A Field Guide to Social Security

Serving Up a Slice of Retirement Pie

What's the Deal?

Social Security is an amazing benefit many of your clients have earned over a lifetime of work. The program offers a variety of options for retirees, with plans they can tailor to best meet their personal needs. As your clients approach retirement, let them know they are not alone. Beginning with the first of the Baby Boomers who turned 65 in 2010, more than 76 million Americans will transition into retirement by 2030.

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.

*Insured Retirement Institute, “Boomer Expectations for Retirement in 2017,” 2017.

Income Sources of Current Retirees

Social Security benefits make up 33% of total retirement income for Americans over 65

Income sources of current retirees infographic

Married Clients? Here’s What They Need to Know About Social Security

When it comes to Social Security benefits in particular, marital status can play a big role, and it’s something for them to consider as they prepare for retirement.

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Terms to Know

Cost-of-Living Adjustment (COLA):

Each year, the Social Security Administration adjusts monthly benefits to ensure that the purchasing power of benefits is not eroded by inflation. The COLA is based on the increase in the Consumer Price Index.

Delayed Retirement Credits (DRC):

Individual Social Security benefits are increased by a percentage (depending on birth date) if you delay retirement beyond your Full Retirement Age. The benefit increase stops at age 70, even if you continue to delay claiming.


This is the payroll tax used to fund Social Security. It is collected by authority of the Federal Insurance Contributions Act (FICA).

Full Retirement Age (FRA):

This is the age at which a person becomes entitled to unreduced (full) Social Security benefits. The age is determined by date of birth, currently increasing gradually to age 67 for those born after 1959.

Primary Insurance Amount (PIA):

This is the benefit amount a worker would receive if he or she elects receiving Social Security benefits at Full Retirement Age (FRA). Retire before FRA and the PIA is reduced, delay retirement and the PIA increases.

Windfall Elimination Provision (WEP):

Some federal employees and employees of state or local government agencies may be eligible for pensions that are based on earnings not covered by Social Security. The Windfall Elimination Provision (WEP) may affect how Social Security calculate your retirement benefits. If you work for an employer that does not withhold Social Security taxes, any pension you receive may reduce your benefits.

So What...Here's Why It Matters

A financially secure retirement doesn’t just happen. It takes foresight, years of planning, and preparation.

Understanding how Social Security works, what it provides – and what it doesn’t – is a big part of planning for retirement.

With a thorough understanding of Social Security, those planning for retirement can make better decisions, and prepare to fill potential income gaps while there’s time.

Social Security statistic 41 million

Social Security Tools Even the Young Can Use

Even before retirement, there are Social Security tools your clients can use.

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Social Security: At Every Age

The retirement your clients imagine is within reach.

Getting an early start and following a plan can help your clients prepare for a secure retirement. With solid planning and disciplined choices, your clients can aim to achieve a retirement they've hoped for.

Click each age range below to explore how Social Security can be an important part of retirement planning at every age.

Surprising Social Security Stats

Only 16% of people 45-64 turn to their financial professional for information of Social Security.
Find Out the Rest

Questions Your Clients Might Ask

Will Social Security still be there when I retire?

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.

What changes should I expect to the system?

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

When should I file for benefits?

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).

Can I work and still receive benefits?

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.

Can I estimate what my benefits will be?

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.

What is the maximum available benefit?

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.

How are my benefits calculated?

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.

What if I am divorced?

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.

Am I entitled to benefits when my spouse dies?

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.

Will I automatically be enrolled in Medicare when I collect benefits?

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.

Support Materials

The following materials are available as additional resources

The 2018 Field Guide to Social Security series also includes a presentation designed specifically to educate your clients. Contact your Transamerica wholesaler to schedule your client seminar today.

Field Guide to Social Security
Social Security Workbook