The Clock is Ticking

Posted on by hgasaway 3 Comments

A deadline will lapse on April 30, 2016, that allows those that turn age 66 by this date to File and Suspend their Social Security benefits. First of all, what is File and Suspend? This is a claiming strategy that allows you to file for your benefit, collect your benefit at a later date, and allow your spouse to file a Spousal Benefit off your benefit (50%) at Full Retirement Age. This other party must also meet the age requirements under the new law.

What kind of difference does this make? It can make a huge difference not only in your lifetime benefit, but in your Survivor’s lifetime benefit amount. How does this work? First of all, File and Suspend allows both the party that turns 66 by April 30, 2015 and the Spouse (if he or she meets the required age standards put in place by the new law) to be able to receive Delayed Retirement Credits on their respective benefit amount, and also receive an income stream. Also, by accruing Delayed Retirement Credits, the Survivor Benefit will increase as well. Another perk, is that under certain circumstances, you can qualify for a Lump Sum Provision or Retroactive benefits.

Let’s use an example: Tier 1 (age 66 by April 30, 2016)     Tier 2 – (must be age 62 by December 31, 2015)

Sammy is age 67 and has not filed for his benefit. Susie is age 65 and has not filed for her benefit. Sammy’s Full Retirement Age Benefit is $1830.00, and Susie’s Full Retirement Age Benefit is $1950.00. Since Sammy is already age 66, he qualifies for File and Suspend (Tier 1). Susie is eligible for Spousal Benefits since she is currently 65 (Tier 2). Here is a list of several of their options:

  1. At age 66, Susie files a Restricted Application off Sammy. At age 70 she files for her own benefit which has accrued Delayed Retirement Credits. Sammy begins his benefit at age 67 – 10 months when Susie files for her benefit. Lifetime benefit is $888,905.00 and Survivor Benefit will be $2,574.00.
  2. They can both file at Full Retirement Age – Lifetime Benefit will be $833,090.00 and Survivor Benefit will be $2,098.00.
  3. They can both wait until age 70 – Lifetime Benefit will be $840, 153.00 and Survivor Benefit will be $2,574.00.
  4. Sammy can draw a Spousal Benefit off Susie and Susie draws her Full Retirement Age benefit; Sammy then draws his full benefit at age 70. Lifetime benefit will be $868,200.00 and Survivor Benefit will be $2,416.00.
  5. Sammy can File and Suspend his benefit prior to April 30, 2016. Susie files for a Restricted or Spousal benefit at age 66 and converts to her own at age 70. Sammy draws his full benefit with Delayed Retirement Credits at age 70. Lifetime benefit will be $884,075.00 and Survivor Benefit will be $2,574.00.

As you can see, by having the opportunity to use the File and Suspend claiming strategy, the clients benefit increases by over $50,000 from Full Retirement Age. And the Survivor benefit increase is $500 per month for life.

Under the new law, these claiming strategies will no longer exist. Do not delay in having this opportunity professionally analyzed……the CLOCK is TICKING!!

You can contact Pillars LLC at 601-954-0699 or visit our website at www.pillarsllc.com for further information.

 

 

 


Survivor Benefits Component to Social Security

Posted on by hgasaway Leave a comment

As Roy and I do the customized reports for clients, it is amazing what a little adjustment in life can make in your future Survivor Benefit for you and your family. I am sure that most of you, when going to file for your benefit, do not really analyze this component. We emphasize this benefit because people are outliving their retirement and a good choice in this area would mean a huge difference in the quality of life for the survivor.

Let me give you two examples…..true situations, just names changed:

  1. John and Susie – John’s benefit at FRA is $2510.00 and Susie’s benefit at FRA is $1738.00.

Social Security Benefit amounts range from $951, 020.00 to $1,069.095.00 depending on the claiming strategy options presented. We presented 6 options.

Survivor Benefits amounts range from $2,147.00 to $3,313.00 per month depending on the option they choose for their benefit election. A difference of $1,166.00 per month for the rest of the life for the survivor.

  1. Carl and Sandy – Carl’s benefit at FRA is $2318.00 and Sandy’s benefit at FRA is $1038.00

Social Security Benefit amounts range from $881,530.00 to $1,073,547.00 depending on the claiming strategy options presented. We presented 5 options.

Survivor Benefits amounts range from $1729.00 to $3,029.00 depending on the option they choose for their benefit election. A difference of $1300.00 per month for the rest of life for the survivor.

This does NOT mean that either one of these couples were left without income from age 66 to 70 – it means that they used claiming strategies (File and Suspend and Restricted – if you qualify under the new law changes). Both couples waited until after their 66th birthdays before filing for any benefits, and both had a healthy income stream from age 66 to 70.

These strategies will go away in 3 years and 7 months under the new Bi-Partisan Budget Act of 2015 – the clock is ticking folks. The BIG CLOCK is ticking for those turning age 66 by April 30, 2016. If you don’t File and Suspend by that date, you will not be able to turn back that clock. All you need to do it make an appointment at the SS office, go in prior to the deadline, and File and Suspend. You will not receive benefits, but you have opened the door for claiming strategies that will improve your benefit. After you do this, call us and we will direct you to the next step in the process.

Thank you Rankin County for your support of our business and this community service. Our contact information is dthompson@pillarsllc.com or 601-954-0699 or our website is www.pillarsllc.com.

Public seminar is February 2, 2016 at the Brandon Library – 6:00 p.m. Must call to reserve a seat.


Social Security Knowledge Center: People Thought We Were Joking

Posted on by Diane Thompson Leave a comment

Roy and I have been educating our communities for over two years now, and many people thought we were joking…..this all sounds too good to be true. Well, with the passage of the Bi-Partisan Budget Act of 2015 people are waking up to realize this is not a joke, and that these opportunities are going to go away.

The reason behind these changes was to close a loophole that provided people more income on their Social Security benefits. Congress did allow these changes to be slowly phased out (next 4 years if you qualify). But, the most important deadline is for those turning age 66 by April 30, 2016 (Tier 1). The option to File and Suspend will no longer exist.   If you don’t File and Suspend by April 20, 2016, if you qualify, you will only be allowed to Suspend, which closes the door on many great benefits. This provided you the option of filing for your benefit, immediately suspending it, allowing it to grow at 8% per year until you decide to take your benefits, and also allowing your spouse to collect Spousal Benefits off your benefit amount. This is called the Restricted Application and there are also rules and regulations regarding this option.

The second category is for those that turned age 62 by December 31, 2015. You will still be able to file a Restricted Application for Spousal Benefits if you meet all the qualifications. This is a very beneficial tool for capitalizing your benefits. One party must file for their benefit, but the other party can still file a Restricted Application and allow their benefit to accumulate Delayed Retirement Credits worth 8% per year.

This information is not available at the Social Security offices. By law, they can give you information on your individual benefit, but not on claiming strategies, combination strategies or other options. It is a shame they can’t give you this information, but on the other hand, don’t blame them for something they are not allowed to do. Blame yourself, for not realizing that these opportunities are available to you, and there are professionals that can help you get the maximum benefit available to you.

We are very blessed with so many seminar requests in the upcoming months. Some are private and some are public….call us at 601-954-0699 to reserve your seat. Or if you just want an individual consultation, we can assist with that.

Those that are Tier 2 (turned age 62 by December 31, 2015) need to consider reviewing what options they will have. It makes sense to PLAN out this decision, because the best end result will come with the proper timing of your benefit, understanding the rules and regulations that apply to your situation, and combining your lifetime Social Security benefit with other assets for your best draw down options. Your lifetime benefit will not fluctuate drastically in 4 years….if you continue working it will only get larger, so it is never too early to PLAN and ANALYZE.

Next public seminar is February 2, 2016 at the Brandon Library, 6:00 p.m. Reservations required. Then we are headed to Florida on February 24th and 25th for seminars in the Bradenton/Sarasota area.


Breaking News: Bipartisan Budget Act of 2015 – Effects on Your Social Security Future

Posted on by Diane Thompson 6 Comments

Effective November 2, 2015

If you were born on or before May 1, 1950 – You have six (6) months to file for File and Suspend, after that it is gone as a filing strategy.

If you were born January 2, 1954 – You have retained access to Restricted Application for Spousal Benefits at 66, provided your spouse has “Filed and suspended” or is receiving benefits. You no longer have the filing strategy “File and Suspend” as an option, unless you were born on or before May 1, 1950 and elected “File and Suspend” by April 30, 2016.

If you were born after January 2, 1954 – You no longer have access to “File and Suspend” and “Restricted Application for Spousal Benefits” and “Retroactive Lump Sum Payment.”

Call or write us. Complete order for a report


2015 Seminars

Posted on by Diane Thompson 3 Comments

We were truly blessed in 2015 and thought we would share a partial list of some of our educational seminars:

Mississippi Hospital Association – November

Mississippi Department of Revenue – March

Barlow, Walker, CPA firm – January

Bank Plus – February

Bank Plus Wealth Management – February

Capital Area Human Resources Agency – Jackson, MS – June

Rotary Club Brandon – February

Kiwanis Club of Brandon – January

Kiwanis Club of Pearl – March

Kiwanis Club of Flowood – November

NorthCentral MSCPA Chapter – June

Raymond James -February

Women’s Seminar – “For Your Eyes Only” – Brandon, MS – June

Brandon Library Community seminars – February and September

Bradenton/Sarasota, Florida Seminars – March


New Year’s Resolutions – December 2015

Posted on by Diane Thompson Leave a comment

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.

 


Questions from Our Readers and Clients

Posted on by Diane Thompson 2 Comments

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.


The “Truth”

Posted on by Diane Thompson Leave a comment

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.


New Law, What Now?

Posted on by Diane Thompson Leave a comment

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 1st, 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.


What is the Best Option Available?

Posted on by Diane Thompson Leave a comment

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.