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Social Security Frank Van Nostrand Public Affairs Specialist.

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Presentation on theme: "Social Security Frank Van Nostrand Public Affairs Specialist."— Presentation transcript:

1 Social Security Frank Van Nostrand Public Affairs Specialist

2 Social Security Programs Retirement Insurance Survivors Insurance Disability Insurance

3 Medicare Supplemental Security Income Other Programs

4 Retirement Income

5 Social Security Cost-of-Living Adjustments 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 %

6 Worker & 2007 Earnings Worker (65/10mo) Spouse (65/10mo) Lower $18,182 $863 $1,294 Average $40,405 $1,421 $2,131 Maximum $97,500 $2,185 $3,277 Social Security Retirement Insurance Benefits

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

8 Who Can Get Retirement Benefits Worker 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)

9 Year of Birth Full Retirement Age & 2 months & 2 months & 4 months & 4 months & 6 months & 6 months & 8 months & 8 months & 10 months & 10 months & 2 months & 2 months & 4 months & 4 months & 6 months & 6 months & 8 months & 8 months & 10 months & 10 months 1960 & later & later 67 Full Retirement Age

10 Who Can Get Retirement Benefits Worker 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 age Increased benefits for retirement after full retirement age Wife or Husband At age 62 At age 62 At any age if caring for child under 16 or disabled At any age if caring for child under 16 or disabled Divorced spouses may qualify Divorced spouses may qualifyChild Unmarried under 18 (under 19 if still in high school) Unmarried under 18 (under 19 if still in high school) Unmarried if disabled before age 22 Unmarried if disabled before age 22

11 Social Security benefits are based on earnings: 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” How Social Security Retirement Benefits Are Figured

12 90% of first $744 32% of the next $3, % of remainder over $4,483 over $4,483 Retirement Benefit Computation

13 Example: AIME = $ % X 744 = % X 744 = % X 3739 = % X 3739 = % X 217 = % X 217 = Primary Insurance Amount Primary Insurance Amount

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

15 Retirement Income

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

17 First Three years First Three years 5/9 of 1% per month 5/9 of 1% per month 6.66% per year 6.66% per year 20% for first three years 20% for first three years Each additional year Each additional year 5/12 of 1% per month 5/12 of 1% per month 5% per year 5% per year Reduction is permanent Early Retirement Benefits (earliest - age 62)

18 % of Benefits % of Benefits You will turn Received at You will turn Received at Year of Birth age 62 in: Age 62 Full Retirement Age and before 80% and before 80% /6% 65 & 2 months /6% 65 & 2 months /3% 65 & 4 months /3% 65 & 4 months /2% 65 & 6 months /2% 65 & 6 months /3% 65 & 8 months /3% 65 & 8 months /6% 65 & 10 months /6% 65 & 10 months % % /6% 66 & 2 months /6% 66 & 2 months /3% 66 & 4 months /3% 66 & 4 months /2% 66 & 6 months /2% 66 & 6 months /3% 66 & 8 months /3% 66 & 8 months /6% 66 & 10 months /6% 66 & 10 months 1960 & later 2022 & later 70% & later 2022 & later 70% 67 The Cost of Early Retirement

19 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 Good news: only 30% have to pay taxes Bad news: you’re probably in that 30% 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. 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 Yearly Rate of Year of Birth Increase (%) Yearly Rate of Year of Birth Increase (%) or later8.0 Delayed Retirement Credits

22 Withheld/ 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 How Work Affects Social Security Benefits

23 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 Divorced widows/widowers qualifyChild Unmarried child under 18, or under 19 if still in high school Unmarried child disabled before age 22 who continues to be disabled Who Can Get Survivors Benefits

24 Parents Age 62 and was receiving at least one-half support from deceased worker Lump Sum Death Payment ($255) ($255) Living with or entitled spouse entitled spouse Entitled child Who Can Get Survivors Benefits

25 Percentage Percentage Full Retirement Age Age Age 50 (Disabled) 71.5 Young Widow(er)75.0 Child 75.0 Survivors Benefits

26 Worker Must be insured (20/40) Must be insured (20/40) Any age Any age Who Can Get Disability Benefits Spouse Age 62 or older Age 62 or older Any age if caring for a child of worker under age 16 Any age if caring for a child of worker under age 16 Divorced spouses qualify Divorced spouses qualify

27 Child Unmarried child under 18, or under 19 if still in high school Unmarried child under 18, or under 19 if still in high school Unmarried child disabled before age 22 who continues to be disabled Unmarried child disabled before age 22 who continues to be disabled Who Can Get Disability Benefits

28 65 and older 65 and older Receiving Social Security Receiving Social Security Disability benefits at least Disability benefits at least 24 months (Except ALS) 24 months (Except ALS) Permanent kidney failure Permanent kidney failure Medicare Coverage

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

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

31 What Does It Cost You? Monthly Premium: $96.40 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: Income Related MonthlyAdjustmentamountTotalMonthlyPremiumamount 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 $38.50$ Greater than $107,000 and less than or equal to $160,000 Greater than $214,000 and less than or equal to $320,000 $96.30$ Greater than $160,000 and less than or equal to $213,000 Greater than $320,000 and less than or equal to $426,000 $154.10$ Greater than $213,000 Greater than $426,000 $211.90$308.30

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

34 InitialGeneralSpecial Medicare Enrollment Periods

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

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

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

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39 REVIEW VERIFY PLAN The Social Security Statement “The Future’s In Your Hands”

40  Online retirement application  Retirement/ Survivors/Disability Planner  FAQ’s  Medicare Card Replacements  Request a Statement Online Services

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46 Call or Visit our Website

47 That’s All Folks!! Questions?


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