1. Social Security Frank Van Nostrand Public Affairs Specialist
Our logo became effective 3/31/95 when SSA became an Independent Agency.
The following proposed talking points are provided for your review. You may find them useful as a resource for you or for your fellow employees. In no way are they intended to be all-inclusive. Virtually all of the information contained within the talking points was derived directly from our Intranet Website. We hope they will be useful in supplementing your presentation.
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Frank Van Nostrand
Public Affairs Specialist

2. Social Security Programs
Disability Insurance
1956
Survivors Insurance
1939
Retirement Insurance
1935
Social Security Programs

3. Supplemental Security Income
1972
1965
Medicare
Other Programs

4. Retirement Income Social Security Pension Savings
This is a graphic representation of the traditional three-legged stool concept and is offered to you as a more simple alternative to the above slide.
Savings

5. Social Security Cost-of-Living Adjustments
Effective Date Amount Effective Date Amount
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
June % Dec %
Dec % Dec % Dec % Dec %
Dec % Dec %
Dec % Dec %
Dec % Dec %
Dec % Dec %
Another economic factor that can affect Social Security is the rate of inflation. Social Security will probably be the only source of your retirement income that is tied directly to the Consumer Price Index. This is important information for your pre-retirement planning.
This chart also reflects that during the early 1980s, when unemployment was very high, the inflation rate was very high. This represented a period when the trust funds were strained. Fewer workers were paying in, while the amount being paid out was increasing. Fortunately, as you can see in recent years the inflation rate has been low and relatively stable.
Some are suggesting that the CPI/COLA formula be changed for Social Security beneficiaries.

6. Social Security Retirement Insurance Benefits
Worker &
2007 Earnings Worker (65/10mo) Spouse (65/10mo)
Lower $18, $ $1,294
Average $40, $1, $2,131
Maximum $97, $2, $3,277
These benefit amounts are provided so that the audience can get a better sense of “What’s in it for me?”
The benefit amounts assume that the worker had steady wages since age 22 and the worker retired at age 65 in January 2001.

7. Credits Needed For Retirement:
How Credits Are Earned
2009:
--1 credit for each $1,090 in covered employment
--maximum of 4 credits/yr ($4,360) 40
Credits Needed For Retirement:

8. Who Can Get Retirement Benefits
Worker
Reduced benefits at 62 (must be insured; 40 credits/10 yrs)
Full benefits at age 65 (age 67, if born after 1960)
A wife or husband can only receive a spouse’s benefit if the worker is receiving a benefit, assuming the benefit on their own work record is not higher.
If a spouse is caring for a child under age 16, of the worker, the spouse could qualify regardless of their age. When the youngest child turns 16, the spouse’s benefit will stop, even though the child’s benefit will continue.
A divorced spouse could receive a benefit as long as they were married at least 10 years. It is possible that more than one spouse could receive a benefit, without penalty or reduction, as if they were the only spouse.

9. Full Retirement Age Year of Birth Full Retirement Age 1937 65
& 2 months
& 4 months
& 6 months
& 8 months
& 10 months
& 2 months
& 4 months
& 6 months
& 8 months
& 10 months
1960 & later 67
The increase in full retirement age was the result of the 1983 Amendments. Full retirement age increases apply to all Retirement Benefits and to Survivors Benefits. Although, we at SSA have always used the term “full” retirement age, you may encounter some that now refer to “full retirement age” as “Normal Retirement Age”.
The Medicare eligibility age of 65 has not changed.
Regardless of your full retirement age, benefits can still be paid at age 62.

10. Who Can Get Retirement Benefits
Worker
Reduced benefits at 62 (must be insured; 40 credits/10 yrs)
Full benefits at age 65 (age 67, if born after 1960)
Increased benefits for retirement after full retirement age
Wife or Husband
At age 62
At any age if caring for child under 16 or disabled
Divorced spouses may qualify
Child
Unmarried under 18 (under 19 if still in high school)
Unmarried if disabled before age 22
A wife or husband can only receive a spouse’s benefit if the worker is receiving a benefit, assuming the benefit on their own work record is not higher.
If a spouse is caring for a child under age 16, of the worker, the spouse could qualify regardless of their age. When the youngest child turns 16, the spouse’s benefit will stop, even though the child’s benefit will continue.
A divorced spouse could receive a benefit as long as they were married at least 10 years. It is possible that more than one spouse could receive a benefit, without penalty or reduction, as if they were the only spouse.

11. How Social Security Retirement Benefits Are Figured
Social Security benefits are based on earnings:
Step 1 - Adjust wages for inflation
Step 2 - Average over most of your working lifetime--(Your highest 35 years)
Step 3 - Result is “average indexed monthly earnings”
This graph provides an overview of the first step that we use in computing a benefit. We are looking for the highest 35 years during a worker's lifetime of earnings, regardless of when earned. Workers that stop working before age 62 are not penalized for so doing, they simply may not have the opportunity to replace lower year wages with the current higher amounts.
This formula also underscores how a worker could qualify for a retirement benefit with just 10 years of work. However, since we are looking for their highest 35 years, in this example, we would be adding in 25 zero years. Needless to say, this worker will be receiving a low benefit. There is no such thing as a minimum benefit.

12. Retirement Benefit Computation - 2009
90% of first $744
32% of the next $3, 739
15% of remainder
over $4,483

13. Example: AIME = $4700 90% X 744 = 669.60 32% X 3739 = 1196.48
Primary Insurance Amount

14. Replacement Rates Low Income Worker: 55% Average Income Worker: 40%
Upper Income Worker: 25%

15. Retirement Income Social Security Pension Savings
This is a graphic representation of the traditional three-legged stool concept and is offered to you as a more simple alternative to the above slide.
Savings

16. Total Retirement Income Social Security Represents:
Lower 1/3
Middle 1/3
Higher 1/3

17. Early Retirement Benefits (earliest - age 62)
First Three years
5/9 of 1% per month
6.66% per year
20% for first three years
Each additional year
5/12 of 1% per month
5% per year
Reduction is permanent
The reduction factor for the first 36 months continues to be a 20% reduction. In other words, a 36-month reduction would net the worker 80% of what they could have received at full retirement age.
A 48-month reduction would net the worker with 75% of what they could have received at full retirement age.
A full 60-month reduction would net the worker 70% of what they could have received at full retirement age.
A spouse at full retirement age would be eligible for 50% of the workers full retirement age benefit.
The reduction factor for the first 36 months continues to be a 25% reduction. In other words, a 36-month reduction would net the spouse 75% of what they could have received at full retirement age.
A 48-month reduction would net the spouse 70% of what they could have received at full retirement age.
A full 60-month reduction would net the spouse 65% of what they could have received at full retirement age.
Many people may have the option of retiring or leaving the workforce prior to age 62. Knowing that their benefit will be permanently reduced for drawing their benefit prior to full retirement age they are left with the decision of waiting for their full retirement age or drawing their benefit at age 62. If they decide to wait until their full retirement age, even though they were otherwise eligible at age 62, they would be foregoing all of the benefits they could have received prior to their full retirement age. Examples:
Full Retirement Age Payments Foregone Ahead until Age
and 9 months

18. The Cost of Early Retirement
% of Benefits
You will turn Received at
Year of Birth age 62 in: Age Full Retirement Age
and before 80%
/6% & 2 months
/3% & 4 months
/2% & 6 months
/3% & 8 months
/6% & 10 months %
/6% & 2 months
/3% & 4 months
/2% & 6 months
/3% & 8 months
/6% & 10 months
1960 & later & later %

19. Your widow inherits the reduction!
If you elect reduced
Benefits and die...
Your widow
inherits
the reduction!

20. Your benefits may be taxed!
Good news: only 30% have to pay taxes
Bad news: you’re probably in that 30%
If your 1040 adjusted gross income (INCLUDING ½ of your Social Security) is over $25,000 for individual or $32,000 for a couple, you’ll pay taxes.

21. Delayed Retirement Credits
Yearly Rate of Year of Birth Increase (%)
1943 or later 8.0
Although annual amounts are shown, DRCs are credited on a monthly basis. Therefore, the annual amounts would be prorated by months.
There have been no changes in the proposed DRCs in recent years. However, because of the increase in Full Retirement Age, the number of DRCs payable will be reduced. (e.g., age 65, full retirement age, could earn 5 years of DRCs; age 67, full retirement age, could earn 3 years of DRCs).

22. How Work Affects Social Security Benefits - 2009
Withheld/
Age Earnings Limit Above Full Retirement Age (FRA) & Above No Limit
Under FRA $14,160 ($1180/mo.) $1 for every $2
Year attaining FRA $37,680 ($3,140/mo.) $1 for every $3

23. Who Can Get Survivors Benefits
Widows/Widowers
Reduced benefits at age 60
As early as age 50 if disabled
At any age if caring for a child of worker under 16 or disabled
Divorced widows/widowers qualify
Child
Unmarried child under 18, or under 19 if still in high school
Unmarried child disabled before age 22 who continues to be disabled
You may wish to explain how a widow or widower can receive a survivors benefit at age 60 and then switch to a benefit on their own work record at age 62. Or, how a widow or widower could receive a reduced survivors benefit at age 60 and then file for an unreduced benefit on their own work record at their full retirement age.

24. Who Can Get Survivors Benefits
Parents
Age 62 and was receiving at least one-half support from deceased worker
Lump Sum Death Payment
($255)
Living with or
entitled spouse
Entitled child
Although parents’ benefits are included, the number of parent beneficiaries is negligible.
The description of eligibility for the LSDP is rather direct. This could be used as an opportunity to address the misleading advertising used by some insurance companies that imply that the only benefit payable is the LSDP, without regard to the monthly widow’s(er’s) benefits.

25. Survivors Benefits Percentage Full Retirement Age 100.0 Age 60 71.5
Age 50 (Disabled)
Young Widow(er) 75.0
Child
This graph offers the opportunity to explain the increased full retirement age (normal retirement age) for widows. Full retirement age has been increased exactly the same for widows(ers) as for workers. The major difference is in the reduction for early benefits. At full retirement age, a widow(er) continues to be eligible for 100% of what the worker would have received. At age 60, a widow continues to receive 71.5% of her full retirement age benefit. In other words, there are now 13 different reduction tables for widows(ers).

26. Who Can Get Disability Benefits
Worker
Must be insured (20/40)
Any age
Spouse
Age 62 or older
Any age if caring for a child of worker under age 16
Divorced spouses qualify
The discussion of factors of entitlement is rather direct. Again, the definition of disability in and of itself explains why it is not "easy" to qualify for a Social Security Disability Benefit. SSA's disability definition is that based on your medical condition you are not expected to be able to do any work for at least 12 months or your condition is terminal. This determination is based on your age, education and work experience.
For people that pay into Medicare only (e.g., CSRS employees), and not Social Security, it is important to remember that they should file for a Social Security disability decision, since they could become eligible for Medicare 25 months after we otherwise could have paid them a cash benefit.
After becoming eligible for a disability benefit, the law requires us to review the continuing disability (CDRs) generally every 3 to 7 years depending on the severity of the disability.

27. Who Can Get Disability Benefits
Child
Unmarried child under 18, or under 19 if still in high school
Unmarried child disabled before age 22 who continues to be disabled
The children’s category is offered here as in the Retirement and Survivors Benefits Sections.

28. Medicare Coverage Receiving Social Security
65 and older
Receiving Social Security
Disability benefits at least
24 months (Except ALS)
Permanent kidney failure
You may wish to remind your audience that although the full retirement age has been increased above age 65, Medicare eligibility is still at age 65.

29. Hospital Insurance In Patient Hospital Coverage
Hospital Deductible: $1068
Coinsurance: Day 61-90: $267 per day
Lifetime Guarantee days (60): $534 per day
Skilled Nursing Facilities
Day : $ per day
Home Health Care
Hospice Care
Premium - $443
$244 with at least 30 QCs

30. Medical Insurance Doctors and other Providers
Hospital Outpatient Services
Home Health Services
X-ray and Laboratory Services
Durable Medical Equipment
Ambulance

31. What Does It Cost You?
Monthly Premium: $96.40

32. Wealthier Seniors will Pay More for their Part B in 2009
Beneficiaries who file an
individual tax return with
income:
Beneficiaries who file a
Joint tax return with
Income Related
Monthly
Adjustment
amount
Total
Premium
Less than or equal to
$85,000
Less than or equal to $170,000
$0.00
$96.40
Greater than $85,000 and
less than or equal to
$107,000
Greater than $170,000 and less than or equal to $214,000
$38.50
$134.90
Greater than $107,000 and
$160,000
Greater than $214,000 and less than or equal to $320,000
$96.30
$192.70
Greater than $160,000 and
$213,000
Greater than $320,000 and less than or equal to $426,000
$154.10
$250.50
Greater than $213,000
Greater than $426,000
$211.90
$308.30

33. What Does It Cost You? Monthly Premium: $96.40 Yearly Deductible: $135
Medicare pays 80% of Approved Charge
You pay 20% of Approved Charge
By law, Physician cannot charge more than 15% on top of Approved charge

34. Medicare Enrollment Periods
IEP
GEP
SEP
Initial
General
Special
The Initial Enrollment Period starts 3 months before the month that you turn age 65 and extends 3 months past the month that you turn 65. If you are not receiving benefits, you should inquire about filing for Medicare 3 months prior to turning age 65 so that your coverage can start the month you turn 65. If you are receiving benefits, you will receive your Medicare card generally about a month before turning age 65, reflecting your Part A and Part B coverage (by far, most people want Part B, even though it's optional).
The Special Enrollment Period is for people (and their spouses) that continue to work past age 65. Since Medicare pays second after their employer group health plan pays first, they are not required to file for Part B. Since Medicare pays second there may be no need for Part B coverage. It is extremely important for workers to check with their employer group health plan for specific guidance. For this reason, they are offered a special period in which to file for Medicare. As a general rule, we can recommend that people file for Part A 3 months prior to turning age 65, and then on the day they stop working call SSA to file for Part B.
The General Enrollment Period is for those people that missed their Initial or Special Enrollment Periods. The window to file is January to March with coverage not beginning until July. If one files in the General Enrollment Period, they will be assessed a 10% penalty for each year after their Initial period.

35. What is the MediGap? Part A Deductibles and Coinsurance
Hospital Care after day 150
Part B Deductible and Coinsurance
Non-covered Services

36. How Do I Close the “Gap” Self Insure MediCal Medicare Supplement
Medicare Advantage

37. And Now There’s Part D! You may NOT need it!
When you become eligible for Medicare, you can purchase Part D Prescription Drug Plans
You want to sign up when first eligible, or you will pay more
Program is voluntary

38. –

39. The Social Security Statement “The Future’s In Your Hands”
REVIEW
VERIFY
PLAN
This slide is offered as a summary piece to your presentation.

40. Online Services www.socialsecurity.gov Online retirement application
Retirement/ Survivors/Disability Planner
FAQ’s
Medicare Card Replacements
Request a Statement

46. Call or
Visit our Website

47. That’s All Folks!!
Questions?