Transcript Stan Fromuth & Joe Olenski Providing guidance and assistance to the American public in making decisions on their Social Security eligibility and.

Stan Fromuth & Joe Olenski
Providing guidance and assistance to the American public in making decisions on their
Social Security eligibility and continuing Social Security issues.
Qualifications – Stan Fromuth & Joe Olenski
• Former employees of the Social Security Administration
• Retired with 76+ years of service with agency
• Regarded as program and policy experts on
Social Security issues
• Both involved in writing and interpreting Social Security
policies and procedures
• Both spent many years as District Managers working
directly with public on Social Security issues and problems
Why do people need assistance and guidance
in making decisions related to Social Security?
1.
Social Security programs are very complex
2.
Avalanche of baby boomers becoming eligible for Social Security
benefits is overwhelming the Social Security Administration
3.
Expertise of Social Security employees is diminishing
4.
Social Security employees are discouraged to give advice
on your best filing options
5.
Changes in Social Security Regulations make it more difficult
for applicants/beneficiaries to amend their decisions
6.
YOU MAY LOSE A SIGNIFICANT AMOUNT OF MONEY
IF YOU FAIL TO MAKE THE BEST DECISIONS
Maximizing Your
Social Security Benefits
Considerations for Filing
The decision of when to begin Social Security benefits is an
individual one based on the individual’s unique
circumstances.
There is no “one size fits all option” that applies
3 Requirements for Entitlement to
Social Security Retirement Benefits
1. You have worked long enough under Social Security
covered employment
2. You have attained retirement age
3. You are retired within the meaning of the
Social Security Act
Insured Status Requirement
• Measured using a provision called “quarters of coverage”
• In 2015, you earn one quarter of coverage for every
$1220 you earn
• You need 40 quarters of coverage (~10 years of work)
to qualify for a benefit
Attainment of Retirement Age
• Full unreduced benefits are paid at Full Retirement Age
(FRA)
• FRA is based on your year of birth
• Benefits can begin as early as age 62
• If you begin receiving benefits prior to attaining FRA,
your retirement benefit amount will be permanently
reduced
Full Retirement Age
Year of Birth
FRA
1943 – 1954
66
1955
66 + 2 months
1956
66 + 4 months
1957
66 + 6 months
1958
66 + 8 months
1959
66 + 10 months
1960+
67
‘Retired’ Within the Meaning of the SS Act
• You do not need to stop working to be considered “retired”
for Social Security purposes
• Social Security has set up certain income limits to
determine if or to what extent an individual is retired
• The income limits depend on your age
Full Retirement Age and Older
At full retirement age,
individuals can receive their
Social Security benefits
no matter how much they earn
In the Year of FRA Attainment and
for Months Prior to Attaining FRA
Individual reaching FRA in 2015
• Can earn up to $41,880 during the months prior to the month
they reach FRA with no effect on their Social Security benefit
• If earnings exceed the $41,880 limit in months
prior to the month they reach FRA,
$1.00 in benefits will be withheld for
every $3.00 earned over the limit
Example
Q
A
An individual attains FRA in April 2015. He will work entire year
and earn $120,000 ($10,000 per month)
In which months can he receive a Social Security check?
He can receive a check for every month in 2015.
He is due a check for all months beginning in April because he attains
FRA in April.
He is due a check for January, February and March because his earnings
for those months ($30,000) are below the $41,880 allowable limit.
In the Years Prior to the Year of Attaining FRA
In 2015, individuals under FRA for the entire year
• Can earn up to $15,720 during the year with no effect
on their Social Security benefit
• If earnings exceed the $15,720 limit, $1.00 in benefits
will be withheld for every $2.00 earned over the limit
Example
Q
A
A 64-year-old worker has been receiving Social Security Retirement
benefits of $1,000 per month. He returns to work in January 2015 and
will earn $30,000 in 2015.
Can he receive any Social Security benefits for 2015?
Yes
Earnings
Less Allowable Limit
$30,000
– $15,720
$14,280 over the limit
Social Security withholds $1 for every $2 over the limit. $14,280 divided by 2 = $7,140
The worker will receive all his Social security benefits except for the first $7,140.
Amount of your Social Security Benefit
• Benefit amount is computed using your highest 35 years
of earnings
• The higher your earnings, the higher your SS benefit
• Average benefit for a retired worker in the U.S. – $1328
• Maximum benefit for individual attaining FRA in 2015 – $2663
Increases in the Retirement Benefit Amount
• Cost of living increases
• Additional work and earnings
• Delayed Retirement Credits
• 2/3% of 1% increase per month (8%/year)
• Beginning with FRA up to age 70
• Change in the reduction factor
How to Maximize Retirement Benefit
• Maximize your earnings and work as long as you can
• Do not take reduced benefits prior to FRA
• Defer taking retirement benefits until age 70
• If you are eligible, collect spouse’s benefits or survivor
benefits prior to FRA or age 70
•
Other pertinent issues (children, health, income needs,
quality of life issues)
Issues Affecting The Decision to Maximize
Benefits
• Pertinent issues to consider
• Children
• Health
• Income needs
• Quality of life issues
Taxation of Social Security Benefits
Part of your Social Security benefits may be taxable
If you file your tax return as an individual and your combined income* is:
•
<$25,000
no part of your SS benefit is taxable
•
$25,000-$34,000
up to 50% of your SS benefits may be taxable
•
>$34,000
up to 85% of your SS benefits may be taxable
*Definition of Combined Income
Your “combined income” is:
Your adjusted gross income
+ Your non-taxable interest
+ ½ of your Social Security benefits
Other Issues Relating to Monthly Benefits
•
Multiple Entitlements – receive only the amount of the highest benefit
•
Family Maximum Limitation and Divorced Spouse Affect on Family Max
•
Deemed Filing for Reduced Benefits
•
No Deemed Filing at FRA
•
Independently Entitled Divorced Spouses
•
No Deemed Filing In Widows/Widowers Claims
•
File and Suspend
Filing for Benefits
• 4 months prior to entitlement
• On-line
• Face-to-face at local office
• By phone
Make an appointment!
Call 1-800-772-1213
Restricting Application for Other Benefits
to Exclude Retirement Benefits
• Can only be done for spouse’s benefits when the applicant
is at least FRA
•
Can be done at any age for widow’s benefits
• Reason for exclusion is to increase the value if the
individual’s own retirement benefit.
How to obtain information and/or contact the
Social Security Administration
www.socialsecurity.gov
1-800-772-1213
SSRC
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