social security income planning

Stop Screwing Yourself, Business Owners!

Posted on July 6, 2017 by - Business Owners, Social Security Benefits

Business owners typically prioritize the success of their company over other financial goals. That’s a good thing in general, but it’s important to keep a balance or you could be creating a host of long-term financial problems for yourself while you’re trying to do the right thing.

A common pattern I see with my clients is that they pay themselves as little as possible and put the vast majority of the available money back into the business. That may be good for the business but it’s not necessarily a smart move for your overall financial picture. When it’s time for retirement, problems arise:

  • Little Social Security income. By keeping the amount you pay yourself low over the years, you deprive yourself of Social Security benefits you might have been able to collect later. The amount of monthly benefit you receive is calculated based on your average earnings over a 35-year period. If you didn’t pay yourself much, the government won’t either.
  • Minimal retirement savings. When you plough all the profits back into the company you reduce the amount available to fund your personal retirement account. That means you don’t have a substantial nest egg that’s growing to take care of you once you’re ready to hand the business over to new owners.
  • Expecting too much. Selling your business when retirement beckons may deliver a nice bundle to provide for your financial needs in the coming years. Then again, it might not. Economic conditions shift, and the type of business you own can make a huge difference in the amount you can actually sell it for.

Take care of your business, but be sure to look out for your own best interests as well. Paying yourself a fair wage and investing in assets like equities and real estate are just as important as that new equipment or extra staff member your company could use. The money you pay into Social Security and invest privately will work together to give you a higher income in retirement than you’d have otherwise.

If you’re not sure how much you should be paying yourself or investing, please contact us today and we’ll help you find the right balance. You deserve a comfortable retirement!

Social Security Benefit Planners
800.270.SSBP (7727) info@socialsecuritybp.com

Military Service and Social Security – How it works

Posted on July 5, 2017 by - Social Security Benefits

Worried about how your military service affects your Social Security? You don’t have to, because the retirement income you’ve earned through military service won’t reduce your Social Security benefits. In fact, if you served on active duty between 1957 and 2001, you may even be credited for extra earnings on your Social Security record.

For Social Security purposes, active duty includes active duty, reserve duty and active duty for training (ACDUTRA), and includes your service in the:

  •         Army
  •         Navy
  •         Air Force
  •         Marines
  •         Coast Guard
  •         National Guard
  •         Public Health Service (service as a commissioned officer)

Although your benefits are not impacted by retirement income from the military, Social Security benefits for survivors may reduce the income beneficiaries receive through the Department of Defense Survivors Benefit Plan. Your military retirement advisor or the Department of Defense will be able to offer information specific to your situation.

Whenever you served, the American people thank you and wish you a happy retirement, complete with all the Social Security benefits to which you are entitled. Want assistance in understanding optimal options for maximizing your Social Security? Choose one of our plans and please use USA2017 to save $50 off any plan.

Social Security and Railroad Earnings

Posted on July 5, 2017 by - Social Security Benefits

Working for a railroad means your Social Security benefits may be calculated differently than for other industries. To qualify for a pension from the Railroad Retirement Board, which maintains your record of earnings, you’ll need to have worked for the railroad at least 120 months or 60 months of railroad work that took place after 1995.

  • For railroad workers whose work history includes less than five years of service since 1995 and less than ten total years of railroad work, your railroad earnings will be added to your other work history to calculate your Social Security credits and your benefits from Social Security. To see your earnings history, you can view your Social Security Statement online. Note that railroad earnings prior to 1973 do not show on your statement but are included in calculating the credits shown and your estimated benefits.
  • Workers who have at least ten years of railroad work or five or more years of railroad work since 1995 usually qualify for a pension from the Railroad Retirement Board. The earnings from this railroad will not be used to calculate Social Security credits or benefits.
  • If you’re entitled to a pension from the Railroad Retirement Board, you can still receive Social Security benefits as long as your work history includes enough credits to qualify for Social Security based on your non-railroad employment history. However, your Tier 1 Railroad Retirement Annuity will be reduced if you also receive Social Security.

We are here to help if you would like to project what your retirement income options will look like.  Please go to our “Select a Plan” to learn more and sign up and use RAILROAD2017 to save $50 off any plan.

Are Employees of Foreign Governments Covered by Social Security?

Posted on July 5, 2017 by - Social Security Benefits

Working inside the U.S. as an employee of a foreign government or an instrumentality of one can mean you’re not covered by Social Security. These workers include diplomats, embassy employees, non-diplomatic representatives, consular officers and employees of foreign government instrumentalities (non-commercial organizations that function on behalf of a foreign government).

Whether or not your work will be counted toward Social Security benefits is controlled by your citizenship status.

U.S. Citizens who work for a foreign government are treated as self-employed citizens are for Social Security. Your employer will not withhold Social Security taxes but your earnings can still count toward your coverage under the program. You are responsible for paying self-employment taxes on the income. Citizens who work for an instrumentality are covered by Social Security, but their earnings may be treated as employment or self-employment based on three conditions. The U.S. Department of State and the IRS will determine which category your work falls into.

Non-citizens are not covered by Social Security for work they perform for a foreign government. Their employment for an instrumentality of a foreign government may or may not be covered by Social Security, depending on same three conditions mentioned above.

Dual citizens who hold citizenship in the U.S. and another country are covered by Social Security in most cases, but depending on the country for which they are working, they may need to pay self-employment taxes or not. Dual citizens who work for an instrumentality of a foreign government may or may not be exempt from paying Social Security taxes on their earnings. Reciprocal social security agreements between the U.S. and foreign governments vary by country, so it is important that dual citizens speak with a qualified professional or governmental administrator to determine program eligibility and tax responsibilities.

If you want to understand options that pertain to your situation please go to our “Select a Plan” and sign up for one of our planning options. Use FOREIGN2017 to receive $50 off any plan.

 

Social Security for Dependent Parents

Posted on November 4, 2016 by - Family Benefits

Dependent Parent Social Security Benefits

Parents take care of us for so many years, and in some cases we are able to help our own parents in their retirement. But what will happen if your dependent parent outlives you?

Very few people know about an important Social Security benefit that can help your financially dependent parent should you pass away before they do. If your parent relies on you for more than half of their living expenses, they may be able to receive benefits in the event of your death. In order to take advantage of this benefit you must have earned enough credits to qualify for Social Security – that’s 40 credit hours – and your parent must:

  • Receive at least half of their support from you
  • Be at least 62 years old
  • Not have remarried since the adult child’s death
  • Not have an individual Social Security benefit that’s more than the potential benefit based on your earnings

This benefit can be an important source of support for your aged parent in the unfortunate event of your death.

If you’d like to learn more about this or other Social Security benefits that can help your family, please contact our office at info@socialsecuritybp.com, or sign up for your Social Security benefit plan today.

Social Security Benefits for Children – Is Your Family Eligible?

Posted on October 11, 2016 by - Children's Benefits, Family Benefits

Social security benefits for children

There are 4.3 million families that currently receive Social Security benefits to help support their children, but many more are eligible and don’t even know they could be getting additional income each month. Qualifying for this benefit has little to do with the children – it’s based on the parents’ status. (Disabled children may be able to collect Supplemental Security Income benefits based on their condition. They may also qualify for the benefits described in this article but the rules are slightly different.)

In a nutshell, Social Security benefits for children are designed to replace the income that is no longer provided by a parent who has retired, died or become disabled and therefore cannot work. The retired, deceased or disabled parent must have worked long enough to qualify for Social Security and the child must be unmarried and under 18 or a full-time student. Benefits end on the child’s 18th birthday, unless he or she is a full time high school student. In that case, benefits continue until graduation or two months after the child’s 19th birthday, whichever comes first.

Social Security benefits for children can be paid to a parent, step-parent, grandparent or another person who cares for the child (but the benefits may stop earlier in this case). The amount received each month depends on the specifics of the situation and the retired, deceased or disabled parent’s work history. In general, benefits are up to 50% of the full amount of a parent’s disability or retirement benefit or as much as 75% of the amount a deceased parent would have received. If other family members also receive Social Security benefits, a family cap on the amount received applies.

If you think you might qualify for Social Security income for a child in your care, contact our firm today. We’ll help you find out about any financial benefits you may be entitled to and complete the filing process so you can start receiving that income each month.

Business Owners: Stop Screwing Yourself on Social Security!

Posted on October 11, 2016 by - Business Owners

Social Security for Business Owners

Business owners typically prioritize the success of their company over other financial goals. That’s a good thing in general, but it’s important to keep a balance or you could be creating a host of long-term financial problems for yourself while you’re trying to do the right thing.

A common pattern I see with my clients is that they pay themselves as little as possible and put the vast majority of the available money back into the business. That may be good for the business but it’s not necessarily a smart move for your overall financial picture. When it’s time for retirement, problems arise:

  • Little Social Security income. By keeping the amount you pay yourself low over the years, you deprive yourself of Social Security benefits you might have been able to collect later. The amount of monthly benefit you receive is calculated based on your average earnings over a 35-year period. If you didn’t take pay yourself much, the government won’t either.
  • Minimal retirement savings. When you plough all the profits back into the company you reduce the amount available to fund your personal retirement account. That means you don’t have a substantial nest egg that’s growing to take care of you once you’re ready to hand the business over to new owners.
  • Expecting too much. Selling your business when retirement beckons may deliver a nice bundle to provide for your financial needs in the coming years. Then again, it might not. Economic conditions shift, and the type of business you own can make a huge difference in the amount you can actually sell it for.

Take care of your business, but be sure to look out for your own best interests as well. Paying yourself a fair wage and investing in assets like equities and real estate are just as important as that new equipment or extra staff member your company could use. The money you pay into Social Security and invest privately will work together to give you a higher income in retirement than you’d have otherwise.

If you’re not sure how much you should be paying yourself or investing, please contact us today and we’ll help you find the right balance. You deserve a comfortable retirement!