www.socialsecurity.gov
Transcription
www.socialsecurity.gov
Social Security www.socialsecurity.gov 1 Today’s young workers can expect to spend 20 or more years in retirement, so it is important to begin financial planning as early as possible. 2 Save for a Secure Future OTHER INCOME SAVINGS & INVESTMENTS PENSION SOCIAL SECURITY 3 Social Security replaces an average of about 40% of pre-retirement earnings. Financial planners generally agree that retirees will need 70-80% of pre-retirement earnings to enjoy a comfortable retirement. 4 To learn how to save and invest for retirement, visit www.mymoney.gov. The website provides helpful information furnished by over 20 federal agencies, including Social Security. 5 How Do You Qualify for Retirement Benefits? You need to work to earn Social Security “credits” Each $1,220 in earnings gives you one credit You can earn a maximum of 4 credits per year Example: To earn 4 credits in 2015, you must earn at least $4,880. Earning 40 credits (10 years of work) throughout your working life will qualify you for a retirement benefit. 6 How Social Security Determines Your Benefit Social Security benefits are based on how much an individual earned and paid in Social Security taxes while working Step 1 -Your wages are adjusted for changes in wage levels over time Step 2 -Find the monthly average of your 35 highest earnings years Step 3 -Result is “average indexed monthly earnings” 7 26 2015 Retirement Benefit Computation Example If your average monthly earnings are = 90% of First 32% of Earnings over $826 through $4,980 $5,200 $826 = $ $4,154 = $1,329 $220 = $ 743 ($4,980 -$826=$4,154) 15% of Earnings over $4,980 Your monthly benefit would be 33 $2,105 8 Windfall Elimination Provision If any part of your pension is based on work not covered by Social Security, you may be affected by the Windfall Elimination Provision. 9 Windfall Elimination Provision (WEP) - 2015 Because your pension is based on work not covered by Social Security, you may be affected by the Windfall Elimination Provision. Normal Computation WEP Computation 90% of the First $826 40-85% of the First $826 32% of the Next $4,154 32% of the Next $4,154 15% of the Remainder 15% of the Remainder 10 Full Retirement Age Chart Year of Birth Full Retirement Age 1943-1954 66 1955 66 and 2 months 1956 66 and 4 months 1957 66 and 6 months 1958 66 and 8 months 1959 66 and 10 months 1960 and later 67 The amount of benefits is affected by the age when your client decides to retire. Early Retirement: –Benefits as early as 62 –25 to 30 % reduction Full Retirement: –Full benefits at full retirement age (100%) Delayed Retirement: –Benefits increase automatically if retirement is delayed past full retirement age up to age 70 –8 % per year 11 Use the Retirement Estimator Convenient, secure, and quick financial planning tool Immediate and accurate benefit estimates Lets you create “What if” scenarios based on different ages and earnings www.socialsecurity.gov/estimator 12 Benefits for Family Members Spouses: At age 62 At any age if caring for a child under age 16 or disabled Is not entitled to a higher benefit on his or her own record Divorced Spouses: Marriage lasted 10 years & they are unmarried Unmarried Children: Up to age 18 Age 18-19 & still in high school Disabled before the age of 22 13 Spouse’s Benefit Computation Benefit is 50% of worker’s unreduced benefit Reduction for early retirement If spouse’s own benefit is less than 50% of the worker’s, the benefits are combined Does not reduce payment to worker 14 Who Can Get Survivors Benefits? Widow/Widower: Worker’s full benefit at their Full Retirement Age • (If deceased worker received full retirement or disability benefits) Reduced benefits as early as age 60, or age 50 if disabled • (71.5% of deceased worker’s unreduced benefit) At any age if caring for a child younger than 16 or disabled Can receive reduced benefits at age 60 and then reduced or unreduced benefits at age 62 or older Remarriage after age 60 (50 if disabled) Full benefits paid to both widow/widower and divorced widow/widower 15 Government Pension Offset (GPO) If you receive a government pension based on work not covered by Social Security, your Social Security spouse’s or widow(er)’s benefits may be reduced. 16 Government Pension Offset (GPO) Applies to Spouse’s Benefits Only 2/3 of amount of government pension will be used to reduce the Social Security spouse’s benefits Example: $4,200 of government pension 2/3 = $2,800 Social Security spouse’s benefits = $750 No benefit payable by Social Security 17 If You Work & Receive Benefits How Earnings Affect Retirement Benefits You Can Make Up To Rate Benefits are Withheld Under Full Retirement Age $15,720/yr. ($1,310/mo.) $1 for every $2 The Year Full Retirement Age is Reached $41,800/yr. ($3,490/mo.) $1 for every $3 Month of Full Retirement Age and Above No Limit No Limit If You Are Note: If some of your retirement benefits are withheld because of your earnings, your benefits will be increased starting at your full retirement age to take into account those months in which benefits were withheld. 18 What Will You Need When Applying for Your Social Security Benefits? Social Security number for each applicant Birth certificate(if date of birth allegation doesn't match Social Security records) Latest W-2 or self- employment tax return Earnings estimate Bank information for direct deposit Information about marriages and divorces Information about military or railroad services 19 Strategies • Pick and Choose • File and Suspend • The Do-Over 20 Retirement Strategies Pick and Choose: (Claim Now, Claim More Later) If you are between full retirement age and 70 and your spouse is already receiving benefits, you can apply for spousal benefits, delay your own benefit and earn delayed retirement credits at 8% up to age 70 at which time your own benefit could very well be higher. File and Suspend: If you are of retirement age and your spouse is full retirement age but does not want to receive his/her benefits, your spouse can apply for benefits and request payments to be suspended. These allows you to receive benefits on your spouse’s Social Security record even though he/she is not receiving theirs. Do Over at Risk: If you file for benefits early and within 12 months you now regret your decision you can withdraw your claim, pay back all the benefits you receive and restart them at higher amount based on your age at time of re-applying. 21 Your Benefits May Be Taxable About 1/3 of people who get Social Security pay income taxes on their benefits. At the end of each year, you’ll receive a Social Security Benefit Statement (Form SSA-1099). Use this statement to complete your Federal income tax return to find out if you have to pay taxes on your benefit. 22 Your Benefits May Be Taxable Individual Tax Return $24,999 or less - no Federal tax on Social Security benefit $25,000 - $34,000 - pay Federal tax on 50% of Social Security benefit More than $34,000 - pay Federal tax up to 85% of Social Security benefit Couple, Married Filing Joint Tax Return $31,999 or less - no Federal tax $32,000 - $44,000 - pay Federal tax on 50% of Social Security benefit More than $44,000 - pay Federal tax up to 85% of Social Security benefit 23 Who Qualifies for Medicare ? Age 65 24 months after entitlement to Social Security disability • Amyotrophic Lateral Sclerosis (ALS) Permanent kidney failure and receive maintenance dialysis or a kidney transplant If you filed for Social Security benefits before age 65, you will be automatically enrolled If you are close to 65, still working and not receiving benefits you will have to sign-up 24 Medicare Coverage Part A - Hospital Insurance Covers most inpatient hospital expenses 2015 Deductible $1,260 Signing up for Medicare prohibits you from participating under employer Health Saving Accounts Part B - Medical Insurance Covers 80% doctor bills & other outpatient medical expenses after first $147 in approved charges 2015 Standard Monthly Premium $104.90 Part C – Health care services through a provider organization Part D - Medicare Prescription Drug Plan Covers a major portion of prescription drug costs for Medicare beneficiaries Enroll With Medicare prescription drug provider not SSA 25 When Can I Sign Up for Medicare Part B? Initial enrollment – 7 month period • 3 months before and 3months after 65th birthday Special enrollment – still working • Anytime you are still covered by employer group health plan • During the 8-month period that begins the month after the employment or coverage ends whichever happens first • COBRA is not considered coverage based on active enrollment Annual General Enrollment • January thru March with July being effective month of coverage 55 Medicare Savings Programs Medicare Savings Program – Helps pay Part B premiums & for some the Part A & B deductibles and coinsurance Extra Help – Helps pay for the cost of Part D premiums, deductibles, and copayments www.socialsecurity.gov/prescriptionhelp/ 27 Medicare For More Information: 1-800-MEDICARE (1-800-633-4227) TTY 1-877-486-2048 www.medicare.gov 28 Connecting With Social Security • Online Services – www.socialsecurity.gov • Call Social Security to schedule an appointment – 1-800-772-1213 – TTY 1-800-325-0778 • Apply at local Office 29 Applying for Retirement Benefits You can apply online for Retirement Benefits by visiting www.socialsecurity.gov and clicking “Benefits” 30 my Social Security Your Online Account ... Your Control ... www.socialsecurity.gov/myaccount my Social Security is an easy-to-access, easy-to-use portal to view and update some of your own Social Security information. 31 Who Can Create a my Social Security Account? You must be at least 18 years old and have: A valid E-mail address; A Social Security number; and A U.S. mailing address. 32 my Social Security Services If you don’t get benefits, you can— View, save, and print your online Social Security Statement. If you do get benefits you can— Get your benefit verification letter; Check your benefit and payment information and your earnings record; Change your address and phone number; and Start or change your direct deposit. 33 Your Online Social Security Statement Provides Estimates of the retirement and disability benefits you may receive; Estimates of benefits your family may get when you receive Social Security or die; A list of your lifetime earnings according to Social Security’s records; The estimated Social Security and Medicare taxes you’ve paid; Information about qualifying and signing up for Medicare; and A printable version of your Social Security Statement. 34 What you can do Online Online Services: Request forms and pamphlets Benefit Eligibility Screening Tool (BEST) Create your online account Apply for Retirement, Disability, Medicare, and Extra Help with Medicare Part D Retirement Estimator Planners for Retirement, Disability, and Survivors Request an Online Social Security Statement www.socialsecurity.gov 35 My Social Security is the fastest, easiest and most secure way to access your personal Social security Information my Social Security provides an online benefit verification letter immediately. Visit: www.socialsecurity.gov/myaccount 36 37
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