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Social Security - Options to help you maximize your benefits

Benefits wooden sign on desert background

Recently, Fidelity Investments (which acts as custodian for Mascoma Wealth Management clients and provides our trading platform) shared with us an informative presentation on Social Security.  This article provides many of the slides used in that presentation.  We believe this information can be beneficial to our clients approaching retirement or thinking about when to retire.  If you have questions, we encourage you to give us a call to continue the conversation.

SS eligibility and sustainability 

Source:  Social Security Administration

SS terms

Source:  Social Security Administration

Value of Waiting

This hypothetical example assumes that the person is not working in retirement. Sample benefit amounts are not exact due to rounding. They do not reflect annual cost-of-living adjustments or taxes. Had taxes been taken into account, the amounts would be lower. Benefit at full retirement age is assumed to be $2,000 per month.

SS breakeven

This hypothetical example assumes that the person is not working in retirement. Sample benefit amounts are not exact due to rounding. They do not reflect annual cost-of-living adjustments or taxes. Had taxes been taken into account, the amounts would be lower. Benefit at full retirement age is assumed to be $2,000 per month.

Longevity

Source: Social Security Administration. Figure assumes a person is in good health.

SS by the numbers

1. Social Security Administration, as of December 31, 2017.
2. Center for Retirement Research at Boston College analysis of Social Security Administration data, 2015.

 Take Benefits because they can

 Source: Social Security Administration.
1. Fidelity Advisor 2013 Survey of Investors at Retirement, July 2013. Conducted by Research Now on behalf of Fidelity Investments, this survey included 1,886 investors between the ages of 50 and 75 with investable assets of $100,000 or more.

ss and working

Source: Social Security Administration, 2018.

provisional income

Source: Social Security Administration, 2018.

Provisional income typically includes:

  • 50% of Social Security benefits
  • Income from municipal bonds
  • Wages
  • Business income
  • Interest, dividends, and capital gains
  • Traditional IRA distributions
  • Rental income

Provisional income may not include:

  • Tax-deferred build-up inside IRAs, 401(k)s, and annuities
  • Income from Roth IRAs
  • Non-taxable income from life insurance


spousal benefits

Source: Social Security Administration, 2017.

maximizing couples benefits strategy

Total includes spousal benefit of $10,800.
This hypothetical scenario depicts the differences in amounts that a retiring couple would receive, depending on when they started collecting Social Security benefits.

four opportunities

 

opportunity 1

Hypothetical example. The “suspending” spouse must have reached full retirement age.
Source: Social Security Administration (Policy RS 00615.250). 

opportunity 2

Hypothetical example.

opporutnity 3

This hypothetical assumes John's monthly benefit at ages 62, 66, and 70 is $1,500, $2,000, and $2,640, respectively.

opportunity 4

You should seek the advice of a legal or tax advisor or contact Social Security to assist with questions.
* Provision is subject to final instruction from the SSA.

r

filling income gap

* Subject to the claims-paying ability of the issuing insurance company.

next steps

 

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