Social Security: America s Most Successful Social Program

Transcription

1 Social Security: America s Most Successful Social Program 56% of the aged receiving Social Security are women More than 204 million workers and their families are protected by Social Security Almost every child born in this country is protected by Social Security from birth The administrative costs of the Social Security program are less than 1%

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3 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. my Social Security Services

4 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.

5 Retirement Benefit Estimator

6 Online Services at SSA.GOV Retirement/Medicare/Spouse/Disability application Retirement/ Survivors/Disability planner Request a 1099 form Medicare Card Replacements Request a Benefit Verification Letter

7 Retirement Benefits Must be at least age 62 Must be insured Must apply for benefits Must be retired

8 Must Be at Least Age 62 Must be age 62 every day of the month generally no check for month of birthday If born on 1 st or 2 nd you are 62 every day of the month Certified birth certificate to prove age Checks are paid after the month is over

9 You Must be Insured To be insured for retirement benefits, you must have 40 quarters of coverage

10 $1,220= 1 Q/C $4,880= 4 Q/C s Quarters of coverage in 2014 $2,440 = 2 Q/C s $3,660= 3 Q/C s Quarters of Coverage in 2015

11 Applying for Social Security Before age 62 go online Apply online at Appointments can be made for telephone /

12 Applying for Social Security? Items you will need Social Security number for each applicant Birth certificate* Latest W-2 and/or selfemployment tax return* Estimate of current and future earnings* Check or account record for direct deposit Information about marriages and divorces* Proof of military service - DD-214* *may not be required

13 How Retirement Benefits are Computed Wages are adjusted for inflation Your 35 highest years of earnings are averaged Result is the average indexed monthly earnings which is used to compute benefits

14 Full Retirement Age Year of birth Full Retirement Age & 2 months & 4 months & 6 months & 8 months & 10 months & 2 months & 4 months & 6 months & 8 months & 10 months 1960& later 67

15 Early Retirement If you receive benefits prior to your full retirement age, benefits are reduced. Reduction is determined by the age at which you file, the earlier you file the greater the reduction. Applies to worker, spouse, and widow(er). Reduction is permanent.

16 You Must Be Retired No limit on work AFTER full retirement age If you RECEIVE benefits prior to full retirement age, work is limited to $15,720/year to avoid penalty In January of the year you will turn full retirement age the limit increases to $41,880

17 What Counts as Earnings Counts: Gross Wages Net Profit from Business Does Not Count: Rental Income Dividends Interest Pensions Annuities Some annual leave

18 Earnings Test for Years Prior to Full Retirement Age Benefit amount = $750 mo. Annual Salary = $18,720 Earnings Limit = - 15,720 Difference = 3,000 divided by 2 (1 for 2 rule) Excess Amount = 1,500 $1500 (excess) divided by $750 (benefit) = 2 missed checks due to work

19 Earnings Test Year of Full Retirement Age Birthday 9/5/1949 Benefit amount $1,000/month Full retirement age 66 = September 2015 Annual salary $66,600 or $5,550/month Salary from January - August $44,880 Earnings Limit = -41,880 Difference = 3,000 divided by 3 (1 for 3 rule) Excess Amount = 1,000 withheld checks $1,000 (excess) divided by $1,000 (benefit) = 1 missed checks due to work

20 Check Pay Dates If born between Pay date will be 1 st & 10 th of month 2 nd Wednesday 11 th & 20 th of month 3 rd Wednesday 21 st & 31 st of month 4 th Wednesday

21 Taxation of Social Security Benefits Determine Modified Adjusted Gross Income All taxable income, plus nontaxable interest, plus 1/2 of Social Security benefit received Individual $24,999 or less - no Federal tax on Social Security benefit $25,000 - $33,999 - pay Federal tax on 50% of Social Security benefit $34,000 or more- pay Federal tax on up to 85% of Social Security benefit

22 Taxation of Social Security Benefits Couple $31,999 or less - no Federal tax $32,000 - $43,999 - pay Federal tax on 50% of Social Security benefit $44,000 or more - pay Federal tax on up to 85% of Social Security benefit For more information, call IRS toll free: or go to

23 Income Tax Withholding You can have federal income tax withheld from your Social Security check 7%, 10%, 15% or 25% Complete a W-4V available from IRS or at

24 Things to Remember Must be age 62 the entire month Benefits are paid after the month is over Direct Deposit is now mandatory COLA s effective December of each year (if applicable) Apply 2-3 months ahead of time May need to furnish proof of age, proof of earnings and/or military service

25 Spouse s Benefits Age 62 or Child under age 16 in care Divorced spouse and marriage lasted 10 years 50% of Worker s unreduced benefit Reduced if spouse not FULL retirement age Workers unreduced benefit = $800 per month Unreduced spouse = $400 per month

26 Dually entitled spouse s benefits Individual is first paid benefit based on own work & then any additional benefit due as spouse Worker s Benefit Spouse Benefit Spouse s Own Benefit Payable As Spouse Example 1 $1,200 $600 $400 $200 Example 2 $1,200 $600 $800 $0

27 Question 1: IRMAA When a couple s MAGI is above $170,00 (falls into an IRMAA) do both individuals pay the increased amount or just one of them? For example: If Mr X signs up for Medicare Part B and their joint income is $200,000 he pays $ A year later Mrs X signs for Medicare Part B, does she also have to pay the $146.90? Their income has not changed, they are jointly still over the $170,000.

28 Modified Adjusted Gross Income (MAGI) Individuals with a MAGI of $85,000 or less Married couples with a MAGI of $170,000 or less Individuals with a MAGI above $85,000 up to $107,000 Married couples with a MAGI above $170,000 up to $214,000 Individuals with a MAGI above $107,000 up to $160,000 Married couples with a MAGI above $214,000 up to $320,000 Individuals with a MAGI above $160,000 up to $214,000 Married couples with a MAGI above $320,000 up to $428,000 Individuals with a MAGI above $214,000 Married couples with a MAGI above $428,000 Part B monthly premium amount 2015 standard premium= $ Standard premium + $42.00 Standard premium + $ Standard premium + $ Standard premium + $ Prescription drug coverage monthly premium amount Your plan premium Your plan premium + $12.30 Your plan premium + $31.80 Your plan premium + $51.30 Your plan premium + $70.80

29 Question 2: IRMAA When a couple s MAGI is above $170,00 (falls into an IRMAA) do both individuals pay the increased amount or just one of them? For example: If Mr X signs up for Medicare Part D and their joint income is $200,000 he pays $ A year later Mrs X signs for Medicare Part D, does she also have to pay the $146.90? Their income has not changed, they are jointly still over the $170,000.

30 Modified Adjusted Gross Income (MAGI) Individuals with a MAGI of $85,000 or less Married couples with a MAGI of $170,000 or less Individuals with a MAGI above $85,000 up to $107,000 Married couples with a MAGI above $170,000 up to $214,000 Individuals with a MAGI above $107,000 up to $160,000 Married couples with a MAGI above $214,000 up to $320,000 Individuals with a MAGI above $160,000 up to $214,000 Married couples with a MAGI above $320,000 up to $428,000 Individuals with a MAGI above $214,000 Married couples with a MAGI above $428,000 Part B monthly premium amount 2015 standard premium= $ Standard premium + $42.00 Standard premium + $ Standard premium + $ Standard premium + $ Prescription drug coverage monthly premium amount Your plan premium Your plan premium + $12.30 Your plan premium + $31.80 Your plan premium + $51.30 Your plan premium + $70.80

31 Question 3: Conditional Part A Explain the process that SSA uses when someone applies for Conditional Part A? I have a couple that have done so but have not heard from SSA or FSD.

32 Question 3: Conditional Part A Potential Qualified Medicare Beneficiary (QMB) files for Premium Part A Medicare with SSA during the prescribed enrollment period The beneficiary specifies that I want this enrollment to be effective only if I am determined to be eligible as a qualified Medicare beneficiary (QMB) and only beginning with the month in which I am eligible as a QMB. SSA refers the beneficiary to FSD to file for QMB status FSD s backlog ranges between 4 and 6 months

33 Part A Prescribed Enrollment Period Individual Enrollment Period (IEP) E-3 E-2 E-1 1st month of Eligibility (E) X X X C X E+1 E+2 E+3 E+4 E+5 E+6 C X C X X- Month of Enrollment E 1 st Month of Eligibility C 1 st Month of Coverage (usually the month attained age 65) C X C

34 Part A Prescribed Enrollment Period General Enrollment Period(GEP) - first calendar quarter of each year (January through March) Special Enrollment Period (SEP) - period for enrollment in SMI and Premium-HI for individuals: eligible based on age 65 or disability, and who delayed enrolling because they have been or are currently covered by a group health plan (GHP) or a large group health plan (LGHP) based on current employment.

35 Question 4: SSI WHAT IS SSI? READ THE SSI REDBOOK SSI stands for Supplemental Security Income. Social Security administers this program. We pay monthly benefits to people with limited income and resources who are disabled, blind, or age 65 or older. Blind or disabled children may also get SSI.

36 Question 4: SSI How does one get SSI? - To get SSI, you must be disabled, blind, or at least 65 years old and have "limited" income and resources. You must also: be a legal resident of the United States, and not be absent from the country for a full calendar month or more or for 30 consecutive days or more; and be either a U.S. citizen or national, or in one of certain categories of qualified non citizens.

37 Question 4: SSI If the SS retirement benefit is below the SSI limit, can the beneficiary get the higher amount? SSI for an Individual in 2015 $733/ couple $1100 SSI General Income Exclusion $20 Let s say the beneficiary is over 65 and receiving $300 retirement benefits and files for SSI.

38 Question 4: SSI $300 Retirement Benefits -$ 20 SSI General Income Exclusion $280 (reduce SSI Limit by $280) $ Individual SSI Limit -$280 $453 SSI can be paid along with $300 Retirement $453 SSI +$300 Retirement Benefits $753