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Add Social Security options to retirement financial planning
slt waddell-reed-profile-Diane Sauber
Diane Sauber


Diane Sauber, CMFC, a Financial Advisor with Waddell & Reed

Q: What city do you live in?
A: Great Bend. I’ve lived here since 1983. I’ve been a Financial Advisor for over 22 years with Waddell & Reed.

Q: Tell us about your family:
A: My husband, Mike, works with me in my practice. We have two daughters. Jessica, who is married and is finishing her fellowship in Pediatric Critical Care at Children’s Hospital in Pittsburgh, Pa. Monica is also married; she has her BSN and works in an Orthopedic Trauma practice in Kansas City. We have one grandson and one due in August.

Q: What are you involved in outside of work?
A: Outdoor activities: Bicycling, snow skiing, water craft, etc. I am a member of Chapter IV P.E.O. I attend St. Patrick Prince of Peace Parish and serve as a Eucharistic Minister.

Q: What drew you to this profession?
A: I became interested in pursuing my licensing as my daughters got into school. I never had any problem with talking to people and I was encouraged to follow this profession. I knew I wanted to help my family and others with financial security. This career is about building relationships. I have been blessed with many opportunities to help others in our community, as well as other communities.

Q: What do you enjoy most?
A: Having the opportunity to help others develop their financial plan and pursue their financial goals. I’ve met people over the years that I would not have ever become acquainted with. I have become a part of their family and get excited for the births, graduations and weddings – and cry along with them at their heartaches.

Q: How has it changed since you first began? What sort of changes do you anticipate in the future?
A: I started in 1993 with no staff or computer. Every year my business has grown and I have continued to add staff and more technology. I’m excited about our new platform that will be enhancing our planning and technology capabilities over the next 12-18 months.
My team members consist of Mike Sauber, who is also a Financial Advisor with Waddell & Reed, and our assistants Pam Hitz, Sue Parmer and Madison Murphy.

Financial Advisor Diane Sauber at Waddell & Reed knows that Social Security income is an important piece in many individuals’ plans to retirement.
“As part of the planning with our prospects and clients, we have given Social Security Seminars, which addresses options for filing. We will be offering more of those seminars that speak to the new changes later this year,” she said.
“Our financial planning software can show different strategies that can help clients with their Social Security decisions. We always suggest that clients should follow up with the Social Security office before they finalize their plans.”
The following information is from the Waddell & Reed brochure, “Filing for Social Security: Flexibility and Choices for Your Retirement.”
Social Security was created in the mid-1930s to offer economic security during financial and economic crises in the U.S.
It was intended to be a supplement for retirement, but today it is the single largest federal program and the sole means of support for many retirees.

To be eligible to receive benefits, you must earn 40 work credits during your working lifetime. You earn credits as you earn income.
In 2016, you will receive one credit for every $1,260 of earnings. Once you have earned $5,040, you have received full work credits for this year. It takes about 10 years of work to accumulate 40 work credits.

Your benefit
Your Social Security benefits are based on your lifetime earnings. The Social Security Administration averages your 35 highest earnings years as the basis of your Primary Insurance Amount (PIA), also referred to as your Full Retirement Benefit.
You can receive your Full Retirement Benefit at your Full Retirement Age (FRA). For an estimate of your Full Retirement Benefit amount, see your Social Security statement. Social Security statements can be accessed online at

Full Retirement Age
Your FRA is the single most important number you need to know when deciding when to file, how to file, and what kind of benefits you will receive from Social Security. The Social Security Administration determines your FRA based on the year in which you were born. Please understand, it is not the age you stop working.

Early retirement benefits
If you choose, you can file for and begin receiving Social Security benefits at 62. However, your benefit will be reduced based on the number of months you filed before your FRA. Reasoning? When you file early, the Social Security Administration anticipates paying your benefit for a longer period of time. Therefore, it pays you less each month.
For example, if your FRA is 66 and you elect to file for benefits at 62, your PIA will be reduced 25 percent for filing 48 months prior to your FRA.
Benefit reductions vary by FRA. To compute the effect of early retirement, go to

Delayed retirement credits
Just as Social Security reduces your benefit if you file early, conversely, it increases your benefit if you file after your FRA. Why? It assumes it will pay you for a shorter period of time. If you were born in 1943 or after, you will receive an 8 percent increase in benefits – per year – for each year you delay benefits until 70. After 70, delayed credits cease; therefore, it is never recommended to delay benefits after 70.

Consider this:
• Cost-of-Living Adjustment (COLA) - Automatic cost of living adjustments went into effect in 1975. Any increases in benefits are linked to the Consumer Price Index for Urban Wage Earners (CPI-W).
In 1980, benefits were increased by 14.3 percent when inflation was at an all-time high. Thirty years later in 2010 and 2011, Social Security had back-to-back years of 0 percent inflation, and in 2016 COLA will once again be 0 percent. The average COLA since 1975 is 3.9 percent, yet the 20-year average is only 2.3 percent.
• Cost of health care - Health care costs represent a larger share of total spending in retirement. The average person over 65 spends 13.4 percent on health care compared to 8.8 percent for those 55-65.1.
A 65-year-old couple retiring today can expect to spend $245,000 on health care during retirement. That amount assumes you qualify for Medicare coverage and does not include costs like over-the-counter drugs, most dental services and long-term care. It also assumes retirement ends in 20 years – around 85.
Imagine the increase in costs if you live past 85. Per the Social Security Administration, 25 percent of 65-year-olds today will live past 90 and 10 percent will live past 95.
Sources: U.S. Bureau of Labor Statistics, Consumer Expenditures Survey, September 2015; Fidelity, 2014

Working in retirement
If you decide to work and collect benefits before your FRA, Social Security may withhold part or all of your annual benefits. However, your withheld benefits are not gone forever. Once you reach your FRA, benefits will be permanently increased to account for the months they were withheld.
• If you work and start collecting benefits at 62, your benefits will be reduced $1 for every $2 you earn above the earnings threshold of $15,720 (in 2016).
• In the year you turn your FRA, benefits will be reduced $1 for every $3 you earn above the earnings threshold of $41,880 (in 2016).
• In the month you turn your FRA and afterward, there are no further reductions in benefits.

Other retirement income
If you are a public employee – such as a federal civil service employee, state or local government employee, police officer, firefighter, teacher – and will receive a pension, your Social Security benefit may be reduced if your employer does not withhold Social Security taxes from your salary. In this situation, the Windfall Elimination Provision determines the impact on your Social Security benefit.
The Government Pension Offset applies to dependents of public employees. Under this law, if you will receive a pension and your employer does not withhold Social Security from your salary, your spouse’s spousal or survivor Social Security benefits may be reduced.
Lastly, if you will receive a pension from the private sector, ask your Human Resources department if a Social Security offset will reduce your pension benefit.

Benefit taxation
Your Social Security benefits may or may not be subject to income taxes. In 2015, about half of Social Security recipients had to pay income taxes on their benefit.
Depending on your provisional income, up to 85 percent of your Social Security benefit is subject to income taxes. Provisional income is the sum of your adjusted gross income, nontaxable interest and 50 percent of your Social Security benefits.