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…