www.socialsecurity.gov

Social Security
www.socialsecurity.gov
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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.
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Save for a Secure Future
OTHER INCOME
SAVINGS & INVESTMENTS
PENSION
SOCIAL SECURITY
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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.
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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.
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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.
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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”
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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
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$2,105
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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.
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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.
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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
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Strategies
• Pick and Choose
• File and Suspend
• The Do-Over
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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.
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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.
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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
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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
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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
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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
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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/
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Medicare
For More Information:
1-800-MEDICARE
(1-800-633-4227)
TTY 1-877-486-2048
www.medicare.gov
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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
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Applying for Retirement Benefits
You can apply online for
Retirement Benefits by
visiting
www.socialsecurity.gov
and clicking “Benefits”
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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.
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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.
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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.
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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.
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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
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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
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