Horsesmouth



Savvy Social Security Planning for Women

Slide #1

Savvy Social Security Planning for Women

Script

Welcome everyone. I'm glad you're here. Today we're going to talk about Savvy Social Security Planning for Women. Social Security is very important to women. Women represent 57 percent of all Social Security beneficiaries age 62 and older, and about 68 percent of all beneficiaries age 85 and older. Whether you are married or single, divorced or widowed, there are certain strategies you can use to give you more benefits over your lifetime. We're going to talk about some of those strategies today.

Slide #2

How Confident Are You?

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How confident are you in your ability to retire comfortably? This question was recently posed to 3,600 men and women who are still working. Not surprisingly, women are less confident in their ability to retire comfortably. 40 percent said they were either not too confident or not at all confident, compared to 33 percent of men.

Slide #3

Retirement Confidence

Script

Another survey asked about some of the financial aspects of retirement.

 

Will you have enough money to live comfortably throughout your retirement years? Only 11% of unmarried women said yes.

 

OK. Forget living comfortably. Will you have enough to meet basic

expenses during retirement? Just 23% of unmarried women said yes.

 

Are you doing a good job of preparing financially for retirement? Only 15% of unmarried women said yes.

 

Remember that many of these unmarried women were once married. Whether through divorce or widowhood, many married women wind up single at the end of their life.

Slide #4

Quote

Script

Women in general have greater concerns about their retirement security yet do less than needed to plan for adequately addressing those concerns.

This quote came from a study by Metlife on Women, Retirement, and the Extra-Long Life. Unfortunately, it's true in too many cases. But at least you're here. Whether this is a first step for you, or you're one of the savvy ones who has been planning for retirement all along, gathering information about Social Security and other sources of income in retirement is what you need to do to take care of yourself financially.

Slide #5

Women's Realities

Script

Here are your realities. In general, women have lower lifetime earnings, lower pensions, and longer lives than men. Women have made a lot of strides in the work world, but there's still a pay gap. On average, women earn 77 cents for every dollar earned by men. This translates to lower retirement savings, lower pensions and lower Social Security benefits. Yet women tend to live longer than men – so you need these resources even more!

Slide #6

The Value of Working Longer

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That gender pay gap means that a full-time working woman will earn $443,360 less than her male counterpart over 40 years, according to a recent study by the National Women's Law Center. Translated another way, a woman needs to work 52 years compared to a man's 40 years just to break even with him.

Everybody's situation is different, of course, but I just want to mention the value of working a few more years. By not being in such a rush to retire, you may be able to pay down debt, add to your retirement savings, reduce the number of years that you have to draw from assets in retirement, and raise your Social Security benefit. It's just a thought, if that option is still available to you.

Slide #7

The Value of Social Security

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OK. Now let's talk about the subject you came here to learn about. The value of Social Security and how you may be able to increase your lifetime benefits.

Slide #8

Social Security Offers Income You Can't Outlive

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Women love Social Security. Here's one reason why. It offers income you can't outlive. Ida Mae Fuller, the first recipient of a monthly Social Security check, lived to age 100. She received Social Security right up until the month she died. If your monthly Social Security benefit is $2,000 and you live 10 more years you'll receive a total of a little over $300,000 in lifetime benefits. If you live 30 more years you'll receive over $1 million. Hard to believe, isn't it? Because Social Security provides inflation-adjusted income for life, the best way to get the most out of the Social Security system is to live a really, really long time.

Slide #9

Social Security Offers Annual Inflation Adjustments

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The previous slide showed the total benefits you might receive depending on how long you live. This slide shows how your annual income could grow with cost-of-living adjustments. The Social Security trustees project annual cost-of-living adjustments averaging 2.7%. So if your benefit is $2,000 and annual COLAS average 2.7%, your monthly income in 10 years will be $2,611. In 30 years it'll be $4,448. Again, when it comes to getting the most out of Social Security, it pays to live a very long life.

Slide #10

Social Security Rules & Strategies

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OK. Now for the fun stuff. Social Security rules and strategies. These can be somewhat complex depending on your marital status. But it's definitely worth understanding the different rules and strategies because it's what can help you get more out of the system.

Slide #11

Questions to Ask

Script

Let's start with a series of questions. The first question is, do you qualify for Social Security benefits on your own work record? You do, if you paid into Social Security for at least 10 years sometime during your lifetime. It doesn't matter if those 10 years occurred all in one stretch early in your life or later in life, or if they were broken up. You just need 10 years of fairly minimal earnings.

Slide #12

Questions to Ask

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Next question, are you currently married? And has your husband started receiving his Social Security benefit? It will become clear later why we are asking these questions. You and/or your husband may be able to receive spousal benefits. We'll explain the strategies.

Slide #13

Questions to Ask

Script

Regardless of whether or not you are currently married, have you been married before? Are there any former husbands, dead or alive, lurking out there? Believe it or not, you may be able to receive Social Security benefits based on a former husband's work record.

If your previous marriage ended in divorce, if it lasted over 10 years, and if you are currently unmarried, you may qualify for divorced-spouse benefits. If you're divorced and your ex-husband is deceased, you may qualify for divorced-spouse survivor benefits. We'll talk more about this later.

Even if you're currently married you could receive survivor benefits based on a former husband's work record as long as your current marriage took place after age 60.

Don't try to memorize all these rules right now. We'll explain them in more detail during the presentation.

Slide #14

Depending on Your Answers

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Depending on your answers to the previous questions, you could be entitled to one or more of the following: Retirement benefits, spousal benefits, divorced-spouse benefits, or survivor benefits. How you coordinate all these benefits is crucial in determining your overall Social Security income.

Slide #15

Definitions

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Let's pause for just a moment to define some Social Security terms.

Slide #16

Full Retirement Age (FRA)

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The first concept to understand is full retirement age. This is the age at which you may claim full, unreduced Social Security benefits. A lot of people think of age 62 when they think of Social Security, but if you claim your Social Security benefit at 62, it will be permanently reduced by 25% or more. To get your full benefit you must wait until full retirement age to claim it. If you were born between 1943 and 1954, your full retirement age is 66. If you were born in 1960 or later, your full retirement age is 67.

Slide #17

Primary Insurance Amount (PIA)

Script

The next important concept to understand is your primary insurance amount. We won't go into the benefit formula today, but basically your benefit is based on your work history. The system uses your highest 35 years of earnings to calculate your benefit. The higher those earnings are, up to the annual Social Security taxable maximum, the higher your benefit will be. This is one reason we encourage women to work a little longer. If you've taken time out of the work force to raise children or go back to school, there may be some zeroes on your earnings record. If you keep working, you may be able to replace some of those zeroes with higher earnings and raise your benefit.

To find your primary insurance amount, just look at your annual Social Security statement. It's your benefit amount at your full retirement age. In this example the benefit amount at full retirement age is $2,029 per month. This is the primary insurance amount, or PIA.

Slide #18

Retirement Benefits

Script

Now let's talk about retirement benefits. If you worked for at least 10 years in a job that paid into Social Security, you will be entitled to a retirement benefit.

Slide #19

How to Estimate Your Social Security Retirement Benefit

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If you are over 60, the Social Security Administration sends you an annual statement, three months before your birthday, showing the amount of benefits you may be entitled to when you retire. If you are under 60 or for any other reason want to access your statement online, you can go to mystatement. You will need to answer a series of questions relating to your credit history. These are for security reasons. Once you answer the questions and set up an account, you'll be able to access your statement at any time in the future. By the way, if you are already receiving Social Security, there is no statement for you. The Social Security Administration stops generating statements for people who are already receiving some form of Social Security benefits.

Other ways to estimate your Social Security retirement benefit are to go to and click on "Estimate Your Retirement Benefits." This method taps into your work history and gives you an estimate similar to what you would see on your statement.

Another way is to use one of the calculators on the Social Security website. Go to planners/benefitcalculators.htm. There are several calculators offered there, from quick and easy to more detailed.

Slide #20

Your Retirement Benefit Will Depend on When You Claim It

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We talked about your primary insurance amount, or PIA, which is the amount of your benefit if you apply for Social Security at full retirement age. But what if you apply at a different age?

Slide #21

What if You Apply Before FRA?

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If you apply for your Social Security retirement benefit before full retirement age, you will receive a percentage of your PIA. If your full retirement age is 66 and you claim at 62, you'll receive 75% of your PIA. So if your PIA is $2,000, your permanent benefit will be $1,500. The difference between $1,500 and $2,000 may not seem like very much now, but over time claiming early can make a huge difference in the amount of total benefits you receive as well as the amount of income you receive each month.

Slide #22

What if You Apply After FRA?

Script

Conversely, if you apply for Social Security after full retirement age, your benefit will go up by 8% for each year you delay. So if your full retirement age is 66 and you apply at 67, your benefit will be 108% of your PIA. At 68 it will be 116%, and so on up to age 70. So if your PIA is $2,000 and you wait until age 70 to apply, your permanent benefit will be $2,640.

Slide #23

Why Delay Benefits? Bigger checks to start

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Here are all the options. Let's say you're 62 now and your PIA is $2,000. If you apply now, your permanent benefit will be $1,500 per month. By age 70, with annual cost-of-living adjustments, it'll be up to about $1,856. Or, you could delay applying until age 70. At that time your PIA will have grown with the 8% annual delayed credits and the annual cost of living adjustments. So even though your statement might show your age-70 benefit to be $2,000, by the time you get to age 70 eight years from now, you might actually receive $3,267 per month. With COLAs, the disparity between the early claiming amount of $1,500 and the later-claiming amount of $2,640 grows wider over time.

Slide #24

Why Delay Benefits? More income later on

Script

And here we see how wide the disparity has grown. When you're 85 years old, your monthly income will be $2,768 if you apply for Social Security at age 62, or $4,872 if you apply at 70. This can make a huge difference in your standard of living! These amounts in the third column may seem high to you now, but they won't seem high when a loaf of bread costs $15. Keep in mind that these numbers are based on annual 2.7% inflation adjustments. The actual inflation adjustments could turn out to be different.

Slide #25

When To Apply for Social Security Key Points To Remember

Script

The "when to apply" question is very complex and really requires a customized analysis. But here are a few points to remember.

 

If you apply early, your benefit starts out at some fraction of your PIA -- and remains at that percentage for the rest of your life. Your benefit amount is locked in at the time you apply, and only goes up with annual COLAs.

 

COLAs magnify the impact of early or delayed retirement because the annual cost-of-living adjustment is applied to either the lower or higher amount. This causes the disparity to increase with each passing year.

 

The "when to apply" question impacts survivor benefits as well. In fact, if your husband earned more than you did so that his PIA is higher than yours, it is even more important for him to delay filing. This will increase your survivor benefit. If he dies first, his higher benefit will transfer over to you. So you want to do whatever it takes to maximize that survivor benefit. The way to do that is to have him apply for his benefit at age 70. We'll talk more about this in a few minutes.

Slide #26

Reasons not to file before FRA

Script

Getting stuck with a reduced benefit is not the only reason not to file for Social Security before full retirement age. Another reason is that if you are still working, some or all of your benefit may be withheld due to the earnings test. $1 in benefits will be withheld for every $2 you earn over $15,720 in 2016. Now, this is not a reason not to keep working. You're going to need those extra earnings both now and in retirement, if you're managing to save some of your income. But it is a reason not to apply for Social Security before your full retirement age. After you turn full retirement age, there is no earnings test. So you can receive your full Social Security benefit and earn as much as you want from working without any benefits being withheld.

Another reason not to file for Social Security before full retirement age is that you might not be able to take advantage of some of the savvy spousal strategies which we're going to talk about next.

Slide #27

Spousal Benefits

Script

OK. Now let's talk about spousal benefits. When Social Security was first instituted in 1935, most women didn't work. So the system allows for spousal benefits to be paid where a woman can draw Social Security off her husband's work record. Now, of course, most women qualify for a retirement benefit on their own work record. But you still may be able to take advantage of spousal benefits. And because Social Security is gender-neutral, your husband may be able to take advantage of spousal benefits too!

Slide #28

Spousal benefit = 50% of your husband’s PIA if you apply at your full retirement age.

Script

Let's start with a simple example. Jack and Jill are married. Jack's PIA is $2,400. Jill never worked so she doesn't qualify for Social Security on her own work record. After Jack files for his benefit, Jill can file for her spousal benefit. The amount will be 50% of his PIA if she files for it at her full retirement age. If she files early, at 62, it will be 35% of his PIA.

Slide #29

Coordinating Benefits

File before FRA

Script

Now let's talk about how to coordinate your own retirement benefit and your spousal benefit. There are some rules you have to follow here. By knowing the rules you can make them work to your advantage.

First, if you file for Social Security before full retirement age, you will receive your own reduced benefit first. If your PIA is less than 50% of your husband's PIA, you may also receive a spousal benefit, providing your husband has filed for his benefit. If your PIA is more than 50% of your husband's PIA, you will not receive a spousal benefit.

Slide #30

Example

Script

Here's an example. Let's say Jack's PIA is $2,400 and Jill's PIA is $800. Jill files for Social Security at 62. Before looking at any spousal benefits, she will be paid her own benefit first. It will be 75% of her $800 PIA, or $600.

Let's say Jack is four years older and has already filed for his benefit. This makes Jill eligible for a spousal benefit. Let's see how much it will be. To calculate the spousal add-on they will subtract her PIA from one-half of his PIA. So that's $1,200 minus $800, which equals $400. Then that amount will also be reduced for early claiming. The $400 will be multiplied by .70 to get $280.

Adding together the $600 reduced retirement benefit and the $280 reduced spousal add-on, Jill will wind up with a total benefit of $880.

Note that this is less than 50% of Jack's PIA. That's because Jill filed early.

Slide #31

Coordinating Benefits

File after FRA

Script

Now let's talk about coordinating spousal benefits if you file at FRA or later. This is where you can take advantage of some interesting rules. If you file after FRA you can restrict your application to your spousal benefit and receive a spousal benefit for four years while your own retirement benefit builds 8% annual delayed credits.

The ability to file a restricted application for your spousal benefit while your own benefit builds delayed credits is a very good deal. So good, in fact, that Congress called it a loophole and decided to phase it out. If you were 62 or older at the end of 2015, you may still file a restricted application for your spousal benefit when you turn 66. If this describes you, please ask us how you can take advantage of this strategy while it is still available.

Slide #32

Savvy Spousal Strategy

Script

Here's an example of a savvy spousal strategy. File for your spousal benefit at 66 and then switch to your maximum retirement benefit at 70.

Let's say Jack's PIA is $2,400 and Jill's PIA is $2,000. When Jill turns 66, she files a restricted application for her spousal benefit and receives $1,200 per month from age 66 to 70. When she turns 70 she switches to her higher retirement benefit of $2,640, which has increased by 8% per year while she was receiving the spousal benefit. This is becoming a very popular strategy and a lot of couples are taking advantage of it. Your numbers will be different from these, of course, so we can show you how it would work in your case.

Please note the following alerts. Jill cannot file a restricted application for spousal benefits before full retirement age. As I mentioned earlier, if she files for Social Security before full retirement age, she will be paid her own benefit first, and it will be reduced. The whole idea here is to delay your own benefit so it will earn those 8% annual delayed credits.

Jack must have filed for his benefit. This is a requirement for spousal benefits.

And I know what you may be thinking. Can Jack do this too? Can Jack and Jill each claim a spousal benefit off each other while their own benefits are growing to age 70? The answer is no. Only one spouse can take advantage of the spousal benefit. The key is deciding which of you should claim the spousal benefit. We have some analytical tools that can help you decide.

And, as I mentioned, this strategy is being phased out. You must be 62 or older at the end of 2015 – that means you were born before 1954 – to take advantage of this strategy.

Slide #33

Divorced-Spouse Benefits

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Now we come to divorced-spouse benefits. If you were married over 10 years to the same husband and are currently unmarried, pay attention.

Slide #34

Divorced-spouse benefit same as spousal benefit if…

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Here are the rules. If your marriage lasted at least 10 years…if you are currently unmarried…and if your ex-husband is at least 62, you may be entitled to a divorced-spouse benefit. If the divorce occurred more than 2 years ago, he does not need to have filed for his own benefit. He only needs to be 62.

Slide #35

Example

Script

Here's an example. Dick and Dora are divorced. They were married more than 10 years. Dora is 62 or older and currently unmarried. Dick's PIA is $2,400. He is over 62. Dora files for her divorced-spouse benefit at her full retirement age and starts receiving 50% of Dick's PIA, or $1,200.

Hard to believe, isn't it? But it's true. And Dick will not be notified that Dora has filed for benefits on his record. Dick's own benefit will not be affected. His current wife's spousal benefit will not be affected. And Dick's other ex-wives' divorced-spouse benefits will not be affected. If he has three ex-wives, and if he was married to each one for 10 years, all three ex-wives may receive full divorced-spouse benefits off Dick's record. And his current wife can receive her spousal benefit as well. The Social Security framers probably didn't think serial marriages would one day become fairly common when they developed these rules, but here we are, and we can take advantage of them.

Slide #36

Savvy Divorced-Spouse Strategy

Script

The savvy divorced-spouse strategy is just like the savvy spousal strategy with a couple of small differences. When you turn full retirement age you file a restricted application for your divorced-spouse benefit. When you turn 70 you switch to your maximum retirement benefit. Unfortunately, this strategy is being phased out and is only available to you if you had turned 62 by the end of 2016. Let me just emphasize, if you were 62 or older at the end of 2015, you are grandfathered for this strategy, which is an excellent way to increase your benefits. That’s why the lawmakers took it away. That’s why you want to take advantage of it if you can.

 

Here's an example. Dick's PIA is $2,400. Dora's PIA is $2,000. When Dora turns 66 she files a restricted application for her divorced-spouse benefit and receives $1,200 per month from age 66 to 70.

 

When Dora turns 70, she switches to her higher retirement benefit of $2,640 – which will probably be higher now because of COLAs.

 

As with the savvy spousal strategy, Dora must have been 62 or older by the end of 2015 – that is, she must have been born before 1954. She cannot do this before full retirement age. Remember, if she files for Social Security before full retirement age she will be paid her own benefit. And it will be permanently reduced. She may not restrict her application to her spousal benefit until she turns full retirement age.

 

Here are the differences. Dick has to be at least 62, but he does not need to have filed for his benefit if the divorce occurred over two years ago.

 

And, get this, Dick can also file for a divorced-spouse benefit on Dora's record. The idea here is that divorced spouses can't control whether the other spouse will or won't file, so that's just not part of the rule for receiving divorced-spouse benefits. Your ex-husband could be receiving a divorced-spouse benefit based on your record and you would never even know about it.

Slide #37

Survivor Benefits

Script

OK. Now let's talk about survivor benefits. You probably can't even imagine this now, but if you're married – or if you're divorced – your husband or your ex-husband might die before you do. Odds are he will, since women on average live longer than men. So you might at some point in your life become eligible for a survivor benefit. If that survivor benefit is higher than the benefit you are receiving at the time of your husband's or ex-husband's death, you can switch to the higher benefit. So even though it may be a long way off, you need to understand how survivor benefits work, because certain decisions made now can affect the amount of that benefit.

Slide #38

Amount of survivor benefit depends on two things

Script

Now, I want you to follow this carefully because the amount of your survivor benefit can vary greatly. It depends on two things. The first factor is when your deceased spouse originally claimed his benefit. This is called the "original" benefit. The second factor is when you claim that benefit. This is called the "actual" benefit. These two events are usually separated in time. For example, your husband could claim his Social Security benefit at 62 and then live to be 80 or 90 years old. You won't claim the survivor benefit until he dies, 20 or 30 years in the future. But the fact that he took his benefit at 62 means it will be much lower than if he had taken it at 70. Husbands often don't think about this when they are 62 and deciding when to apply for Social Security.

Slide #39

“Original” survivor benefit based on when worker claimed his benefit

Script

In this example, Jack's PIA is $2,400 and he dies at age 70 or later. The original survivor benefit will be $3,168 if he had claimed his Social Security benefit at 70. Or it will be just $1,980 if he had claimed it at 62. Let me ask you this: do you think Jill would rather have a survivor benefit of $3,168 or $1,980? Unless she's a crazy woman, she'd opt for the $3,168. What does she need to do to make this happen? She needs to get to Jack before he turns 62 and tell him to file for his Social Security benefit at 70, not 62. This is why we say that women should be the Social Security decision makers for the family. The age at which Jack files for his benefit will directly affect Jill's survivor benefit, so she's the one who should be making that decision.

Slide #40

“Actual” survivor benefit based on when widow claims benefit

Script

Now we get to Jill's actual benefit. We've already seen that the original benefit could be anywhere from $1,980 to $3,168 depending on when Jack filed for his benefit. Now let's say that Jack has died and Jill is wondering when she should apply for her survivor benefit.

 

If she is over 60, she can apply at any time. In fact, if she goes to her Social Security office and tells them that Jack has died, they will probably encourage her to go ahead and apply for her survivor benefit right then. Social Security people are in the business of helping people get all the benefits they are entitled to right now. But from a long-term perspective this may not be the best move. The amount you start with is the amount you will stick with throughout your life, so it pays to start with the highest amount possible.

 

As we can see on this table, if Jill applies for her survivor benefit at age 60, she will get a fraction of the original amount.

 

We can also see that if Jack had applied for his benefit at 62, Jill will get a much smaller survivor benefit, regardless of when she claims it.

 

As you can see, there is a huge disparity in these benefit amounts – from a low of $1,716 to a high of $3,168 depending on the decisions they make. These decisions will determine Jill's standard of living later in life.

Slide #41

When survivor benefits can be claimed

Script

Survivor benefits can be claimed as early as age 60, or 50 if you are disabled. But remember that if you claim at 60, the amount will be reduced. So young widows shouldn't automatically file for their survivor benefit as soon as they turn 60. You need to analyze all of your Social Security claiming options before deciding when to file.

To qualify for a survivor benefit you must have been married to the person who died. Living together doesn't count. If he died during the marriage, you only need to have been married for 9 months. If he died after you divorced, that marriage must have lasted at least 10 years. By the way, same-sex couples can now get Social Security benefits if they are or were legally married and live in a state that recognizes gay marriage at the time of application.

Slide #42

You can receive the higher of your survivor benefit or your retirement benefit. Not both.

Script

When planning ahead for when you might be on your own, remember that you can receive the higher of your survivor benefit or your retirement benefit, but not both. So if Jack is receiving $3,168 and Jill is receiving her spousal benefit of $1,200 – let's say she doesn't qualify for Social Security on her own work record – she can jump up to Jack's benefit of $3,168 after he dies. But her $1,200 benefit will stop. Jill should plan ahead for this loss of income. We can help you with that.

Slide #43

Divorced-spouse survivor benefits same as survivor benefits if:

Script

If your ex-husband dies, and if you are either unmarried or you're married and the marriage took place after age 60, you may qualify for a divorced-spouse survivor benefit. A lot of women won't think of this, especially if they were married and divorced many years ago.

For example, Sam and Sue were married from 1970 to 1985. Sam died in 1995. Sue has not remarried. As soon as she turns 60 she will become eligible for a divorced-spouse survivor benefit. Remember, though, that if she starts it at 60 it will be reduced, so she might want to wait until she turns 66.

Slide #44

If you think you might outlive your husband or ex-husband:

Script

Just to summarize what we've been talking about. If you think you might outlive your husband or ex-husband – and odds are you will – you want to encourage your husband to wait until age 70 to start his Social Security benefit. Then you want to claim your survivor benefit at your full retirement age or later. Hopefully you will be well over full retirement age when your husband dies. But just keep this bit of information in mind.

And then you want to coordinate your survivor benefit with your own retirement benefit.

Slide #45

Coordinating survivor benefits and retirement benefits

Script

Now let's talk about how to coordinate survivor benefits and retirement benefits. Remember, you never know when you might become eligible for a survivor benefit, so it is worth tucking this information away for when you might need it.

Slide #46

What if you qualify for a retirement benefit and a survivor benefit?

Script

What if you qualify for both a retirement benefit and a survivor benefit? This will be the case with most of you. Now, if you and your husband are well over 70 when he dies, it will be straightforward matter of taking the higher benefit. You'll either switch to your husband's benefit and yours will stop, or his will stop and you'll keep receiving your own benefit.

What I'm about to talk about now is if you are under age 70 and qualify for survivor benefits now, either because your husband has died, or your ex-husband has died and you were married over 10 years. And you also qualify for Social Security benefits on your own work record.

What you can do here is switch from one benefit to another. But you have to be strategic about it. You could start your own benefit at 62 and switch to your survivor benefit at 66. Or, you could start your survivor benefit at 60 and switch to your own benefit at 70. Which of these two strategies you should do will depend on the respective amounts. What you want to do is take the higher benefit last. This will be your permanent benefit which you will receive into your old age, so you want to maximize it as much as possible. If you are in this situation we can help you analyze your claiming options.

Slide #47

Example: If survivor benefit is higher than retirement benefit

Script

If the survivor benefit is higher than the retirement benefit, you'll want to take the retirement benefit at 62 and switch to the survivor benefit at 66.

So in this example Linda would start her own benefit of $750 at 62 and then switch to the full survivor benefit of $2,200 at 66.

Slide #48

Example: If survivor benefit is lower than retirement benefit:

Script

Conversely, if the survivor benefit is lower than the retirement benefit, you'll want to take the survivor benefit at 60, or as soon as you become eligible for it, and switch to your retirement benefit at 70.

In this case Dora has a high PIA. Her survivor benefit is $1,800, which is less than her own benefit. So she claims her survivor benefit at 60 and receives the reduced amount of $1,287 from age 60 to 70. When she's 70 she switches to her maximum retirement benefit of $2,640.

Slide #49

Social Security and Remarriage

Script

If you're divorced or widowed and thinking about remarrying, keep these rules in mind.

If you remarry at any age, you can't receive divorced-spouse benefits. So if you're already receiving divorced-spouse benefits and thinking about remarrying, understand that your divorced-spouse benefit will stop. However, you may be able to get spousal benefits based on your new husband's record.

If you remarry before age 60 you can't get survivor benefits or divorced-spouse survivor benefits.

If you remarry after age 60, you can still get survivor benefits or divorced-spouse survivor benefits.

I know the rules are hard to keep straight. Don't try to memorize them. If you have questions, you can always ask us or call the Social Security Administration.

Slide #50

Summary of survivor planning: husband or ex-husband still living

Script

OK. Here's a summary of survivor planning if your husband or ex-husband is still living.

If you're married, encourage your husband to delay his benefit to age 70.

As for your own benefit, consider your husband's life expectancy. If your husband has some health problems and may have a short life expectancy, you could go ahead and claim an early benefit on your own record because you'll be switching to your survivor benefit at some point.

On the other hand, if your husband is in good health and has a long life expectancy, you should maximize your own benefit by delaying it to age 70 because you'll be receiving it for many years before switching to the survivor benefit. This will maximize your income to you as a couple while you both are alive.

Slide #51

Summary of survivor planning: husband or ex-husband deceased

Script

If your husband or ex-husband is already deceased, do what we talked about earlier. Compare your own benefit to your survivor benefit and take the higher benefit last. To preserve your survivor benefit, do not remarry before age 60, no matter how much you love the guy. Just kidding. Do what you want, just remember that if you remarry before age 60 any survivor benefits you might be entitled to from a previous husband's record will not be available to you unless the remarriage ends.

Slide #52

Advice for Women by Marital Status

Script

OK. Here is a summary of strategies depending on your marital status.

If you are currently married, coordinate your benefits with your husband. To optimize your benefits, one or both of you would delay the start of benefits to age 70 in order to earn the maximum 8% annual delayed credits. One of you can receive a spousal benefit from age 66 to 70, providing you had turned 62 by the end of 2015.

 

If you are divorced, consider maximizing your benefit by delaying it to age 70. Receive your divorced-spouse benefit from age 66 to 70. Again, you must have turned 62 by the end of 2015.

 

If you are widowed, coordinate your retirement and survivor benefits. Take the higher benefit last.

If you've never been married, you're on your own with no help from spousal benefits. Consider maximizing your own benefit by working as long as possible and applying for Social Security at age 70.

Regardless of your current marital status, if you have a former husband who's deceased, consider that survivor benefit as a possible resource as long as you did not remarry before age 60.

I know this is a lot to remember. If nothing else, I hope I have opened your eyes to some of the possibilities with Social Security. You may be entitled to more benefits than you realized. For help with your individual situation, you can either make an appointment to talk to us, or call the Social Security Administration. Just be aware that Social Security workers don't always take into consideration your longer-term financial plan. They often recommend the strategy that will give you the highest benefit right now. That isn't always what you want.

Slide #53

Planning for the Extra-Long Life

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As we wrap up, consider this. You could live to age 95. Or 100. It's not so far-fetched today. Savvy women are arranging their financial affairs to keep the income flowing just in case they do live to age 95.

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Planning for the Extra-Long Life

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Social Security is one of your best income sources because it provides inflation-adjusted income for as long as you live.

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Planning for the Extra-Long Life

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The decisions you make in your 60s will determine the amount of income you have in your 70s, 80s, and 90s. The difference between early and late claiming will grow as annual cost-of-living adjustments cause the higher amount to grow faster than the lower amount.

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Planning for the Extra-Long Life

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Delaying the start of benefits will give you more income later in life.

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Planning for the Extra-Long Life

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Coordinating spousal and survivor benefits may give you extra income while you delay your main benefit.

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Planning for the Extra-Long Life

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But Social Security decisions should not be made in isolation. Social Security alone is not enough income for most people. So you should make your Social Security decisions within the context of your overall retirement income plan.

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Thank you!

Script

Thank you so much for your kind attention.

[Take Q&A]

[Invite attendees to make an appointment for a customized analysis]

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