Brought to You By: TRAINING For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Simplified Presented by: Damon La Tanzi

Brought to You By:

TRAINING

For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014

Social Security Simplified

Presented by:Damon La Tanzi

Vice President – Sales & MarketingDMI Marketing, Inc.

Brought to You By:

Introduction to TerminologyMost Common Abbreviations Used in Social Security Planning


Brought to You By:

FRA – Full Retirement AgeBased on Date of Birth – Age When You Receive 100% of SSI

Minimum & Maximum Ages Born After 1937 Minimum Age 62 Maximum Age 70

FRA - Full Retirement Age Born 1943-1954 FRA Age 66 See Chart at SSA.gov


Brought to You By:

COLA – Cost of Living AdjustmentUsed to Determine Increase in SSI – Set Each Year by CPI(W)


Brought to You By:

1975-2012Average COLA

4.1% Per Year

1990-2012Average COLA

2.7% Per Year



Brought to You By:



Brought to You By:

AIME – Average Indexed Monthly EarningsBased on Your Entire Work History

How to Calculate AIME Top 35 Working Years

Adjusted for Inflation Similar to COLA for SSI

AIME Helps Determine PIA Primary Insurance Amount 3 “Bend Points”?

90% - 32% - 15%


Brought to You By:

PIA – Primary Insurance AmountThe Basis for Determining Full Retirement Age Benefits

The PIA Formula Step 1 - AIME 3 “Bend Points” – 2013 Figures

90% of First $791+ 32% of $792-$4,768+ 15% Amount Over $4,768

Primary Insurance Amount


Brought to You By:

The PIA Formula Example AIME = $8,000

- $791 * 90% = $711.90- $3977 * 32% = $1272.64- $3232 * 15% = $484.80

PIA = $2,469.34


PIA – Primary Insurance AmountThe Basis for Determining Full Retirement Age Benefits

Brought to You By:

Longer Wait = More Benefits?

Full Retirement Age Benefit $2,000/mo. $24,000/yr.

Minimum Age – 62 Benefit $1,500/mo. $18,000/yr.

Maximum Age – 70 Benefit $2,640/mo. $31,680/yr.


Brought to You By:

Can I Work & Collect Benefits?

If your begin collecting benefits before your Full Retirement Age,the amount of “Earned Income” you can make without penalty is significantly reduced.

2013 NumbersBefore FRA (62-65)

Exempt Amount $15,120 $1 Reduction/$2 Income

During FRA (66) Exempt Amount $40,080 $1 Reduction/$3 Income Monthly Offset


Brought to You By:

Introduction to SSI TaxesWhen will Social Security Benefits Become Taxable?

Individual Filing• 0% of Benefits Taxable

• Less Than $25,000• 50% of Benefits Taxable

• Greater Than $25,000• Less Than $34,000

• 85% of Benefits Taxable• Greater Than $34,000

Married Filing Jointly• 0% of Benefits Taxable

• Less Than $32,000• 50% of Benefits Taxable

• Greater Than $32,000• Less Than $44,000

• 85% of Benefits Taxable• Greater Than $44,000


Brought to You By:

Social Security Filing StrategiesThere are 3 different ways to file for Social Security Benefits

No Special FilingNo unique strategies are

used to earn delayed retirement credits.

File & SuspendOne spouse files for benefits

and does not collect any benefit payments

File RestrictedOne spouse files for spousal benefits after the previous

spouse files

From these 3 strategies and the different filing age combinations, we get several additional filing strategies…


Brought to You By:

Both Spouses File for Benefits

In Social Security Explorer, you will see 8 different filing combinations as shown in the illustration above…

You Suspend Spouse Files

Spouse Suspends You File

You File Restricted Spouse Files

Spouse Files Restricted

You File

You SuspendSpouse FilesRestricted

Spouse SuspendsYou File Restricted

No Benefits at this Age


Social Security Filing StrategiesThere are 3 different ways to file for Social Security Benefits

Brought to You By:

Review of Switching StrategiesThe two most commonly used “Switching Strategies” are “File & Suspend” and “Filing a Restricted Application”

File & SuspendAt Full Retirement Age, one spouse files for benefits and immediately suspends

payments. This spouse receives Delayed Retirement Credits of 8% per

year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the

larger amount.

Restricted ApplicationAt Full Retirement Age, one spouse files

a restricted application and begins collecting benefits based on the other

spouse’s benefit amount. The first spouse must have already filed for

benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit.


Brought to You By:

Most Common Maximization StrategyBy combining the two strategies, both spouses are able to receive132% of their Full Retirement Age Benefit starting at age 70.

File & SuspendAt Full Retirement Age, one spouse files for benefits and immediately suspends

payments. This spouse receives Delayed Retirement Credits of 8% per

year until age 70 and will receive 132% of their Full Retirement Age benefit. All COLA adjustments will be based on the

larger amount.

Restricted ApplicationAt Full Retirement Age, one spouse files

a restricted application and begins collecting benefits based on the other

spouse’s benefit amount. The first spouse must have already filed for

benefits for the second to receive the 50% spousal benefit. At age 70, the second spouse collects their benefit.

COMBINE


Brought to You By:

How Does the Strategy Work?By combining the two strategies, both spouses are able to receive132% of their Full Retirement Age Benefit starting at age 70.


Today’s Example• Joe files and suspends at age 66

• Benefit grows at 8%/yr• Plus COLA at 3%/yr• Benefits start at age 70• Grows from $2000 $3247/mo.

• Deborah files restricted at age 66• Collects 50% spousal benefit• Her Benefit grows at 8%/yr• Plus COLA at 3%/yr• Grows from $1000 $1722/mo.

Brought to You By:

Social Security Explorer SoftwareIn the first appointment, we use the Social Security Explorer Software to create the initial report and show the client what is at stake.

$349 Annual Subscription How to Get a Copy for FREE!

Works on All Browsers Including iPad and Android Tablets

Start ASAP vs. Using Our

Recommended Strategy


Brought to You By:

The Sales ProcessUsing the Social Security Simplified System

SeminarOr

Direct Mail

1st AppointmentWalk client through the Social Security Explorer

Report Process

2nd AppointmentPrepare Supplemental

“Simplified Report” and discuss solutions to Income

Gaps

GENERATE THE LEAD

MAXIMIZESSI BENEFITS

FILL THE INCOME GAPS


Brought to You By:

The DOs & DON’Ts of SSI PlanningOur goal is to provide the Maximization Report, not toact as an intermediary between the client and the SSA

WHAT NOT TO DO• Assist client in the filing process or fill

out paperwork for the client when filing for benefits

• Call Social Security Administration with the client or on the client’s behalf

• Discuss or illustrate specific tax situations with clients unless you have proper licensing

WHAT TO DO• Educate yourself on Social Security

Strategies for Married Couples• Visit SSA.gov to learn about different

filing strategies and how to file• Purchase Social Security Explorer and

become familiar with the interface• Learn basic terminology and most

commonly used acronyms• Attend weekly training webinars


Brought to You By:

1st Appt: Fact Find

Prospect must bring: SS Statements Financial Statements

Complete Client Worksheet Answer general questions Prepare them for 2nd appt


Brought to You By:

Before 2nd appt: Social Security Explorer

Joe – Age 63 Deborah – Age 61 FILE ASAP VS. USING OUR RECOMMENDATION


Brought to You By:


File ASAP

$1,134,036Recommended

$1,570,768


Before 2nd appt: Social Security Explorer

Brought to You By:

Creating the “Simplified Report”We use the benefit values from the Social Security Explorer Report

Information Needed:• Agent Name(s)• Spouse Names• Spouse Ages• Spouse FRA Benefit• Investment Rate (0%)• COLA Rate (3%)• Desired Monthly Income• Immediate Amount• Recommended Strategy• Estimated Benefits


Brought to You By:

2nd Appt: SSE & Income Gap


Recommended

$1,570,768


Brought to You By:

Joe – Age 63 Deborah – Age 61

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000


2nd Appt: SSE & Income Gap

Brought to You By:

2nd Appt: Teeing up the Annuity SaleUsing the Simplified Report to Make Lifetime Income Annuity Sales


Let’s Take a Closer Look…• Years 1-7In order to maximize Social Security, the client will need to use other assets or continue to work. This will start the conversation about existing retirement accounts, such as 401(k), IRA, Pension and brokerage accounts.


Brought to You By:

Let’s Take a Closer Look…• Years 1-7In order to maximize Social Security, the client will need to use other assets or continue to work. This will start the conversation about existing retirement accounts, such as 401(k), IRA, Pension and brokerage accounts.• Years 7-22While both spouses are still living, there will be an income gap of approximately 20-27%. To fill this gap, we can use an Indexed Annuity with a lifetime benefit rider that defers for 7 years and provides a minimum of $20,000 in lifetime income.


2nd Appt: Teeing up the Annuity SaleUsing the Simplified Report to Make Lifetime Income Annuity Sales


Brought to You By:


Using Joe’s Age, we will need approximately $213,000 to

guarantee $20,000/yr. income starting in 8 years

3rd Appt: Making the Annuity SaleUsing the Simplified Report to Make Lifetime Income Annuity Sales


Brought to You By:

3rd Appt: The Life Sale

Joe – Age 63 Deborah – Age 61 Let’s Take a Closer Look…• Years 23-29When the first spouse dies, the income gap increases significantly due to a reduction in Social Security Income. Option 1: Insure 100%Buying a no lapse policy today for the full income gap at the death of the first spouse.

Joe – Age 63 $415,000 $830/mo.

Option 2: Insure 50%Buying a no lapse policy today that covers half of the income gap at the death of the first spouse.

Joe – Age 63 $207,500 $430/mo.


Using the Simplified Report to Make No Lapse Life Sales

Brought to You By:

Call DMI Marketing at

1-800-322-6342


Documents

Brought to You By: TRAINING For agent use only. Terms and Conditions Apply. © Copyright –DMI 2014 Social Security Simplified Presented by: Damon La Tanzi