Social Security

 A Monthly Income Source

·       Social Security is an Annuity with Inflation Protection

 ·       Age 62 is the earliest to claim benefits

 ·       Taking at age 62 reduces your payout by 25% to 30%

 ·       The Greenspan Commission, enacted 1983, raised Full Retirement Age (FRA) beyond age 65 for those born after 1937. 

 Birth Year                             FRA

1943 - 1954                          66
1955                                         66 and 2 months
1956                                         66 and 4 months
1957                                         66 and 6 months
1958                                         66 and 8 months
1959                                         66 and 10 months
1960 and after                   67
 

 ·       Delaying adds 8% per year to your yearly payout.  Maximum delay to age 70 increases total to 130% of your FRA amount.  No benefit to delaying past age 70.

 ·       Married couples:  Higher Earning (HE) spouse collects 100% of their benefit.  Lower Earning spouse collects one of these two choices:

 ·       their benefit.

 ·       50% of HE spouse benefit.

 ·       After death of spouse, surviving spouse collects one benefit, whichever is largest.

 ·       After death of spouse a one time $255 payment for funeral expenses is available to the surviving spouse. 

 ·       It is possible to get a “Reset” on your Social Security.  You can stop receiving payments, pay back what you have received, and then wait to start again at a later date.  Reset is limited to first 12 months of receiving benefits. 

 ·       Retirement Specialists Incorporated (RSI) believes that maximizing your monthly payout is more important than maximizing your lifetime payout.

 ·       RSI Rule of Thumb:  Delay Social Security until you need to take it.  This maximizes your monthly amount and your spouse’s monthly amount.  Retirement benefits can be 76% higher at age 70 than at age 62!

 ·       Social Security features both an income tax and a penalty.  You avoid the penalty by not taking Social Security until after you quit working or until your FRA, whichever comes first.  RSI Rule of Thumb:  Don’t begin Social Security until you quit work. 

 ·       Social Security began spending more than it was receiving in 2012, five years earlier than U. S. Government projections!

 ·       Social Security is now drawing down the Trust Fund to make its payments.  The Trust Fund will be depleted in approximately 2028.

 ·       Federal law mandates a 25% cut in Social Security payments when the Trust Fund is depleted.  Will this law be suspended at the last moment or will everyone have their payments cut in approximately 13 years?

 ·       By printing paper money the U. S. Government could maintain Social Security payments but reduce their purchasing power.  Extreme example; a loss of purchasing power could mean your monthly Social Security check would only pay for your electric bill.