In the News – Social Security and Medicare

Social Security Changes for 2020

October 13, 2019

Social Security recipients will get 1.6 percent bigger checks in 2020. Each year about this time, the Social Security Administration announces the annual Cost-of-Living Adjustment (COLA). While this is good news for recipients, wage earners are going to pay for this increase.

The maximum amount of earnings subject to Social Security tax will increase by $4,800 to $137,700 in 2020. Workers pay 6.2 percent of their earnings into the Social Security system until their income exceeds the taxable maximum. They also pay an additional 1.45 percent of their wages for Medicare for which there is no cap.

Lastly, individuals who will turn 62 in 2020 will need to wait even longer to claim their full retirement benefit. The full retirement age for those born in 1958 is 66 and eight months.

You can find the Fact Sheet of 2020 Social Security changes here.

Social Security Terms...COLA is Not a Fizzy Drink

August 22, 2019

One of the most important parts of becoming conversant and fluent with the topic of Social Security is understanding the terms and especially, the acronyms used by the agency. It's an entirely new language and many of the phrases and terms originated over 80 years ago.

Luckily, the SSA has a tremendously helpful glossary that defines and describes the most commonly used terms. And once you see the tongue twisters some of them are, you will appreciate the acronyms too! The link will also give you the English-Spanish translation.

Social Security's Definition of Disability

August 4, 2019

The Americans with Disabilities Act (ADA) was signed into law by President George H.W. Bush on July 26, 1990. Disability affects millions of Americans. The SSA can help, but there are strict criteria for meeting the definition of disability. The definition of disability under Social Security is also different than it is for other programs and they do not pay benefits for partial or short-term disability. Learn more here.

You Shouldn't Be Surprised - Americans Lose Trillions Claiming Social Security at the Wrong Time

July 11, 2019

This article last week caught the eye of many in my circle who know what I do.

Most retirees should wait longer to access their benefits, researchers find. Some should claim them sooner.

"People are pretty much doing the opposite of what they should be doing," said Matt Fellowes, founder and chief executive officer of United Income and co-author of the paper.

Their analysis found that 96% of retirees choose the wrong year to tap Social Security. That is A LOT of people needing your RSSA services!

When to take Social Security is a key decision for America's elderly, for whom the program has become a critical safety net. About half of older Americans get most of their income from the program.

We're here to help them make that key decision in the most optimal way.

A Fun Post from the Social Security Administration - Just in Time for Mother's Day!

May 10, 2019

Once a year Social Security posts the top baby names for the past year. I don't know about you, but I like seeing something a bit frivolous and cute on their website!

"Just arrived! Social Security is excited to announce the top 10 baby names of 2018. For most people, Social Security starts at birth when they get their first Social Security card. That makes us the source for the most popular baby names each year! Coming in at number 10 are Evelyn and Logan. At number 9, Harper and Mason. You can read the rest of the top 10 on our baby names page."

Good News from the Social Security Board of Trustees Annual Report

April 22, 2019

Today, the Social Security Board of Trustees released its annual report on the current and projected financial status of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds.

The combined funds are projected to become depleted in 2035, one year later than projected last year, with 80 percent of benefits payable at that time.

The DI Trust Fund is estimated to become depleted in 2052, extended 20 years from last year's estimate of 2032, with 91 percent of benefits still payable.

Please read this press release to learn more details on the Trustees Report.

Collecting Social Security and Still Working? Beware of the Earnings Test!

March 27, 2019

If you haven't reached your full retirement age (FRA), but are collecting Social Security and also still working, the Social Security earnings test could cause the SSA to withhold some, or even all, of your monthly benefit payments. Based on when you will reach your FRA, two different earnings test limits are applied.

For 2019, if you will not reach your FRA until next year (2020), the earnings test limit is $17,640 per year or $1,470 per month. People in this group will have $1 withheld for every $2 earned over this limit.

If you will reach FRA this year in 2019, the earnings test limit is $46,920 per year, or $3,910 per month. And your earnings are only counted in the months prior to the month you reach FRA. The benefit reduction rate is $1 for every $3 in excess earnings over this limit.

Please read How Work Affects Your Benefits to learn more about the earnings test.

Have You Started Collecting Social Security Benefits and Changed Your Mind?

March 21, 2019

There are a certain number of retirees who start collecting Social Security benefits - often as early as possible at age 62 - then change their mind about that decision.

Perhaps they decided to go back to work, or suddenly came into an inheritance, or talked to an RSSA and realized that they should have coordinated their claiming age with their spouse's, or finally understood how much their benefit would increase if they could wait to claim later.

Whatever the reason, there is a 12-month window to withdraw a Social Security benefits application and refile at a later time. The catch? You must pay back the benefit income you've received, but this does not include interest. Then the slate is wiped clean and you can refile at a later date. Retirees are only allowed to withdraw an application one time.

And if 12 months have passed by? Another option for increasing Social Security retirement benefits is available to retirees at their full retirement age (FRA). At that time - or anytime from FRA up to age 70 - you may ask the SSA to suspend your benefits. This then allows the amount you were receiving to start collecting delayed retirement credits up to age 70. The monthly increase amounts to 8% per year and can change a retiree's income from what they collected at 62 up to the amount they would have claimed at their FRA to begin with.

The catch for this strategy is that if a worker suspends their benefits, any family members collecting off that worker's earnings record will also be suspended.

Still, it is always worth asking the questions, "Have you started collecting Social Security benefits?", "Yes?", "When?".

A Reason to Withdraw Your IRA Funds Instead of Collecting Social Security Early

December 7, 2018

Your monthly Social Security check will often be three-quarters larger if you file for Social Security benefits at age 70 instead of 62, says Laurence Kotlikoff, economics professor at Boston University, Advisory Board member of NARSSA and the author of "Get What's Yours: The Secrets to Maxing Out Your Social Security". Consider withdrawing from your traditional IRA first to fund your retirement in the early years and hold off from collecting that monthly Social Security check. This will allow your Social Security check to grow - it grows 8% a year from the time you reach your full retirement age till you turn age 70.

Making Social Security 'Hip' with Millennials

November 30, 2018

As a Registered Social Security Analyst, be prepared to hear this comment from younger workers often: "Oh, I'm not counting on Social Security. It won't be there for me."

I remember saying this myself years ago, but now I understand - and truly believe - that the program can be saved for generations to come if we demand it from our lawmakers. We've seen recently the tremendous impact that young adults and engaged voters can have on political "hot topics".

Please read this insightful article to learn why making Social Security "hip" with millennials can help push a movement to SAVE SOCIAL SECURITY to the forefront of bipartisan issues that MUST be tackled.

12 Top Things to Know About Social Security

November 19, 2018

Learn the facts about these most misunderstood Social Security myths and rumors in this excellent article from the AARP Bulletin, November 2018.

Social Security Disability Benefits vs. Retirement Benefits at Age 62

October 31, 2018

Although workers are eligible to collect Social Security retirement benefits as early as age 62 - assuming they have earned 40 credits of Social Security coverage during their lifetime - their retirement check would be 75 percent of their full benefit rate.

If that same 62 year-old worker is disabled and has worked and paid Social Security taxes in five out of the last ten years, they should apply for both retirement and disability benefits at age 62.

Unlike retirement benefits being reduced at age 62, if the disability claim is approved, they would be paid their full retirement age amount, or 100 percent.

If the worker has not worked in five out of the last ten years, then they would not be eligible for any Social Security disability benefits and would only get a reduced retirement check.

But in that case, if their retirement check is less than about $750 per month, they may possibly be due Supplemental Security Income (SSI) disability, which is like a welfare program. Set up a meeting at your local Social Security office to make sure you are receiving all the benefits you are entitled to.

Medicare Open Enrollment Ends on December 7

October 28, 2018

Medicare's Open Enrollment began on October 15 and ends on December 7. Now is the time to review your coverage, compare it with other options, and see if you need to make any changes for next year.

Social Security Changes for 2019

October 26, 2018

Social Security recipients will get 2.8 percent bigger checks in 2019. Each year about this time, the Social Security Administration announces the annual cost-of-living adjustment (COLA). While this is good news for recipients, wage earners are going to pay for this increase. The maximum amount of earnings subject to Social Security tax will increase by $4,500 to $132,900 in 2019. Workers pay 6.2 percent of their earnings into the Social Security system until their income exceeds the taxable maximum. They also pay an additional 1.45 percent of their wages for Medicare for which there is no cap.

Lastly, individuals who will turn 62 in 2019 will need to wait even longer to claim their full retirement benefit. The full retirement age for those born in 1957 is 66 and six months, up from 66 and four months for people born in 1956, 66 and two months for those with a birth year of 1955 and 66 for everyone born between 1943 and 1954. The full retirement age will further increase in 2-month increments over the next two years.

You can find the Fact Sheet of 2019 Social Security changes here.

Social Security When You Are Self-Employed

October 26, 2018

Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution, sends taxes to the Internal Revenue Service (IRS), and reports wages to Social Security. However, self-employed people must report their earnings and pay their Social Security taxes directly to the IRS. These taxes will help determine your eligibility for benefits later.

You're self-employed if you operate a trade, business, or profession, either by yourself or as a partner. You report your earnings for Social Security purposes when you file your federal income tax return. If your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms you must file.

Net earnings for Social Security are your gross earnings from your trade or business, minus your allowable business deductions and depreciation. Some income doesn't count for Social Security and shouldn't be included in figuring your net earnings.