What is a Plan?

Posted on by hgasaway Leave a comment

Retirement is something that needs to be well thought out and planned for in advance. Not only do you need to look at potential income from Social Security, you need to set up your Medicare options (age 65), and you need to review your other 401K’s or pension plans for best use withdrawals. This does not happen the week before you “check out”. At Pillars LLC, we like to see clients at least two years before they plan to retire, so all the above can be set into action. We are only one piece of the RETIREMENT PUZZLE – our desire is to work with other professionals that work in the retirement venue for the betterment of the beneficiaries.

Medicare is an area of expertise – we do not touch it; financial planning is an area of expertise – we do not touch it; tax law is an area of expertise – we do not touch it. Our area of expertise is Social Security and that is all we do.
When we do a good job for our clients, they thank us. When business owners and professionals make a good referral for our services, this employee or client will be with you for the duration. Why, because you had their best interest in mind on this very important area of expertise.

Because I am nearing retirement age, I have spent quite a bit of time doing research on my options for drawing Social Security retirement benefits.

Recently I attended an informational session hosted locally by PILLARS and Cooley/Labas Financial Advisors. It was there that I learned about an option that I had never read about in my research …. and I was not even aware that I was eligible to choose that option.

I immediately made an appointment with PILLARS and they walked me through all my options and even helped me know the correct verbiage to use when I go to the SS office to file for my retirement benefits

Thank you, Diane and Roy, for showing me the best way to maximize my Social Security retirement benefits.

Vicki Shirley, Corinth, MS

As we have stated in many of our articles, TIMING is critical when it comes to electing the best option for you and your family regarding Social Security. Are you getting a bonus or a check for accrued sick leave and/or vacation? If you draw this at the wrong time you will be hit with the Earnings Limitations Rules. How close in age are you and your spouse? Does one of you want to keep working and the other retire? Do you really need to draw the Survivor Benefit at age 60 and suffer the reductions? Can you cut back to part-time for a while and gradually make the transition to Social Security? If entitled to two benefits, such as ex-spouse, spousal or survivor and your own, which benefit should you take first? REMEMBER – being entitled to a benefit does not mean you need to take it – in many cases, this is a very poor decision. And Social Security and retirement are not synonymous.

Therefore, we tell people they need a PLAN – Social Security should not be taken just because you are entitled to receive it. When, how and why need to be factored into your decision. Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years. We are Corinth, MS residents, but we service clients nationwide.


What Every Women Needs to Know Before Filing” Part II

Posted on by hgasaway Leave a comment

Hope you had a chance to read Part I of this series as it contained very important information for the ladies in our communities. As we continue this article, I am going to give you a likely example of the concerns for women:

1. SALLY – married 22 years – divorced but single
2. Age – 62 years old
3. Working, but her company is downsizing and she will probably be let go
4. Her PIA (Primary Insurance Amount) is $900 per month as she stayed home for many years raising the children

Her question to us was – how in the world can I live on $900 per month? And actually, if she drew her benefit at age 62, it would only be $712 per month.

Now, let’s take a look at her full situation based on the Rules and Regulations. RULES MATTER

1. Since she is still single, had been married 10 years and divorced for two years, and is currently age 62, she is entitled to a benefit off her ex-husband’s benefit amount.
2. Wait a minute – she just told me her ex-husband has passed away.
3. He was a surgeon and his benefit was $2,735 per month.
4. Sally is entitled to an Ex-Spousal Survivor Benefit of $2,735 per month if taken at her Full Retirement Age. Or if she takes it today, will be reduced to $2324 per month. Or Sally (because she turned age 62 prior to January 1, 2016 – Bi-Partisan Budget Act of 2015) can begin her benefits at age 62/10 months in the amount of $712 and switch to FULL Ex-Spousal Survivor Benefits at age 66 in the amount of $2,735.

Hope this example brings home many points to our readers – had Sally just gone to the Social Security office and filed for her benefit at age 62, her Life Expectancy (age 90) benefit amount would have been $239,232.00 vs. her best case scenario, after all questions were answered and all rules considered, her Life Expectancy benefit amount is $814,755.00. Therefore, this is why we do, what we do.

Social Security is not a one size fits all or even a one size fits most situation – EVERY situation is different and needs professional review. Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years. We are Corinth, MS residents, but we service clients nationwide.


Confusion at Best

Posted on by hgasaway Leave a comment

Almost on a weekly basis, we are made aware of someone that went to file for Medicare and filed for Social Security at the same time – age 65. The filing dates are not the same readers…..please read on!!

Sure, it sounds logical to kill two birds with one stone. And, if this is what you plan to do, you have that option. One of the complexities of these two programs is that you become eligible at different times. Social Security benefits are available as early as age 62, but most people don’t become eligible to receive Medicare benefits until age 65. Also, what makes things confusing, is that if you file at the same time, it is one application process vs. two.

What we are saying is that you can file for Medicare and Social Security at different times. Make sure you file for Medicare coverage within the appropriate initial enrollment period, avoiding any potential penalties that can result from missing that deadline. Then, when the timing is appropriate for you, file for your Social Security benefit. Timing is critical when it comes to these benefits.

Remember that age 66 (your Full Retirement Age) is the magic age, when claiming strategies can be implemented to improve your income stream through your life expectancy. With only a one year difference (age 65 vs. age 66) you can change your Social Security future earnings quite a bit.

As we have reiterated in several articles filing before Full Retirement Age has the following implications: ELIMNATES Delayed Retirement Credits, REDUCES Spousal Benefits, REDUCES benefit amounts from 5% – 30%, INTRODUCES Earnings Limitations, ELIMINATES Claiming Strategies, and you could find yourself in the middle of a medical insurance gap. Think it through readers or better yet, let the professionals review your options with you.

Make a Plan – have your Medicare reviewed by a specialist, have your other assets reviewed by a specialist, and have your Social Security benefits reviewed by a specialist. In the scheme of things, you will be so glad that you took these small steps to make sure your choices are in your best interest.

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years. We are Corinth, MS residents, but we service clients nationwide.


“Gray Divorces” and Social Security

Posted on by hgasaway Leave a comment

Divorce is not an easy situation at any age. Complications arise involving children, pensions, 401K’s, and the house, but people are not aware of the complications that arise involving Social Security. In many instances, this change of status can jeopardize the retirement security of literally millions of baby boomers.

A recent study, Bowling Green University (2013), states that one in four Americans getting a divorce are 50 years of age or older. Between 1990 and 2010, the divorce rate double in what has been titled the “gray divorce” years.

RULES for Divorced Spousal Benefits:

1. Must have been married 10 years or longer.
2. Claimant must be single.
3. Must have been divorced two years.
4. Both men and women are entitled to this benefit if they meet all the rules and regulations.
5. Must be at least 62 years of age – benefit will be reduced due to filing early.
6. Ex-spouse will not be affected by your claim against his or her benefit amount, in fact, unless you tell them, they will probably not even know that you are receiving this benefit.
7. If taken at the appropriate time, can be 50% of the ex-spouses Full Retirement Age Benefit.

In the first two years after a divorce, an ex-spouse could be caught in “Nowhere Land”. If the ex-spouse has not filed for his/her benefits they must wait two years after the divorce is finalized to claim benefits as an independently entitled spouse. If you turned age 62, prior to January 1, 2016, you can also utilize a Restricted Application for Spousal Benefits and allow your own retirement benefit to grow at 8% per year until you decide to file. But, then again, this might not be the best choice of options. In many cases, clients need to get an income stream coming in as soon as possible and if you find yourself in “Nowhere Land” you might have to take another direction with filing.

We would have to say, that analyzing situations for divorced individuals is the most difficult of our cases. There are so many rules and so many ways to look at your options for filing, and many times there is no communication between the parties to assist in the review. There is no possible way to review these options in a short newspaper article. Suffice it to say, if you find yourself in this situation, you should contact a professional to help you through this maze called Social Security.

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years. We are Corinth, MS residents, but we service clients nationwide.


Why is my Social Security Check LESS than Expected?

Posted on by hgasaway Leave a comment

We get phone calls quite frequently from people wanting to know why their Social Security check is less than expected; there are several possible reasons:

  1. If you opted to take your benefit before your Full Retirement Age there will be a reduction to your benefit amount. Mind you, this is for life! Could be as much as 25-30% depending on your Full Retirement Age.
  2. If you are eligible for Medicare, that required amount is reduced from your Social Security check. Starting in 2017 that standard amount is $134. And this amount varies incrementally based on reported income.
  3. If your income levels, if filing before Full Retirement Age, are above the allowed earnings per the Earnings Limitations rules and regulations. This is could effectively reduce your Social Security check to zero. The Earnings Limitations for 2017 is $16,920.00 per year, and $44,880 in the year you turn Full Retirement Age. Be careful you don’t make a mistake with Earnings Limitations – could prove costly!
  4. If you signed a form that allows the SSA to take taxes out of your benefit amount. Some people make this decision based on their tax situation.
  5. Delayed retirement credits that accrue after Full Retirement Age (8% per year after Full Retirement Age) are paid out the January after the credits are earned, if you claim before age 70, and after your Full Retirement Age. If you want to shorten this delay in getting your final credits, claim late in the year. As we tell our clients, TIMING is critical.
  6. Also, there are reductions for those that have Federal Pension Offset. This is a whole different set of rules and regulations.

Please be mindful that filing for your benefit is not an easy decision, in fact if researched properly, is very complicated.

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years– we have your back on this one! We are Corinth, MS residents, but we service clients nationwide.


What in the World is AIME?

Posted on by hgasaway Leave a comment

During our seminars, we try to explain AIME to our attendees. It is quite complicated, so very hard to explain in few short minutes. AIME stands for Averaged Indexed Monthly Earnings. So that the Social Security Administration can determine your PIA (Primary Insurance Amount), 35 top years of earnings are needed to compute the AIME. Your Primary Insurance Amount is what is reported on your SS statement as the amount you will receive at a designated age. SS chooses those years with the highest earnings, sums the indexed earning amounts, applies an indexing factor, and then divides this amount by the total number of months in those years, being 420.

Your past earnings are indexed by adjusting them for subsequent economic growth, to put them in terms of today’s dollars. This is done by multiplying your past earnings by an index, that reflects changes in the national earnings for every year since you earned wages until you turn age 60. Included in this compensation are wages, tips and other compensation subject to federal income taxes and reported on your W-2. It 1991, this also started including contributions to deferred compensation plans. Excluded in this amount are certain distributions from plans that are reported as taxable compensation.

So, in thinking this through, you might be thinking what happens to the totals after age 60? These years are not indexed so they are counted at their actual value. How does that affect me? If you earn above the annual ceiling ($127,500 in 2017) the benefits of continuing to work are almost guaranteed, because they will represent a new top 35 year of earnings for you.

My top 35 years of earnings has some zeros included – this was because I chose to stay home with my kids during their younger years. My decision – no regrets, but these zeros are included in my total. So, for each year I work past age 60, if my income is more than zero, that will replace one of the numbers used to compute my AIME and my amount should increase. This could be a BIG DEAL for many of you.

The BIG DEAL doesn’t just stop at your benefit – the higher your benefit amount, the higher any auxiliary benefits will be for your family – Spousal Benefits, Family Benefits, and Survivor Benefits.

Putting a pencil and paper to all these calculations can be daunting to say the least. When we tell you it is complicated, we are not pulling your leg. Missing one of these rules and regulations can cost you income, and that is for the rest of your life.

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years– we have your back on this one! We are Corinth, MS residents, but we service clients nationwide.


Checkin’ it Twice

Posted on by hgasaway Leave a comment

People often ask why Roy and I are helping people with their Social Security decisions. It is an easy answer….as we were approaching our own retirement, we started to get things in order (why we suggest clients to contact us 2 years prior to retirement). We visited our local SS office and quickly realized that much more research was necessary before we felt comfortable with our options. The more we researched the topic, we realized that people needed to be educated on their options, as there were many more options than what appeared on our SS statements. We both went back to school and became National Social Security Advisors, and the rest is history. We had no idea how this company would be accepted in the Jackson, MS area, but it quickly took off. We have facilitated over 60 seminars in the last three years and some of those are listed on our website at www.pillarsllc.com. We have also helped hundreds of folks in Mississippi to improve their income stream regarding their SS benefit.

It doesn’t matter to us when you file for your benefit; it does matter to us that you are educated on all your options before making this basically permanent decision. The SS office can give you information on your benefit amount, but it cannot give you advice, or look at your benefits collectively if married. That is our area of expertise.

Some people need to file for benefits at age 62, and we understand that completely. But, they also need to understand some of the consequences of this decision:

  1. Reduces your benefit amount by 25-30% depending on your Full Retirement Age.
  2. Reduces your Survivor Benefit to your spouse.
  3. Eliminates Claiming Strategies that can greatly improve your income stream.
  4. Eliminates Delayed Retirement Credits which are 8% per year after Full Retirement Age for a total of a 32% increase from 66-70. You do not have to wait until age 70, in fact this increase is calculated on a monthly basis for increases to your Primary Insurance Amount.
  5. Limits income potential – if drawing early, in 2017 you can only earn $16,920 per year without being penalized by Social Security.
  6. Interferes with health insurance coverage, if you are no longer working and do not have medical coverage. You must fill this gap until age 65 when you qualify for Medicare.

A long list of what if’s; that is why professional advice is strongly recommended before filing for your benefit. We review all options with you at different ages, to insure complete knowledge of your options, which allows you to make a PLAN. Consider your SS statement not a stop sign, but a green light for improvement in your income potential.

Social Security is only one piece of the Retirement Puzzle, but we consider it the cornerstone or foundation. We see couples weekly that their combined SS benefit through their life expectancy is well over a million dollars…. middle America earners. Don’t let this slip through the cracks!!

Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years– we have your back on this one! We are Corinth, MS residents, but we service clients in all 50 states.


Bucket of Choices

Posted on by hgasaway Leave a comment

Life is a bucket of choices….some are easy, some not so much. But we all must take more seriously choices that will have a lifetime of consequences. Agreed? Well, that is what you are looking at when you decide on your Social Security benefit…. basically, a permanent decision.

We are going to share with you in this article a real situation…..middle America, both spouses working for most of their lifetime, just trying to keep their heads above water, raising those kids and now approaching retirement. They need to get every penny they are entitled to, so that is where Pillars LLC steps in to advise.

FULL RETIREMENT AGE BENEFIT – JOHN ($2193) SUSIE ($1387)   John is 65 and Susie is 63 – their life expectancy is normal, being 85 for John and 88 for Susie.

After talking with this couple, we determined their desire was for one of them to take a benefit and for the other one to maximize their position by collecting the available Delayed Retirement Credits. They were not sure how long they want to do this, but will supplement their income with part-time jobs until they desire to both draw their benefits. Susie is starting to have some medical issues, so they want to explore all options.

PRIMARYCumulative lifetime benefit would be $1,023,780.69. This is the best option they have, but does not take into consideration their desires or emotions and is used for comparison purposes. With this option, John would file at age 69.2 months in the amount of $2,734.00. Susie would file a Restricted Application for Spousal Benefits at 66.8 months in the amount of $1,096 and then switches to her benefit at age 70 in the amount of $1831. Survivor Benefit would be $2,748.00.

FULL RETIREMENT AGEcumulative lifetime benefit would be $922,839.31. both would simply draw their benefits at age 66. Survivor Benefit will be $2,208.00.

DELAYED – Cumulative lifetime benefit is $988,546.73.   Both would wait at draw at age 70. Survivor Benefit will be $2895.00.

***Many people think waiting to age 70 is the best option – not so – as you see in these totals, not using a claiming strategy costs them $35,000 and income stream for 2 years****

ALTERNATIVE ! – Cumulative life-time benefits are $1,021,441.76. John begins benefits at age 70 at $2,895.00 Susie files for a Restricted Application for Spousal Benefits at age 67.6 in the amount of $1,096.00. Susie switches to her own benefit at age 70 in the amount of $1831.00. Survivor Benefit amount is $2,895.00

ALTERNATIVE 2 – Cumulative lifetime benefit is $1,009,986.23. Susie begins her benefits at age 63.7 in the amount of $1,164.00. John files a Restricted Application for Spousal Benefits at age 66.1 in the amount of $694.00. John switches to his own benefit at age 70 in the amount of $2895.00. Survivor Benefit is $2895.00

The early option (at age 62) did not come into play with this couple, as they were past that age when requesting our services. We could have given them literally hundreds of other option combinations, but these were in line with their desires.

Our job as Advisors is to keep the income stream where people are comfortable, and to maximize the Survivor Benefit.  Most people do not realize that with some flexibility and knowledge of the rules and regulations, you can continue with income, improve your benefit and your survivor benefit until you decide to draw. In this real-life case, from simply drawing at age 66 to utilize claiming strategies, the lifetime benefit can improve over $100,000, depending on the option the client chooses, and the survivor benefit improved over $540 per month. Most online calculators will give you Primary, Full and Delayed benefit amounts…..….Pillars LLC gives you the Alternatives.

Your Social Security statement is the starting point for your benefits computation. Make the right choices…..they are basically permanent. Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years– we have your back on this one! We are Corinth, MS residents, but we service clients in all 50 states.


Did You Know, Did You Know, Did You Know?

Posted on by hgasaway Leave a comment

Roy and I read probably 10 news articles a day and listen to several webinars a week to keep up to date with news in the Social Security world. Social Security laws are very complicated and we owe it to our readers to keep up to date. We would like to caution you about the things you read on the internet…. some of it is true and some is not…. heard of the term FAKE NEWS……well, we see that as well. In this article we are going to highlight some of the latest news that might interest out readers.

  1. Social Security paper statements are AGAIN becoming a thing of the past. Only individuals who are 60 and over, who aren’t receiving benefits and who don’t have a MY SOCIAL SECURITY account online will get paper statements. This measure will net a reduction in processing costs of about $11.3 million in 2017.
  2. You can be both a widow and a surviving divorced spouse. Lots of rules and regulations, but if single and of filing age, you need to determine which benefit, at what time, is best for you.
  3. Unpaid student loan debt can lead to a smaller Social Security check or Disability benefit. In 2015, the government reduced Social Security checks for 173,000 Americans, up 380% from 2002.
  4. The Earnings Limitations test will increase in 2017 to $16,920 per year and in the year you reach Full Retirement Age that limit will increase to $44,880 for the year or $3,740 per month. So, you can work and collect Social Security, but you need to be very aware of these thresholds.

Most readers know that collecting Social Security benefits before Full Retirement Age can lead to a temporary reduction in retirement benefits. But, did you know that it can also reduce payments to family members – such as spouse or minor dependent children – who collect benefits on your record?

  1. Your Social Security benefits are not tax-free. Maybe people don’t have to pay tax on their Social Security benefits, however, if you have significant taxable income in addition to your Social Security benefits, up to 85% of your benefits could be subject to tax.

We are planning Social Security education seminars in the Corinth, MS area in February and March of 2017. Please watch for further details or call for dates and times. Roy and Diane Thompson are both National Social Security Advisors and Roy is a former CPA of 40 years. Their guidance and direction will make a difference for you and your family. You may contact Pillars LLC on our website at www.pillarsllc.com or email at dthompson@pillarsllc.com or simply give us a call at 601-954-0699. We are located in Corinth, MS but assist clients throughout the United States.


Can I Ever Get the Maximum Benefit from Social Security?

Posted on by hgasaway Leave a comment

Did you know that 61% of Social Security retirement benefit recipients receive at least half of their income from Social Security? And, 33% of beneficiaries rely on Social Security for 90% or more of their income. With that being said, how can I get the most from my Social Security benefit?

In 2017, the maximum benefit for someone retiring at Full Retirement Age will be $2,687 per month. That is an increase of $48 per month over the 2016 maximum of $2,639. On an annual basis, the 2017 amount will produce $32,244 in income.

However, the one thing that affects the true maximum benefit from Social Security is the age at which you decide to file for benefits. The above amount assumes that you take your benefits at Full Retirement Age, which is 66 for those who were born in 1951 and retiring in 2017. If you claim your benefits earlier than Full Retirement Age, you get less. At age 62, this benefit amount would be $2,153 per month. On the other hand, if you wait until age 70, that amount increases with Delayed Retirement Credits to $3,538 per month.

Yet, the main reason why most people don’t acquire the maximum benefit is simply because they don’t earn enough money throughout their careers. Social Security looks at the highest-earning 35 years of your work history to determine your benefit amount (PIA), adjusting earlier earnings for inflation to determine your average indexed monthly earnings.

Social Security is a progressive program, which means it is designed to replace more pre-retirement income for low earners and less for high earners. Also, Social Security only gives workers credit for the amount they earned up to a certain wage cap – in 2017 this cap is $127,000.

That means in order to qualify for the maximum amount payable to beneficiaries; you must have earned at least the wage base limit for 35 years of your career. For most Americans, earning a salary of $127,000 or more is an unrealistic goal. But that should not keep you from working toward that goal – remember your benefit is based on your top 35 years of earnings, so keep plugging away.

When reviewing your situation collectively with your spouse’s earnings, as we do at Pillars LLC, you can improve your lifetime benefit by utilizing claiming strategies. Timing is critical in the Social Security world when it comes to benefits. Don’t settle for less than you are entitled to, because of not knowing.

Roy and Diane Thompson are both National Social Security Advisors and Roy is a former CPA of 40 years. Their guidance and direction will make a difference for you and your family. You may contact Pillars LLC on our website at www.pillarsllc.com or email at dthompson@pillarsllc.com or simply give us a call at 601-954-0699. We are located in Corinth, MS but assist clients throughout the United States.