Although Social Security is for all workers, it is complicated. Even simple questions about the best time to start benefits don't have a simple answer that works for everyone. Here are some basics that can help you understand the impact Social Security benefits might have within the rest of your retirement picture.

Check your current record
To check your benefits, go to www.ssa.gov, click on "My Social Security" and then create an account.

There will be a record of your earnings and estimates of your Social Security benefits for early retirement, full retirement and retirement at age 70. You'll also find estimates of the amount of benefits paid to your spouse and other eligible family members as a result of your retirement, disability or death.

Social Security fraud happens, so the Social Security Administration makes the signing up a bit more difficult that one might expect. Just realize this is making it more difficult for the scammers too. You'll need access to more than just your Social Security number. Some security questions might have answers you'd need to look up instead of remember. For example, they might ask exactly how much your last car payment was, or which streets you've ever lived on.

What is your "full" or "normal" retirement age?
The Social Security Administration's language regarding "full" or "normal" retirement age is referring to the age at which full benefits can be received. Starting benefits before this age reduces the annual benefit, and after this age increases the annual benefit.

For persons born from 1943 through 1954, the full retirement age is 66. Those born in 1960 and later years have a full retirement age of 67. The higher retirement age is phased in for those born in 1955 through 1959.

Receiving benefits early
You can begin receiving Social Security benefits as early as age 62, regardless of your full retirement age. Taking benefits early reduces them permanently, based upon the number of months that you receive checks before you reach full retirement age.

Example: George's full retirement age is 66, but he starts benefits at age 62. There is about a 25% reduction in George's benefits. In an actuarial sense, early retirement gives people about the same total Social Security benefits over their lifetimes as retirement at the normal age, but in smaller amounts so as to take into account the longer period during which they will receive them.

In a personal sense, it all depends upon how long you live. It will take about 12 years of full benefits to recoup the foregone early benefits, so the break-even age is about 78.

Starting benefits after normal retirement age - A few years can make a big difference
Conversely, Social Security benefits increase by a certain percentage if you choose to delay receiving them. These increases will be added in automatically from the time that you reach your full retirement age until you start taking your benefits, or until you reach age 70. The percentage varies depending on your year of birth, but is 8% per year for those whose full retirement age is 66.

Working while collecting benefits
You may continue to work and still receive retirement benefits. However, exceeding certain limits for earned income before you reach normal retirement age will reduce benefits. Your earnings in or after the month that you reach your full retirement age will not affect your Social Security benefits.

Only wages or self-employment income are "earned income." Interest payments, dividends, and capital gains are not counted at all.

Special considerations for married couples
When a husband and wife have each paid social security taxes, the choices are more complicated and more important to understand. Each partner has a basic benefit plus a spousal benefit but may only collect the larger benefit. They don't have to claim at the same time. For example, one spouse might begin benefits early, while the other waits until age 66 or later to begin.

Spousal benefits are based upon the work record of a living spouse or ex-spouse. They are generally 50% of the worker's benefit. Survivor benefits, based upon the work record of a deceased spouse or ex-spouse, are 100% of the deceased worker's last benefit. There are a number of other differences to keep in mind too such as: the earliest age for spousal benefits is 62, and the earliest age for survivor's benefits is 60. The spousal benefit at 62 is 35% of the worker's benefit, and the survivor's benefit taken at age 60 is 71.5% of the worker's benefit.

Does taking Social Security mean retirement readiness?
At Garden State Trust Company, we can help assess the retirement readiness of clients as they decide if they are ready to fully retire or move to a work-optional lifestyle.

Social Security is generally intended as a supplement to other retirement income, but it can still play a major role in affecting how other assets are utilized. By using certain assets for income instead of others as you retire, you can preserve the tax-preferred status and growth of certain accounts, maximizing your resources.

If you are getting close to taking the retirement leap, but still wondering if you'll be financially stable and won't run out of money during retirement, we'd be pleased to provide a consultation to help you make an informed decision.
FAMOUS WILL FOR THE MONTH HARRY HELMSLEY
CLICK THE NAME TO READ
CLICK THE NAME TO READ
Harry Helmsley was a real estate mogul whose interests at one time included the Empire State Building in New York City. He died in 1997, leaving an estate valued at over $1.7 billion.
In the Informational Article, What Happens to Property Acquired After Death? read about an unusual case involving property acquired after death, a court holds the law of intestacy applies. How Long Must You Plan For? Read the latest life expectancy statistics for retirees.

Finally, with Memorial Day on Monday May 30th, all of us at Garden State Trust Company would like to remember and honor the men and women who have made the ultimate sacrifice to protect our country. Thank you to all who have served and are serving in our Armed Forces. And, still special prayers for the people of Ukraine defending their country.

Sincerely,
Ira J. Brower, Founder
What Happens to Property Acquired After Death?
William Keough was among the hostages held captive in Iran between 1979 and 1981. He survived the ordeal, but died in 1985. William's wife, Katherine, died in 2004. Her will left her residuary estate to her stepson, Steven, who was William's son from an earlier marriage.

In 2015, Congress enacted the Justice for United States Victims of State Sponsored Terrorism Act. Under the Act Katherine was entitled to $600,000 as the spouse of a hostage. If a person entitled to compensation had died when the Act took effect, the money was paid to the estate's personal representative.

When Katherine died, her sole heir under the intestacy laws was her brother, Fred Schwarz. He died intestate in 2018. In 2019 Fred's cousin, Eleanor, filed a lawsuit claiming the $600,000 should pass to Fred's estate. She was the administrator of his estate. The executrix of Katherine's estate argued that it should pass under the residuary clause of her will.

The Appellate Division of the Supreme Court of New York held for Fred's estate. Will provisions can only control the disposition of property that the decedent owns at death. "We are particularly persuaded by the decision in Shaw Family Archives Ltd., which involved a dispute over ownership interest in Marilyn Monroe's right of publicity after her death. The court determined that New York law did not permit a testator to dispose by will of property that she did not own at the time of her death," the Court wrote. As Katherine could not have known of the possibility of the future payment, her will is ineffective as to it, and the $600,000 must pass by intestacy to Fred's estate. 

(May 2022)
© 2022 M.A. Co. All rights reserved.
How Long Must You Plan For?
According to the latest data from the National Vital Statistics Reports (March 2022, reporting on 2019 experience, so before the pandemic), a male age 65 should expect to live 18.2 more years (to age 83.2) and a female 20.8 years (to age 85.8). Half of 65-year-olds will die sooner, half later than suggested by those averages.

That tells us nothing about you, of course. How's your health? Your family history? You'll want to take these into account, and you probably should plan for longer than you expect to live.

Here's another way to look at the numbers from that report. For every 100,000 men, how many reach age 85? 36,252 men do. For every 100,000 women, 50,324 reach age 85. Mortality increases precipitously after that, as shown in the table below.


Number of survivors of 100,000 people
Source: National Vital Statistics Report, Volume 70 Number 19, March 22, 2022


The table quantifies the fact of life that everyone knows, women live longer than men. Half of the men reach age 80, but half of the women reach age 85. 

Race is a measurable factor in longevity as well, according to the report. Some 63% of Asians will live to 85, and 53% of Hispanics. For whites the figure is 42%, for Blacks 33%, and for American Indian and Alaskan natives, just 30%. Asian women have a nearly 8% chance of reaching age 100.

To answer the question in the headline, probably longer than your first guess.

(May 2022)
© 2022 M.A. Co. All rights reserved.
Disappointment for NFT Collectors?
What do you get when you cross art with the technology behind digital currencies such as bitcoin? The answer is a "Non-Fungible Token," or NFT. The token is a digital representation of a digital thing, and it is made unique with a blockchain signature. Their value comes from their uniqueness. CNBC reports that NFT trading in NFTs reached an estimated $17.6 billion in 2021. However, the craze may have peaked.

In March 2021, Jack Dorsey, the founder of Twitter, sold an NFT of his first tweet in 2006 for $2.9 million. The tweet was "just setting up my twttr." This particular NFT was considered by some to be the Mona Lisa of NFTs, because of its potential historical significance in the social media phenomenon. 

The owner of Dorsey's tweet NFT put it up for auction earlier this year, pledging to give half of the proceeds to charity. Evidently he was expecting bids in the range of tens of millions of dollars. Unfortunately, the market did not share the owner's enthusiasm, with bids of only tens of thousands of dollars. When the offer failed to exceed some $14,000, the owner withdrew the NFT from the auction.

It's too soon to know whether this failed auction is an outlier or it signals a cooling of the NFT craze. When it comes to art or collectibles, a good rule to follow is to buy for the joy of ownership, not for the prospect of profit. Collecting should not be confused with investing.

(May 2022)
© 2022 M.A. Co. All rights reserved.
Articles of Interest

Did you know that Rutgers University in New Brunswick is home to one of the state's most beautiful botanical gardens?  Read More


War, pandemic and sluggish markets hit the world's billionaires this year. Read More


From burgers and side salads to lemonades and desserts, there's no better way to celebrate the holiday weekend than with these summery recipes. Read More
WALL - MAIN OFFICE
732-255-5000

SOUTH JERSEY REGIONAL OFFICE
856-281-1300
LEBANON REGIONAL OFFICE
908-287-7188

LINWOOD REGIONAL OFFICE 
888-323-5535
Garden State Trust Company | gstrustco.com
Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2022. All rights reserved.