Social Security: With You Through Life’s Journey…
Produced at U.S. taxpayer expense
Overview• Retirement Insurance• Survivors Insurance• Working While Receiving Benefits• Taxation of Benefits• Medicare
Retirement Insurance
A Foundation for Planning Your Future
SocialSecurity.gov
How Do You Qualify for Retirement Benefits?
• By earning “credits” when you work and pay Social Security taxes
• In 2020, each $1,410 in earnings gives you one credit• You can earn a maximum of 4 credits per year• You need 40 credits (10 years of work)
Note: To earn 4 credits in 2020, you must earn at least $5,640.
What You Can Expect at Full Retirement Age
0%
10%
20%
30%
40%
50%
60%
LowEarner
AverageEarner
HighEarner
55%
41%34%
% of Preretirement Earnings
Retirement Options
• Early Retirement • Full Retirement • Delayed Retirement
Full Retirement Age
Year of Birth Full Retirement Age
1943 – 1954 66
1955 66 & 2 months
1956 66 & 4 months
1957 66 & 6 months
1958 66 & 8 months
1959 66 & 10 months
1960 or later 67
How Age Affects Your Benefits
Age You Choose to Start Receiving Benefits
Note: This example assumes a benefit of $1,000 at a full retirement age of 66
Chart1
62
63
64
65
66
67
68
69
70
Series 1
Monthly Benefit Amounts Differ Based on the Age You Decide to Start Receiving Benefits
1,000
1,080
1,160
1,240
1,320
750
800
866
933
1000
1080
1160
1240
1320
Sheet1
Series 1
62$750
63800
64866
65933
661000
671080
681160
691240
701320
SocialSecurity.gov
What is the Best Age to Retire?
Financial Needs & Obligations
Cash Needs
Health
Work During RetirementFamily Longevity
Amount of Future Social Security Benefits
SocialSecurity.gov
Life Expectancy Statistics• A man reaching age 65 today can expect to live, on
average, until age 84.3.
• A woman turning age 65 today can expect to live, on average, until age 86.6.
• And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.
socialsecurity.gov/planners/lifeexpectancy.html
How Social Security Determines Your Benefit?
• Step 1: Your wages are adjusted for changes in wage levels over time
• Step 2: Find the monthly average of your 35 highestearnings years
• Step 3: Result is “average indexed monthly earnings”
Benefits are based on earnings
SocialSecurity.gov
2020 Retirement Benefit Formula
Average Monthly Earnings = $5,800
90% of First.................................................... $960 = $864
32% of Earnings over $960 through $5,785...$4,825 = $1,544($5,785-$960=$4,825)
15% of Earnings over $5,785........................ $15 = $2.25
$5,800 $2,410.25*
*Payments rounded to whole dollar amounts
If your average monthly earnings are = $5,800
Then your monthly benefit would be = $2,410$
SocialSecurity.gov
socialsecurity.gov/myaccount
my Social Security
SocialSecurity.gov
my Social Security ServicesIf you do not receive benefits, you can:
• Request a replacement Social Security card;
• Check the status of your application or appeal;
• Get a benefit verification letter as proof that you are not getting
benefits;
• Get your Social Security Statement to review:o Estimates of your future retirement, disability, and survivor benefits;
o Your earnings once a year to verify the amounts that we posted are
correct; and
o The estimated Social Security and Medicare taxes you’ve paid.
SocialSecurity.gov
my Social Security ServicesIf you receive benefits or have Medicare, you can:
• Request a replacement Social Security card;
• Report your wages if you work and receive Disability benefits;
• Get a benefit verification letter;
• Check your benefit & payment information and your earnings record;
• Change your address and phone number;
• Start or change direct deposit of your benefit payment;
• Request a replacement Medicare card; and
• Get a replacement SSA-1099 or SSA-1042S for tax season.
SocialSecurity.gov
Your Spouse:• Age 62 or older • At any age, if caring for a child under age 16 or disabled
Your Ex-Spouse:• Married at least 10 years• Ex-spouse 62 or older and unmarried• Divorced at least two years and you and your ex-spouse
are at least 62 – he or she can get benefits even if you are not retired
Spousal Benefits
SocialSecurity.gov
• Benefit is 50% of the worker’s unreduced benefit• Reduction for early retirement• Does not reduce payment to the worker, or current
spouse if ex-spouse applies• Spousal benefit must be higher than their own benefit –
unless born before January 2, 1954 and at full retirement age.
Spousal Benefits
SocialSecurity.gov
Survivors Insurance
SocialSecurity.gov
Survivor Eligibility Factors
ChildMay receive benefits if not married and is under age 18 (or under age 19 if still in high school)
Disabled Child May receive benefits beyond age 18 if not married and was disabled before age 22
Widow/WidowerOr
Divorced Widow/Widower
May get full benefits at full retirement age – or reduced benefits at age 60 – or as early as age 50 if disabled – or at any age if caring for child under 16 or a disabled child
SocialSecurity.gov
When you pass away, your surviving spouse may:
• At full retirement age, receive 100% of deceased worker's unreduced benefit
• At age 60, receive 71.5% of your full benefit • Receive reduced benefits on one record at age 60,
then reduced or unreduced benefits on another record at age 62 or older
• Remarry after age 60 and continue to receive survivors benefits
Note: Full benefits to both widow or widower and divorced widow or widower.
Survivor Benefits
SocialSecurity.gov
• Parents’ Benefits – For a parent who is age 62 and was receiving at least one-half of his or her financial support from the son or daughter who died.
• Lump Sum Death Payment – A surviving spouse or child may receive a one-time lump-sum death payment of $255.00 if they meet certain requirements.
Other Survivor Benefits
socialsecurity.gov/survivors
SocialSecurity.gov
A child must have:• A parent who’s disabled
or retired and entitled to Social Security benefits; or
• A parent who died after having worked long enough in a job where they paid Social Security taxes.
Auxiliary Benefits for ChildrenThe child must also be:• Unmarried;• Younger than age 18;• 18-19 years old and a full-
time student (no higher than grade 12); or
• 18 or older and disabled. (The disability must have started before age 22.)
SocialSecurity.gov
Applying for Benefits3 options available to apply:
Online
By phone 1-800-772-1213
At our officeYou choose the most convenient option for you!
Note: Child and survivor claims can only be done by phone or in a field office (not online) at this time.
SocialSecurity.gov
SocialSecurity.gov
Working While Receiving Benefits
SocialSecurity.gov
If you are You canmake up to
If you earn more, some benefits will be
withheldUnder Full Retirement Age $18,240/yr. $1 for every $2
The Year Full Retirement Age is Reached
$48,600/yr. $1 for every $3
Month of Full Retirement Age and Above
No Limit No Limit
Note: If some of your retirement benefits are withheld because of your earnings, your benefits will be increased starting at your full retirement age to
take into account those months in which benefits were withheld.
Working While Receiving Benefits
What Income CountsIncome that Counts as Earnings:
• Gross wages from employment and/or net earnings from self-employment.
Income that Does NOT Count as Earnings:• Inheritance Payments• Pensions• Income from Investments• Interest and Dividends• Capital Gains• Other Sources
Retirement Earnings Test Calculator
Retirement Earnings Test Calculator
Taxation of Benefits
SocialSecurity.gov
Visit IRS.gov and search for Publication 554, Tax Guide for Seniors, and Publication 915, Social Security And Equivalent Railroad Retirement Benefits
Individual Tax Return• $25,000 - $34,000 – 50% of your benefits are taxable• Over $34,000 – 85% of your benefits are taxable
Joint Tax Return• $32,000 - $44,000 – 50% of your benefits are taxable• Over $44,000 – 85% of your benefits are taxable
Taxation of Social Security Benefits
Combined Income
½ Social Security
Nontaxable Interest
Adjusted Gross
Income
Your Benefits Can Be Taxable
• About 1/3 of people who get Social Security pay income taxes on their benefits.
• At the end of the year, you’ll receive a Social Security Benefit Statement (Form SSA-1099) to use when completing your Federal Income tax return.
Medicare
SocialSecurity.gov
Medicare Eligibility
Age 65Entitled to
Disability for 24 Months
Kidney Failure
ALS
Exposure to Environmental
Health Hazards
SocialSecurity.gov
Visit Medicare.gov for details
Part A - Hospital Insurance• Covers inpatient hospital expenses • 2020 Deductible $1,408
Part B - Medical Insurance• Covers 80% of doctor’s bills and outpatient medical expenses after
1st $198 in approved charges• 2020 Standard Monthly Premium $144.60
Part D = Prescription Drug Plans• Covers major portion of prescription drug costs• Enroll with Medicare Prescription Drug Provider, not SSA• Annual Enrollment Period – October 15 thru December 7
Medicare
SocialSecurity.gov
Initial
• Age 65• 7 month
window
Special
• Work• Employer
Group Coverage
General
• January thru March
• Penalty
Medicare Enrollment Periods
SocialSecurity.gov
1-800-MEDICARE or Medicare.gov
SocialSecurity.gov
Q&A Session
SocialSecurity.gov
Social Security: With You Through Life’s Journey…
Produced at U.S. taxpayer expense
Social Security: �With You Through Life’s Journey…OverviewSlide Number 3A Foundation for Planning �Your FutureSlide Number 5Slide Number 6Retirement OptionsFull Retirement AgeSlide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Spousal BenefitsSpousal BenefitsSlide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Applying for BenefitsSlide Number 25Slide Number 26Slide Number 27What Income CountsRetirement Earnings Test CalculatorRetirement Earnings Test CalculatorSlide Number 31Slide Number 32Your Benefits Can Be TaxableSlide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Social Security: �With You Through Life’s Journey…