie decides to take her own benefit at age 66 – benefit amount will be $1,905 per month. Jack switches to his new benefit at age 68 which is $2,670 per month. The survivor benefit for this option will be $2,765 per month. The lifetime expectancy benefit for this option is $1,185,952.00

Option #6 – Jack decides to File and Suspend his benefit at age 66 and draw his own at age 68 – this benefit amount will be $2,670. Leslie files a Restricted application and draws Spousal Benefits at age 66 – this will be $1,192 per month. At age 70 Leslie draws her own benefit which has been accumulating Delayed Retirement Credits – this amount will be $2,515 per month. Survivor benefit for this option will be $2,765 per month. Lifetime expectancy benefit is $1,240,996.00.

NOTE – this option brings more to Jack and Leslie than if they both had waited until age 70

There you go – a real life example of the benefit of having a professional review and analyze your various options. And please take note of the difference in the survivor benefit, which is an area we concentrate on for our clients.

Call Pillars, LLC at 601-954-0699 or visit our website at www.pillarsllc.com for easy access to the application process.

Roy and I just returned from a conference in Bay St. Louis hosted by MAPA (Mississippi Association of Personnel Administrators). We met so many interesting people who are eager to learn about the true benefits available through Social Security analysis. Glad we were invited to attend this year.

When you talk with hundreds of people within a two day span, their comments throw up the following red flags about the term “clueless”.

1. The majority of people think their retirement age is 65 – no, that is when you file for Medicare…..two different ages and two different benefit situations.
2. Most people believe they can still draw their benefit and work full-time – this is only true after age 66 unless you are willing to face the Earnings Limitations and the cuts that will take place in your benefit amount. Huge eye-opener if you are not planning properly on this issue. In the year you reach Full Retirement Age, you can earn $41,480 and still qualify for benefits.
3. Most people believe you have to be a U. S. citizen in order to qualify for benefits.
4. People have no idea what “family benefits” are actually available in many different life situations.
5. People are aware of spousal benefits, but do not understand how to use them or the best use of this strategy. Logic would dictate that the smaller earner file off the larger earner to capitalize on this benefit…..in many cases, this is not the case because of age differences and other factors. You can be short changing your lifetime benefit if this is not calculated properly.
6. People do not understand the benefits available to divorced clients or the qualifications. Divorced clients have many more options than married, so don’t allow your lack of education on this topic reduce your benefits.
7. People believe the online calculators for Social Security benefits are accurate – you can actually go to five different websites, put your numbers in each of these websites, and come up with different answers. You need to put your trust in people with state of the art software that can handle all 2,728 rules and regulations and handle different life situations.

People are not aware because they have not been educated….this is Pillars’ passion. We are available for seminars, both large and small. We also work with clients one on one to analyze their benefits and determine options they can choose from that will meet their individual needs. Social Security analysis is all we do. Call us today at 601-954-0699 or visit our website for more information and to investigate your many options over and above the three you have on your Social Security statement.

Every week we read new statistics about women – their increasing share of the nation’s wealth, escalating numbers as heads of households, higher rates of college enrollments, significantly higher percentage of buying power, and increasing majority in many of the higher income professions. The financial world has historically been one of the most male dominated professions in our country. It is natural for men to reach out to other men, rather than women, when discussing financial matters. But when it comes to Social Security, this should not be the case, as statistically, women outlive men by 5-10 years, and women are left to manage the remaining income sources without the proper advice.

Discussing Social Security with women is very important….many of them do not realize that this one-time decision will have a significant impact on the value of their retirement assets.

WAYS WOMEN CAN BE POSITIVELY OR NEGATIVELY IMPACTED FROM THEIR SOCIAL SECURITY DECISION

1. A single woman will collect more lifetime income by delaying the age at which she starts collecting benefits from eligibility at 62 up to the Full Retirement Age (FRA) of 66/67 or even waiting until age 70.k
2. A married woman can employ creative strategies to maximize her lifetime Social Security income. Understanding how the spousal income and survivor benefits work and correctly applying this strategy can be a significant generator of additional income for life.
3. A divorced woman, who has been married at least 10 years and divorced for two years, may be eligible to collect off her ex-spouse’s earnings. She may collect these benefits as early as 62 while her own earnings benefit continues to grow earning Delayed Retirement Credits. There are many rules and regulations attached to this benefit, so advice from a Professional is recommended before making this decision. But in the end, this could add tens of thousands of dollars to your lifetime benefit if you meet all the qualifications. And your ex-spouse will not be affected by your decision.
4. A widowed woman can receive full Survivor Benefits when she reaches FRA or reduced benefits as early as age 60. Again, timing of this benefit is critical for the best outcome. You have to consider work, earning limits, and actually how much the reduction will be before making your decision.

WOMEN…..do not be held captive to the sayings “It won’t be there for me, so I don’t count on it”, “It’s not that much money anyway” or “I’m just going to take it as soon as possible because it’s going to run out and I want to get mine now” .   There is too much at stake not to have this benefit reviewed by a Professional. It is not a small amount of money, it is not going to run out, and you can improve upon your benefit amount with proper advice and knowledge of the rules and regulations.

Contact Pillars LLC at www.pillarsllc.com for more information or call us at 601-954-0699.

One of our clients had a situation that was worthy of discussion. As you may or may not know, your Social Security benefit is your story….yours alone; it is based on your top 35 years of earnings. You may be entitled to improve your benefit based on certain filing strategies, but that is a long list and you need to know how to combine the strategies with your spouse’s benefit if married……individually vs. collectively, delaying your benefit, etc.

This client makes a very good salary for herself. She works hard, long hours; her husband died at an early age, while on disability, leaving her with children in the mix; not an easy set of circumstances for anyone.

Her goal is to retire early and enjoy her first grandchild, which is easy to understand. She is entitled to survivor benefits starting at age 60 (although they will be reduced by 28.5% if taken when eligible and subject to earnings limitations) and then switch to her own Social Security benefit which would be higher. So what is the problem?

She earns too much money…..works too hard and her benefits, if she takes them early are going to take a beating as a result. Fair? We don’t make the rules; just try to navigate through them to help people get the most benefit they deserve.

It is true that you can work and draw Social Security at the same time. But, the earning limits for 2015 is $15,720. For every two dollars you earn over this amount, one dollar of your benefit would be withheld. If you are 64 and receiving $1500 per month from SS, you would have to earn $51,720 to stop all 12 of your SS payments. If any of your SS payments is stopped due to work, you get credit back for every missing month, and a raise in future benefits. It is called the Adjustment to the Reduction Factor and it happens automatically when you reach Full Retirement Age (not before). This is a very complicated formula, so don’t try to do this without advice!!

So, what is the problem…..she should just take her survivor benefit, keep working, and switch to her benefit after 66. EXCEPTION to the RULES – the Adjustment to the Reduction Factor does not apply to SPOUSAL benefits or SURVIVOR benefits.

As we tell our readers, there are many exceptions to the rules that you need to be aware of before you make this basically permanent decision. We cannot possibly discuss all of them through our news articles…..professional advice is necessary.

If our client decides to take the benefits she is entitled to, at the time she is entitled to take them, her income would have to be reduced by almost 2/3. At 66, if she quits working she can take her benefit which is higher, or draw her survivor benefit and have to continue working part-time to make up the difference. But guess what…..from a financial standpoint, she will probably never see the survivor benefit her husband worked hard to provide. Fair? You decide.

You may contact us at 601-954-0699 or visit our website at www.pillarsllc.com.

Now that you all have received your W-2’s it is time to start thinking about your tax returns. Roy is a C.P.A. and use to be a Tax Partner, so I know from previous experience, what that means. The kids and I use to leave town for Grandma’s on March 15^th, and return home on April 16^th. Worked out great for us!!

All seriousness aside, this is also a great time to get a recent copy of your Social Security statement. If you didn’t receive one as part of the select group, you will have to go online and register to get your copy. Go to www.ssa.gov and set up your account. Take the time to compare your earnings records to prior W-2’s and look for errors. You really need to do this each year, as errors are made and much easier to correct if done in a timely fashion.

Also, while gathering your information for your tax return, if you are between the ages of 57-65, you need to start looking at your retirement plans and desires. Some of the risks involved in retirement are:

Longevity Risk, Entitlement Risk (Medicare), Market Risk, Lifestyle Risk, Inflation Risk, Medical Expense Risk, Tax Risk, Personal Event Risk and Incapacity Risk.

Some of these we have control over, some of them we don’t. All of them are very real, and need to be discussed and considered before electing your Social Security benefit.

It would be wonderful if we all could go into retirement debt free, but for most people, this is not the case. For most, Social Security is the cornerstone of their Retirement Roadmap; something they need to count on for an income stream. This income stream is necessary so other assets don’t have to work so hard. As we talk about tax season, how many of you have your taxes done by a professional…..and if a mistake is made, you can amend your return. Guess what…..Social Security is basically a permanent decision and you don’t look for professional advice?

So, if Social Security is indeed the foundation of your retirement income, why don’t you take it more seriously? What aren’t you taking advantage of the claiming strategies that are available to you? Probably because you don’t know about them, or don’t have a clue how to find out about these options.

Pillars, LLC, was started to help our community determine the best outcome they will have regarding their Social Security benefits. With the proper timing, strategies, and knowledge of the rules and regulations, your income stream can look much brighter. Our Social Security analysis reports are very affordable. Do yourself and your family a favor, and educate yourself about your options……not just three options to file at age 62, 66/67 or 70, but many, many more.

Thought you might enjoy this tidbit……January 31, 2015, marked the 75^th anniversary of the first monthly Social Security check. Ida May Fuller, a legal secretary from Vermont, received the first check in the amount of $22.54. Ms. Fuller lived to 100 years of age; 35 years after receiving her first check…..she had collected nearly $23,000 in benefits. And this did not include COLA benefits as they had not been signed into law. She received over 1,000 times what she contributed.