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Understanding Social Security: Benefits, Retirement, and Eligibility Guide

Learn about Social Security retirement benefits, calculations, eligibility for dependents, and more. Understand how working affects benefits and contact Social Security for assistance. Get insights on widow(er)’s benefits, government pension offsets, disability benefits, and survivor benefits. Discover the modified formula calculation for retirement benefits and the exceptions to the Windfall Elimination Provision (WEP). Explore the impact of full retirement age increases and the rules for spouse's benefits. This educational guide provides valuable information on maximizing your Social Security benefits.

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Understanding Social Security: Benefits, Retirement, and Eligibility Guide

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  1. Understanding Social Security Cindy Lundquist

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  5. Retirement Benefits – Modified Formula Calculation Modified Formula (WEP) WEP Formula Regular Formula • 40% of the first $895 • 32% of the next $5,397 • 15% of the remainder • 90% of the first 895 • 32% of the next $5,397 • 15% of the remainder Exception: If 20 to 30 years of “substantial” Social Security earnings, WEP does not apply. If between 20 and 30 years of substantial earnings, the 90 percent factor is reduced between 45 and 85 percent. Page 5

  6. Retirement Benefits When Benefits Start • Early retirement (Age 62) • Full retirement (65 to 67 depending on year of birth) • Delayed retirement (Age 70) Page 6

  7. Retirement Benefits Full Retirement Age is Increasing Page 7

  8. Working and Social Security Work can affect your benefits if: • You earn above Social Security limits • You are under full retirement age (FRA) Page 8

  9. Social Security’s Earnings Limits – 2019 Note: Only earnings from work affect benefits. Earnings adjusted annually for inflation. Page 9

  10. Eligibility for Dependents • Spouse • Children Page 10

  11. Spouse’s Benefits • Married for at least 1 year, unless mother or father of minor child of the worker • Divorced, but married for 10 years and currently unmarried • Age 62, or has a minor child under age 16 in his/her care who is entitled to checks on the worker’s record • Own Social Security at FRA is less than half of worker’s rate at FRA Page 11

  12. Government Pension Offset • Applies to spouse’s benefits only • 2/3 of amount of the government pension will reduce the Social Security spousal benefit • Example: Betty is retired from IRS and did not pay into Social Security while working. Her pension is $1,200 per month. Betty’s husband is receiving $1,500 per month from Social Security • $1,200 Government Pension x 2/3 = $800 • Social Security Spousal Benefit = $750 • No cash spousal benefit payable by Social Security Page 12

  13. Child’s Benefit • Child of worker • Natural • Step-child • Adopted • Illegitimate • Dependent grandchild or step-grandchild • Under 18 or became disabled before age 22 • Unmarried Page 13

  14. Widow(er)’s Benefits • Married for at least 9 months or mother or father of worker’s child • Divorced, but married for at least 10 years • Age 60 or if disabled age 50 • Unmarried unless marriage occurs after age 60 Page 14

  15. Computing Survivor Benefits Notes: - Government Pension Offset (GPO) applies to widow(er)’s benefits. - Earnings limit of $17,640 applies if under FRA. Page 15

  16. Disability Benefits • Under full retirement age • Must have recent work under Social Security • Condition expected to last at least 12 months or end in death • Physical or mental condition so severe unable to work Page 16

  17. Contacting Social Security • Toll free 800-772-1213 • www.ssa.gov Page 17

  18. Disclaimer This presentation is provided for educational purposes only. Please contact Office of Personnel Management, the Thrift Savings Plan Board, the Social Security Administration, or your financial representative for advice. Page 18

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