A GUIDE FOR MAKING INFORMED DECISIONS

Transcription

1 A GUIDE FOR MAKING INFORMED DECISIONS Issued by Pruco Life Insurance Company and by Pruco Life Insurance Company of New Jersey. Prudential Annuities, its distributors and representatives do not provide tax, accounting, or legal advice. Please consult own attorney or accountant Ed. 04/206

2 SOCIAL SECURITY What you need to know Social was created in 935 to help Americans supplement their retirement income. While almost everyone is generally familiar with Social, the details can be complex and easily lead to confusion. As a significant portion of the average retiree s income comes from Social, it s critical to fully understand how it works. This guide provides a general overview of Social, explains the options that may be available to you, and answers the questions that people most commonly ask. Equipped with an understanding of the rules and options, you can make more informed decisions and determine best strategy for getting the most from Social. Please note that the information in this brochure is general in nature and not individualized for particular situation. Working with financial professional can help you decide how to best fit Social into financial plan. Information is based on current law, which can change at any time. 2/6 Social

3 calculating retirement What is my full retirement age? Full retirement age is the age at which you can begin to collect full Social retirement without any reductions. This age is determined by the year you were born. YEAR BORN FULL RETIREMENT AGE and 2 months and 4 months and 6 months and 8 months and 0 months 960 and after 67 Can I start taking my Social retirement before I reach my full retirement age? 2 Yes, you can receive Social retirement as early as age 62. If you begin to receive before you reach full retirement age, will be permanently reduced. The amount of the reduction depends on the age when you begin receiving and full retirement age. The amount you receive when you first begin taking sets the base for the retirement you will receive for the rest of life. You will also receive any annual cost-of-living adjustments, and depending on work history, you may receive higher if you continue to work. YOU CAN RECEIVE SOCIAL SECURITY RETIREMENT BENEFITS AS EARLY AS AGE 62. EARLY SOCIAL SECURITY BENEFITS (assuming a full retirement age of 66 and a $24,000 annual benefit) AGE PERCENTAGE OF FULL RETIREMENT BENEFIT ANNUAL BENEFIT % $8, % $9, % $20, % $22, % $24,000 EARLY SOCIAL SECURITY BENEFITS (assuming a full retirement age of 67 and a $24,000 annual benefit) AGE PERCENTAGE OF FULL RETIREMENT BENEFIT ANNUAL BENEFIT % $6, % $8, % $9, % $20, % $22, % $24,000 Retirement Benefits, SSA Publication No , ICN457500; January Social Program Operations Manual RS (2) Social 3/6

4 calculating retirement What happens if I take my Social while I am still working? EXAMPLE: Phillip, age 62, is still working and is weighing his Social options. At his full retirement age of 66, his retirement benefit will be $24,000. He decides to begin Social at age 62, with a reduced benefit of $8,000 (a 25% reduction). Phillip also continues to work and earns $25,000 annually. His earnings put him $9,280 over the earnings threshold, which will cause him to lose $4,640 of his. His annual benefit becomes $3,360. $8,000 benefit - $4,640 reduction = $3,360 When Phillip reaches his full retirement age at 66, the reduction to his benefit as a result of his wages will end, even if he is still working. This is a hypothetical example for illustrative purposes only It depends on age. If you are at or above full retirement age, working will not reduce Social benefit. If you are under full retirement age, $ of benefit is reduced for every $2 of wages you earn above an annual limit of $5,720 in 206. In the year in which you reach full retirement age, from January st until the last day of the month prior to the month of birthday, $ of benefit is reduced for every $3 you earn above an annual limit of $4,880 in 206. Benefit reductions do not continue past full retirement age. benefit will be recalculated so that you recover the previously withheld amounts over remaining life expectancy. These limits do not include withdrawals from retirement accounts, dividends, interest, or other unearned income. The reduction of retirement benefit is based only on wages it does not include spouse s wages. If spouse is under full retirement age and working, any he or she is receiving will be reduced. What happens if I delay until after I reach full retirement age? 2 From full retirement age until you reach age 70, for every year you delay taking Social, will increase by 8%. After age 70, the 8% increase does not continue. As a result, there is no incentive to delay taking after age 70. Assuming a full retirement age of 66 and a $24,000 annual benefit AGE PERCENTAGE OF FULL RETIREMENT BENEFIT ANNUAL BENEFIT 66 00% $24, % $25, % $27, % $29, % $3,680 Assuming a full retirement age of 67 and a $24,000 annual benefit AGE PERCENTAGE OF FULL RETIREMENT BENEFIT ANNUAL BENEFIT 67 00% $24, % $25, % $27, % $29,760 How Work Affects Benefits, SSA Publication No , ICN ; January Social Program Operations Manual RS (B) 4/6 Social

5 Are my Social taxable? Maybe, depending on the amount of other income you received in the year. If you are single, determine if are taxable by adding the following items together: ADJUSTED GROSS INCOME + NONTAXABLE INTEREST + ½ YOUR SOCIAL SECURITY BENEFITS = PROVISIONAL INCOME If provisional income is: Between $25,000 and $34,000, up to 50% of Social benefit is taxable. Above $34,000, up to 85% of Social benefit is taxable. If you are married and filing a joint tax return, determine if are taxable by adding the following items together: ADJUSTED GROSS INCOME + NONTAXABLE INTEREST + ½ OF COMBINED SOCIAL SECURITY BENEFITS = PROVISIONAL INCOME If provisional income is: Between $32,000 and $44,000, up to 50% of you and spouse s Social benefit is taxable. Above $44,000, up to 85% of you and spouse s Social benefit is taxable. Will I get a cost-of-living adjustment (COLA) every year? 2 Not necessarily. To determine a COLA, in the third quarter of each year, the Social Administration looks at what percentage increase an economic indicator (the CPI-W*) has had since the third quarter of the previous year. Whatever percentage that indicator has increased will be applied to Social for the next calendar year. If there is no increase, there can be no COLA. However, if there is a percentage decrease in that indicator, there is no subsequent reduction in Social. DID YOU KNOW? Over the past 40 years, there have been only three years with no cost-of-living adjustment, all of them occurring within this decade: 200, 20 and 206. YEAR COST-OF-LIVING ADJUSTMENT % % % 200 0% 20 0% % 203.7% 204.5% 205.7% 206 0% Retirement Benefits, SSA Publication No , ICN , January Social : Cost-of-Living Adjustment (COLA), accessed April 206 * The Consumer Price Index for Urban Wage Earners and Clerical Workers is an index of prices of goods and services typically purchased by urban wage earners and clerical workers. By law, it is the official measure used by the Social Administration to annually adjust paid to Social beneficiaries and Supplemental Income recipients. Social 5/6

6 calculating spousal and survivor How do I calculate my spouse s benefit? When spouse applies for Social, he or she will be eligible for the higher of two different amounts: His or her own benefit OR Up to 50% of benefit, assuming you have applied for Social. If spouse is under full retirement age and their Social benefit based on their own work history is more than the spousal benefit, spouse will not be eligible for a spousal benefit. EXAMPLE #: Tom s Social benefit is $24,000 annually. Betty s Social benefit is $8,000 annually. At full retirement age, Betty is entitled to $2,000 annually (her $8,000 benefit + $4,000 spousal benefit to increase her amount to 50% of Tom s benefit). EXAMPLE #2: Tom s Social benefit is $24,000 annually. Betty s Social benefit is $6,000 annually. Since Betty s benefit is more than 50% of Tom s, she is not eligible for a spousal benefit. Hypothetical examples for illustrative purposes only. At what age can my spouse begin collecting a spousal benefit? 2 For spouse to be eligible for Social spousal, you must have applied for Social and spouse must be at least 62. If spouse begins to collect spousal before he or she has reached full retirement age, he or she will not be eligible for the maximum 50% spousal benefit. Assuming a full retirement age of 66 and a maximum $2,000 spousal benefit AGE PERCENTAGE OF SPOUSE S FULL RETIREMENT BENEFIT ANNUAL BENEFIT 62 35% $8, % $9, % $0, % $0, % $2,000 Assuming a full retirement age of 67 and a maximum $2,000 spousal benefit AGE PERCENTAGE OF SPOUSE S FULL RETIREMENT BENEFIT ANNUAL BENEFIT % $7, % $8, % $9, % $0, % $0, % $2,000 Retirement Benefits, SSA Publication No , ICN , January Social Program Operations Manual RS (B)(2) 6/6 Social

7 How will my spouse s survivor work? Generally, if a surviving spouse is over the age of 60, he or she can begin to receive survivor. If the surviving spouse is at full retirement age, his or her benefit is generally equal to what the decedent s Social benefit was, or would have been at the time of his or her death. However, if the deceased spouse dies before full retirement age and had not yet begun receiving retirement, the surviving spouse is entitled to a benefit equal to 00% of the deceased spouse s full retirement benefit. If the surviving spouse is under full retirement age, the amount of the survivor benefit is reduced. Assuming a full retirement age of 66 and a deceased spouse benefit of $24,000 2 AGE PERCENTAGE OF DECEASED SPOUSE S BENEFITS ANNUAL BENEFIT % $7, % $8, % $9, % $20, % $2, % $22, % $24,000 Assuming a full retirement age of 67 and a deceased spouse benefit of $24,000 2 AGE PERCENTAGE OF DECEASED SPOUSE S BENEFITS ANNUAL BENEFIT % $7, % $8, % $9, % $20, % $2, % $22, % $23, % $24,000 There are a few exceptions where survivor can begin under age 60, including: A surviving spouse caring for children under the age of 6 or a disabled child receives 75% of the deceased spouse s benefit. A surviving spouse who is disabled can collect a survivor benefit as early as age 50, and receives 7.5% of the deceased spouse s benefit. Survivor Benefits, SSA Publication No , ICN , July Social Program Operations Manual RS (B)(2) Social 7/6

8 understanding divorced spouse and survivor If you remarried before the age of 60 and are still married, you cannot collect survivor from a former spouse. If you remarried before the age of 60 but that marriage has now ended, you may collect survivor from a deceased ex-spouse. If I am divorced, can I still claim retirement based on my ex-spouse s Social? Depending on the length of marriage and whether you have remarried, you may be able to collect based on divorced spouse s Social. Collecting these has no effect on former spouse s. In order to collect from a divorced spouse: You and ex-spouse must both be over the age of 62 marriage must have lasted 0 years or more You must have not remarried If divorced spouse has not yet applied for, you can still receive based on his or her record if you have been divorced for more than two years. If I am divorced, can I still claim survivor based on my ex-spouse s Social? If divorced spouse has passed away, you may be eligible to collect survivor as a widow/widower if: You are over the age of 60 The marriage lasted more than 0 years You are not now remarried OR You are over the age of 60 The previous marriage lasted 0 years or more You have remarried, but after the age of 60 8/6 Social as of January 206

9 Medicare and Social At what age will I become eligible for Medicare? 2 Most Americans will become eligible for Medicare at age 65. (There are some exceptions for people who are disabled or who have certain conditions.) If you are already receiving Social at age 65, you will automatically be enrolled in Medicare. To enroll in Medicare, you must sign up during a seven-month period that spans the three months prior to the month of 65th birthday, the month of birthday, and the three months following birthday month. If you sign up for Medicare during this period, you will generally pay no premium for Medicare Part A and the standard premium for Medicare Part B. If you sign up for Medicare Part B after this period, you will pay the standard premium and potentially a 0% penalty for life. If you are covered by a group health plan based on current employment when you reach the Medicare eligibility period, you are not required to enroll in Medicare. When the employment ends or the group health coverage ends, you will have eight months to enroll in Medicare without any premium penalties. Do my Medicare premiums reduce my Social benefit? 3 THE FOUR PARTS OF MEDICARE Medicare Part A provides hospital insurance coverage Medicare Part B covers doctors services, outpatient hospital care, and other medical services Medicare Part C, also known as Medicare Advantage, covers the same services as Parts A and B through private health insurance plans Medicare Part D provides prescription drug coverage It is possible that Social check will be lower than you had expected because of the deductions for Medicare premiums. When you sign up for Medicare and you have already started to receive Social, the premiums for Medicare Part B will automatically be deducted from monthly Social check. You may also elect to have Part D premiums deducted from monthly Social check. Other Medicare premiums, or if you have enrolled in Medicare but have not yet begun to receive Social, will be paid out of pocket. How is my Medicare Part B premium calculated? 2 Medicare Part B premium for a given year is determined based on reported income from two years prior. If income exceeds a defined threshold, premium will be increased. If income in 204 is less than the threshold of $85,000 for a single filer or $70,000 for a married couple filing jointly, the monthly premium per person in 206 will be $2.80.* See the table below for the 206 premiums for those with higher income levels in 204. INDIVIDUAL TAX RETURN JOINT TAX RETURN MONTHLY PREMIUM $85,000 or less $70,000 or less $2.80* $85,00 up to $07,000 $70,00 up to $24,000 $70.50 $07,00 up to $60,000 $24,00 up to $320,000 $ $60,00 up to $24,000 $320,00 up to $428,000 $36.70 above $24,000 above $428,000 $ What Every Woman Should Know, SSA Publication No ICN , September U.S. Department of Health and Human Services, Notice CMS-806-N. November 0, Medicare and You 206, page 36 How can I pay my Part B premium? CMS Product No. 0050, September 205 * Those protected under the hold harmless provision of Social prior to January, 206 will continue to pay $04.90 per month Social 9/6

10 the restricted application strategy The Bipartisan Budget Act, signed into law late in 205, has dramatically changed the landscape of Social planning. The new law directly impacts two powerful claiming strategies: () Restricted Application and (2) File and Suspend. The Restricted Application strategy remains available to anyone who has attained the age of 62 before December 3, 205. How does the Restricted Application strategy work? The Restricted Application strategy could allow spouse to claim a spousal benefit while letting his or her own benefit grow. If spouse is still working and you decide to retire, you may want to consider using this strategy if: Both you and spouse are eligible for a Social benefit based on own work histories, and one spouse has filed for his or her Social. At least one spouse has reached full retirement age, and that spouse wants to delay his or her own Social to take advantage of the 8% delayed retirement credit. Note: You cannot file a restricted application until you have reached full retirement age. RESTRICTED APPLICATION EXAMPLE: Adam has reached his full retirement age of 66 and is eligible for a $2,000 a month ($24,000 a year) benefit, but he is not ready to start his Social payments. Meghan also has reached her full retirement age of 66 and decides to begin taking her Social which are $,500 per month or $8,000 per year. By using the Restricted Application strategy, when Meghan starts taking her Social, Adam can file for Social and request only his spousal benefit. Meghan files for her Social and receives $,500 per month. Adam then files a restricted application for spousal only making him eligible for $750 per month. Since Adam is not receiving his own, from age 66 until age 70, he will be eligible to receive the 8% per year delayed retirement credit, increasing his own Social. This is a hypothetical example for illustrative purposes only. SOME OF THE ADVANTAGES OF THIS STRATEGY: By having Adam receive a spousal benefit from ages 66-70, Adam and Meghan have increased their cash flow. This strategy allows them to receive $36,000 from Social over those four years that Adam would not have otherwise received. For each year Adam delays taking his own past age 66 to age 70, his benefit will increase by 8%. At age 66, his benefit would have been $2,000 per month / $24,000 per year. At age 70, his benefit will be 32% larger: $2,640 per month / $3,680 per year. By waiting until age 70 to begin his own, not only will Adam s benefit be larger, but at his passing, Meghan s survivor benefit will increase as well. It will equal what Adam was receiving: $2,640 per month / $3,680 per year. A NOTE ON THE FILE AND SUSPEND STRATEGY As of April 30, 206, the File and Suspend strategy is no longer available. However, those who have already Filed and Suspended their prior to this date will not be impacted. 0/6 Social

11 strategies for widows and widowers If you are a surviving spouse over the age of 60, you are entitled to receive survivor. However, like many people, you may not realize there are strategies that can help you to get the most from. If you are entitled to both individual and survivor, it may be worthwhile to explore collecting one benefit first and then switching to the other at a later date. This ability to switch between can really make a significant difference in the total amount you receive from Social. Strategy One COLLECTING THE SURVIVOR BENEFIT FIRST, AND THEN SWITCHING TO THE INDIVIDUAL BENEFIT In this example, you could benefit from collecting the reduced survivor benefit of $20,592 per year at age 60, and then switching to own individual benefit of $3,680 per year at age 70. Receiving the reduced survivor benefit from age 60 to age 70 will not reduce the individual available at age 70. In fact, the individual available at age 70 grow to a larger amount than the full survivor available at full retirement age. INDIVIDUAL BENEFITS SURVIVOR BENEFITS AT AGE 62 $8,000/year AT AGE 60 $20,592/year AT AGE 66 $24,000/year AT AGE 66 $28,800/year AT AGE 70 $3,680/year AT AGE 70 $28,800/year Above example assumes a full retirement age of 66, individual of $24,000/year at full retirement age, and survivor of $28,800/year at full retirement age. Strategy Two COLLECTING THE INDIVIDUAL BENEFIT FIRST, AND THEN SWITCHING TO THE SURVIVOR BENEFIT In this example, you could benefit from collecting own reduced individual benefit of $3,500 per year at age 62, and then switching to the survivor benefit of $28,800 per year at age 66. Receiving the reduced individual benefit from age 62 to age 66 will not reduce the survivor available at age 66. In this case, the full survivor available at age 66 grow to a larger amount than the individual available, even at age 70. INDIVIDUAL BENEFITS SURVIVOR BENEFITS AT AGE 62 $3,500/year AT AGE 60 $20,592/year AT AGE 66 $8,000/year AT AGE 66 $28,800/year AT AGE 70 $23,760/year AT AGE 70 $28,800/year Above example assumes a full retirement age of 66, individual of $8,000/year at full retirement age, and survivor of $28,800/year at full retirement age. As everyone s situation is unique, it s important to work with financial professional to determine if these strategies might benefit you. Please keep in mind that the earnings test will apply to those under full retirement age, and can impact the results for those who have excess wages and/or self-employment income. Social /6

12 payment would be about $,767 a month understanding Social statement at full retirement age Reviewing Social statement can provide you with important details about. You and financial professional can examine statement and current retirement plan to see if you re on track to reach goals. WANDA WORKER 456 ANYWHERE AVENUE Here are some tips on how to read statement and better understand Social. MAINTOWN, USA - January 2, 206 payment would be about $,767 a month at full retirement age are not intended to be Social Statement Social only source of income when you retire WANDA WORKER 456 ANYWHERE AVENUE MAINTOWN, USA - Are you thinking about retirement? Are you ready for retirement? ability mily vivors icare To view Social On average, Social will replace about 40 Statement online anytime create a percent of annual pre-retirement earnings my Social account today! We have tools that can help you! Estimate future retirement at socialsecurity.gov/estimator Are you about retirement? 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The lawtogoverning benefit amounts may change because, by 2034, Medicare You credits qualify for Medicare at age 65. Even if you do not retire at age 65, be may be able to take advantage of an increase in We based benefit estimates on these facts: the payroll taxes collected willsocial be to pay only about 79 percent of scheduled sure to ofcontact months before 65th birthday to. date birth (please verify name on three page and this date of birth)... April 5,enroll 956 in Medicare. Estimated Benefits monthly payments. estimated taxable earnings per year after * estimated arefacts: based on current law. Congress has made$44,234 changes to the law in the We based benefit estimates on these Social number (only the last four digits are shown to help prevent identity theft)... XXX-XX-234 past and can do so at name any time. Thelaw amounts may change because, by , date of birth (please verify on page andgoverning this date ofbenefit birth)... 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XXX-XX-234 you ve earned $5,040, you ve earned four credits for the(only the railroad employment or pensions through lifetime, to receive retirement For disability and survivors ow Benefits Are. Estimated, young people need fewer credits to be eligible. year. Most people need 40 credits, earned over their working taxes collected will be to pay only about 79 percent of scheduled. work on which you did not pay Social tax. Visit to learn more. Windfall Elimination Provision (WEP) In the future, We checked records to see whether you have earned if you receive a pension from employment in which do on current law. The law ualify for, you earn credits through work (3) estimated are you based credits to qualify for. If you haven t earned not pay Social taxes, such as some federal, state yet to qualify for any typeyou of benefit, can tcredit give you or local government four each year. 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13 Earnings Record Taxed Taxed Taxed Taxed Years You Social Taxed Medicare Taxed Years You Social Medicare Worked Earnings Earnings Years You Social Medicare Worked Earnings Earnings ,26 29,26 Worked973 Earnings Earnings ,992 30, ,72, ,969 32, , , ,043 35, ,07 3, ,5 36, ,982 3, ,676 36, ,386,72 5,386, ,694 37, ,484 39, ,93 2,49 6,93 2, ,937 40, ,577 8, , ,923 9,923 3, ,778 42, ,53 44, ,23 3,982,23 3, ,97 45, ,675 2, , ,908 3,908 5, ,055 44, ,549 44, ,955 4, ,486 6,93 6,486 6, ,0 45, ,833 7, ,33 45, ,577 8, ,275 44, ,07 9, ,923 9, ,234 44, ,346 20, Not yet recorded ,508,23 2,508, ,988 2,675 22,988 2, ,540 24,490 3,908 23,540 24,490 3, ,78 4,955 25,78 4, ,327 6,486 27,327 6, ,833 7,833 Total Social 989 and Medicare 9,07 taxes paid over 9,07 working career through the last year reported on the chart above: Estimated taxes paid for Social : Estimated taxes paid for Medicare: ,346 20,346 You paid: $6,279 You paid: $4,759 employers 99 paid: 2,508 $63,09 2,508 employers paid: $4, ,988 22,988 Note: Currently, 993 you and employer 23,540 each pay a ,540 percent Social tax on up to $8,500 of earnings and a.45* percent Medicare tax on all earnings. If you are self-employed, you pay the combined employee and employer amount, which is a 2.4 percent 994 Social tax 24,490 on up to $8,500 of 24,490 net earnings and a 2.9* percent Medicare tax on entire net earnings. *If you have 995 earned income of more 25,78 than $200,000 ($250,000 for 25,78 married couples filing jointly), you must pay 0.9 percent more in Medicare taxes ,327 27,327 Help Us Keep Earnings Record Accurate You, employer and Social share responsibility for the accuracy of earnings record. Since you began working, we recorded reported earnings under name and Social number. We have updated record each processing last year s earnings reports when Statement was prepared. complete earnings for last year will be shown on next year s Statement. Note: If you worked for more than one employer during any year, or if you had both earnings Pay close attention to Earnings Record, which details earnings subject to Social over the years. Because Social benefit is based on these numbers, it s important to check this record for accuracy. Some Facts About Social About Social and Medicare Social pays retirement, disability, family and survivors. Medicare, a separate program run by the Centers for Medicare & Medicaid Services, helps pay for inpatient hospital care, nursing care, doctors fees, drugs, and other medical services and supplies to people age 65 and older, as well as to people who have been receiving Social disability for two years or more. Medicare does not pay for long-term care, so you may want to consider options for private insurance. Social covered earnings qualify you for both programs. For more information about Medicare, visit or call (TTY if you are deaf or hard of hearing). Retirement If you were born before 938, full retirement age is 65. Because of a 983 change in the law, the full retirement age will increase gradually to 67 for people born in 960 and later. Some people retire before their full retirement age. You can retire as early as 62 and take at a reduced rate. If you work after full retirement age, you can receive higher because of additional earnings and credits for delayed retirement. Disability If you become disabled before full retirement age, you can receive disability after six months if you have: Extra Help with Medicare If you know someone who is on Medicare and has limited resources and income, Extra Help is available for prescription drug costs. The Extra Help can help pay the monthly premiums, annual deductibles and prescription co-payments. To learn more or to apply, visit or call (TTY ). Receive and still work... Receive and still work... You can work and still get retirement or survivors. If you re younger than full retirement age, there are limits on how much you can earn without affecting benefit amount. When you apply for, we ll tell you what the limits are and whether work would affect monthly. When you reach full retirement age, the earnings limits no longer apply. Before you decide to retire... Carefully consider the advantages and disadvantages of early retirement. longer If apply. you choose to receive before you reach full retirement age, monthly will be reduced. To help you decide the best time to retire, we offer a free publication, Before When you To decide Start Receiving to retire... Retirement Benefits (Publication No ), that identifies the many factors you should consider before applying. Most people can receive an estimate of their benefit based on their actual Social You can work and still get retirement or survivors. If you re younger than full retirement age, there are limits on how much you can earn without affecting benefit amount. When you apply for, we ll tell you what the limits are and whether work would affect monthly. When you reach full retirement age, the earnings limits no Carefully consider the advantages and disadvantages of early retirement. If you choose to receive before you reach full retirement age, monthly will be reduced. As we discussed, consider the advantages and disadvantages that working can have on monthly Social payout. WHAT SOURCES OF RETIREMENT INCOME DO YOU HAVE? It s never too late to take inventory of where retirement income is going to come from. financial professional can help you estimate how much retirement income you ll need and how much you ll have. Doing this now may give you the opportunity to help fill in any gaps or shortfalls. Social 3/6

14 why don t I receive a Social statement every year? To reduce costs, the Social Administration now mails Social statements to contributors every five years. However, statement is also available online. Go to socialsecurity.gov to create a secure user account and view statement today. WANDA WORKER 456 ANYWHERE AVENUE MAINTOWN, USA - payment would be about $,767 a month at full retirement age Social Statement Are you thinking about retirement? Are you ready for retirement? We have tools that can help you! Estimate future retirement at socialsecurity.gov/estimator Apply for retirement, spouse s, Medicare, or disability at socialsecurity.gov/applyfor And once you receive, manage at myaccount.socialsecurity.gov Social Statement tells you about how much you or family would receive in disability, survivor, or retirement. It also includes our record of lifetime earnings. Check out earnings history, and let us know right away if you find an error. This is important because we base on our record of lifetime earnings. Social are not intended to be only source of income when you retire. On average, Social will replace about To view Social Statement online anytime create a my Social account today! my Social myaccount.socialsecurity.gov 40 percent of annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably when you retire. To see Statement online anytime, create a my Social account at myaccount.socialsecurity.gov. Carolyn W. Colvin Acting Commissioner Follow the Social Administration at these social media sites. Go to socialsecurity.gov Click on my Social Click on Sign in or Create an Account Click on Create an Account Read and agree to the Terms of Service, then click Next Verify identity by providing personal information, such as name and Social number Secure identity by answering personal questions only you would know Create account by creating a username and password Congratulations! You now have an account 4/6 Social as of December 204

15 securing retirement Thinking above and beyond Social Not surprisingly, today s workers would like to retire without compromising their current lifestyle, and many are counting heavily on Social and company pensions to meet their retirement income needs. Yet, on average, Social provides only 4 of every 0 dollars of a retiree s income. Social is just one part of an overall plan for a secure retirement. financial professional can help you prepare for financial needs. Begin planning for future Conventional wisdom says you ll need as much as 70% to 80% of pre-retirement income, adjusted each year for inflation, to continue current lifestyle. There are many factors to consider when deciding how much more money you will need from sources other than Social to create retirement income. By taking these three steps, you may be better prepared for the future. Step : Review tax-advantaged investment accounts and company pension plans to see how much income you can expect to receive from these sources. Step 2: List other income sources you may have to help bridge the gap between Social and the income you ll actually need to last a lifetime in retirement. Step 3: Talk to financial professional and review Social and retirement plans. financial professional can use a variety of tools to develop a strategy that will help you build more assets and bridge income gap. See if a variable annuity fits into plan Ask financial professional about how a variable annuity may help provide retirement income certainty by creating guaranteed income that can last a lifetime. There are many types of variable annuity strategies that may: Help protect retirement income during market downturns Offer the opportunity for guaranteed income growth Provide tax deferral advantages Give you the flexibility to access account value if needed (subject to contract terms) financial professional can help you decide which variable annuity strategy is right for unique situation. ssa.gov as of January 206 Social 5/6

16 Withdrawals in excess of the income amount impact the value of a product or benefit and can also affect the certainty of the income. An excess withdrawal occurs when cumulative Lifetime Withdrawals exceed the income amount in an annuity year. If an excess withdrawal is taken, only the portion of the Lifetime Withdrawal that exceeds the remaining income amount for that year will proportionally and permanently reduce future guaranteed amounts. If an excess withdrawal reduces the account value to zero, no further amount would be payable and the contract terminates. Investors should consider the features of the contract and the underlying portfolios investment objectives, policies, management, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained from financial professional. Please read the prospectus carefully before investing. Issuing companies are located in Newark, NJ (main office). Variable annuities are distributed by Prudential Annuities Distributors, Inc., Shelton, CT. All are Prudential Financial companies and each is solely responsible for its own financial condition and contractual obligations. Prudential Annuities is a business of Prudential Financial, Inc. Annuity contracts contain exclusions, limitations, reductions of, and terms for keeping them in force. licensed financial professional can provide you with complete details. A variable annuity is a long-term investment designed for retirement purposes. Investment returns and the principal value of an investment will fluctuate so that an investor s units, when redeemed, may be worth more or less than the original investment. Withdrawals or surrenders may be subject to contingent deferred sales charges. All references to income certainty and guarantees, including the benefit payment obligations arising under the annuity contract guarantees, rider guarantees, optional, any fixed account crediting rates or annuity payout rates are backed by the claims-paying ability of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey. Those payments and the responsibility to make them are not the obligations of the third party broker/dealer from which this annuity is purchased or any of its affiliates. All guarantees, including optional, do not apply to the underlying investment options. This material should be regarded as educational information on Social and is not intended to provide specific advice. If you have questions regarding particular situation, you should contact legal or tax advisors. Because qualified retirement plans, IRAs and variable annuities offer a tax-deferral feature, you should carefully consider the other features,, risks, and costs associated with a variable annuity before purchasing one in either a qualified plan or an IRA. Before purchasing a variable annuity, you should take full advantage of 40(k) and other qualified plans. 206 Prudential Financial, Inc. and its related entities. Prudential Annuities, Prudential, the Prudential logo, the Rock symbol, and Bring Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide ORD Ed. 04/206 [REF042]