social security frank van nostrand public affairs specialist
TRANSCRIPT
Social Social SecuritySecuritySocial Social SecuritySecurity
Frank Van NostrandFrank Van Nostrand
Public Affairs Public Affairs SpecialistSpecialist
Social Security Programs
Retirement
Insurance
Survivors
Insurance
Disability Insurance
Medicare
Supplemental
SecurityIncome
Other Programs
RetirementRetirementIncomeIncome
Social SecuritySocial SecurityCost-of-Living AdjustmentsCost-of-Living AdjustmentsEffective Date Amount Effective Date Amount June 1975 8.0% Dec 1992 3.7%June 1976 6.4% Dec 1993 2.6%June 1977 5.9% Dec 1994 2.8%June 1978 6.5% Dec 1995 2.6%June 1979 9.9% Dec 1996 2.9%June 1980 14.3% Dec 1997 2.1%June 1981 11.2% Dec 1998 1.3%June 1982 7.4% Dec 1999 2.4%June 1983 3.5% Dec 2000 3.5%June 1984 3.5% Dec 2001 2.6%June 1985 3.1% Dec 2002 1.4%Dec 1986 1.3% Dec 2003 2.1% Dec 1987 4.2% Dec 2004 2.7%Dec 1988 4.0% Dec 2005 4.1%Dec 1989 4.7% Dec 2006 3.3%Dec 1990 5.4% Dec 2007 2.3%Dec 1991 3.7% Dec 2008 5.8%
Worker & 2007 Earnings Worker (65/10mo) Spouse (65/10mo)
Lower $18,182 $863 $1,294Average $40,405 $1,421 $2,131Maximum $97,500 $2,185 $3,277
Social Social SecuritySecurity
Retirement Retirement Insurance Insurance BenefitsBenefits
2009:2009:
--1 credit for each $1,090 --1 credit for each $1,090 in covered employmentin covered employment
--maximum of 4 credits/yr --maximum of 4 credits/yr ($4,360)($4,360)
How Credits How Credits Are EarnedAre Earned
Credits Needed For Retirement:Credits Needed For Retirement:
Who Can Get Who Can Get Retirement Retirement
BenefitsBenefits
WorkerWorker Reduced benefits at 62 (must be insured; 40 credits/10 Reduced benefits at 62 (must be insured; 40 credits/10
yrs)yrs) Full benefits at age 65 (age 67, if born after 1960)Full benefits at age 65 (age 67, if born after 1960)
Year of Birth Full Retirement AgeYear of Birth Full Retirement Age 1937 1937 6565 1938 1938 65 & 2 months 65 & 2 months 19391939 65 & 4 months65 & 4 months 1940 1940 65 & 6 months65 & 6 months 19411941 65 & 8 months65 & 8 months 1942 1942 65 & 10 months65 & 10 months 1943-1954 1943-1954 6666 19551955 66 & 2 months66 & 2 months 19561956 66 & 4 months66 & 4 months 1957 1957 66 & 6 months66 & 6 months 19581958 66 & 8 months66 & 8 months 1959 1959 66 & 10 months66 & 10 months 1960 & later 1960 & later 6767
Full Retirement AgeFull Retirement Age
Who Can Get Who Can Get Retirement Retirement
BenefitsBenefits
WorkerWorker Reduced benefits at 62 (must be insured; 40 credits/10 yrs)Reduced benefits at 62 (must be insured; 40 credits/10 yrs) Full benefits at age 65 (age 67, if born after 1960)Full benefits at age 65 (age 67, if born after 1960) Increased benefits for retirement after full retirement ageIncreased benefits for retirement after full retirement age
Wife or HusbandWife or Husband At age 62At age 62 At any age if caring for child under 16 or disabledAt any age if caring for child under 16 or disabled Divorced spouses may qualifyDivorced spouses may qualify
ChildChild Unmarried under 18 (under 19 if still in highUnmarried under 18 (under 19 if still in high school)school) Unmarried if disabled before age 22Unmarried if disabled before age 22
Social Security benefits are based on Social Security benefits are based on earnings:earnings:
Step 1Step 1 - Adjust wages for inflation - Adjust wages for inflation
Step 2Step 2 - Average over most of your working - Average over most of your working lifetime--(Your highest 35 years) lifetime--(Your highest 35 years)
Step 3Step 3 - Result is “average indexed - Result is “average indexed monthly earnings” monthly earnings”
How Social SecurityHow Social SecurityRetirement Benefits Are FiguredRetirement Benefits Are Figured
90% of first $74490% of first $744
32% of the next $3, 73932% of the next $3, 739
15% of remainder 15% of remainder
over $4,483over $4,483
Retirement Benefit Retirement Benefit Computation - 2009Computation - 2009
Example:Example:
AIME = $4700AIME = $4700
90% X 744 = 90% X 744 = 669.60669.60 32% X 373932% X 3739 = = 1196.481196.48 15% X 217 = 15% X 217 = 32.5532.55
Primary Insurance AmountPrimary Insurance Amount 1898.631898.63
Low Income Worker: 55%
Average Income Worker: 40%
Upper Income Worker: 25%
Replacement Rates
RetirementRetirementIncomeIncome
Total Retirement IncomeTotal Retirement IncomeSocial Security Represents:Social Security Represents:
Lower 1/3
Middle 1/3
Higher 1/3
First Three yearsFirst Three years 5/9 of 1% per month5/9 of 1% per month 6.66% per year6.66% per year 20% for first three years20% for first three years
Each additional yearEach additional year 5/12 of 1% per month5/12 of 1% per month 5% per year5% per year
Reduction is permanentReduction is permanent
Early Retirement BenefitsEarly Retirement Benefits(earliest - age 62)(earliest - age 62)
% of Benefits% of Benefits You will turn Received at You will turn Received at
Year of Birth age 62 in: Age 62 Full Retirement Year of Birth age 62 in: Age 62 Full Retirement AgeAge
1937 1937 1999 and before 80% 1999 and before 80% 65 65 1938 1938 2000 79 1/6% 2000 79 1/6% 65 & 2 months 65 & 2 months 19391939 2001 2001 78 1/3% 78 1/3% 65 & 4 months 65 & 4 months 1940 1940 2002 2002 77 1/2% 65 & 6 months 77 1/2% 65 & 6 months 19411941 2003 2003 76 2/3% 65 & 8 months 76 2/3% 65 & 8 months 1942 1942 2004 2004 75 5/6% 65 & 10 months 75 5/6% 65 & 10 months 1943-1954 2005-161943-1954 2005-16 75% 75% 66 66 19551955 2017 2017 74 1/6% 74 1/6% 66 & 2 months 66 & 2 months 19561956 2018 2018 73 1/3% 73 1/3% 66 & 4 months 66 & 4 months 1957 1957 2019 2019 72 1/2% 72 1/2% 66 & 6 months 66 & 6 months 19581958 2020 2020 71 2/3% 66 & 8 months 71 2/3% 66 & 8 months 1959 1959 2021 2021 70 5/6% 66 & 10 months 70 5/6% 66 & 10 months 1960 & later 2022 & later 70% 1960 & later 2022 & later 70% 67 67
The Cost of Early RetirementThe Cost of Early Retirement
If you elect reduced If you elect reduced Benefits and die...Benefits and die...
Your widowinherits
the reduction!
Your benefits may be Your benefits may be taxed!taxed!
Good newsGood news: only 30% : only 30% have to pay taxeshave to pay taxes
Bad newsBad news: you’re : you’re probably in that 30%probably in that 30%
If your 1040 adjusted If your 1040 adjusted gross income gross income (INCLUDING ½ of your (INCLUDING ½ of your Social Security) is over Social Security) is over $25,000 for individual $25,000 for individual or $32,000 for a or $32,000 for a couple, you’ll pay couple, you’ll pay taxes.taxes.
Yearly Rate of Yearly Rate of Year of BirthYear of Birth Increase (%) Increase (%)
1927-281927-28 4.04.01929-301929-30 4.54.51931-321931-32 5.05.01933-341933-34 5.55.51935-361935-36 6.06.01937-381937-38 6.56.51939-401939-40 7.07.01941-421941-42 7.57.51943 or later1943 or later 8.08.0
Delayed Retirement Delayed Retirement CreditsCredits
Withheld/Withheld/Age Age Earnings Limit Earnings Limit Above Above Full Retirement AgeFull Retirement Age(FRA) & Above (FRA) & Above No Limit No Limit
Under FRA Under FRA $14,160 ($1180/mo.) $1 for every $2$14,160 ($1180/mo.) $1 for every $2
Year attaining FRA $37,680 ($3,140/mo.) $1 for every Year attaining FRA $37,680 ($3,140/mo.) $1 for every $3$3
How Work Affects How Work Affects Social Security Social Security Benefits - 2009Benefits - 2009
Widows/WidowersWidows/WidowersReduced benefits at age 60Reduced benefits at age 60
As early as age 50 if disabledAs early as age 50 if disabled
At any age if caring for a child At any age if caring for a child of worker under 16 or disabledof worker under 16 or disabled
Divorced widows/widowers qualifyDivorced widows/widowers qualify
ChildChildUnmarried child under 18, or Unmarried child under 18, or under 19 if still in high schoolunder 19 if still in high school
Unmarried child disabled before Unmarried child disabled before age 22 who continues to be disabledage 22 who continues to be disabled
Who Can Get Survivors Who Can Get Survivors BenefitsBenefits
ParentsParents
Age 62 and was receiving Age 62 and was receiving at least one-half support from at least one-half support from deceased workerdeceased worker
Lump Sum Death Payment Lump Sum Death Payment ($255)($255)
Living with or Living with or entitled spouseentitled spouseEntitled childEntitled child
Who Can Get Survivors Who Can Get Survivors BenefitsBenefits
PercentagePercentage
Full Retirement AgeFull Retirement Age 100.0 100.0
Age 60 Age 60 71.5 71.5
Age 50 (Disabled)Age 50 (Disabled) 71.5 71.5
Young Widow(er)Young Widow(er) 75.075.0
Child Child 75.0 75.0
Survivors BenefitsSurvivors Benefits
WorkerWorker Must be insured (20/40)Must be insured (20/40) Any ageAny age
Who Can Get Disability Who Can Get Disability BenefitsBenefits
SpouseSpouse Age 62 or olderAge 62 or older Any age if caring for aAny age if caring for a
child of worker under age 16 child of worker under age 16 Divorced spouses qualifyDivorced spouses qualify
ChildChild Unmarried child under 18, or under 19Unmarried child under 18, or under 19
if still in high schoolif still in high school Unmarried child disabled beforeUnmarried child disabled before age age
22 who continues to be disabled22 who continues to be disabled
Who Can Get Disability Who Can Get Disability BenefitsBenefits
65 and older65 and older
Receiving Social SecurityReceiving Social Security
Disability benefits at leastDisability benefits at least
24 months (Except ALS)24 months (Except ALS)
Permanent kidney failurePermanent kidney failure
Medicare CoverageMedicare Coverage
Hospital InsuranceHospital Insurance In Patient Hospital CoverageIn Patient Hospital Coverage
Hospital Deductible: $1068Hospital Deductible: $1068 Coinsurance: Day 61-90: $267 per dayCoinsurance: Day 61-90: $267 per day Lifetime Guarantee days (60): $534 per day Lifetime Guarantee days (60): $534 per day
Skilled Nursing FacilitiesSkilled Nursing Facilities Day 21-100: $133.50 per dayDay 21-100: $133.50 per day
Home Health CareHome Health Care Hospice CareHospice Care Premium - $443Premium - $443
$244 with at least 30 QCs$244 with at least 30 QCs
Medical InsuranceMedical Insurance
Doctors and other ProvidersDoctors and other Providers Hospital Outpatient ServicesHospital Outpatient Services Home Health ServicesHome Health Services X-ray and Laboratory ServicesX-ray and Laboratory Services Durable Medical EquipmentDurable Medical Equipment AmbulanceAmbulance
What Does It Cost You?What Does It Cost You?
Monthly Premium: $96.40Monthly Premium: $96.40
Wealthier Seniors will PayWealthier Seniors will PayMore for their Part B in 2009More for their Part B in 2009
Beneficiaries who file anBeneficiaries who file anindividual tax returnindividual tax return with with
income: income:
Beneficiaries who file a Beneficiaries who file a Joint tax returnJoint tax return with with
income: income:
Income RelatedIncome RelatedMonthlyMonthly
AdjustmentAdjustmentamount amount
TotalTotalMonthlyMonthlyPremiumPremiumamountamount
Less than or equal to Less than or equal to $85,000 $85,000
Less than or equal to Less than or equal to $170,000 $170,000 $0.00 $0.00 $96.40 $96.40
Greater than $85,000 andGreater than $85,000 andless than or equal toless than or equal to
$107,000 $107,000
Greater than $170,000 and Greater than $170,000 and less than or equal to less than or equal to
$214,000 $214,000 $38.50 $38.50 $134.90 $134.90
Greater than $107,000 andGreater than $107,000 andless than or equal toless than or equal to
$160,000 $160,000
Greater than $214,000 and Greater than $214,000 and less than or equal to less than or equal to
$320,000 $320,000 $96.30 $96.30 $192.70 $192.70
Greater than $160,000 andGreater than $160,000 andless than or equal toless than or equal to
$213,000 $213,000
Greater than $320,000 and Greater than $320,000 and less than or equal to less than or equal to
$426,000 $426,000 $154.10 $154.10 $250.50 $250.50
Greater than $213,000 Greater than $213,000 Greater than $426,000 Greater than $426,000 $211.90 $211.90 $308.30 $308.30
What Does It Cost You?What Does It Cost You?
Monthly Premium: $96.40Monthly Premium: $96.40 Yearly Deductible: $135Yearly Deductible: $135 Medicare pays 80% of Approved Medicare pays 80% of Approved
ChargeCharge You pay 20% of Approved ChargeYou pay 20% of Approved Charge By law, Physician cannot charge more By law, Physician cannot charge more
than 15% on top of Approved chargethan 15% on top of Approved charge
InitialInitial
GeneralGeneral
SpecialSpecial
Medicare Medicare EnrollmentEnrollment PeriodsPeriods
What is the MediGap?What is the MediGap? Part A Deductibles and CoinsurancePart A Deductibles and Coinsurance Hospital Care after day 150Hospital Care after day 150 Part B Deductible and CoinsurancePart B Deductible and Coinsurance Non-covered ServicesNon-covered Services
How Do I Close the How Do I Close the “Gap”“Gap”
Self InsureSelf Insure
MediCalMediCal
Medicare SupplementMedicare Supplement
Medicare AdvantageMedicare Advantage
And Now There’s Part D!And Now There’s Part D!
You may You may NOTNOT need it! need it! When you become eligible for When you become eligible for
Medicare, you can purchase Part D Medicare, you can purchase Part D Prescription Drug PlansPrescription Drug Plans
You want to sign up when first You want to sign up when first eligible, or you will pay moreeligible, or you will pay more
Program is voluntaryProgram is voluntary
1- 800 – 434 - 02221- 800 – 434 - 0222
REVIEW
VERIFY
PLAN
The Social Security StatementThe Social Security Statement““The Future’s In Your The Future’s In Your
Hands”Hands”
Online retirement application
Retirement/ Survivors/Disability Planner
FAQ’s
Medicare Card Replacements
Request a Statement
Online ServicesOnline Services
Call orCall orVisit our WebsiteVisit our Website1-800-772-1213
www.socialsecurity.govwww.socialsecurity.gov
That’s All Folks!!
Questions?Questions?