Strategic Social Security Data Entry
Contents
The Strategic Social Security calculator will be based on the data entered, understanding of regulations and various assumptions (e.g. cost of living adjustments (COLA) used to project income from Social Security). The data required for the analysis is discussed below.
Setup
Include Spouse
If the spouse's projected Social Security benefit is to be included in the analysis, check this box.
| Notes: | The strategy for Social Security significantly changes with or without a spouse. |
| To use a selected strategy for a retirement income needs analysis in the the Quick Gap or Gap Analysis calculators the inclusion/exclusion of a spouse must match. |
Social Security Cost of Living Adjustment
COLA Method
This determines the what value is used for projecting growth in Social Security benefits. The options include historical averages (30, 20 and 10 years) and Custom.
Custom COLA
This prompt is available if Custom is selected as the COLA Method in the previous prompt. Enter the custom COLA to use for future Social Security benefits.
Generating Scenarios
By default TRAK will step through every month for both the client and the spouse (i.e. Scenario Frequency of Monthly). This means the analysis the start the client's income at the earliest age, and run through every spouse scenario on a monthly basis. This can generate a significant number of scenarios and may take a short while to generate. If generating scenarios Quarterly, Semiannually, or Annually is sufficient, select the appropriate item.
Additional Calculation Analysis
TRAK will calculate the total cash flow for each scenario. Additionally, TRAK can calculate an additional value.
Time Value of Money is what value of income in today's dollars. When this is selected, a COLA prompt will be displayed
Lump Sum Investment determines the lump sum required today for the illustrated cash flow. When this is selected, a Rate of Return will also be displayed.
Reports
To always include the scenario with the highest income in the reports, check this box.
Client and Spouse values (first names will be displayed in box headers)
Date of Birth
Enter the date of birth for the respective individual.
Life Expectancy Age
Enter the anticipated life expectancy age for the individual. The life expectancy will impact the analysis.
Social Security Benefits
Have the client provide you the projected benefits from Social Security (either their published document or from their website).
| Warning: | As stated on the SSA website, it is not legal for anyone other than the individual to access the projection from the Social Security website. More information is available on the Social Security Administration's (SSA) website. |
| Note: | The Social Security benefit values should be provided by SSA's estimates to provide the best estimates and strategies. |
WEP & GPO Options
Social Security benefits can be adjusted and fine tuned with the Windfall Elimination Provision and the Government Pension Offset values.
Government Pension Offset (GPO) if they are getting pension benefits enter those values; if eligible to receive spouse, widow or widower benefits, this will reduce those benefits based on the pension amount (2/3rd of the pension amount generally). Enter the values for the pension and account for any annual increase.
Windfall Elimination Provision (WEP) if in a pension plan where they did not contribute to SS then the SSA wants to make sure everything is fair for everybody so they will reduce the SS benefit to offset the pension benefit the person will receive. Enter substantial earnings years (less than 30 will reduce the 90% factor SSA uses – more on the SSA website) – TRAK will adjust the benefits accordingly. Additionally, verify pension values.
Other Options
Additional adjustments to configure include divorce and widow benefits.
Divorce/Ex-Spouse Benefits if the client has benefits from an ex-spouse, enter the value for the ex-spouse's full retirement age (FRA) income.
Widow's Benefits if the client has widow benefits and fits the proper criteria, enter the deceased spouse's full retirement age (FRA) income.