1. Social Security

2. n Retirement benefit n Spouse's benefit n Your pension and Social Security n Work in retirement n Cost-of-living adjustments n Taxation of benefits n Disability benefit n Survivor benefit n Medicare n Applying for benefits

3. Social Security tax (FICA) 2006 employee contributions if in “Covered Employment” n OASD1 rate: 6.20% on maximum of $94,200 n Medicare rate: 1.45% on all wages

4. Retirement benefit n Eligibility based on number of credits (quarters of coverage) n Benefit based on primary insurance amount (PIA)

5. When benefits can start n Early benefits at age 62 with permanent reduction n Full benefits at normal retirement age (age 65 if born before 1938) n Benefits increased if delayed beyond normal retirement age

6. Spouse's benefit n At spouse’s normal retirement age, spouse's benefit is 50% of worker’s PIA n If spouse is age 62, spouse's benefit is reduced

7. Your pension and Social Security n If you qualify for your own Social Security benefit, its amount will be reduced because of your Fire and Police Pension n Your Social Security benefit as a spouse will also be reduced because of your Fire and Police Pension

8. Work in retirement n Annual earnings limit if you work and receive Social Security benefits n $1 reduction for every $2 earned over $12,480 if under SSNRA in 2006 n $1 reduction for every $2 earned over $33,240 if attain SSNRA in 2006

9. Social Security benefits n Inflation  Indexed to CPI n Income taxes  Up to 85% of benefits may be subject to federal income taxes

10. Social Security disability benefit n You must be fully insured and currently insured n You must be unable to perform any gainful work n Your disability must be expected to last at least twelve months n The benefit is payable at any age without reduction

11. Social Security survivor benefit Surviving spouse can receive benefit if: n Age 60, or n Disabled and over 50, or n Any age if caring for eligible dependent child

12. Social Security survivor benefit Amount of surviving spouse benefit: n 100% of PIA if surviving spouse is at normal retirement age n Reduced at earlier ages n 75% if caring for eligible dependent child

13. Medicare n Coverage begins at age 65 n Part A – hospital insurance n Part B – medical insurance, including doctor's services n Part C – Medicare Advantage n Part D – prescription drugs n Long-term care insurance

14. Applying for benefits n Three months before you want checks to begin n Three months before age 65 for Medicare n Social Security number n Proof of age n Last two to three years' w-2 n Your personal earnings and benefit estimate statement

15. Click Link below to continue... LAFP3 TAXES2006 2006 0818.ppt