Social Security: Unlock Its Potential

Transcription

1 Social Security: Unlock Its Potential

2 Social Security Trivia Mr. Ernest Ackerman First recipient of Social Security retirement benefits Received $0.17 Miss Ida May Fuller Contributed $24.75 to Social Security Received $22, Source: Historical Background And Development Of Social Security, 2

3 Social Security Snapshot Income of Americans Age For 2018: 2 Estimated average monthly payments: Retired worker = $1,377 Retired couple = $2,294 Maximum monthly Social Security retirement payment to someone retiring at age 66: $2, Income of the Aged Population, Fast Facts & Figures About Social Security, Social Security Changes, (released 11/27/17) 3 Workers With Maximum-Taxable Earnings, ssa.gov/oact/cola/examplemax.html 3

4 Agenda Timing Work Taxes Awareness 4

5 Timing 5

6 Timing What s Your Full Retirement Age (FRA)? Eligible for 100% of Benefits Birth Year FRA mos mos mos mos mos Later 67 Source: Retirement Planner: Benefits By Year Of Birth, ssa.gov,

7 Timing Early vs. Delayed Filing: How it Affects Your Social Security Benefit Amount of full Social Security benefit received (2018) 1 1 ssa.gov,

8 Timing How Delaying Benefits May Reduce Your Clients Tax Burden Age 62 Age 70 This chart is hypothetical and for illustrative purposes only. 8

9 Work 9

10 Work How Will Working Impact My Benefit? 1 Before FRA At FRA After FRA 1 How Work Affects Your Benefits, ssa.gov, 1/

11 Work How Will Working Impact My Benefit? 11

12 Taxes 12

13 Taxes How Will Your Clients Social Security Benefits be Taxed? Benefits may be taxable based on Combined Income *Modified Adjusted Gross Income is also referred to as MAGI. 13

14 Taxes How Will My Social Security Benefits be Taxed? 1 If Combined Income is Less than or equal to $25,000 if you file as an individual ($32,000 if married, filing jointly) $25,001 - $34,000 ($32,001 - $44,000 if married, filing jointly) ($44,000 if married, filing jointly) % of Social Security that s taxable More than $34,000 1 Benefits Planner: Income Taxes And Your Social Security Benefits, ssa.gov, 1/

15 Taxes Possible Ways to Reduce Combined Income Tax-free retirement income Roth IRAs & Roth 401(k)s 15

16 Awareness 16

17 Awareness The Bipartisan Budget Act of 2015: Effects on Social Security What s changed No more double-claiming Dependents can t claim payments if you suspend your payments Although file-and-suspend benefit is still an option it has changed What s the same Married individuals are still eligible to claim payments worth up to 50% of the higher-earning spouse s benefit All workers have the option to increase their monthly benefits by delaying their claim of payments until age 70 17

18 Awareness Your Social Security snapshot Use this worksheet to assess your individual situation MAI035 18

19 Awareness Questions to ask before taking benefits: When do I plan to stop working? Do I need this extra income? Will I have to pay taxes on my income? How long will I live? 19

20 Main Idea To make the most of your Social Security benefits, consider all the factors. 20

21 Social Security Timing Work Taxes Awareness 21

22 Next Steps Next Steps Download your social security statement by logging on to ssa.gov/myaccount Estimate what your monthly income needs will be in retirement using the client worksheet. Meet with your financial advisor & tax professional to evaluate your overall portfolio and create an income plan. 22

23 Disclosures This material is general marketing material, and provides only general plan and retirement information. This material is not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, investors should consult a tax or legal counsel for advice. Hartford Funds is not providing any investment advice of any kind (impartial or otherwise) in this material and is not acting as a fiduciary in connection with the preparation or distribution of this material. Investors should consult their own financial adviser for advice or recommendations with respect to the information addressed in this material. Hartford Funds Distributors, LLC, Member FINRA. SEM_SS_