Social Security – You don’t have to claim when you retire

You don’t have to claim when you retire.

Retiring and claiming are two different things. So if you have enough savings when you retire, you have two options.

– Start collecting right away. That’s what most people do.

– Delay and, while you wait, use a portion of your savings to live on. This option will draw down your savings more quickly, but increase the inflation-proof Social Security benefit you’ll get each month for the rest of your life.

Should you delay or claim right away?

No one wants to draw down all their savings. Savings are valuable as a reserve, can be invested in high-yielding assets, or left as an inheritance. But drawing an income out of your savings, over an extended period of time in retirement, can be tricky. So it could make sense to use some of your assets to live on and delay claiming Social Security.

– If you need to assure you and your spouse a higher basic income for the rest of you lives.

– If you will still have enough savings for “rainy day” emergencies.

© 2009, by Trustees of Boston College, Center for Retirement Research


Does not represent the Social Security Administration.

Social Security – More Options if You’re Married

social security, retirement, financial planning, financial advisor colorado springsSpecial Rules that raise the benefits of the lower-earning spouse-most often the wife-generally make claiming later an attractive option for married men.

The spousal benefit

If both husband and wife have claimed benefits, each is guaranteed half what the other would get at the Full Retirement Age (whih used to be 65, is now 66, and will be 67).

  • Spousal benefits are reduced up to 35% if claimed before the recipient’s Full Retirement Age.

The survivor benefit

Widow(er)s can keep their own benefit or, if they chose, instead claim a survivor benefit equal to their spouse’s monthly benefit.

  • Survivor benefits are available as early as age 60, or age 50 if disabled, but are reduced up to 28.5% if claimed before the recipient’s Full Retirement Age.
  • Survivor benefits almost always go to widows, as most survivors are women (wives are generally younger than their husbands and live longer) and most wives have lower monthly benefits (they generally ear less and start to collect at younger ages).

Ex-spouses are entitled to these benefits if the marriage lasted 10 years.

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Husbands can get more for their wives

Most wives will outlive their husband, by about 7 years on average, and most widows get their husband’s higher monthly benefit in place of their own.

A husband can increase the monthly benefit his wife gets as his survivor more than 20% if he claims Social Security at 66, no 62, and 60% if he claims at 70.

*Claiming later could be the most effective way a husband can improve his wife’s long-term financial security.

© 2009, by Trustees of Boston College, Center for Retirement Research

 

Social Security – Claim Later Get More

The later you claim, the more you get.

The monthly benefit you earn as a worker is generally based on when you start to collect and the average of the highest 35 years of earnings on which you’ve paid Social Security payroll tax.

social security, retirement, financial planning, financial advisor colorado springs, social security graph, living graph

 

 

 

 

 

 

 

 

 

 

 

75% of original income is need to keep your standard of living.

*As the Full Retirement Age rises to 67, benefits claimed at any age will replace a smaller share of earnings.

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You get even more…

…if working longer raises the average of the highest 35 years of earnings on which you’ve paid Social Security payroll tax. For example, say you were 62 in 2005 and had 31 years of employment, at $40,000 a year.

If you retire and start to collect benefits at 62:

The average of your highest 35 years of earnings = $35,400

your monthly benefit, based on your average earnings and claiming age = $1,030

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If you work four more years, at $40,000 a year, and retire at 66:

The average of your highest 35 years of earnings = $40,000

your monthly benefit, based on your average earnings and claiming age = $1,500

33% for claiming later + 12% more for more earnings = 45% more overall

 

© 2009, by Trustees of Boston College, Center for Retirement Research


Does not represent the Social Security Administration.

Social Security – How much secure income will you need?

Social Security is especially good for providing a basic retirement income that you and your spouse can rely on. The income it provides is inflation – proof and keeps coming as long as you or your spouse is alive.

Your chances for a very long life are excellent
Chances that one person in a married couple, both age 62, will live…

social security, retirement, financial planning, financial advisor colorado springs, social security graph, living graph

 

 

 

 

Inflation-Proof!
You get more dollars from Social Security if prices rise, so what you can buys stays the same.

Employer pensions and private annuities
provide a guaranteed income for the rest of your life.
But they are rarely inflation-proof. If prices rise 3% a year, in 20 years they’ll buy barely half what they do today.

401(k)s, Individual Retirement Accounts (IRA)s, and other savings can be invested in stocks that could produce high returns, saved for rainy days, or passed on to your children.
But high returns bring increased risk, and financial shocks are likely over the course of your retirement. On the other hand, cash in the bank is not inflation-proof.

Work is an important source of income for some retirees.
But few people work past 70. So relying too much on earnings could be a big mistake.

*Social Security will likely be much more important as you age, as other sources of income often dry up.

© 2009, by Trustees of Boston College, Center for Retirement Research

Financial Goal Setting – YouTube Channel

I will be starting a YouTube Channel in the next week about financial planning. I will be discussing all financial aspects (planning, life insurance, annuities, social security, ect). This is my logo sting (intro) to my new YouTube Channel.

Social Security – Living on Less

social security, retirement, financial planning, financial advisor colorado springs

There’s no simple answer. But to maintain your standard of living, you won’t need as much as you currently earn.

You will pay less tax

  • You won’t pay payroll tax on income from Social Security, savings, or employer pensions.

  • You won’t pay income tax on all your Social Security benefits

You won’t need to save for retirement.

The mortgage will probably be paid off (or will be soon).

The kids will probably be out on their own (or will be soon).

To maintain your standard of living, experts say you’ll need roughly %75 of your current income.

If work is difficult, you might want to retire early even if it means having a lower standard of living.

But be careful: You’re talking about a lower standard of living for the rest of your life. You’ll also need money on reserve for medical emergencies, unexpected home repairs, and other “rainy day” expenses.

© 2009, by Trustees of Boston College, Center for Retirement Research

Social Security – The Power of Patience

social security, retirement, financial planning, financial advisor colorado springsThe later you claim Social Security, the higher your monthly benefit.

As you approach retirement, how long you work and when you claim will usually have a far greater impact on how much income you’ll have in retirement than how much you save or how much you invest.

If you start collecting at age:

Age 62: $1000

Age 66: $1333

Age 70: $1760

© 2009, by Trustees of Boston College, Center for Retirement Research

 

Social Security – Filing Claim

social security, retirement, financial planning, financial advisor colorado springsHow old you are when you claim Social Security has a dramatic effect on the monthly benefits you and, if married, your spouse will get for the rest of your lives.

© 2009, by Trustees of Boston College, Center for Retirement Research

Dale Payne – Financial Advisor in Colorado Springs

financial advisor in colorado springs, financial advise, financial advisor colorado springs, insurance agent colorado springs, retirement colorado springs, long term care, long term care colorado springs, life insurance, life insurance agentMy name is Dale Payne and I am an independent Financial Advisor in Colorado Springs. I’ve worked in securities since 1986 and a licensed insurance agent since 1990. Over my 28 years of experience, I’ve found that it takes both securities and insurance to make a plan work. My objective is to help you achieve your goal of financial freedom. I can help you with a complete Financial Plan, Insurance needs, Annuities and even How to Save Money at any income level. I am also a Registered Tax Return Preparer.

I am an Investment Advisory Representative of Pearl Street Advisors, LLC. Pearl Street is an SEC Registered Investment Advisor.

Credentials – CFP®, ChFC®, CLU®, CDFA®
I am a graduate of the University of Phoenix with a Bachelors Degree of Science in Business Management. I earned my ChFC® (Chartered Financial Consultant) in 2007 and CLU® (Certified Life Underwriter) in 2008 from the American College and my CFP® (Certified Financial Planning Practitioner) in 2012 http://CFP.net.  CDFA® (Certified Divorce Financial Analyst. Additional professional designations of CAS® (Certified Annuity Specialist) and the CFS® (Certified Fund Specialist) with the Institute of Business and Finance. Additionally, I am a member of the Better Business Bureau.

My passion is financial planning and the relationships that result when I make a difference. My other passions are travel, writing short stories, the practice of yoga, and my Miniature Schnauzer, Bella.

Previously Held

  • Series 7 General Securities 8/16/1986
  • Series 24 Securities Principal 12/13/1988
  • Series 65 Investment Advisor 5/31/1995
  • Series 51 Municipal Securities 2005

I am no longer associated with a broker dealer or FINRA. These are shown only to illustrate experience.

Financial Professional

Are you suddenly on your own or forced to assume greater responsibility for your financial future? Unsure about whether you’re on the right track with your savings and investments? Finding yourself with new responsibilities, such as the care of a child or an aging parent? Facing other life events, such as marriage, divorce, the sale of a family business, or a career change? Too busy to become a financial expert but needing to make sure your assets are being managed appropriately? Or maybe you simply feel your assets could be invested or protected better than they are now.

These are only some of the many circumstances that prompt people to contact someone who can help them address their financial questions and issues. This may be especially true for women, who live longer than men on average and therefore may face an even greater challenge in making their assets last over that longer life span. In fact, one survey found that women often value advice from a professional in their financial decision-making even more than men do.*

Why work with a financial professional?

A financial professional can apply his or her skills to your specific needs. Just as important, you have someone who can answer questions about things that you may find confusing or anxiety-provoking. When the financial markets go through one of their periodic downturns, having someone you can turn to may help you make sense of it all.

If you don’t feel confident about your knowledge of investing or specific financial products and services, having someone who monitors the financial markets every day can be helpful. After all, if you hire people to do things like cut your hair, work on your car, and tend to medical issues, it might just make sense to get some help when dealing with important financial issues.

Even if you have the knowledge and ability to manage your own finances, the financial world grows more intricate every day as new products and services are introduced. Also, legislative changes can have a substantial impact on your investment and tax planning strategy. A professional can monitor such developments on an ongoing basis and assess how they might affect your portfolio.

A financial professional may be able to help you see the big picture and make sure the various aspects of your financial life are integrated in a way that makes sense for you. That can be especially important if you own your own business or have complex tax issues.

If you already have a financial plan, a financial professional can act as a sounding board, giving you a reality check to make sure your assumptions and expectations are realistic. For example, if you’ve been investing far more conservatively than is appropriate for your goals and circumstances, either out of fear of making a mistake or from not being aware of how risks can be managed, a financial professional can help you assess whether and how your portfolio might need adjusting to improve your chances of reaching those goals.

When should you consult a professional?

You don’t have to wait until an event occurs before consulting a financial professional. Having someone help you develop an overall strategy for approaching your financial goals can be useful at any time. However, in some cases, a specific life event or perceived need can serve as a catalyst for seeking advice. Such events might include:

  • Marriage, divorce, or the death of a spouse
  • Having a baby or adopting a child • Planning for a child’s or grandchild’s college education • Buying or selling a family business
  • Changing jobs or careers Planning your retirement
  • Developing an estate plan
  • Receiving an inheritance or financial windfall

Making the most of a professional’s expertise

  • You’ll need to understand how a financial professional is compensated for his or her services. Some receive a fee based on an hourly rate (usually for specific advice or a financial plan), or on a percentage of your portfolio’s assets and/or income. Some receive a commission from a third party for any products you may purchase. Still others may receive some combination of fees and commissions, while still others may simply receive a salary from their financial services employer. Don’t be reluctant to ask about fees; any reputable financial professional shouldn’t hesitate to explain how he or she is compensated.
  • Even if you’re a relative novice when it comes to finances, don’t be afraid to ask questions if you don’t understand what’s being presented to you. You’re not being rude; you’re simply trying to prevent misunderstandings that could backfire later. • Don’t let yourself be pressured into making a financial decision you’re not comfortable with or don’t understand. This is your money, and you have the right to take whatever time you need. However, give yourself a deadline for your decision so you don’t get caught in “analysis paralysis.”
  • If you think your financial life simply needs a checkup rather than a complete overhaul, you’ll need to clarify the areas in which you’re looking for assistance. That can help you decide what type of advice you’re looking for from your financial professional, though you should also pay attention to any additional suggestions raised during your discussions. Your plans should take into consideration your financial goals, your time horizon for achieving each one, your current financial and emotional ability to tolerate risk, and any recent changes in your circumstances.
  • Don’t assume you have to be wealthy to make use of a financial professional. While some do focus on clients with assets above a certain level, others do not.
  • Think about the scope of the services you’ll need. Do you want comprehensive help in a variety of areas, or would you be better off assembling a team of specialists? Do you need an ongoing relationship, or can your needs be taken care of on a one-time basis? If you’re a relative novice or having to deal with decisions you’ve never had to make before, someone with broad-based expertise might be a good place to start.
  • Even if you feel you need detailed advice from several different specialists–for example, if you own your own business–consider whether you might benefit from having someone who can coordinate among them. A financial professional can sometimes be a gateway to other professionals who can help with specific aspects of your finances, such as accounting, tax and/or estate planning, insurance, and investments.
  • If you want comprehensive management, you may be able to give a financial professional the independent authority to make trading decisions for your portfolio without checking with you first. In that case, you’ll likely be asked to help develop and sign an investment policy statement that spells out the specifics of the firm’s decision-making authority and the guidelines to be followed when making those decisions.

If you feel that consulting an expert can be helpful, don’t postpone making that call. The sooner you get your questions answered, the sooner you’ll be able to pay more attention to the things–family, friends, career, hobbies–that an organized financial life can help you enjoy.

*February 2012 survey of 1,150 affluent individuals conducted by Spectrem Group, a research/consulting firm focused on the affluent and retirement markets.

IMPORTANT DISCLOSURES The information presented here is not specific to any individual’s personal circumstances.To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable–we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.