2. Social Security

3. Social Security Programs Retirement Insurance Survivors Insurance Disability Insurance

4. Medicare Supplemental Security Income Other Programs

5. A Foundation for Planning Your Future

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

7. 53 million people Who Gets Benefits from Social Security? 32 million Retired Workers 2.9 million Dependents 7.4 million Disabled Workers, 1.8 million Dependents 4.6 million Widows/ Widowers 1.9 million Children of Deceased Workers 2/2009

8. Payments to Beneficiaries Employees, Employers & the Self- Employed Contributions 2010 6.2% of $106,800 Financing Benefits Through Contributions

9. How is Social Security funded in 2008? Payroll Tax 84% Trust Fund Interest 14% Taxation of Benefits 2%

10. Payments to Today’s Beneficiaries Reserves for Future Beneficiaries Reserves for Future Beneficiaries Administrative Costs How Is Social Security Income Spent? 73.8% 25.4% 0.9%

11. The Number of Workers per Beneficiary is Decreasing 532 196020092034 532 196020092034

12. Life Expectancy for Those Age 65 Today MenWomen U.S. Population8185 White8084 African Americans7983 Hispanic8588 Asian8488 American Indians8488 MenWomen U.S. Population8185 White8084 African Americans7983 Hispanic8588 Asian8488 American Indians8488

13. America Is Getting Older U.S. Population Age 65 & Older America Is Getting Older U.S. Population Age 65 & Older 11 Million 1946 (7% of total population) 38 Million 2009 (12% of total population) 74 Million 2034 (19% of total population)

14. In 2015, Social Security Will Begin Paying More in Benefits than is Collected in Taxes In 2015, Social Security Will Begin Paying More in Benefits than is Collected in Taxes 13

15. Social Security Trust Funds will be Exhausted in 2037 14 At exhaustion in 2037, only about 78% of benefits could be paid.

16. 2010: --1 credit for each $1,120 in covered employment --maximum of 4 credits/yr ($4,480) How Credits Are Earned Credits Needed For Retirement:

17. 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

18. 90% of first $761 32% of the next $3,825 15% of remainder over $4,586 Retirement Benefit Computation – 2010 (Born in 1948)

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

20. Use the New Retirement Estimator You can get estimates of your future Social Security retirement benefits using our new online Retirement Estimator.  No manual keying of earnings is needed  ‘What if’ scenarios are easy You can get estimates of your future Social Security retirement benefits using our new online Retirement Estimator.  No manual keying of earnings is needed  ‘What if’ scenarios are easy It’s convenient, secure and quick. www.socialsecurity.gov/estimator It’s convenient, secure and quick. www.socialsecurity.gov/estimator

21. Year of Birth Full Retirement Age 1937 65 1938 65 & 2 months 1939 65 & 4 months 1940 65 & 6 months 1941 65 & 8 months 1942 65 & 10 months 1943-1954 66 1955 66 & 2 months 1956 66 & 4 months 1957 66 & 6 months 1958 66 & 8 months 1959 66 & 10 months 1960 & later 67 Full Retirement Age

22. Year of Birth Yearly Rate of Increase 1937 – 1938 6.5% 1939 – 1940 7.0% 1941 – 1942 7.5% 1943 or later 8.0% Applies to months after Full Retirement Age up to age 70 Delayed Retirement Credits

23. Social Security Cost-of-Living Adjustments Effective DateAmount June 19758% June 19766.4% June 19775.9% June 19786.5% June 19799.9% June 198014.3% June 198111.2% June 19827.4% Dec 19833.5% Dec 19843.5% Dec 19853.1% Dec 19861.3% Dec 19874.2% Dec 19884% Dec 19894.7% Dec 19905.4% Dec 19913.7% Effective DateAmount June 19758% June 19766.4% June 19775.9% June 19786.5% June 19799.9% June 198014.3% June 198111.2% June 19827.4% Dec 19833.5% Dec 19843.5% Dec 19853.1% Dec 19861.3% Dec 19874.2% Dec 19884% Dec 19894.7% Dec 19905.4% Dec 19913.7% Effective DateAmount Dec 19923% Dec 19932.6% Dec 19942.8% Dec 19952.6% Dec 19962.9% Dec 19972.1% Dec 19981.3% Dec 19992.5% Dec 20003.5% Dec 20012.6% Dec 20021.4% Dec 20032.1% Dec 20042.7% Dec 20054.1% Dec 20063.3% Dec 20072.3% Dec 20085.8% Effective DateAmount Dec 19923% Dec 19932.6% Dec 19942.8% Dec 19952.6% Dec 19962.9% Dec 19972.1% Dec 19981.3% Dec 19992.5% Dec 20003.5% Dec 20012.6% Dec 20021.4% Dec 20032.1% Dec 20042.7% Dec 20054.1% Dec 20063.3% Dec 20072.3% Dec 20085.8%

24. NO Social Security Cost- of-Living Adjustment For December 2010

25. Example: Worker with average pre-retirement income of $ 30,000 (Retiring at age 66 in 2008) 1st Year of Retirement Pension $ 13,000/ 50% Social Security $ 13,000/50% Inflation3% per year Example: Worker with average pre-retirement income of $ 30,000 (Retiring at age 66 in 2008) 1st Year of Retirement Pension $ 13,000/ 50% Social Security $ 13,000/50% Inflation3% per year Value of Inflation Protection

26. example continued: Worker with average pre-retirement income of $ 30,000 example continued: Worker with average pre-retirement income of $ 30,000 5 th Year of Retirement Pension $ 13,000/47% Social Security $ 14,632/53% 10 th Year of Retirement Pension $ 13,000/43% Social Security $ 16,962/57% 20 th Year of Retirement Pension $ 13,000/36% Social Security $ 22,796/64% 5 th Year of Retirement Pension $ 13,000/47% Social Security $ 14,632/53% 10 th Year of Retirement Pension $ 13,000/43% Social Security $ 16,962/57% 20 th Year of Retirement Pension $ 13,000/36% Social Security $ 22,796/64%

27. Who Can Get Retirement Benefits Worker Starting as early as age 62 (must be insured; 40 credits/10 yrs) Wife or Husband Starting as early as 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

28. Worker --5/9 of 1% (20% reduction for 1st 36 mos.) --5/12 of 1% (10% reduction for next 24 mos.) Spouse (50% at full retirement age) --25/36 of 1% (25% reduction for 1st 36 mos.) --5/12 of 1% (10% reduction for next 24 mos.) Reduction is permanent Early Retirement Benefits (earliest - age 62)

29. Example: Mr & Mrs A Husband & wife both born in 1948 – FRA=66 Both worked same job with same pay. They would each collect the same, unreduced benefit at age 66 based on their “high 35”. IF their computation said $1,000 monthly, each would get $1,000.

30. Example: Mr & Mrs B Husband & wife both born in 1948 – FRA=66 Only one worked (same job). The worker would collect $1,000 monthly. The non-working spouse would receive $500 monthly.

31. Example: Mr & Mrs C Husband & wife both born in 1948 – FRA=66 Only one worked (same job as in prior example). They can’t wait until age 66, they retire at 62. The worker would collect 75% of the FRA of $1,000 or $750 monthly. The non-working spouse would receive 70% of his/her FRA of $500,or $350 monthly.

32. Example: Mr & Mrs D Husband & wife both born in 1948 – FRA=66 Husband at 66 = $1,000 Wife at 66 = $400 on own + $100 as a wife Husband at 62 = $750 (25% reduction) Wife at 62 = $370 $300 on own ($400 reduced 25%) + $70 as a wife ($100 reduced 30%)

33. Option for Spouse at FRA Restricting application : - delay filing for your own retirement benefit - delay filing for your own retirement benefit - restrict application to spouse’s benefit only - later, file for your own ret. & receive DRCs (8% yearly increase)

34. When are benefits paid? Benefits paid on Birth date on 2 nd Wednesday1 st – 10 th 3 rd Wednesday11 th – 20 th 4 th Wednesday21 st – 31 st Benefits for the month, are paid after the month.

35. Withheld/ Age Earnings Limit Above Under FRA $14,160($1,180/mo.) $1 for every $2 YR of YOUR FRA $37,680($3,140/mo.) $1 for every $3 Full Retirement Age No Limit How Work Affects Social Security Benefits - 2010

36. Retiree goes back to work and earns $24,160 for the year (Count ONLY wages & self-employment income) $24,160 -14,160 $10,000 / 2 = $5,000 $9,000 (SSA of $750 monthly) - 5,000 $4,000 SSA payable in 2009 Example of How Work Affects Social Security Benefits – 2010 (Age 63)

37.   Automatic Recomputation of “Best 35”   Automatic adjustment at FRA Is there any benefit from working and NOT receiving benefits?

38. Are Your Benefits Taxable? Combined Percent of Income Benefits Taxed Individual $25,000-34,000 50% Over $34,000 85% Couple $32,000-44,000 50% Over $44,000 85% (IRS PUB 915 or www.irs.gov)

39. 28% can expect to become disabled prior to age 67 (one out of four) 14% can expect to die prior to age 67 (one out of seven) Importance of Social Security to Young People

40. Percentage Full Retirement Age 100.0 Age 60 71.5 Age 50 (Disabled) 71.5 Widow(er) at any age if caring for 75.0 child of worker under 16 or disabled Child 75.0 Survivors Benefits

41. Worker Age 31 & older Must have 20 credits in the 40 credit period just prior to becoming disabled That is, 5 years of work out of the last 10 years What is “Insured Status” for Disability Benefits?

42. Medicare Coverage 65 and older Receiving Social Security Disability benefits at least 24 months* Permanent kidney failure * (ALS-as soon as checks start)

43. Covers most inpatient hospital expenses. 2010 Deductible $1,100 (Next 59 days paid for by Medicare) Part A Medicare Coverage Hospital Insurance

44. Covers 80% doctor bills & other medical expenses after a $155 yearly deductible is met. 2009 Basic Monthly Premium $96.40 2010 Newly eligible $110.50 Part B Medicare Coverage Supplementary Medical Insurance 2010

45. Higher Incomes=Higher Part B Premiums 1/2010  Income under 2010 limit – premium= 25% of the actual cost-75% paid for by the government;  Income over the 2009 limits will pay anywhere from 35% to 80% of actual cost of the Part B premium NOTE: Only 4 to 5 percent of Medicare beneficiaries will be affected by this provision. Most people will continue to pay the standard premium.

46. Higher Incomes=Higher Part B Premiums 1/2010  Income under $85,000 –$110.50 premium, This is 25% of the actual cost-75% paid for by the government;  $85,000-107,000 - $154.70 premium  $107,000-160,000 - $221.00 premium  $160,000-$213,000 -$287.30 premium  $214,000 & up - $353.60 premium

47. When Can I Sign Up for Medicare? Medicare Enrollment Periods:  Initial - at age 65  Special - if still working  General - January-March

48. Started January 1, 2006 Voluntary for Medicare Beneficiaries Premiums, deductibles & co-pays apply. People with limited incomes & assets can apply with Social Security for help to pay Part D Premiums, to get lower co-pays & lower deductibles Can apply when 1 st eligible for Medicare All others – Apply 11/15-10/31/10. Medicare Prescription Drug Plans (Part D of Medicare)

49. 2010 Annual countable Income below $16,245 ($1,353.75/mo.) Resources below $12, 510 (w/burial exclusion) Part D Medicare Prescription Drug Coverage – Help Available

50. INQUIRE BEFORE YOU RETIRE (BEFORE JANUARY) Get facts 3 months before retirement All information can be obtained by phone Applying for Your Social Security Benefits

51. FILE ONLINE www.socialsecurity.gov or 1-800-772-1213 3 Months in advance!

52. QUESTIONSQUESTIONS