Social Security Making a Difference in Communities

By Kirk Larson, Social Security Washington Public Affairs Specialist

Social Security is a critical federal program that promotes income stability among millions of households in the United States. Social Security is always evolving to meet the needs of the American public. We’re optimistic about the future and the limitless possibilities for progress.

Much of the progress we’ve made together, as a nation, is through the shared responsibility of paying Federal Insurance Contributions Act (FICA) tax. This federal payroll tax funds Social Security— programs that provide benefits for retirees, the disabled, and children of deceased workers. You help us keep millions of hard working Americans out of poverty.

Without your contribution, wounded warriors wouldn’t receive the benefits they deserve. Children who have lost parents would have no social safety net. Millions of elderly people would be destitute. In the same way that we take great pride in helping people who need it, you should take pride in making this country stronger. You can see the many ways our retirement benefits help your loved ones and neighbors at www.socialsecurity.gov/retire.

Right here in the Washington Social Security is at work providing support.

In King County alone there are over 300,000 people (about 1 out of 6) collecting monthly payments totaling over 5 billion dollars per year.

When you look at Washington State the economic impact in small and large communities is undeniable. There are close to 1.3 million people receiving monthly payments worth more than 20.4 billion dollars per year.

The case is similar in other state. Take Idaho, there are over 326,000 people receiving payments. That is about one out of every five people. That represents over 4.8 billion dollars per year.

Social Security money is an important driver of local commerce.

If you want to learn about your own Social Security benefits, visit www.ssa.gov/myaccount/ to empower your future, for today and tomorrow.

 

Four “Dangerous Assumptions” that Put Your Retirement at Risk

Here at AgingOptions we interact with all sorts of people as they begin to plan for retirement. Some have a very realistic view of the future, and they’re not afraid to deal with reality as they contemplate what the future holds. Others seem to live in a dream world, refusing to look the future squarely in the eye, and holding onto assumptions and misperceptions that could very likely put their future security at risk. In short, some seniors are “clear-eyed planners” while others are more like “starry-eyed dreamers.”

We reflected on this fact recently when we discovered this extremely perceptive article on the USA Today website. The article was written by Maurie Backman of the popular financial website Motley Fool, and we were immediately drawn to the eye-catching headline: “Four Assumptions That Could Destroy Your Retirement.” Naturally we wanted to know more, and as we read this article we found ourselves nodding in agreement. In our view the kind of assumptions outlined in this article are exactly the ones that can cause seniors to enter retirement dangerously unprepared.

One caveat before we examine these four assumptions further: they all deal with finances. At AgingOptions we always remind our clients, radio listeners and seminar guests that financial planning, as important as it is, is only one facet of a good retirement plan. There are at least four more essential elements to a sound retirement strategy, all interrelated, which we’ll talk about at the end of this blog post.

Here’s how writer Maurie Backman introduces the four dangerous assumptions. “Think you’ve got retirement in the bag?” he writes. “It’s an unfortunate fact that many seniors approach retirement ill-prepared and run into financial trouble because of it.” He then goes on to explain “four major assumptions a large number of workers just plain get wrong.” Ready? Here they are.

Dangerous Assumption Number One, Backman writes, is miscalculating your life expectancy. Are you saving for a shorter retirement than you’ll actually experience? You’re not alone. “Many people who retire in their mid-60s assume that they’ll only need enough savings to cover another 15-20 years of expenses,” writes Backman. But that may not be enough. “People are living longer these days, and while that’s a positive trend in theory, it does pose certain financial challenges.” Once the average American man reaches age 65, he can reasonably expect to live almost 20 more years, says the Social Security Administration, while for a woman the life expectancy averages closer to 22 years past age 65. And remember, those numbers are only averages: 25 percent of today’s 65 year olds will live past age 90. “When planning for retirement,” says USA Today, “don’t make the mistake of selling your life expectancy short.”

Dangerous Assumption Number Two: overestimating how long you’ll be able to keep working. You may think you’ll be able to work as long as you want to, but “working into your mid- to late 60s or 70s is by no means a given,” says the article. A recent Voya Financial study reported that fully 60 percent of Americans ended up retiring earlier than planned, often due to job loss, health issues, or a family member needing care. It’s a good idea to keep working as long as you can, for both financial and personal reasons, but you also need to be prepared in case your plans should change and your work life be cut short.

Here’s Dangerous Assumption Number Three: assuming you’ll spend less when you retire. We’ve written about this in several posts on our AgingOptions Blog (including this one). A recent study by the Employee Benefit Research Institute reported that nearly half of retirees said they actually spent more during their first few years of retirement than before they quit working. Sometimes (for about one-third of retirees) this higher spending level continues for the first six full years of retirement! When planning for your retirement lifestyle, it’s essential to be realistic, or else your budget will prove woefully inadequate and your retirement plan will suffer.

Finally, Dangerous Assumption Number Four: believing Social Security will cover all your retirement expenses. This links closely to number three above. Social Security is designed to replace only about 40 percent of the average retiree’s income, and since the average beneficiary is only receiving about $16,300 per year, this is another area where your expectations have to be tempered with reality. Let the AgingOptions team of professionals help you by reviewing your financial picture before retirement looms – there may be ways you had never considered to boost your income well beyond what Social Security will provide.

From our perspective here at AgingOptions, all of these “dangerous assumptions” share a common theme: they involve a failure to plan thoroughly and comprehensively for one’s retirement years. Many retirees will set up a financial plan and feel confident they’ve done all they need to do, only to find out too late that their basic “money management” plan is inadequate and will lead them down the road to retirement disaster and disappointment. Money alone is not the answer! Yes, it’s vital to protect your assets in retirement, but what about your housing choices – can you avoid unplanned institutional care? What about your loved ones – can you avoid becoming a burden to those closest to you? With a traditional financial plan the answer is completely uncertain. With an AgingOptions LifePlan, the answer is a confident “yes,” because financial, medical, housing, legal and family components are all working together.

We invite you to join us for one of our free LifePlanning Seminars where you’ll learn much more about our revolutionary approach to the art and science of planning for retirement. A few hours invested will reap exciting dividends, we assure you! For a complete listing of locations, dates and times, plus online registration, click here, or call us during the week. Remember, there’s no obligation whatsoever.

The most dangerous thing you can do as a retiree, in our estimation, is failing to plan. Let AgingOptions help you create a LifePlan that will allow you to achieve the secure and fruitful retirement you’ve always hoped for!

(originally reported at www.usatoday.com)

Monthly Social Security Benefit Increase for 2017 and Medicare Part B is going up.

By Kirk Larson

Social Security Western Washington Public Affairs Specialist

Monthly Social Security and Supplemental Security Income (SSI) benefits will increase 0.3 percent in 2017.  The 0.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 60 million Social Security beneficiaries in January 2017. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2016. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.  The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

The standard Part B premium amount in 2017 will be $134 (or higher depending on your income). However, most people who get Social Security benefits will pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for 2017 Social Security benefits. If you pay your Part B premium from your monthly Social Security payment, your monthly premium can go no higher than the increase you receive to your monthly Social Security benefit. Social Security will tell you the exact amount you will pay for Part B in 2017. You’ll pay the standard premium amount if:

  • You enroll in Part B for the first time in 2017.
  • You don’t get Social Security benefits.
  • You’re directly billed for your Part B premiums.
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $134.)
  • Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above $85,000 for an individual or $170,000 for a couple filing a joint tax return amount. If so, you’ll pay the standard premium amount plus an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

Most Social Security beneficiaries will not see a reduction in their 2016 monthly benefit amount because of the increase in the Medicare Part B premium. This is because the Social Security Act contains a “hold harmless” provision that protects most beneficiaries. The amount of the benefit payable between 2016 and 2017 will stay the same even though the Medicare Part B premium increases.

To learn more about Medicare Part B costs go to https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html at the Medicare webpage.

Monthly Social Security Benefit Increase for 2017 and Medicare Part B is going up.

By Kirk Larson Social Security Western Washington Public Affairs Specialist

Monthly Social Security and Supplemental Security Income (SSI) benefits will increase 0.3 percent in 2017.  The 0.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 60 million Social Security beneficiaries in January 2017. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2016. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.  The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

The standard Part B premium amount in 2017 will be $134 (or higher depending on your income). However, most people who get Social Security benefits will pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for 2017 Social Security benefits. If you pay your Part B premium from your monthly Social Security payment, your monthly premium can go no higher than the increase you receive to your monthly Social Security benefit. Social Security will tell you the exact amount you will pay for Part B in 2017. You’ll pay the standard premium amount if:

  • You enroll in Part B for the first time in 2017.
  • You don’t get Social Security benefits.
  • You’re directly billed for your Part B premiums.
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $134.)
  • Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above $85,000 for an individual or $170,000 for a couple filing a joint tax return amount. If so, you’ll pay the standard premium amount plus an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

Most Social Security beneficiaries will not see a reduction in their 2016 monthly benefit amount because of the increase in the Medicare Part B premium. This is because the Social Security Act contains a “hold harmless” provision that protects most beneficiaries. The amount of the benefit payable between 2016 and 2017 will stay the same even though the Medicare Part B premium increases.

To learn more about Medicare Part B costs go to https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html at the Medicare webpage.

Social Security Benefits based on Deceased Spouse

 Dear Rajiv,

 My question on the radio concerned when a relative, age 63, still working, whose wife passed away four years ago, could collect one-half of his deceased wife’s social security. He plans on working until age 70 or so, and will want to collect his larger social security benefit at that time.

 Please advise when he should file to collect benefits, his wife’s and/or his own. You indicated that he could collect his wife’s benefit at age 66.

 Thank you so much for your great radio show and your time.

Regards,

 aka “Diane” from “Graham”

Hi Rajiv and Deanna,

Thanks for your note, Rajiv.  I hope you had a great Thanksgiving.

 Answer:

Deanna, Rajiv was definitely on the right track.  Until he is 66, his work will reduce or eliminate any Social Security payments.  At 66 that goes away, so he could take SS while continuing work.

As you know, your relative is eligible two ways, as a widower and as a worker in his own right.  The first step is to see which of these two amounts is bigger:  his widower benefit at 66, or his own benefit at 70.  (Those ages are when each benefit maximizes.)  He might know the amounts—at least roughly—or he can get them by calling or visiting SSA.

Assume that his own benefit at 70 is bigger.  Then he would file for the widower’s benefit at 66, and get 100% (not 50%) of his wife’s benefit.  Then at 70 he would take his own.

If the widower’s benefit is bigger, just take that at 66.

Neither of these pathways was changed by last year’s budget bill.

If he stops work before 66, he could immediately take the smaller payment, then switch to the bigger one at 66 (for the widower’s payment) or 70 (for his own).

Reference:  https://www.ssa.gov/planners/survivors/ifyou2.html, especially the second bullet under “When you should apply.”

He should be sure to run his plan by SSA before committing to it, for example when he applies at 66.

Hope this helps.  Best wishes for warm and meaningful holidays.

 Andy Landis

Thinking Retirement

 

 

Social Security Adjusted Payment

Hello Rajiv, I have not received an adjusted SSA payment for my earnings for 2015, I normally receive this in November of the following year (2016) I am receiving SSA payments at present (full retirement age) but am still working thus making SS payments via my paycheck. I seem to have this issue every year and cannot get any help from SSA web portal or with a telephone agent. I have heard Rajiv Nagaich talk about this on his radio show and was wondering if he had someone I could get help from at the SSA office in Seattle. Kindest Regards Emily Lea Reed

Hi Emily;

Here’s a response after consulting with my SSA contact:

Some background:  your Social Security payment is based on your highest 35 years of work, after inflation adjustment.  Each year in November, any new work from the previous year is automatically posted to your work record.  The new posting causes an AERO (Automated Earnings Reappraisal Operation), and if the new earnings are one of your top 35 years, triggers a raise in your Social Security.

This year, the AEROs have been performed, and notices are being sent to those affected.

Watch for your notice in the next few weeks.  If you don’t receive it by January 1, it’s possible that 2015 was not one of your top 35 earnings years.  If you believe otherwise, take your 2015 W-2 into your Social Security office and request a manual AERO.

Hope this helps, and best wishes for warm and meaningful holidays.

Andy Landis, Social Security Expert

Thinking Retirement

(206) 440-1998

[email protected]

www.andylandis.biz

Social Security Cost of Living Increase So Tiny You Won’t Notice It!

Here’s the good news about your Social Security cost of living adjustment (COLA) for 2017: there’s going to be one, unlike last year when the COLA was zero. But here’s the bad news: this year’s increase is so tiny, at 0.3%, you won’t even notice it.  Some experts have calculated that the average Social Security beneficiary may see a whopping $5 increase in benefits. Before you get too excited, as this article recently published by the Reuters news service points out, the entire increase is almost certainly going to disappear into higher premiums for Medicare.

As Reuters puts it, “The Social Security COLA has lacked fizz for much of the past decade,” having remained less than 2 percent in every year but one since 2009. For three years the COLA has been non-existent. This puts a burden on seniors, many of whom are on fixed income (half of Medicare recipients live on less than $24,150 per year, said a 2014 report from the Kaiser Family Foundation). As any senior will tell you, prices definitely do seem to be on the rise, so why doesn’t the Social Security COLA reflect actual market conditions?

Turns out that the culprit is the law that sets the standard by which the cost of living adjustment is calculated. Social Security COLA is determined based on what’s called the CPI-W, which is shorthand for the Consumer Price Index for Urban Wage Earners and Clerical Workers. This index includes a measure of several costs for goods and services purchased by average working men and women, and it is weighted accordingly. For the past several years, one factor has been chiefly responsible for the CPI-W remaining suppressed: low energy prices. According to one expert quoted by Reuters, Max Gulker from the American Institute for Economic Research, “If you look category by category at prices that are up or down, energy is what is pulling things down overall.”

The trouble for seniors, especially retirees on Social Security, is that they benefit far less from low energy prices because they tend to drive less. Low energy costs are less of a boon to older Americans than to most working adults. On the other hand, seniors spend more than twice as much on medical coverage as the rest of the population, research shows, and yet skyrocketing medical costs are not adequately reflected in the CPI-W. Max Gulker told Reuters that “The categories that are really rising are healthcare and education costs.”

As a response, the experts at the Bureau of Labor Statistics (the ones who calculate the CPI-W) have developed an experimental index called the CPI-E, or Consumer Price Index for the Elderly.  This index is weighted toward the things seniors spend their money on, such as health care. Advocates for seniors are pushing for the adoption of a fairer standard such as the CPI-E for calculating the Social Security COLA, but so far without much success. (Speaking of medical costs, the Reuters article explains in some detail how Medicare premiums for Part B and Part D will be going up this year. Since the law protects current beneficiaries from having their Social Security benefits reduced, and since the cost of living adjustment is so measly, most of that higher Part B cost will be borne by new enrollees. Again, click here to read it.)

So what’s the long-term solution?  Reuters suggests (somewhat optimistically) that “the COLA mess” has to be part of a broader political conversation about Social Security reform. Other more short-term proposals include one by Senator Elizabeth Warren (D-Mass) to provide a one-time “emergency COLA” of 3.9 percent, which she says equals the average raise given to top CEO’s last year. In today’s political climate, who can say how or when these ideas will be debated? But it does suggest that seniors ought to be using their considerable political clout to force policy-makers from both parties to get serious about a system that clearly needs to be reexamined.

Do you have questions about Social Security or Medicare? We invite you to call our office any time. Our experienced professional staff can help you decipher your choices and make the decisions that are best for you. In fact, no matter what your questions about retirement, from housing choices to financial planning to legal affairs to family communications, AgingOptions will be your best resource. We offer a unique approach to retirement planning that we call LifePlanning – an approach so comprehensive that it encompasses all these needs we’ve just listed, and many more. Don’t head into retirement without a plan, and don’t give up because these decisions seem so complex! With us as your guide, together we can navigate through the circumstances that are unique to your situation and create the perfect plan for you.

There’s a simple, no-obligation way to find out more: attend one of our free LifePlanning Seminars. You’ll come away with a clear understanding of just how beneficial LifePlanning can be. Click on the Upcoming Events tab for details and registration, or call our office and we’ll gladly assist you. We’ll look forward to meeting you at a LifePlanning Seminar in your area soon!

(originally reported at www.reuters.com)

HIT A HOME RUN WITH SOCIAL SECURITY

By Kirk Larson Social Security Washington Public Affairs Specialist

A home run is a highlight of any baseball game. The fans cheer with excitement to see a player rocket the ball into the stands. So, what are you doing to prepare for your retirement home run? Your goal should be to get past 1st, 2nd & 3rd base and make it home with a hefty plate of savings. Social Security has many tools to help you achieve financial security.

Take the first step and visit www.socialsecurity.gov/myaccount. The benefit of having a my Social Security account is that it gives you access to your personal Social Security Statement, verification of correct earnings, and an estimate of your early retirement benefits at age 62, full retirement age of 66, and delayed age at 70.

We protect your information by using security features and strict identity verification to detect fraud. In several states including the newly added Idaho, Mississippi, and North Dakota, you can request a replacement Social Security card online. Find out if your state offers the service at www.socialsecurity.gov/ssnumber.

In addition to using your personal my Social Security account to prepare for a comfortable retirement, you can visit www.myra.gov. At myRA, you can access new retirement savings options from the Department of the Treasury. This service is designed for the millions of Americans who struggle with saving for retirement — it’s an easy and safe way to help you take control of your future.

myRA is designed for people who don’t have a retirement savings plan through their employer, or are limited from other savings options. If your employer provides a retirement savings plan, such as a 401(k), learn more about that plan’s potential for matching contributions or other benefits.

Since myRA isn’t connected to any employer, it allows workers to hold on to it when they move to different jobs. myRA makes your money grow faster than a traditional savings account. Having both my Social Security and myRA accounts in place, you’re guaranteed to hit a home run in successfully planning for your future. Learn more about all of your choices at www.socialsecurity.gov.

NEWS FOR SAME-SEX COUPLES ABOUT SOCIAL SECURITY

By Kirk Larson Social Security Washington Public Affairs Specialist

The Supreme Court decision in Obergefell v. Hodges, holding that same-sex couples have a constitutional right to marry in all states, resulted in Social Security recognizing more same-sex couples as married. This is important for determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments. We recently updated instructions for employees to process claims and appeals when a determination of marital status is necessary. As part of the new instructions, we have:

• Removed from our policy any mention or consideration of the dates when states first recognized same-sex marriages from other states. These dates are no longer relevant.

• Added the dates when some foreign jurisdictions allowed same-sex marriage, thereby eliminating the need for a case-specific legal review in many foreign same sex marriage claims.

• Updated and simplified our procedures for processing claims involving a transgendered or intersex person, allowing these individuals to self-identify as members of a same or opposite-sex marriage.

• Streamlined and clarified the policy instructions, addressing questions raised by advocates and employees.

We encourage anyone who believes they may be eligible for benefits to apply now. Learn more at www.socialsecurity.gov/same-sexcouples.

LISTEN AND LEARN ABOUT SOCIAL SECURITY. FREE AUDIO PUBLICATIONS FOR YOUR CONVENIENCE

By Kirk Larson Social Security Washington Public Affairs Specialist

Perhaps you’ve been planning to read that booklet on Social Security benefits for some time now, but you never seem to find the time to sit down with it. If only you could listen to an audio version, just as you might listen to the latest novel by your favorite author on audio book. Now you can. Social Security offers more than a hundred publications in audio format, in both English and Spanish. You can find them at https://www.ssa.gov/pubs/audio/audio.html and https://www.ssa.gov/pubs/ or you can call (800) 772-1213 for assistance. At Social Security, we want to make sure you can get the information you need. That is why we offer our publications in print, online in both Internet and PDF versions, and some in audio format. You also can get publications in Braille, in enlarged print and even cassette or CD. If you are blind or visually impaired and are having trouble reading a notice we sent you in the mail, you can ask a Social Security representative to read it and explain it to you. You can contact us as many times as you want to get an explanation. Social Security is committed to using technology to improve the customer service experience. Learning about any aspect of Social Security’s programs is easier than ever, in the format that works best for you. These days, you can even get a personalized estimate of your future benefits and apply for those benefits online. From the comfort of your home, you can access information about Social Security. Take it a step further and use the audio publications in combination with the Frequently Asked Questions (FAQs) section to get answers to over 700 questions. If you were planning to plug in the ear buds and listen to a little music tonight, why not play the Social Security publication you’ve been putting off? It’s never been easier to learn about Social Security. Just visit our webpage and you can learn about Social Security programs at www.ssa.gov. Welcome to our online library. Whatever your preferred format, we’re here for you.