The document discusses various questions people have about their social security and retirement benefits, such as why cost of living adjustments have been low, potential changes to the social security system, and strategies for maximizing benefits like delaying claiming benefits. An expert answers the questions, explaining issues like the cost of living formula and outlining various proposals from a bipartisan commission to address challenges facing the social security system.

2. What’s Ahead for Social Security?
Social Security is supposed to be a security blanket for most Americans, but lately it hasn’t felt all that comforting.
Because of the cost-of-living formula used by the Social Security Administration, benefits recipients are not receiving an
increase in 2011 for the second year in a row. And under current rules, the entire Social Security system is in danger of becoming
insolvent. To avoid that, the cochairs of a bipartisan commission on the federal deficit recently proposed raising the normal re-
tirement age, increasing the annual limit on income that is subject to the Social Security payroll tax and other controversial
changes.
Bottom Line/Personal asked Social Security expert Theodore Sarenski to address some of the questions and concerns
that many people have…
Q: Why are benefits not rising when it feels like living expenses are going up and up?
The Social Security cost-of-living formula has not been particularly fair to retirees lately. The formula’s inflation index
hasn’t climbed for two years largely because home values have plummeted and car prices have stagnated. But retirees typically
don’t buy a lot of homes and new cars. Many of the things that they spend on—health care,
heating fuel and utilities, for example—have in fact increased in price.
Cost-of-living increases are likely to resume once real estate values stabilize. Mean-
while, remember that there was a big 5.8% cost-of-living increase in benefits three years ago.
The system wouldn’t seem quite so unfair if that increase had been spread evenly over the past
three years. However, under a proposal by the deficit commission’s cochairs, cost-of-living ad-
justments would become less generous starting in 2012 under a new formula.
Q: Are benefits going to end if the Social Security system starts to run out of money?
No. It is true that the system is expected to run a deficit by 2015, and its reserves are indeed on course to be depleted—
but not until 2037. Most likely, the government will make changes in the tax and/or benefits rules in time to prevent that.
Even in the very unlikely event that the reserves are completely depleted, the system would still be able to pay around
75% of its obligations through 2084 by distributing the taxes paid into the system each year by those still in the workforce.
Q: How likely is it that the government actually will make changes to Social Security?
My prediction is that politicians will keep feeding us Social Security scare stories every election year, but they will not
substantially alter the system for many years, perhaps even decades. In the 75-year history of the Social Security system, law-
makers have always waited until disaster was imminent before making changes. That said, America’s budget problems are very
pressing, and politicians might conclude they cannot solve these problems without slashing the cost of the Social Security
system.
Q: What are the possible changes?
In addition to changing the cost-of-living formula, the commission cochairs made the following proposals, which the full
commission had not yet voted on as of press time…
Slowly raise the normal retirement age to 68 b 2050 and to 69 by 2075…increase the early
retirement age from 62 to 64…and at the same time provide a “hardship exemption” for people physi-
cally unable to work past age 62. The normal retirement age increase would affect only people born
after 1960. Currently, the normal retirement age for people born in 1960 or later is 67.
Gradually raise the annual limit on income subject to the Social Security payroll tax from the
current $106,800 until it’s near $190,000.
Give retirees an option to collect half their benefits early and the other half at a later age.
This would allow early retirees to draw some income from the Social Security system, perhaps to
supplement income from a part-time job, while also allowing some of their benefits to continue to
grow by delaying them until age 70.
Establish a new special minimum benefit to keep low-wage workers above the poverty line.
Provide a “benefit bump-up” for older retirees equal to 5% of the average benefit. The bump-
up would be phased in over five years, starting 20 years after a retiree first becomes eligible for
benefits.
The cochairs also proposed several alternative changes, which include increasing benefits for
low-income widows or widowers…capping the spousal benefit at one-half the average worker’s benefit, rather than one-half the
partner’s benefit…and reinstating college benefits for child survivors—benefits that were eliminated in 1981.

3. Q: How can I maximize my benefits?
Unless poor health or family history suggests that you are likely to pass away before age 77, you’ll get more money
from the system by waiting until your late 60s or age 70 to start receiving your benefits. Delaying the start of benefits until at
least age 66 is attractive if you are married because it increases your partner’s spousal and survivor benefits, too, by up to 8%
per year.
Strategies to maximize benefits…
“62/70 strategy.” Married people should consider this. The lower-earning spouse, usually but not always the wife,
claims benefits based on her own earnings at age 62, with her husband claiming spousal benefits on her earnings as soon as he
reaches his full retirement age—66 if he was born between 1943 and 1954. then the husband switches to his own benefits when
he turns 70, with his wife switching to spousal benefits based on his earnings. This couple receives the largest possible benefit
checks after the husband turns 70 but still gets benefits before then.
“File-and-suspend” strategy. If one spouse has no significant earnings history, this strategy is a second option. Here,
the wage-earning spouse files for benefits when he reaches the normal retirement age, then immediately asks that those benefits
be suspended. Then his partner can claim spousal benefits based on his suspended account, while the amount that will be on the
wage earner’s eventual monthly checks continues to grow until he ends the suspension in his late 60s or at age 70, the age at
which the benefits rate stops rising.
Q: For someone who would like to work a few more years, is there a risk that taking a low-paying job at the end
of a career will drive down the earnings history on which his/her future Social Security checks will be based?
Continuing to work is far more likely to increase someone’s eventual Social Security benefits than it is to reduce them
even if the late-career job doesn’t pay well. Benefits are computed based on the 35 highest-earning years among your final 40
working years, not on the final salary, as they are with some pension plans.
If someone has worked for fewer than 35 years, even a small paycheck will boost benefits because it will replace $0
earning years in the calculations.
If the person already has 35 working years, the small pay-
checks might not boost the earnings history but will make it easier to
delay the start of Social Security benefits past age 62, thereby in-
creasing eventual monthly checks by up to 8% per year, simply
based on age, until age 70. just try to avoid starting benefits while
you’re still working—that would increase the odds that your benefits
will be taxed.
Working additional years is likely to reduce Social Security
benefits only if someone already has worked 40 years and had high
earnings in the early years relative to the rest of his career. Continu-
ing to work in this situation could bump those long-ago high-earning
years out of the most recent 40 working years, removing those years
from the benefits equation.
Q: For someone in debt who is worried that creditors and debt collectors are going to grab his Social Security
benefits, is there anything that can be done to protect those benefits?
Creditors and debt collectors usually cannot legally garnish Social Security benefits. Unfortunately, when banks receive
court orders directing them to freeze accounts, they often do so, even when the accounts contain Social Security assets. Most
account holders don’t fight this because they don’t realize it is illegal.
If this happens to you, be sure to contact the bank and point out that Social Security income is in the account and cannot
legally be frozen. Then insist that the assets be released. Be aware, however, that Social Security benefits can be legally frozen
or garnished if the debt involves unpaid federal income taxes or child support.
Reprinted with the permission of:
Bottom Line Publications
Boardroom Inc.
281 Tresser Blvd., 8th floor
Stamford, CT 06901
www.bottomlinesecrets.com

4. Financial Planning for the Decade Ahead
Having concluded the first decade of the 21st century, now is a good time to reflect back on the last 10 years. This review can
offer insight into what expectations should be going forward. Most would agree that it has been both a volatile and unpredictable
period. We experienced an economic environment in the U.S. that many could compare only to the Great Depression. America’s
unemployment rate has led many people to deplete both personal and
family member’s savings, the stock market has left many people fearful
of any non-guaranteed alternatives, and with interest rates at historic
lows, alternatives are simply measured by opportunity for return of princi-
pal as opposed to return on principal.
Ten year time horizons have typically provided for a good “sample set” of
data for planners to provide broad perspectives for their recommenda-
tions. The S&P 500 opened ten years ago on Jan 2, 2001 at 1320.28. With
only a few trading days left in 2010, it is on pace to close at an approxi-
mate loss of 5% for that ten year period.
Despite this long term reduction, many financial plans are maintaining their traditional investment strategies. Investment philoso-
phies such as Long Term Planning, Staying the Course, or Buy and Hold positioning are still considered the order of the day.
The prudence of these strategies lies solely within their abilities to provide relatively consistent returns above guaranteed options.
In this reflection, below is a quick list of events that prohibited this consistency:
Stock Market Correction of 2008 (S&P 500 declines 56% from October 1, 2007 to March 2, 2008)
Troubled Asset Relief Program (TARP)
Flash Crash of 2010 (DJIA declines by 9.2% in 1 day)
Tech Bubble
Real Estate Crisis
Financial meltdown of various European countries
Federal Reserve’s Quantitative Easing Policy
Unprecedented Ponzi Schemes uncovered
General Motors Declares Bankruptcy
The future decade will undoubtedly bring with it more unexpected turns. While resiliency will likely prevail, many ill-prepared
financial plans are likely to fail. The uncertainty surrounding this economy has led many people to look for ways to find financial
security. Achieving this type of security comes only with proper planning and an understanding of current conditions and alter-
natives, coupled with a regular review of progress.
Whether your goals include guaranteed lifetime income or a hedge against future inflation, CLA offers alternatives to help you
achieve your goals. Contact your CLA representative today to start planning for the future.
If you have any questions regarding this article, please contact our offices to schedule an
appointment with one of our agents. Our toll free number is 1-888-404-6848, Monday-Friday,
8:30am-5:00pm Central Time.
CLA does not give legal, investment or tax advice. Only an attorney can provide legal advice. You should consult with your own attor-
ney to discuss your specific estate planning needs. You should always consult with your tax professional on issues related to taxes.

5. Family & Friends
Dear CLA Client,
I would like to announce a new program available to all of our clients here at CLA. This new
program is called Family & Friends, and is designed to help you make sure that the people you
care about receive an education about planning. Over the years we have been told over and
over,
“I wish my brother could hear this.”
Or,
“My friend from church really needs this information.”
Now, we have developed a way to help you. All we need at CLA is their name and contact
number. Our Family & Friends Enrollment Counselors will do the rest. Because we are a
nationwide service organization, it is very likely that there is a Planning Class scheduled in
their area soon.
So, all you have to do is let us know which of your Family and Friends would enjoy our
presentation. Here is how you make it happen for the people you care about:
Call Direct to Family & Friends Enrollment Counselor
1-888-889-8888
Monday-Friday 9am-5pm CST
That’s it! That’s all you have to do. We will take it from there.
I hope and trust we have done a good job for you. We look forward to serving you in the future.
Best Regards,
John Long
Vice President, CLA Estate Services

6. │ ASCLA LUSA │ JULY 2010 │ 1-888-404-6848
CLA A USA │ JULY 2010 │ 1-888-404-6848
U C

7. INSURANCE
how much
COVERAGE
By Winona Travis, CISR is enough?
o your current auto and homeowner’s policies supply the coverage you need? Insur-
ance is not a one-size-fits-all product; it should be tailored to protect you in the event
of a loss. The coverage purchased should be determined by needs. Advice from a licensed
professional is the best gauge in deciding whether or not you are properly insured.
There are many aspects to consider when
purchasing home and auto insurance:
• What company can secure a combi-
nation of the best coverage, service,
and price?
• How much coverage is needed to
protect my family and assets?
• How can insurance scores, based on
credit history, lower rates?
• What is the difference between PIP
and Medical Payments in regards to
auto policies?
• How valuable is towing and rental
coverage, and to what situations
does it apply?
Make sure that your family and assets • What can be done to save money on
are covered with the proper insurance policy. home and auto insurance policies?

8. What company can secure a combination of After gaining a full understanding of a clients
the best coverage, service, and price? needs, the agent will be able to work with an
insurance carrier to find that perfect fit.
When shopping for insurance, great importance
should be placed the source of the purchase.
The common misconception that this “does not How much coverage is needed to protect
matter” could cost you time, money, and peace my family and assets?
of mind. There are several different avenues
through which to purchase home and auto in- Visiting with an agent is imperative in the pro-
surance. These include captive agents who sell cess of ensuring proper coverage. Unfortunate-
for only one company and independent agencies ly, many people find themselves under-insured
who offer a multiple options and companies. due to the agent’s lack of attention to important
details which dictate how much coverage is ac-
Independent insurance agencies can offer tually required.
excellent service and policies to fit particular
needs, because they have access to several Not having enough coverage on an auto policy
A rated companies they can shop to ensure could be financially devastating in the event of
competitive rates for the coverage needed to an at-fault accident! Many clients are not aware
protect families and their assets. of the possibility of higher policy limits that
require little extra premium. The best way to
It is important for an agent to gather infor- ensure you have enough protection is to have
mation needed to secure coverage with the a professional agent who can determine how
company that best suits each individual. Your much coverage you really need.
insurance program is unique and should be
custom fit to your particular needs.
How can insurance scores,
based on credit history, lower rates?
In today’s time, most insurance companies use
insurance and/or credit score as a tool in de-
termining rates. Many clients ask about
the correlation between credit scores
and premiums being charged. They
also inquire as to the necessity
of a Social Security number
when obtaining insurance.
Through studies, insurance
companies have gathered
that people who are respon-
sible with money also seem to
be responsible on the road. This
same group also tends to file few-
er quantities of small claims as well
as choose to self-insure in efforts to
keep their insurance rates low.

9. What is the difference between PIP and What can be done to save money
Medical Payments in regards to auto policies? on home and auto insurance policies?
Personal Injury Protection (PIP) is intended to The best way to save money on insurance is
cover the insured in the event of injury while to have an agent who will take the time to get
in the vehicle. PIP will not only cover medical to know you and your financial situation. The
payments, but also covers lost wages as well. more information given to an agent, the more
Many clients are retired, and therefore do not advise can be rendered on how much cover-
need coverage of lost wages. In which case, age is needed to protect your family and assets
medical coverage would be a sufficient option without over (or under) insuring you.
for senior clients, as it is less expensive. In the
same light, those without medical insurance Furthermore, take the time to ask questions
might find it beneficial to consider a higher limit until you are comfortable with the insurance
on this coverage. being purchased. An insurance professional
should strive to take the time to get to know
How valuable is towing and rental coverage, each client resulting in best possible decisions
regarding individual insurance programs.
and to what situations does it apply?
Insuring your assets is important so make sure
Towing is a great addition to your auto policy your agent is taking the time to look at your
because not only can it be utilized in the event financial situation and has an understanding of
of an accident, but also it can be used if the how to properly protect you
vehicle breaks down and requires towing to and your family.
a mechanic.
Rental coverage can only
be used when the ve-
hicle is unavailable
because it is be-
ing repaired
in the event
of a loss.
Household
with only
one ve-
hicle ben-
efit greatly
from this
optional
c o v e ra g e .
Fa m i l i e s
with mul-
tiple cars
can cut their
premium by
not selecting
this coverage.

10. Eat Your Way to Low Cholesterol
If you have high cholesterol, your primary objective should be to find a way to lower it without drugs and their side effects.
The good news is that just eating the right foods often can reduce cholesterol by 50 points or more.
Most people know to eat a low-fat diet, but there are certain foods that can help lower cholesterol that may surprise you…
MACADAMIA NUTS
Macadamia nuts are among the fattiest plant foods on the planet, about 76% total fat by
weight. However, nearly all of the fat is monounsaturated. This type of fat is ideal because it lowers
LDL (bad) cholesterol without depressing HDL (good) cholesterol.
A team at Hawaii University found that study participants who added macadamia nuts to
their diets for just one month had total cholesterol levels of 191 mg/dL, compared with those eating
the typical American diet (201 mg/dL). The greatest effect was on LDL cholesterol.
Macadamia nuts are higher than other nuts in monounsaturated fat, but all nuts are high in
vitamin E, omega-3 fatty acids and other antioxidants. Data from the Harvard Nurses’ Health study
found that people who ate at least five ounces of any kind of nut weekly were 35% less likely to suffer heart attacks than those who
ate less than one ounce per month.
Caution: Moderation is important because nuts—macadamia nuts, in particular—are high in calories. Limit servings to be-
tween one and two ounces—about a small handful a day.
RHUBARB
Rhubarb is ideal for both digestive health and lowering cholesterol because it contains a mix of soluble (see
“Oats” on page three) and insoluble fibers.
A study reported in Journal of the American College of Nutrition found that participants who ate a little less than
three ounces of rhubarb daily for four weeks had an average drop in LDL cholesterol of 9%.
This tart-tasting vegetable isn’t only an ingredient in pies. You can cut and simmer the stalks and serve rhubarb
as a nutritious side dish (add some low-calorie strawberry jam for a touch of sweetness).
RICE BRAN
It’s not as well-known for lowering cholesterol as oats and oat bran, but rice bran is just about as
effective and some people enjoy it more. A six-week study at University of California, Davis Medical
Center found that people who ate three ounces daily of a product with rice bran had drops in total cho-
lesterol of 8.3% and a reduction in LDL of 13.7%.
You can buy rice bran in most supermarkets—it’s prepared like oatmeal. Or you can try pre-
pared rice-bran breakfast cereals, such as Quake Rice Bran Cereal and Kenmei Rice Bran.
RED YEAST RICE
Made from a yeast that grows on rice, red yeast rice contains monacolins,
compounds that inhibit the body’s production of cholesterol.
One study found that people who took red yeast supplements and did nothing else had drops in LDL of
23%. When the supplements were combined with healthy lifestyle changes, their LDL dropped by
about 42%.
Red yeast rice may be less likely than statins to cause the side effect myopathy (a painful muscle dis-
ease). Recommended dose: 600 milligrams (mg), twice daily. It is available online and at health-food
stores.
GREEN TEA
Green tea is a concentrated source of polyphenols, which are among the most potent antioxi-
dants. It can lower LDL cholesterol and prevent it from turning into plaque deposits in blood vessels. In
one study, men who drank five cups of green tea daily had total cholesterol levels that were nine points
lower than men who didn’t drink green tea.
Three to five cups daily are probably optimal. Black tea also contains polyphenols but in lower
concentrations than green tea.

11. VITAMINS C AND E
These vitamins help prevent cholesterol in the blood from oxidizing. Oxidized cholesterol is
more likely to cling to artery walls and promote the development of atherosclerosis, the cause of most
heart attacks.
I advise patients with high cholesterol to take at least 400 international units (IU) of d-
alpha-tocopherol, the natural form of vitamin E, daily. You might need more if you engage in ac-
tivities that increase oxidation, such as smoking.
For vitamin C, take 1,000 mg daily. People who get the most vitamin C are from 25% to
50% less likely to die from cardiovascular disease than those who get smaller amounts.
THE BIG THREE
In addition to the above, some foods have long been known to reduce cholesterol, but they are so helpful that they bear
repeating again…
Cholesterol-lowering margarines. I use Benecol every day. It’s a margarine that contains stanol esters, cholesterol-
lowering compounds that are extracted from plants such as soy and pine trees. About 30 grams (g) of Benecol (the equivalent of
about three to four pats of butter) daily will lower LDL by about 14%.
Similar products, such as Promise Buttery Spread, contain sterol esters. Like
stanols, they help block the passage of cholesterol from the digestive tract into the blood-
stream. We used to think that sterols weren’t as effective as stanols for lowering cholesterol,
but they appear to have comparable benefits.
Oats. They are among the most potent nutraceuticals, natural foods with medicine-like
properties. Both oat bran and oatmeal are high in soluble fiber. This type of fiber dissolves
and forms a gel-like material in the intestine. The gel binds to cholesterol molecules, which
prevents them from entering the bloodstream.
A Harvard study that analyzed the results of 67 scientific trials found that even a small
amount of soluble fiber daily lowered total cholesterol by five points. People who eat a total
of 7 g to 8 g of soluble fiber daily typically see drops of up to 10%. One and a half cups of
cooked oatmeal provides 6 g of fiber. If you don’t like oatmeal, try homemade oat bran muffins. Soluble fiber also is found in
such foods as kidney beans, apples, pears, barley and prunes.
Also helpful: Psyllium, a grain that’s used in some breakfast cereals, such
as Kellogg’s All-Bran Bran Buds, and in products such as Metamucil. As little as 3
g to 4 g of psyllium daily can lower LDL by up to 20%.
Fish. People who eat two to three servings of fish a week will have signifi-
cant drops in both LDL and triglycerides, another marker for cardiac risk. One large
study found that people who ate fish as little as once a week reduced their risk for a
sudden, fatal heart attack by 52%.
I eat salmon, tuna, herring and sardines. Other good sources of omega-3
fatty acids include walnuts, ground flaxseed, tofu and canola oil.
Fish-oil supplements may provide similar protection, but they are not as
effective as the natural food, which contains other beneficial nutrients as well.
Reprinted with the permission of:
Bottom Line Publications
Boardroom Inc.
281 Tresser Blvd., 8th floor
Stamford, CT 06901
www.bottomlinesecrets.com
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