“Clueless” About Social Security

Posted on by Diane Thompson Leave a comment

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.


Women and Social Security

Posted on by Diane Thompson Leave a comment

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.


What Truly is Fair?

Posted on by Diane Thompson Leave a comment

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.

 


Tax Season/Social Security Season

Posted on by Diane Thompson Leave a comment

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 15th, and return home on April 16th. 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 75th 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.


Chicken Salad and Social Security

Posted on by Diane Thompson Leave a comment

I was making chicken salad this week and it had for me a unique likeness to Social Security – you may be thinking I have lost my mind, but stay with me. Most everyone puts mayonnaise in their chicken salad, but the other ingredients are a mile long, depending on your favorite recipe. For me, I love almonds, green grapes, green onions, celery and many different spices.

This is the case with Social Security. Through our series of articles and seminars, we are trying to educate the public on the many options you actually have. We have been truly blessed with so many clients from our area, but I can’t help but think of those that think this is a joke or some kind of a scam. They are missing out on such a better income stream throughout retirement and aren’t willing to investigate the differences in benefit readily available to them for the asking.

Social Security is indeed very complicated. And it is interesting that people think the best they could possibly do is wait until 70….not true!! If you don’t implement one of the many claiming strategies available to everyone, you are going to short-change yourself on maximizing your retirement.

The formulas are complex…..you can’t come up with these options with pencil and paper. Sophisticated software is needed…..and on top of that, you have to know the rules and regulations to dig for further options that the software doesn’t consider. That is because life happens…..we take into consideration health issues, your desires, your monetary needs, and software cannot do that.

Back to the chicken salad…..some of these additional ingredients you may be missing is Restricted Application, File and Suspend, Retroactive benefits, Lump Sum Provision, and Deemed Filing just to name a few. Situations with Disability Benefits, Family Benefits, Widow Benefits, Divorced, WEP and GPO get much more involved and complex. This benefit is for the rest of your life….take it seriously.

Contact www.pillarsllc.com for more information; next seminar is September 29th at 6:00 p.m. at the Brandon library….seating is limited so call 601-954-0699 to reserve your seat.


Individually vs. Collectively

Posted on by Diane Thompson Leave a comment

It seems impossible that we have been writing these articles for over a year now. So many great comments and questions have come as a result. Diane will be hosting a seminar on June 23rd at 6:00 p.m. at the Brandon Library, for Ladies Only. The reason for this seminar is that we are seeing many widowed, divorced and single ladies that do not know how to handle their Social Security situation, and we felt a seminar was in order. “For Your Eyes Only” – please register at the Brandon Library as seating is limited.

One of the most important things that we hope our readers have learned is that the Social Security Administration can give you information, but they cannot give you advice. Each person’s Social Security benefit is based on their individual top 35 years of earnings. Just as a side note, you need to check this against your W-2 as mistakes are made and it will affect your Full Retirement Age benefit. If you don’t have your individual Social Security statement, you need to go online at www.ssa.gov, set up an account and print out your benefit statement.

For couples, to take these two benefit statements, and implement the claiming strategies that are available to you by law, will give you the greatest improvement in your lifetime income stream….hence, individually vs. collectively. We are not talking about a few dollars; the increase could be dramatic. There are over 2,728 rules and regulations that must be applied and this is not an easy task. Sophisticated software is necessary to provide you with the best result. And of great importance is the timing factor…..when you take your benefit, and when your spouse takes their benefit will greatly affect the outcome of your lifetime benefit. Through a customized report, we will show you 5-7 different ways to file, that will best suit your desires, take into consideration your health and the necessary income stream to maintain a good quality of life. There are also many different options for widowed, divorced and single individuals that can be explored. Without the necessary understanding of the rules and regulations, you are leaving yourself at risk of making a choice that may or may not be in your best interest. And remember, in most cases your decision is permanent.

People think if they both wait until 70 to take their benefit, this is best they could ever do….this is actually not true. You can still improve upon your position with the benefit of a claiming strategy such as File and Suspend or Restricted Application.

Comment we are proud of from Roy and Mary Callahan –“Roy and I couldn’t believe how complicated this Social Security stuff becomes when you try to plan for the future. We just kept putting it off for another day. No, it is not time for us to draw our Social Security anytime soon. Thanks to Pillars, LLC seminars and individual attention, we now have a plan for our future! We will get the most for both of us! Thank you Diane C. Thompson and Roy for taking care of this complicated system!”

Roy and Diane are both National Social Security Advisors and can be reached at 601-954-0699 or dthompson@pillarsllc.com.


Unless You Ask, You Won’t Receive

Posted on by Diane Thompson Leave a comment

Roy and I just returned from Florida where we presented several Social Security seminars. One of the things that continues to amaze us, are the number of people that have already claimed their benefits, are confused about their choices, and are not really sure why they did what they did. Considering the fact that Social Security, in most cases, is a permanent decision, you would think people would become more informed before making their choices.

Because you are ELIGIBLE for a benefit, does not mean that taking the benefit when eligible is a good decision for you, your family or your situation. Let me give you an example:

Susan’s husband dies quite unexpectedly at age 62 – Susan is 60. She is told by family that one of the first things she needs to do is go to the Social Security office and file for her Survivor Benefit. Yes, Susan is eligible, but…….if she is working she will experience Earning Limitations, she will take a reduction in her benefit amount for life (28.5%) and her benefit will be automatically eliminated. She may need the money, and that often happens. But, if she doesn’t there are strategies that can be utilized to help her through this process and greatly improve upon her income stream, for life.

People tend to forget that Social Security is a benefit that is based on your earnings history. The Social Security offices does not know to whom you are married, who you have divorced, whether your spouse or ex-spouse has died, whether you have young or disabled children, or whether or not you are taking care of dependent parents. So, if you don’t know the questions to ask, you are probably up the creek without a paddle.

Pillars, LLC, will develop a comprehensive review of your situation. Instead of analyzing your benefit individually, we analyze it collectively, looking at all the questions and variables that need to be answered. This is how you are able to maximize your benefit throughout retirement. On many occasions, we have actually written scripts for clients to take with them to the Social Security office for clarity of the situation. In our customized reports, included is a set of instructions for filing that you take with you to the Social Security office.

You have probably heard the saying “Know Before you Go”; this is so true when it comes to filing for your benefit. You may contact us at www.pillarsllc.com or call 601-954-0699 for assistance.


9 to 5

Posted on by Diane Thompson Leave a comment

Hopefully you now have your Social Security statement and have reviewed your 35 years of earnings. It is time to start looking at a start time for benefits……especially for couples, coordinating their start times will provide many opportunities to boost cumulative lifetime income. Before you do that, let’s discuss work and earnings limits while drawing Social Security.

What is considered work? Simply said, wages and self-employment (net) are considered work. Work is not money from rental properties, investments, IRA, 401K or deferred comp, stock option income, etc. Early-outs, severance pay and vacation pay-outs received AFTER you retire are normally NOT wages. If you work for wages, income counts when it is earned, not when it is paid. However, they do count an employee’s contribution to a pension or retirement plan if the contribution amount is included in the employee’s gross wages. If you are self-employed, income counts when you receive it as well – not when you earned it. An exception is if it is paid in a year after you become entitled to Social Security and you earned it before you became entitled to benefits.

Earning Limits

Younger than Full Retirement Age

$15,480 per year
$ 1,290 per month
Social Security benefits are withheld at $1 for
every $2 over the annual limit

The year you reach Full Retirement Age   

$41,400 per year
$3,450 per month
Social Security benefits are withheld at $1 for
every $3 over the annual limit

FULL RETIREMENT AGE

NO LIMIT ON EARNINGS

Also, please be aware that your spouse’s spousal benefit will also be withheld if you earn greater than the annual earnings test limit.  
In the year you reach full retirement age (66 for most of us reading this article) a more generous earnings limit applies.  Social Security will only count earnings before the month you reach full retirement age and in 2014 that limit is $41,400.  Starting with the month you reach full retirement age, there is no limit on your earnings.

There is a huge difference between when you want to retire, and when a report or a free calculator tells you to retire.  We strive to work one-on-one with couples to determine the best choice for their life, based on their work situation, their health, family situations and such.  You can contact Roy or Diane Thompson, at 601-954-0699 or email us at dthompson@pillarsllc.com or rthompson@pillarsllc.com.

 


Are We Ready? Am I Ready?

Posted on by Diane Thompson Leave a comment

Before you make that trip to the Social Security office, or file for your benefit online, please make sure you have researched all your choices and have answered the following questions:

  1. At what age should I file for benefits?
  2. At what age should my spouse file for benefits?
  3. By coordinating our decision, will we see a greater gain?
  4. When does it make sense to claim a spousal benefit?
  5. How can I claim my benefit, still work, and let my benefit grow?
  6. How do I make sure my spouse gets the largest survivor benefit?
  7. How do we know which of the filing methods might be right for us? Straight, Restricted or File and Suspend?
  8. If one of us lives a long life, how does that affect our decision?
  9. How will work affect my benefit?
  10. If I am divorced, having been married 10 years and currently single, what are my options?
  11. If I have a government pension, how will that affect when I file and how will it affect the survivor benefit?
  12. What about any tax consequences?These are just a few of the questions that need to be answered, but a great place to start.  Unfortunately, most people don’t have many of these questions answered, yet decide to file for their benefit.  Why?  Usually, because they don’t know where to get their answers and it is overwhelming.We are not pointing fingers, because we were right where you are when looking at our retirement decisions.  We are not ready to retire yet, but close, and wanted to get our ducks all in a row.  We went to advisors, seminars, to the Social Security office and still felt we didn’t know much more than when we started.  That is when we became National Social Security Advisors, taking on those 2,700 rules and regulations and trying to advise people getting close to retirement.

    Hopefully through reading some of our articles, and understanding the need for a customized report, our community is realizing the need for more in depth research on this topic before making their decision.  If interested, we are hosting a seminar at the Brandon Public Library on September 29, 2014 at 6:00 p.m. titled “What You Don’t Know Could Hurt You”.  It should last about an hour with additional time for questions and answers.  Please join us and see if we can clear up some of that muddy water…

    We are pleased to announce that our website is up and complete.  Please take a minute to look at it and we would welcome any comments or suggestions.  www.pillarsllc.com  See you at the Library…..or call us for an appointment at 601-954-0699.


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