A Foundation for Planning Your Future

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A Foundation for Planning Your Future
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3-Legged Stool of Retirement Security
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Value of Inflation Protection
Example Average worker with pre-retirement
income of 30,000 1st Year of Retirement Pension
12,000/ 57 Social Security 9,000/43 Inflatio
n 3 per year
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Value of Inflation Protection
5th Year of Retirement Pension 12,000/54 Socia
l Security 10,130/46 10th Year of
Retirement Pension 12,000/51 Social
Security 11,744/49 20th Year of
Retirement Pension 12,000/43 Social
Security 15,783/56
example continued Average worker with
Pre-retirement income of 30,000
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You Need to Work to Earn Social Security Credits

• Each 920 in earnings
• gives you one credit
• You can earn a maximum
• of 4 credits per year
• Example To earn 4 credits in 2005, you must earn
  at least 3,680. Earning 40 credits throughout
  your working life will qualify you for a
  retirement benefit.

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Your Age When You Retire Affects Your Benefits

• If Youre A Worker and Retire
• At age 62, you get less money permanently
• At your full retirement age, you get your
• full benefit
• You get even more money if you work past
• your full retirement age

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In Addition to the Retiree, Who Else Can Get
Benefits?

• Your Spouse
• At age 62
• At any age if caring for child under 16 or
  disabled
• Divorced spouses may qualify
• Your Child
• Not married under 18
• (under 19 if still in high school)
• Not married and disabled before age 22

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Full Retirement Age
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
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How Social Security Determines Your Benefit
Social Security benefits are based on
earnings Step 1 Your wages are adjusted for
inflation Step 2 Find the average of your 35
highest earnings years Step 3 Result is average
indexed monthly earnings
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Retirement Benefit Computation Example
If your average monthly earnings
are 3,900 Then your benefit would
be 1,591 Average Monthly Earnings 3,900 90
of First 627 564 32 of the
Next 3,152 1009 15 of the Remainder 121 1
8 3,900 1,591
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What Youll Get at Full Retirement Age
57
43
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of earnings
Low Earner
Average Earner
High Earner
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Windfall Elimination Provision
If any part of your government pension is based
on work not covered by Social Security, you may
be affected by the Windfall Elimination Provision.
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Windfall Elimination Provision (WEP) - 2005
Normal Computation WEP Computation 90 of the
First 627 40 of the First 627 32 of the Next
3,152 32 of the Next 3,152 15 of the
Remainder 15 of the Remainder
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Exception of the Windfall Elimination Provision
of First Factor Years of Coverage in Benefit
Formula 30 or more 90 29 85 28 80 27 75 26 70
25 65 24 60 23 55 22 50 21 45
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Government Pension Offset (GPO)
If you receive a government pension based on work
not covered by Social Security, your Social
Security spouses or widow(er)s benefits may be
reduced.
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Government Pension Offset (GPO)
Spouses Benefits Only 2/3 of amount of
Government pension will be used to reduce the
Social Security spouses benefit
Example 900 of Government pension
2/3 600 Social Security Spouse
Benefits 500 No
cash benefit payable by Social Security
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You Can Work Still Receive Benefits
If You Are You Can If You Make More, Make Up
To Some Benefits Will Be Withheld Under
Full Retirement Age 12,000 (1000/mo.) 1 for
every 2 Full Retirement Age and Above No Limit
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What Will You Need When Applying for Your Social
Security Benefits?

• Social Security Number for each applicant
• Proof of Age (birth certificate)
• Latest W-2 or Self-Employment Tax return
• Earnings Estimate
• Bank information for Direct Deposit
• Information about Marriages/Divorces
• Information about Military or Railroad Service

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Who Can Get Survivors Benefits?

• Widow or Widower
• Reduced benefits at age 60
• If disabled as early as age 50
• At any age if caring for child under 16 or
  disabled
• Divorced widows/widowers may qualify
• If Your Child Is
• Not married under age 18 (under 19 if still in
  high school)
• Not married and disabled before age 22

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Other Survivors Benefits

• Parents
• Age 62 and was receiving at
• least one-half support from
• deceased worker
• Lump Sum Death Payment (255)
• Most spouses or children

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Social Securitys Disability Definition
A medical condition preventing substantial work
for at least 12 months, or expected to result in
death. The determination also considers age,
education work experience.
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Who Can Get Disability Benefits?

• Worker
• Must have paid into Social Security five out of
  last 10 years
• Spouse
• At age 62
• At any age if caring for child
• under 16 or disabled
• Divorced spouses may qualify

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Who Can Get Disability Benefits?

• Child
• Not married under 18
• (under 19 if still in high school)
• Not married and disabled
• before age 22

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Who Can Get Medicare?
65 older -or- Receiving Social Security
disability benefits at least 24
months -or- Permanent kidney failure -or- Amyotrop
hic Lateral Sclerosis (ALS)
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Medicare Coverage

• Part A Hospital Insurance
• Covers most inpatient hospital expenses.
• 2005 Deductible 912
• Part B Supplementary Medical Insurance
• Covers 80 doctor bills other outpatient
  medical expenses after 1st 110 in approved
  charges.
• 2005 Monthly Premium 78.20

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When Can I Sign Up for Medicare?

• Medicare Enrollment Periods
• Initial - at age 65
• Special - if still working
• General - January-March

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For More Information
1-800-MEDICARE www.medicare.gov
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What Should You Do toPrepare for Your Retirement?
Call the year BEFORE you retire All
information can be obtained by phone
1-800-772-1213 TTY 1-800-325-0778
www.socialsecurity.gov
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Find Out About Your Social Security
Request Your Social Security Statement
for Estimates of benefits at different
retirement ages Different wage estimates www.socia
lsecurity.gov
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Visit Our Website or Call! www.socialsecurity.gov
-or- 1-800-772-1213 TTY 1-800-325-0778
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Social Securitys Online Services

• Retirement Disability Applications
• Retirement/Survivors/Disability Planner
• eNews
• Medicare Card Replacements
• Request a Statement
• Request a Benefit Verification Letter
• Change of Address

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The Social Security Statement
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The Social Security Statement

• The Statement provides you with estimates of
  monthly Social Security retirement, disability
  and survivors Benefits
• The Statement provides earnings for you to check
  for accuracy

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The Social Security Statement