AW Elliott & Associates

Prepare for Retirement the Right Way

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Start Planning for Your Retirement Today

At AW Elliott & Associates in Mira Loma, California, we believe that retirement is something that you should be planning for as early as possible. A comprehensive retirement plan is critical if you wish to secure your future stability and happiness.


At our firm, we make sure that your plan factors in all of the important variables such as your income, expenses, social security investments, inflation projections, and more. With our services, we guarantee that you can enjoy your post-retirement life without any hassle. 

The Factors That May Affect Your Retirement Benefits 

Your average earnings for most of your working career will serve as the basis of the benefits you will receive. The higher your lifetime earnings are, the higher your benefits will be. If you have years of no or low earnings, the amount may be smaller than what you would have received if you had worked continuously.


Your age at the time you start receiving benefits also affects your benefit amount. For example, if you start your retirement benefits at age 62 (the earliest possible retirement age), your benefit will be less than if you waited until your full retirement age. If you start your retirement benefits only after full retirement age, the monthly benefit may be higher because of delayed retirement credits.

Things to Do if You Are Self-Employed

If you operate a trade, business, or profession, either by yourself or as a partner, you are self-employed. Self-employed individuals must report their earnings and pay taxes directly to the IRS.


The time when you file your federal income tax return is when you report your earnings to Social Security. If your net earnings in a year are $400 or more, you must report your earning on IRS Schedule SE for Social Security purposes, along with the other tax forms you must file


Please make sure you contribute to the retirement plan for the self-employed.

Things to Do if You Work for a Federal, State, or Local Government

If you are a federal, state, or local government worker and do not pay Social Security taxes, the pension that your agency will provide may reduce any Social Security benefits that you are entitled to due to the following factors:


The way your Social Security retirement or disability benefits are computed may affect your benefits. Read the Windfall Elimination Provision fact sheet for information about this. Another is the benefits that you receive as a spouse or widow/widower. Read the Government Pension Offset fact sheet to learn more about this provision. For further information, visit the SSA website for federal, state, and local government employees.

Things to Do if You Work Outside the U.S.

If you work outside the US for an American company or, in some cases, an associate of an American company, you and your employer may have to pay Social Security taxes on the same earnings to both the US and the foreign country. However, if you work in one of the agreement countries included in the SSA fact sheet, the international agreements can help you. The following are included in the agreements:


Your Social Security coverage will be assigned to either the US or the foreign country.

You and your employer will not have to pay taxes to both countries.


Learn more about working outside the US by visiting the SSA website on international programs.

Prepare for Your Medical Needs

Medicare is a health insurance plan for people ages 65 and older and people with disabilities or permanent kidney failure. Most people have all three parts of this health insurance plan. Learn what these parts are by reading the information below.


Hospital Insurance: Sometimes referred to as Part A, this covers inpatient hospital care and specific follow-up care. You’ve already paid for this while you were working since this is a part of your Social Security taxes.


Medical Insurance: Sometimes referred to as Part B, this is optional and pays for physicians’ services, as well as specific services not covered by hospital insurance. Monthly premiums must be paid.


Prescription Drug Coverage: Sometimes referred to as Part C, this covers prescription drugs. Like medical insurance, this is optional, and you must pay monthly premiums. However, you may be able to get additional help in paying monthly premiums, annual deductible, and prescription co-payments.


If you’re already receiving Social Security benefits when you turn 65, your Medicare (Part A) will begin automatically. If you’re not getting Social Security, you must sign up for Medicare before your 65th birthday even if you aren’t ready to retire.

For Those Already Receiving Disability or Survivors’ Benefits During Retirement Application

There will be no changes if you are receiving disability benefits when you reach full retirement age, except that your benefits will be called retirement benefits rather than disability benefits. You are also eligible for your own higher benefits if you’re receiving survivors’ benefits. You can switch from survivors to retirement benefits as early as the age of 62 or as late as the age of 70.


In several cases, widows or widowers start receiving one benefit at a reduced rate and shift to the other benefit at an unreduced rate at full retirement age. However, if you change your benefit, you will be paid only the higher of the two benefits, not both.

Annuities in a Nutshell 

A contract between you and an insurance company is called an annuity. This is where you agree to make a lump sum payment or a series of payments. In return, the insurer agrees to pay you periodically that starts immediately or at some later date.


Annuities usually offer a tax-deferred earning. This may include a death benefit that will pay your beneficiary a guaranteed* minimum amount, like your total purchase payments. Moreover, unlike retirement plans, the amount of money that you can put into an annuity isn’t limited.


Choosing the most suitable annuity can be confusing due to the sheer number of annuity products on the market today. In fact, there are three types of annuities. These are the following:


Timing of Payout (Immediate or Deferred) – In an immediate annuity, the annuitant starts receiving payments right after purchase. This is for individuals needing immediate income from their annuity. In a deferred annuity, payments start at some future date, usually at retirement.


Investments by Insurers (Fixed or Variable) – High-grade corporate bonds and government securities are where insurance companies invest annuity assets in. Insurers offer a guaranteed* rate, usually over a period of 1-10 years. Variable annuities give you more control of where your premium goes, such as securities portfolios, fixed interest accounts, and money market securities.


Liquidity Options – An annuity may permit you to withdraw your interest earnings of up to 15% per year without a penalty (although any withdrawal from an annuity may be subject to taxes and a 10% federal penalty if taken before the age of 59 and a half).


More Information on the Types of Annuities


Fixed Annuity: It is guaranteed by the insurance company that you’ll earn a minimum rate of interest in the annuity’s accumulation phase. Another guarantee is that periodic payments will be a fixed amount. These payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or yours and your spouse’s.


Variable Annuity: Through an array of subaccounts, similar to mutual funds, variable annuity gives the purchaser more options on where their premium goes. The return rate on your purchase payments, as well as the amount of periodic payments you will eventually receive, differ depending on the performance of the subaccounts you chose.


Equity-Indexed Annuity: This is a hybrid kind of annuity. During the accumulation period, when you make a lump sum payment or a series of payments, the insurance company credits you with a return based on an equity index’s changes.


For example, the S&P 500 Composite Stock Price Index (An annuity’s index account does not credit the same return or a percentage of the return of any index. Dow Jones indices are exclusive of the dividend income of the company stocks that comprise it.) A minimum return is usually guaranteed by the insurance company.


After the accumulation period, periodic payments will be made to you by the insurance company under your contract’s terms, unless you choose to receive a lump sum.


The SEC regulates variable annuities, which are securities. Fixed annuities are not securities. Therefore, they’re not regulated by the SEC.


Equity-indexed annuities combine parts of traditional securities (opportunity for earnings potential of interest, with an index’s performance as the basis) and traditional insurance products (guaranteed minimum return). An equity-indexed annuity may or may not be a security depending on the mix of features. The common equity-indexed annuity is not registered with the SEC.

Important Considerations

If you are thinking about purchasing an annuity, it is helpful to carefully consider the following before doing so:


The rating of the insurance company (with their financial strength indicated) issuing the annuity, particularly in a fixed annuity’s case


The fees paid to the brokers who market the annuities on the insurance company’s behalf


Any withdrawal from an annuity may be subject to taxes and a 10% federal penalty if taken prior to the age of 59 and a half.


Read answers from the SEC for more information about annuities. If you cannot access the link provided, kindly get in touch with us to request a copy.


*Annuity guarantees depend on the issuing insurance company’s claims paying-ability and financial stability.

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