The end of a year always gets us curious about changes in the coming year that will affect clients. Most of us who are producing regularly having a growing percentage of our client base who are retired or near retirement age. And, topic #1 for most is Social Security.
Here’s a question for you: how many of your clients currently on Social Security made a poor decision on when they decided to enroll? While there are no specific numbers nationally, the general thought is that it’s a high percentage. And, there are no do-overs with Social Security. A bad decision will impact a client for the rest of their life.
There’s a big opportunity for agents to become more versed in the details of Social Security to provide added value to clients. Kiplinger’s earlier this year ran a great article on the things consumers should know about Social Security. I repeat a few of them here to whet your appetite for the opportunity to add Social Security to your repertoire.
- It’s an age thing. Clients can take benefits as early as age 62 but that decision can have a significant impact on the amount they receive each month. Waiting until retirement age can also have a significantly positive impact on their spouse and children. And waiting until after retirement age up to age 70 – if their situation allows – can be even more positive.
- How benefits are factored is complex. In short, the benefit is based on the 35 years in which the client earned the most money. If they have fewer than 35 years of earning, each year with no earnings will be factored at zero. They can increase their benefit by working longer, even if it’s just part time. No low earning year will replace a high earning year… it’s always the 35 highest earning years. Good news: if they decide to work part-time into their retirement years their benefit won’t be impacted if they have 35 years of higher earnings.
- Income for survivors. If the spouse dies first the client can take a survivor benefit. If the client is at full retirement age, that benefit is worth 100% of what the spouse was receiving at the time of his or her death (or 100% of what the spouse would have been eligible to receive if he or she hadn’t yet taken benefits). A widow or widower can start taking survivor benefits at age 60, but the benefit will be reduced because it’s taken before full retirement age.
There are many more nuances and details to Social Security, which means more opportunities to become a trusted advisor for clients. Read the full Kiplinger article here.
Below are some of the most important changes coming in 2015 to Social Security. While nothing earth shattering, our retired or near-retirement-age clients will hang on every word. A quick communication to your clients with this information might be a great way to expand your discussion into other needs.
- Bigger payments. Social Security recipients will receive 1.7 percent bigger checks in 2015. This will result in the typical retiree getting about $22 more per month to about $1,328. The average benefit for retired couples is expected to increase about $26 per month to about $2,176.
- Higher earning limits for retirees. Retirees who turn 66 in 2015 and have signed up for Social Security can earn up to $41,880 before every $3 earned above that limit will result in one benefit dollar being withheld. However, once a retiree turns 66 there is no limit on earnings and Social Security payments are recalculated to give the retiree credit for the withheld benefits.
- Maximum benefit increases. The maximum possible Social Security payment for a worker who signs up at retirement age will be $2,663 per month in 2015, up $21 from 2014.
- Tax cap increases. The maximum taxable earnings cap will increase to $118,500 next year. People that earn more than the taxable maximum do not pay Social Security taxes on that amount nor have those earnings factored into the calculation for future Social Security payments.
Source: US News and World Report
Product of the week: Gerber Guaranteed Issue Whole Life
Guaranteed issue whole life insurance provides life insurance to those who can’t qualify due to their health condition. Gerber offers life insurance for individuals 50-80 with no medical exam, no medical questions, and no prescription drug check. This is designed for anyone to be approved if they fall within the ages of 50-80. Products like this are perfect for clients diagnosed with diabetes, heart disease, COPD, and many other chronic conditions. Below are some of the many benefits of carrying Gerber’s Guaranteed Issue Whole Life product:
- Issue ages: 50-80
- No medical questions or exams
- No underwriting
- Pre-existing conditions accepted
- Accepts credit card
- e-Application available
Call 866-547-8780 and talk to Drew Gurley, ext. 102.
- Funerals: It was bound to happen… drive-through viewing. A Michigan funeral home spent $300,000 to add a drive-through kiosk for viewing the deceased. It’s not a joke and the owner is bowing his back to defend his idea. See what you think.
- Fact Finder: End of year means planning. Get prepared to help your clients get prepared. Our Fact Finder provides an excellent platform to better understand client needs, plans and concerns. Click here to download the Redbird Fact Finder.