A FIELD GUIDE TO SOCIAL SECURITY

Social Security requires a strategy too

Understand the retirement benefit your clients have earned over a lifetime of work.

Social Security offers a variety of options for retirees with plans they can tailor to best meet their personal needs.

Transamerica’s Field Guide to Social Security helps answer some of the most common questions about Social Security benefits, making it a great resource for you and your clients as they prepare for retirement.

Download our Field Guide to Social Security and Planning Workbook.

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Questions your clients might ask

Some information claims Social Security is going bankrupt, and most agree there are legitimate concerns about the program’s sustainability. However, there are some misconceptions. Reserves are projected to pay full benefits until 2035, and tax income is projected to cover 75% of benefits from 2035-2091 even if no changes are made to the system. The worry may not come from funding but legislative changes to Social Security itself and that could happen well before age 73 for those over 55. Of course, changes to the Social Security program through legislative action are always a possibility.

There has been much debate over how to make Social Security more solvent, and concrete solutions have yet to be implemented. However, changes that have been discussed include an increase in Social Security tax rates, a higher maximum earnings amount subject to Social Security taxes, an increase in Full Retirement Age (FRA), a decrease in future retirement benefits, and a reduction in the Cost-of-Living Adjustment (COLAs).*

*Source: Social Security, Actuarial Publications, “Proposals Affecting Trust Fund Solvency,” 2016

The answer to this question is different for everybody, but it’s important to know your benefit amount will change depending on when you file. You may receive reduced benefits as early as the first month you reach 62, you may receive full benefits at FRA, or you can receive a higher benefit amount if you delay receiving them beyond FRA (up to age 70).
Yes. However, there are limits to how much you can earn before your benefits will be reduced. If you begin receiving benefits before FRA, you may earn up to $17,040 per year. If you earn more, $1 of benefits will be withheld for every $2 you earn above the limit. If you begin receiving benefits in the year you reach FRA, you may earn up to $45,360 per year, with $1 of earnings being withheld for every $3 you earn above the limit. There is no limit to the amount you can earn if you start receiving benefits at or after FRA.
Yes. Doing so is a crucial aspect of retirement planning. Your estimated benefit is included as part of your annual Social Security statement. You can find this statement online by visiting SSA.gov/myaccount. To create an account, you must create a username and password and provide personal information to verify your identity.
The maximum benefit for 2018 is $2,788 per month at FRA. However, most retirees don’t receive anything close to that amount. The average in 2018 is expected to be $1,404 monthly.
The Social Security Administration must first determine you’ve obtained the 40 credits necessary for full eligibility. Usually this amounts to 10 years in the workforce. From there, the SSA calculates your average indexed monthly earnings during the 35 years in which you earned the most and then plugs it into a formula that determines your Primary Insurance Amount (PIA). Your PIA, the amount you would receive at FRA, is reduced if you collect prior to FRA and increased if you collect after FRA.
Many who divorced long ago do not realize they are entitled to a spousal benefit if the marriage lasted more than 10 years. Typically, the beneficiary spouse must be currently unmarried. Divorced spouses do not have to wait for their former spouse to file before collecting benefits on his/her record.
Yes. If you are age 60 or older (50 or older if disabled) you are eligible. If taken at FRA, you are eligible for 100% of your spouse’s benefit amount at the time of death. If taken early, the benefit will be reduced to no more than 71.5% of your spouse’s benefit amount. Family earned income limits apply.
Enrollment in the federal health insurance programs Medicare Part A and Part B is automatic for those 65 and older who receive Social Security benefits. However, those who are not receiving Social Security benefits must apply on their own. Late enrollment may result in delayed coverage or costly penalties. Visit Medicare.gov to learn more.

Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.

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