Social Security.

Transcription

1 Social Security

2 A Foundation for Planning Your Future OTHER INCOME SAVINGS & INVESTMENTS PENSION SOCIAL SECURITY 2

3 What is myra? A new retirement savings account developed by the U.S. Department of the Treasury Designed for people who don t have access to a retirement savings plan at work, or who lack options to save It is a Roth IRA that invests in new U.S. Treasury retirement savings bonds Open an account, build up savings to $15,000, then transfer or roll over savings to a private-sector Roth IRA 3

4 Who Pays for Social Security? Today s Workers & Employers Today s Beneficiaries 4

5 The Number of Workers per Beneficiary is Decreasing

6 my Social Security Your Online Account... Your Control... 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. 6

7 Social Security s Online Services Review your Social Security Statement Change of Address and Phone Number Get a Benefit Verification Letter Start or Change Direct Deposit Retirement Estimator Retirement & Disability Applications Medicare Online Apply for Extra Help With Medicare Drug Plan Costs Retirement/Survivors/Disability Planner Medicare Card Replacements Get a replacement SSA-1099/SSA-1042S 7

8 How Do You Qualify for Retirement Benefits? You need to work to earn Social Security credits Each $ 1,260 in earnings gives you one credit You can earn a maximum of 4 credits per year Example: To earn 4 credits in 2016, you must earn at least $ 5,040. Earning 40 credits (10 years of work) throughout your working life will qualify you for a retirement benefit. 8

9 How Social Security Determines Your Benefit Social Security benefits are based on earnings 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 9 9

10 2016 Retirement Benefit Computation Example If your average monthly earnings are = $ 5,500 Then your monthly benefit would be = $ 2,197 Average Monthly Earnings $ 5,500 90% of First $ 856 = $ % of Earnings over $ 856 through $ 5,157 $ 4,301 = $ 1,376 ( $ 5,157- $ 856= $ 4,301) 15% of Earnings over $ 5,157 $ 343 = $ 51 $ 5,500 $ 2,197 10

11 Full Retirement Age Year of Birth Full Retirement Age 1937 or earlier & 2 months & 4 months & 6 months & 8 months & 10 months & 2 months & 4 months & 6 months & 8 months & 10 months 1960 or later 67 11

12 Your Age at the Time You Elect Retirement Benefits Affects the Amount For example, if you were born from 1943 through 1954: Age 62 75% of benefit Age % of benefit Age % of benefit 12

13 What You Can Expect at Full Retirement Age 60% 50% 55% Preretirement % of Earnings 40% 30% 41% 41% 34% 20% 10% 0% Low Earner Average Earner High Earner 13

14 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

15 Windfall Elimination Provision (WEP) Normal Computation WEP Computation 90% of the First $ % of the First $ % of the Next $ 5,157 32% of the Next $ 5,157 15% of the Remainder 15% of the Remainder 15

16 Exception to the Windfall Elimination Provision Years of Social Security Coverage % of First Factor in Benefit Formula 30 or more or fewer 40 Our Online WEP calculator allows you to estimate your Social Security benefit. 16

17 What Will You Need When Applying for Your Social Security Benefits? Social Security number for each applicant Proof of age (only 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/divorces 17

18 In Addition to the Retiree, Who Else Can Get Benefits? Your Child Not married under 18 (under 19 if still in high school) Not married and disabled before age 22 Your Spouse Age 62 or older At any age, if caring for a child under age 16 or disabled 18

19 In Addition to the Retiree, Who Else Can Get Benefits? Your Ex-Spouse Marriage lasted at least 10 years Ex-spouse 62 or older Divorced at least two years and you and your ex-spouse are at least 62, he or she can get benefits even if you are not retired Ex-spouse s benefit amount has no effect on the amount you or your current spouse can get 19

20 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 20

21 Bipartisan Budget Act of 2015 Made changes to retirement and spousal benefits filing options, primarily used by married couples 21

22 What is Deemed Filing? When you file for either your retirement or your spouse s benefit, you are required or deemed to file for the other benefit as well. Deemed filing rules already apply when you file for either your retirement or your spouse s benefit and you are before full retirement age. html 22

23 New Rules for Deemed Filing The Bipartisan Budget Act extends deemed filing rules to apply at full retirement age (FRA) and beyond. The new rules are effective immediately for individuals who turn 62 on or after January 2, An individual born on January 2, 1954 will reach his or her full retirement age (66) in January 2020, the first month deemed filing will apply to someone who reaches full retirement age. 23

24 New Rules for Voluntary Suspension If you submit a request to suspend your benefits to earn delayed retirement credits on or after April 30, 2016: You will not be able to receive auxiliary benefits on someone else s Social Security record. Anyone receiving benefits on your record (excluding divorced spouses) will also be suspended for the same months you request suspension. 24

25 Who Can Get Survivors Benefits? Your Child if: Not married under age 18 (under 19 if still in high school) Not married and disabled before age 22 Widow or Widower: Full benefits at full retirement age Reduced benefits at age 60 If disabled as early as age 50 At any age if caring for child under 16 or disabled Remarriage after age 60 (50 if disabled) Divorced widows/widowers may qualify 25

26 Widow or Widower Benefit Computation At full retirement age, 100% of deceased worker s unreduced benefit At age 60, 71.5% of deceased worker s unreduced benefit Reduced benefits on one record at age 60, reduced or unreduced benefit on other record at age 62 or older Full benefits to both widow or widower and divorced widow or widower 26

27 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. The Social Security spouse s or survivors benefit is reduced by two-thirds of the government pension gross amount. 27

28 GPO Example Mary receives a monthly $1,200 government pension and is eligible for a $750 in spousal benefits. 2/3 of a $1,200 government pension = $800 Social Security spouse s benefits = $750 We must reduce the $750 by $800. No benefit payable by Social Security 28

29 You Can Work & Still Receive Benefits If You Are Under Full Retirement Age The Year Full Retirement Age is Reached Month of Full Retirement Age and Above You Can Make Up To If You Make More, Some Benefits Will Be Withheld $ 15,720/yr. ( $ 1,310/mo.) $ 1 for every $ 2 $ 41,880/yr. ( $ 3,490/mo.) No Limit $ 1 for every $ 3 No Limit 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. 29

30 Who Can Get Medicare? 65 & older -or- 24 months after entitlement to Social Security disability benefits -or- Amyotrophic Lateral Sclerosis -or- Permanent kidney failure and receive maintenance dialysis or a kidney transplant 30

31 Medicare Has Four Parts Part A - Hospital Insurance Covers most inpatient hospital expenses Part B - Medical Insurance Covers 80% doctor bills & other outpatient medical expenses 2016 standard monthly premium $

32 Medicare Has Four Parts Part C Medicare Advantage Plans Health plan options offered by Medicare-approved private insurance companies, not by Social Security Part D Medicare Prescription Drug Coverage Covers a portion of your prescription drug costs You enroll with a Medicare-approved prescription drug provider, not Social Security 32

33 When Can I Sign Up for Medicare Part B? Medicare Enrollment Periods: Initial at age 65 General January-March Special if still working 33 33

34 For More Medicare Information MEDICARE ( ) TTY

35 Any Questions? 35