Category Archives: Social Security

The Future of Social Security – Social Security Board of Trustees Annual Report

The Social Security Board of Trustees released its annual report in June regarding the long-term financial status of the Social Security Trust Funds.  The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year, with 79 percent of benefits payable at that time.  The DI Trust Fund will become depleted in 2023, extended from last year’s estimate of 2016, with 89 percent of benefits still payable.

In the 2016 Annual Report to Congress, the Trustees announced:

The asset reserves of the combined OASDI Trust Funds increased by $23 billion in 2015 to a total of $2.81 trillion.  The combined trust fund reserves are still growing and will continue to do so through 2019.  Beginning in 2020, the total cost of the program is projected to exceed income.  The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034 – the same as projected last year.  At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.  “Now is the time for people to engage in the important national conversation about how to keep Social Security strong.  The public understands the value of their earned benefits and the importance of keeping Social Security strong for the future,” said Carolyn W. Colvin, Acting Commissioner of Social Security.

Other highlights of the Trustees Report include:

* Total income, including interest, to the combined OASDI Trust Funds amounted to $920 billion in 2015.  

* Total expenditures from the combined OASDI Trust Funds amounted to $897 billion in 2015.  There were about 60 million beneficiaries at the end of the calendar year.

* Non-interest income fell below program costs in 2010 for the first time since 1983.  Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.

* During 2015, an estimated 169 million people had earnings covered by Social Security and paid payroll taxes.

* The cost of $6.2 billion to administer the Social Security program in 2015 was a very low 0.7 percent of total expenditures.

* The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.4 percent in 2015.

 View the 2016 Trustees Report at www.socialsecurity.gov/OACT/TR/2016/

 By Kirk Larson , Social Security Washington Public Affairs Specialist  

 

 

Social Security Celebrates Black History Month

By Kirk Larson, Social Security Washington Public Affairs Specialist:

 

Throughout the month of February, we celebrate Black History Month. Created in 1926, this event coincides with the birthdays of Abraham Lincoln on February 12 and Frederick Douglass on February 14. African American communities have celebrated these birthdays together since the late 19th century.

Honoring our shared history and reflecting on the past is one way we unify as a nation. We remember that we are all Americans — we believe in freedom and democracy for all. Another shared belief is that we all deserve a comfortable retirement, free of economic hardship.

Social Security has retirement benefits and the tools to help you plan for your retirement and to apply for benefits online. We also provide disability benefits to individuals with medical conditions that prevent them from working. If the disabled individual has dependent family members, they can also receive payments.

If you or anyone you know is disabled, they may qualify for disability benefits. Studies show that a 20-year-old worker has a 1-in-4 chance of becoming disabled before reaching full retirement age. You can see if you meet our strict definition of disabled and also apply for disability benefits at www.socialsecurity.gov/disabilityssi/apply.html.

Widows, widowers, and their dependent children may be eligible for Social Security survivors benefits. Social Security helps by providing income for the families of workers who die. In fact, 98 of every 100 children could get benefits if a working parent dies. And Social Security pays more benefits to children than any other federal program. You can learn more about Social Security survivors benefits at www.socialsecurity.gov/survivors.

Honoring each other begins with fair and equal treatment. Social Security guarantees that, if you pay into the system, you will have the same benefits as everyone else. This Black History Month, we want to make sure our diverse nation is covered and that no one is left out of the benefits they deserve. Visit www.socialsecurity­­­.gov to learn more.

 

Will Your Social Security Income be Taxable? Odds Are They Will

It’s a question we hear from our clients frequently. As they approach retirement, some seniors have always assumed that their Social Security benefits will be tax-free – but will they be? The answer depends on several factors, but odds are – if you’re approaching the time when you begin drawing benefits – you will end up paying taxes on at least some of that income.

We recently found this report from Kiplinger. It was originally written a few years ago but just updated, and it explains in detail who will pay income tax on Social Security benefits, along with ways to minimize your tax exposure. Kiplinger states that “about 25 million Americans pay income taxes on their Social Security benefits — a surprise for many seniors who were planning on a source of tax-free income.” Depending on your income, the article reports, recipients could pay tax on up to 50% of your benefits, or for some up to 85%.

We won’t go into unnecessary detail here, but if we have the chance to meet with you individually we can help you evaluate your own personal situation. But one basic question retirees frequently ask is what the earning threshold is that makes benefits taxable. Kiplinger says, “The first step is to compute your ‘provisional income,’ which is basically your adjusted gross income (not counting any Social Security benefits) plus any tax-exempt interest and 50% of your benefits.” Once you’ve calculated that figure, according to Kiplinger, “Your benefits are totally tax free if your provisional income is less than $25,000.” That’s for single or head-of-household tax returns. If you file a joint return, that threshold rises to $32,000.

One final point: if you do have to pay taxes, Social Security will withhold payments from your check if you desire. That saves you the need to make quarterly payments.

Protecting your assets in retirement is vitally important, and that requires a realistic assessment of all your sources of income. One of the surest ways to maintain your independence and avoid becoming a burden to your loved ones is to make all your retirement plans carefully.

 

  • Are your financial resources being carefully and realistically allocated?
  • Have you considered all your various housing options to plan where and how you’ll live?
  • Are your legal affairs and all necessary documents up to date and complete?
  • Are you thinking ahead to handle your health care needs as you age?
  • Are your family members fully informed about your wishes in retirement?

We work with our clients to weave all five of these elements into a comprehensive plan – called a LifePlan. With your LifePlan in place you can face retirement knowing you’ll be able to protect your assets as you age, avoid becoming a burden to your loved ones, and also avoid being forced into institutional care against your wishes.

Where do you begin? We invite you to start by attending a free LifePlanning Seminar where we’ll provide you with helpful information about all these aspects to your retirement plan. Click on the Upcoming Events tab on this website, and you’ll see all the upcoming dates, times and locations. It will be a pleasure meeting with and working with you.

(Originally reported at www.kiplinger.com)
 

 

 

 

 

To Increase Social Security Benefits, Consider “Restricted Application”

As you’ve probably heard, and as we reported in a recent article on this website, the rules governing some common Social Security strategies have recently changed.  (You can click here to access this article.) And if you’re about to start drawing Social Security benefits for you and your spouse, you may very likely be affected.

The biggest change, and the one we recently reported on, is the end of a practice known as “File and Suspend.” As summarized by local Social Security expert Andy Landis, this strategy allowed a beneficiary to file for benefits and then immediately suspend receiving them, which in turn produced three significant advantages:

  • Future Social Security payments continued to increase while suspended
  • The spouse or qualifying children of the beneficiary could immediately start drawing benefits to which they were entitled
  • All suspended payments could be collected retroactively if the beneficiary decided to end the suspension.

But the new rules eliminate this practice, except for those few who may be eligible to file before May 1, 2016. So what strategies are there to maximize benefits? Consider a second idea called “Restricted Application,” or RA. This practice is still allowed for anyone born before January 1, 1954. Under RA, the beneficiary waits to file until age 66, then takes only his or her spousal (or ex-spousal) benefits. By waiting to draw full benefits until age 70, those benefits have grown by 32% — worth waiting for. Meanwhile your spousal benefits keep coming.

Is this “Restricted Application” option the right one for you? Possibly – and in order to find out, Andy Landis advises that you search for “Social Security Calculator” online. Just make sure the one you use is updated to the new rules. According to Andy, “The calculator at http://www.socialsecuritysolutions.com/ is already updated and others are coming.” And, he adds, “Check with the Social Security Administration before locking in any strategy.”

As always, we welcome the opportunity to serve as your guide as you plan for a fruitful and secure retirement. Social Security is only one part of a much larger puzzle! We invite you to begin mapping out your retirement by attending a free LifePlanning Seminar coming soon to a location near you. Click on the Upcoming Events tab on our website for the details. You’re also invited to call our office any time for an appointment so we can go over your plan in person.

(additional information at www.andylandis.biz)

Getting it Right: Here Are the 9 Worst Social Security Mistakes

For most American retirees, Social Security benefits form a vital part of their income – in fact, for many these benefits provide most if not all of the funds retirees live on. That’s why older Americans need to make careful decisions about when to take their benefits – and which benefits to take – so that their income can be maximized.

We discovered this helpful related article on the Kiplinger financial news website (Click here for the link.) It’s titled “9 Worst Social Security Mistakes You Can Make,” and while the article is a few months old, the information is highly relevant today.

Some of these mistakes seem obvious. For example, not all seniors plan for the correct retirement age – they fail to realize that while the full retirement age for benefits is 66 for people born between 1943 and 1954, if you’re born in 1955 or later the retirement age rises gradually, reaching age 67 for those born during or after 1960. Another common mistake most seniors have heard a great deal about is claiming benefits too early, starting at age 62 – not realizing that waiting until 66 boosts benefits by 25%, and waiting until 70 generates an extra 32% on top of that in Social Security payments for the rest of a retiree’s life.

Other tips, however, may be more complex but can add significantly to the income of both you and your spouse. For example, the practice known as “filing and suspending” is a powerful way to increase benefits, but many couples make the mistake of failing to consider this income-boosting technique. Another mistake many couples make is failing to consider all their options to maximize spousal benefits both now and later. It’s essential to plan carefully to decide when each of you should begin taking the Social Security benefits you’ve earned.

Protecting your assets is a top priority as you plan for a comfortable retirement, so learning strategies to maximize your earned benefits is important. But it’s only one elements of a much larger plan that we encourage our clients to make – a Life Plan that covers other important aspects of retirement, including your Health, your Legal affairs and your Family relationships. If you’re looking for a blueprint to help begin laying those plans, we invite you to attend one of our upcoming Life Planning Seminars, where you’ll gain invaluable information to help you plan for your future as you age. Simply click on the Upcoming Events tab on this website for dates, times and locations.

Of course, should you desire, we welcome the chance to meet with you in person. Contact us for an appointment, and we’ll help you plan for a more secure future.

(originally reported at www.kiplinger.com)

 

It’s Official: No Cost of Living Raise for Social Security Recipients

After several years of modest increases, 65 million people will miss out on something this month: a cost of living adjustment, or COLA, applied to their Social Security benefits. And this will spell financial pressure for many.

This is the first time in five years that Social Security benefits, adjusted for inflation each October, remain unchanged. Last year benefits rose 1.7%, and for three years in a row they have climbed less than 2% per year. The news of zero COLA, announced October 15, 2015, has triggered a barrage of news reports and articles. For a good summary with some helpful links, we suggest an article found on the CNN Money website (click here to access the article).

The good news, if we can call it good, is that inflation (using the yardstick the Social Security Administration employs) has actually declined over the past 12 months. This is mostly due to a 30% drop in gas prices, and it means lower overall living costs for many. But the problem for seniors, as this article made clear, is that they benefit less from lower gas prices than other segments of the population do, because seniors drive less. Meanwhile medical costs have risen faster than inflation, which affects seniors disproportionately. As the CNN Money article put it, “The problem for seniors is that the way the government measures inflation simply doesn’t reflect how people on Social Security spend.”

So how will you adjust? If you’re among the 65 million on Social Security, and if you’re committed to protecting your assets in retirement, having a solid Life Plan in place as you age is essential to your peace of mind and your financial health. A Life Plan will also cover other vital aspects of your retirement besides finances.

We encourage you to join us at a location near you for one of our upcoming Life Planning Seminars where we will give you important suggestions on building toward a solid financial future. We would also welcome the opportunity to meet with you individually or as a couple. Click on the Upcoming Events tab on our website for Life Planning Seminar dates, times and locations.

(Originally reported at www.money.cnn.com)

Medicare & Social Security “Double Whammy” Facing Retirees

What do you call it when your Social Security earnings remain stagnant – with no cost-of-living increase – but your premiums for some Medicare expenses rise more than 50 percent? A recent article on the NBC News website calls it a Double Whammy – and that, the article states, is what seniors are facing in the coming year.

This combination of zero-growth in Social Security benefits and an alarming rise in health care costs should give every senior a wake-up call. You can read the entire article here.

As the online article explains, the chief reason for the flat-line in Social Security benefits is declining oil prices. While lower costs at the gas pump (and for home heating oil) do benefit many retirees, these low prices create a double-edged sword by keeping inflation low. This reduced inflation caps any Social Security increase. Because of the way Social Security cost-of-living (COLA) increases are calculated (a method many consider unfair to seniors) the net result is that there will be no COLA increase this year.

At the same time, some Medicare costs will skyrocket. While it’s true that in the short term these costs will only affect about 30 percent of beneficiaries, the longer-term outlook points to an alarming rise in health care costs and accompanying premiums affecting just about everybody, suggesting that the period of zero-to-modest increases in health care costs is coming to a close.

Our clients have told us repeatedly that one of their greatest concerns is protecting their assets in retirement. For that reason, whether you are already retired or just starting to plan for your retirement future, we urge you to attend an upcoming Life Planning Seminar. We’ll share vital information that will help you put together a plan that takes all aspects of your retirement, including health care and finances, into account. Simply click on the Upcoming Events tab on this website.

(Originally reported at www.nbcnews.com)

 

80 Years Old, And More Popular Than Ever!

As you consider how to protect your financial assets in retirement, Social Security will almost certainly be an important part of your plan. The good news is, this essential federal program now enjoys as much popular support as it ever has.

Social Security is celebrating its 80th birthday, and a recent AARP survey reports the government program still enjoys overwhelming levels of popularity. This is true not just among seniors but among all age groups.

That’s the finding from AARP’s newly released report on the popularity of Social Security. AARP has been conducting similar research periodically since 1995. The report shows that more than 8 in 10 Americans say that contributing to Social Security is important to the good of all, not just retirees, and two-thirds of respondents call Social Security one of the most important federal programs. However, the same survey also revealed a wide range of misinformation and misconceptions about this far-reaching government program.

The article, including several links to related reports, is available at this link. One important finding: 80 percent of all age groups plan to rely on Social Security for their retirement – a statistic that speaks volumes about the essential nature of this 80 year old institution!

(Originally reported at blog.aarp.org)

The Future of Social Security – Social Security Board of Trustees Annual Report

By Kirk Larson

Social Security Western Washington Public Affairs Specialist

The Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds.  The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one year later than projected last year, with 79 percent of benefits payable at that time.  The DI Trust Fund will become depleted in 2016, unchanged from last year’s estimate, with 81 percent of benefits still payable.

Preparing for the disappearing Social Security advantage

The Social Security advantage for married women is shrinking. Much of the focus of Social Security and retirement experts concentrates on describing ways to maximize Social Security benefits. The majority of those options realize benefits for a spouse, usually a woman, who didn’t work much if at all, outside the home and therefore saw little to no Social Security benefit of their own. Married women benefitted from this because they could claim on a husband’s benefit whether they were still married, widowed or divorced but of course this also worked for a man that didn’t work outside of the household or who wasn’t the main breadwinner. For women, this has been an important benefit because less than 40 percent of women born in the 30s participated in the labor force when they were between the ages of 24 and 35. Just 30 years later, that percentage rose to 75 percentage for their younger counterparts. The result, according to experts is that while only 44 percent of the older cohort received Social Security benefits based on their own work history, 75 percent of Generation X women will.

At the same time, the marriage rate has also decreased. In the 30s, over 80 percent of women between the ages of 25 to 34 were married and by age 55 to 64, almost 70 percent were married. For Generation X women, fewer than 60 percent married between the ages of 25 and 34. When those same women reach the 55 to 64 cohort, researchers expect that rate to drop to 56 percent.

Overall, women make up about 60 percent of Social Security beneficiaries. Because women still traditionally make less than men make and live for several years longer than men do, the implications for future financial security may be grave. While experts don’t expect women’s Social Security benefits advantage to disappear, it’s likely to become much smaller. While it’s not all doom and gloom, after all, women are working and therefore building up their own benefits, it’s worth noting that women, especially single women, are far more in jeopardy of finding themselves in poverty as they age already. The future may find that the number of older women in poverty grows to new records. For women, especially single women, the onus will be on them to find ways to create their own financial security.

Men, far more than women, are known for not asking directions. A UK insurance company found that three-quarters of women will ask directions while less than 40 percent of men will do so. With that advantage in mind, women should be asking for directions for more than an unfamiliar journey. Women, especially, but of course men too, should be asking a financial advisor what kind of steps they should take to secure their financial future. Those that are married should be looking for help on maximizing their Social Security benefits because while the benefits may be shrinking they do still exist.

Category Archives: Social Security

The Future of Social Security – Social Security Board of Trustees Annual Report

The Social Security Board of Trustees released its annual report in June regarding the long-term financial status of the Social Security Trust Funds.  The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year, with 79 percent…

Social Security Celebrates Black History Month

By Kirk Larson, Social Security Washington Public Affairs Specialist:   Throughout the month of February, we celebrate Black History Month. Created in 1926, this event coincides with the birthdays of Abraham Lincoln on February 12 and Frederick Douglass on February 14. African American communities have celebrated these birthdays together since the late 19th century. Honoring…

Will Your Social Security Income be Taxable? Odds Are They Will

It’s a question we hear from our clients frequently. As they approach retirement, some seniors have always assumed that their Social Security benefits will be tax-free – but will they be? The answer depends on several factors, but odds are – if you’re approaching the time when you begin drawing benefits – you will end…

To Increase Social Security Benefits, Consider “Restricted Application”

As you’ve probably heard, and as we reported in a recent article on this website, the rules governing some common Social Security strategies have recently changed.  (You can click here to access this article.) And if you’re about to start drawing Social Security benefits for you and your spouse, you may very likely be affected….

Getting it Right: Here Are the 9 Worst Social Security Mistakes

For most American retirees, Social Security benefits form a vital part of their income – in fact, for many these benefits provide most if not all of the funds retirees live on. That’s why older Americans need to make careful decisions about when to take their benefits – and which benefits to take – so…

It’s Official: No Cost of Living Raise for Social Security Recipients

After several years of modest increases, 65 million people will miss out on something this month: a cost of living adjustment, or COLA, applied to their Social Security benefits. And this will spell financial pressure for many. This is the first time in five years that Social Security benefits, adjusted for inflation each October, remain…

Medicare & Social Security “Double Whammy” Facing Retirees

What do you call it when your Social Security earnings remain stagnant – with no cost-of-living increase – but your premiums for some Medicare expenses rise more than 50 percent? A recent article on the NBC News website calls it a Double Whammy – and that, the article states, is what seniors are facing in…

80 Years Old, And More Popular Than Ever!

As you consider how to protect your financial assets in retirement, Social Security will almost certainly be an important part of your plan. The good news is, this essential federal program now enjoys as much popular support as it ever has. Social Security is celebrating its 80th birthday, and a recent AARP survey reports the…

The Future of Social Security – Social Security Board of Trustees Annual Report

By Kirk Larson Social Security Western Washington Public Affairs Specialist The Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds.  The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one…

Preparing for the disappearing Social Security advantage

The Social Security advantage for married women is shrinking. Much of the focus of Social Security and retirement experts concentrates on describing ways to maximize Social Security benefits. The majority of those options realize benefits for a spouse, usually a woman, who didn’t work much if at all, outside the home and therefore saw little…