2ND Q UA RTE R 20 1 7 | I S S U E NO.

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Retirement Matters

Managing Your Retirement Plan Just Got Easier.

IN THIS UPDATE:

ECONOMIC REVIEW.................................................................PAGE 1

HIGHLIGHTING SOCIAL SECURITY..........................................PAGE 2

winner in the second quarter. The MSCI EM Index produced

positive returns of 6.27% over the last three months, and is
up 18.43% year-to-date. The MSCI EAFE Index, a measure
of developed international markets, returned 6.12% in the
second quarter. The MSCI EAFE Index generated returns of
13.81% year-to-date. International markets were supported by
ECONOMIC REVIEW a weaker U.S. dollar.

D
omestic equities continued in the black through the
second quarter of the year as volatility remained at low
levels. Year-to-date, the S&P 500 Index returned 9.34%,
with 3.09% generated during the second quarter. Over the
one-year time period, the S&P 500 Index returned 17.90%.
In June, the Federal Reserve raised rates for the second time in
2017. The Fed increased rates by 0.25% to between 1.00% and
1.25%. The bond market returned 1.45% in the second quarter
of 2017. Year-to-date the Barclays US Aggregate Bond Index
generated returns of 2.27%.

In 2016, small capitalization companies largely outperformed The chart below shows the major index and Morningstar
large capitalization companies and value outperformed growth. category style returns for the quarter, one-year, three-year, five,
However, through the first half of the 2017 calendar year, and ten-year time periods ending June 30, 2017.
large cap companies have surpassed small caps. Year-to-date,
the S&P 500 Index outperformed the Russell 2000 Index by
PERFORMANCE
4.35%. Through the first half of the year, the Russell 2000
returned 4.99%. The same occurred with growth-oriented Name QTR YTD 1 YR 3 YR 5 YR 10 YR

companies compared to value. Large cap growth equities BBgBarc US Agg

1.45% 2.27% -0.31% 2.48% 2.21% 4.48%
returned 5.00% in the second quarter, and are up 14.14% Bond TR USD

year-to-date. Large cap value equities returned 1.77% over the S&P 500 TR USD 3.09% 9.34% 17.90% 9.61% 14.63% 7.18%
past three months, and are up 5.57% year-to-date. Russell 2000 TR USD 2.46% 4.99% 24.60% 7.36% 13.70% 6.92%

International equities also saw positive growth as investor MSCI EAFE NR USD 6.12% 13.81% 20.27% 1.15% 8.69% 1.03%
Copyright 2017. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.

confidence improved. Emerging markets proved to be the big MSCI EM NR USD 6.27% 18.43% 23.75% 1.07% 3.96% 1.91%

Morningstar Large
1.77% 5.57% 16.46% 6.38% 12.61% 5.18%
Value
A CBIZ Representative can be reached at: Morningstar Large
5.00% 14.14% 20.01% 8.79% 13.86% 7.50%
6050 Oak Tree Blvd., Suite 500 Cleveland, OH 44131 Growth

877.323.3867 Morningstar Small

0.26% 0.53% 21.15% 5.16% 12.44% 5.96%
Value
Morningstar Small
4.32% 10.14% 23.10% 6.66% 12.80% 7.05%
PAGE 1 Growth

Source: Morningstar
Highlighting Increase for
Age to Recieve Full
Social Security Benefits
(Called full retirement age or

Social Security
Delayed Retirement normal retirement age.)
YEARLY MONTHLY
YEAR OF FULL
RATE OF RATE OF YEAR OF BIRTH*
BIRTH RETIREMENT AGE
INCREASE INCREASE

T
he passing of the Social Security Act of 1935 during the 1933 11/24 1937 or earlier 65
5.5%
heart of the Great Depression marked one of the most 1934 of 1% 1938 65 & 2 mo.
significant pieces of legislation in U.S. history. The act 1935
6.0%
1/2 1939 65 & 4 mo.
encompassed numerous social welfare programs, however, 1936 of 1%
1940 65 & 6 mo.
for the first time, the federal government would be providing a 1937 13/24
6.5% 1941 65 & 8 mo.
program to assist the retiring population. Today, about 96% of the 1938 of 1%
American workforce participates in Social Security, yet many have 1939 7/12 1942 65 & 10 mo.
7.0%
limited knowledge of how the program works. 1940 of 1% 19431954 66
Eligibility and Benefit Calculation 1941 5/8 1955 66 & 2 mo.
7.5%
1942 of 1%
Individuals born after 1929 must accumulate 40 credits to be 1956 66 & 4 mo.
1943 2/3
eligible for a retirement benefit from Social Security. Up to four 8.0% 1957 66 & 6 mo.
or later of 1%
credits per year are awarded to individuals who work and pay 1958 66 & 8 mo.
Social Security tax. Credits are subject to a minimum earnings 1959 66 & 10 mo.
level that increases slightly each year as average wages rise.
1960 and older 67
For example, individuals working in 2017 will earn one credit
for every $1,300 in wages up to the four credit maximum. If you were born on January 1st of any year you should refer to the previous
Currently, income is reported once per year which means year. (If you were born on the 1st of the month, we figure your benefit (and
workers can earn the maximum of four credits at any point in your full retirement age) as if your birthday was in the previous month.)
the year. For example: if a worker earns $5,200 (the minimum
amount to earn all four credits for the year) in the first three an annual benefit increase of eight percent for each year they
months of 2017, they will receive all four credits regardless of defer until age 70 as noted in the chart. Individuals who work and
whether or not they work for the rest of the year. Before 1978, earn wages through this deferral period may also receive a larger
credits were calculated differently and workers had to earn calculated benefit because they will be increasing their amount of
income throughout the year to earn all of their credits. It is lifetime earnings. Many factors play a role in determining when an
important to note that only earnings subject to Social Security individual should elect benefits: working status, alternate sources
payroll tax qualify for earning credits. Income received from of income, savings, marital status, and potential longevity, to name
pension payments, retirement plan distributions, and interest just a few. Individuals should take careful consideration of their full
and dividends on savings do not qualify towards earning credits. financial picture or consult a qualified professional before making
Credits do not need to be earned consecutively; the Social any decisions on when they should elect to receive Social Security
Security Administration will aggregate all credits earned during benefits. Regardless of when a participant plans to make a Social
ones lifetime when determining eligibility. Security election, they should strongly consider filing for Medicare
benefits when eligible at age 65 to prevent the possibility of paying
Eligible participants will receive a benefit that is based on two higher premiums.
factors: their lifetime earnings history and the age at which they
claim benefits. It is important to clarify that a participants age at Spousal Benefits
claim may be different than their age at retirement. The lifetime The Social Security Administration allows individuals to file a
earnings component is simple the more an individual earns over claim for spousal benefits based on their spouses working
their working years, the larger their benefit. The age component is history. If an individual claiming spousal benefits is also eligible
a bit more complex. For an individual to realize their full retirement for their own benefits, they will always receive their benefits first.
benefit, they must claim benefits on or after their full retirement If they are entitled to a larger benefit as a spouse, the difference
age as determined by their date of birth. Participants may elect will be added to their payment. A spousal benefit elected at full
an early retirement claim as early as age 62; however, they will retirement age will equal one half of the working spouses benefit
receive a reduced benefit amount based on how far they are from and will be reduced if taken before. An individual may apply
full retirement age. For example: an individual turning 62 in 2017 for spousal benefits even if they are not Social Security eligible
has a full retirement age of 66 and two months. If early retirement themselves. In order to file for spousal benefits, both spouses
is elected, they will only receive approximately 74.2% of their full must be of minimum retirement age, and the working spouse
retirement age benefit. Individuals may defer benefits beyond full
retirement age and be eligible to receive more than 100 percent of Continued on page 3
their full retirement benefit. The benefit is increased every month
the claim is deferred until a maximum age of 70 at which point PAGE 2
the benefit is capped. Participants born in 1943 or later will see
Continued from page 2
must already be receiving Social Security retirement or disability
benefits (an exception exists for spouses below retirement age
who are caring for a disabled child or a child under age 16). Just
like before, if either spouse is below full retirement age at the
time spousal benefits are claimed, the benefit will be reduced.
It is important to note that new legislation has closed a loophole
pertaining to the voluntary suspension of benefits also known
as file and suspend. Prior to legislation, a working spouse at
full retirement age could apply for retirement benefits while their
spouse subsequently filed for spousal benefits. Immediately
thereafter, the working spouse could suspend receipt of their
benefit until age 70 and allow it to grow. During the time their
benefits were suspended and growing, their spouse was able
to collect spousal benefits. The new legislation still allows
individuals at full retirement age to suspend their benefit until
age 70, however, their spouse will not be able to receive spousal
benefits until the working spouse receives theirs. The new law
applies to individuals who request a suspension on or after April
30, 2016. For more information on The Bipartisan Budget
Act of 2015 as it pertains to these changes visit:
https://www.ssa.gov/planners/retire/claiming.html
Benefits After Divorce
Individuals divorced after a marriage that lasted ten years or
longer may file for benefits under their ex-spouses record. In
order to do so, they must remain unmarried, be age 62 or older
(60 if the ex-spouse has passed away or 50 if the divorced
individual is disabled), their ex-spouse must be Social Security
eligible, and the ex-spouses benefit must exceed any benefit
the divorced individual is entitled to personally. Unlike spousal
benefits however, a divorced individual of two years does not
need to wait for their ex-spouse to claim benefits in order to
file on their record. If a divorced individual is taking care of an
ex-spouses child who is under 16 years of age or disabled, the
length of marriage rule does not apply. As with the previous
situations, filing for benefits on an ex-spouses record before full
retirement age will result in a decreased benefit.
The remarriage of an ex-spouse will not discontinue benefit.
Subsequently, it is possible for an individual who is divorced to
have a current and ex-spouse both claiming benefits on their
record. Once remarried, a previously divorced individual can no
longer claim on their ex-spouses record unless the new marriage
ends through divorce, death, or annulment.
Survivor Benefits
The Social Security Administration extends benefits to spouses
and children in the event of an eligible workers passing. The
This market commentary contains our current opinions and does not represent a recommendation of any particular security, strategy or investment product.
Such opinions are subject to change without notice. These comments are distributed for documenting due diligence and educational purposes. No part of this publication
may be reproduced in any form, or referred to in any other publication without express written permission. Past performance is no guarantee of future results. Indexes are
not managed and cannot be invested in directly. All returns include reinvested dividends, sourced from Morningstar and Bloomberg.
Securities and investment advisory services offered through CBIZ Financial Solutions, Inc.
Member FINRA / SIPC and SEC Registered Investment Adviser
Home Office located at:
6050 Oak Tree Blvd, Suite 500, Cleveland, OH 44131 (216) 447-9000
survivor benefit is based on the earnings of the worker who
passed. Surviving spouses who have attained full retirement
age may receive 100 percent of the deceased workers basic
benefit. Surviving spouses starting at age 60 may receive
a reduced benefit (age 50 if disabled). Surviving spouses
caring for disabled children or children under 16 years of age
will be eligible for at least 75% of the workers basic benefit,
regardless of age. Unmarried children under age 18 (19 or
younger if attending elementary or secondary school full time)
and children disabled before age 22 are also eligible for 75% of
the deceased workers basic benefit. A Social Security eligible
individual will receive the greater of their own benefit or their
benefit as a surviving spouse, but not both.
Tax and Inflation
Individuals with income other than Social Security benefits
wages, self-employment income, pension income, dividends and
interest, IRA and other retirement plan distributions may have
to pay federal income tax on up to 85% of their benefit. If a tax
liability is anticipated, recipients have the option of having federal
income taxes withheld from their monthly payment. Most states
do not impose a tax on Social Security benefits, however some
still do; it is important to consult with your specific states tax
code and plan accordingly. Social Security benefits are evaluated
annually to account for cost of living adjustments (COLA). The
cost of living is measured by the Consumer Price Index for Urban
Wage Earners and Clerical Workers (CPI-W) which is prepared by
the Bureau of Labor Statistics. This adjustment is designed to
maintain the purchasing power of the benefit.
Final Thoughts and Resources
While Social Security has provided vital retirement income
for millions of Americans since its inception, we must keep
in mind that it is a system designed to be a component of a
sound retirement plan; not to stand alone as one. With the ever
changing political and economic landscapes, it is important
now more than ever that we take our retirement into our own
hands by saving as much as possible, taking advantage of
employer-sponsored benefits, seeking professional advice,
and continuously monitoring progress. As such, we encourage
you to reach out to your plan sponsor or CBIZ Retirement Plan
Services. We are poised to answer your questions and help
guide you on your path to retirement.
For more information about Social Security, or for Social Security
related questions, call the Social Security Administration toll-free
at 1-800-772-1213, visit their website at www.ssa.gov, or visit
your local Social Security office.
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