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Social Security

Social Security. Frank Van Nostrand Public Affairs Specialist. 1956. 1939. 1935. Disability Insurance. Survivors Insurance. Retirement Insurance. Social Security Programs. 1972. 1965. Supplemental Security Income. Medicare. Other Programs. Retirement Income. Social Security.

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Social Security

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  1. Social Security Frank Van Nostrand Public Affairs Specialist

  2. 1956 1939 1935 Disability Insurance Survivors Insurance Retirement Insurance Social Security Programs

  3. 1972 1965 SupplementalSecurityIncome Medicare Other Programs

  4. RetirementIncome Social Security Pension Savings

  5. Social SecurityCost-of-Living Adjustments Effective Date Amount Effective Date Amount June 1975 8.0% Dec 1992 3.7% June 1976 6.4% Dec 1993 2.6% June 1977 5.9% Dec 1994 2.8% June 1978 6.5% Dec 1995 2.6% June 1979 9.9% Dec 1996 2.9% June 1980 14.3% Dec 1997 2.1% June 1981 11.2% Dec 1998 1.3% June 1982 7.4% Dec 1999 2.4% June 1983 3.5% Dec 2000 3.5% June 1984 3.5% Dec 2001 2.6% June 1985 3.1% Dec 2002 1.4% Dec 1986 1.3% Dec 2003 2.1% Dec 1987 4.2% Dec 2004 2.7% Dec 1988 4.0% Dec 2005 4.1% Dec 1989 4.7% Dec 2006 3.3% Dec 1990 5.4% Dec 2007 2.3% Dec 1991 3.7% Dec 2008 5.8%

  6. Social SecurityRetirement Insurance Benefits Worker & 2007 EarningsWorker (65/10mo)Spouse (65/10mo) Lower $18,182 $863 $1,294 Average $40,405 $1,421 $2,131 Maximum $97,500 $2,185 $3,277

  7. 2009: --1 credit for each $1,090 in covered employment --maximum of 4 credits/yr ($4,360) How Credits Are Earned 40 Credits Needed For Retirement:

  8. Worker Reduced benefits at 62 (must be insured; 40 credits/10 yrs) Full benefits at age 65 (age 67, if born after 1960) Who Can Get Retirement Benefits

  9. 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

  10. Worker Reduced benefits at 62 (must be insured; 40 credits/10 yrs) Full benefits at age 65 (age 67, if born after 1960) Increased benefits for retirement after full retirement age Wife or Husband At 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 highschool) Unmarried if disabled before age 22 Who Can Get Retirement Benefits

  11. 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 SecurityRetirement Benefits Are Figured

  12. 90% of first $744 32% of the next $3, 739 15% of remainder over $4,483 Retirement Benefit Computation - 2009

  13. Example: AIME = $4700 • 90% X 744 = 669.60 • 32% X 3739 = 1196.48 • 15% X 217 = 32.55 • Primary Insurance Amount1898.63

  14. Replacement Rates Low Income Worker: 55% Average Income Worker: 40% Upper Income Worker: 25%

  15. RetirementIncome Social Security Pension Savings

  16. Total Retirement IncomeSocial Security Represents: Lower 1/3 Middle 1/3 Higher 1/3

  17. First Three years 5/9 of 1% per month 6.66% per year 20% for first three years Each additional year 5/12 of 1% per month 5% per year Reduction is permanent Early Retirement Benefits(earliest - age 62)

  18. % of Benefits You will turn Received at Year of Birth age 62 in: Age 62 Full Retirement Age 1937 1999 and before 80% 65 1938 2000 79 1/6% 65 & 2 months 1939 2001 78 1/3% 65 & 4 months 1940 2002 77 1/2% 65 & 6 months 1941 2003 76 2/3% 65 & 8 months 1942 2004 75 5/6% 65 & 10 months 1943-1954 2005-16 75% 66 1955 2017 74 1/6% 66 & 2 months 1956 2018 73 1/3% 66 & 4 months 1957 2019 72 1/2% 66 & 6 months 1958 2020 71 2/3% 66 & 8 months 1959 2021 70 5/6% 66 & 10 months 1960 & later 2022 & later 70% 67 The Cost of Early Retirement

  19. If you elect reduced Benefits and die... Your widow inherits the reduction!

  20. Your benefits may be taxed! • Good news: only 30% have to pay taxes • Bad news: you’re probably in that 30% • If your 1040 adjusted gross income (INCLUDING ½ of your Social Security) is over $25,000 for individual or $32,000 for a couple, you’ll pay taxes.

  21. Yearly Rate of Year of Birth Increase (%) 1927-28 4.0 1929-30 4.5 1931-32 5.0 1933-34 5.5 1935-36 6.0 1937-38 6.5 1939-40 7.0 1941-42 7.5 1943 or later 8.0 Delayed Retirement Credits

  22. Withheld/ Age Earnings Limit Above Full Retirement Age(FRA) & Above No Limit Under FRA $14,160 ($1180/mo.) $1 for every $2 Year attaining FRA $37,680 ($3,140/mo.) $1 for every $3 How Work Affects Social Security Benefits - 2009

  23. Widows/Widowers Reduced benefits at age 60 As early as age 50 if disabled At any age if caring for a child of worker under 16 or disabled Divorced widows/widowers qualify Child Unmarried child under 18, or under 19 if still in high school Unmarried child disabled before age 22 who continues to be disabled Who Can Get Survivors Benefits

  24. Who Can Get Survivors Benefits Parents Age 62 and was receiving at least one-half support from deceased worker Lump Sum Death Payment ($255) Living with or entitled spouse Entitled child

  25. Percentage Full Retirement Age 100.0 Age 60 71.5 Age 50 (Disabled) 71.5 Young Widow(er) 75.0 Child 75.0 Survivors Benefits

  26. Worker Must be insured (20/40) Any age Who Can Get Disability Benefits Spouse • Age 62 or older • Any age if caring for achild of worker under age 16 • Divorced spouses qualify

  27. Child Unmarried child under 18, or under 19if still in high school Unmarried child disabled beforeage 22 who continues to be disabled Who Can Get Disability Benefits

  28. 65 and older Receiving Social Security Disability benefits at least 24 months (Except ALS) Permanent kidney failure Medicare Coverage

  29. Hospital Insurance • In Patient Hospital Coverage • Hospital Deductible: $1068 • Coinsurance: Day 61-90: $267 per day • Lifetime Guarantee days (60): $534 per day • Skilled Nursing Facilities • Day 21-100: $133.50 per day • Home Health Care • Hospice Care • Premium - $443 • $244 with at least 30 QCs

  30. Medical Insurance • Doctors and other Providers • Hospital Outpatient Services • Home Health Services • X-ray and Laboratory Services • Durable Medical Equipment • Ambulance

  31. What Does It Cost You? • Monthly Premium: $96.40

  32. Wealthier Seniors will PayMore for their Part B in 2009

  33. What Does It Cost You? • Monthly Premium: $96.40 • Yearly Deductible: $135 • Medicare pays 80% of Approved Charge • You pay 20% of Approved Charge • By law, Physician cannot charge more than 15% on top of Approved charge

  34. Initial General Special Medicare Enrollment Periods IEP GEP SEP

  35. What is the MediGap? • Part A Deductibles and Coinsurance • Hospital Care after day 150 • Part B Deductible and Coinsurance • Non-covered Services

  36. How Do I Close the “Gap” • Self Insure • MediCal • Medicare Supplement • Medicare Advantage

  37. And Now There’s Part D! • You may NOT need it! • When you become eligible for Medicare, you can purchase Part D Prescription Drug Plans • You want to sign up when first eligible, or you will pay more • Program is voluntary

  38. 1- 800 – 434 - 0222

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

  40. Online Services • Online retirement application • Retirement/ Survivors/Disability Planner • FAQ’s • Medicare Card Replacements • Request a Statement www.socialsecurity.gov

  41. Call or Visit our Website 1-800-772-1213 www.socialsecurity.gov

  42. That’s All Folks!! Questions?

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