Tuesday fred nesbitt ssa
Upcoming SlideShare
Loading in...5
×
 

Tuesday fred nesbitt ssa

on

  • 1,466 views

 

Statistics

Views

Total Views
1,466
Views on SlideShare
1,466
Embed Views
0

Actions

Likes
0
Downloads
19
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Tuesday fred nesbitt ssa Tuesday fred nesbitt ssa Presentation Transcript

  • FREDERICK H. NESBITT, CONSULTANT FLORIDA PUBLIC PENSION TRUSTEES ASSOCIATION THIS PRESENTATION ON SOCIAL SECURITY IS FOR INFORMATIONAL PURPOSES ONLY. NO ONE SHOULD MAKE A RETIREMENT DECISION BASED SOLELY ON THE INFORMATION PRESENTED. Social Security and Your Retirement
  • What is Social Security?
    • Social Insurance – FDR (1935)
    • Retirement Insurance
    • Survivor Insurance
    • Disability Insurance
    • Health Insurance (1965)
  • Social Security (FICA) - 2010
    • OASDI – 6.2 % of wages to $106,800 , paid by employee and matched by employer = 12.4% contribution - maximum $13,243
    • Health Insurance – 1.45% of wages (no maximum), paid by employee and matched by employer = 2.90% contribution
    • Total Social Security Contribution = 15.3%
  • Social Security Eligibility
    • Retirement:
    • (40 quarters of covered employment)
    • Age 62 with reduced benefits
    • Age 65-67 with full benefits
    • Age 70 with enhanced benefits
  • Medicare Eligibility
    • Medicare:
    • (40 quarters of covered employment or through your spouse) and age 65
    • Part A – Hospital Insurance
    • Part B – Medical Insurance
    • Part D – Medicare Prescription
    • Drug Plan
  • How is Social Security Calculated?
    • 35 years of best Social Security wages (indexed) – zero for years below 35
    • Divide by 420 months to get AIME (average indexed monthly earnings)
  • How is Social Security Calculated?
    • Wages required to earn one quarter:
    • (maximum 4 quarters per year)
    • 1951-77 = $50
    • 1978-80 = $250-290
    • 1981-90 = $310-$500
    • 1991-2000 = $540-780
    • 2001-2010= $890- $1,120 (2010)
  • Calculating Your Benefit
    • PIA (Primary Insurance Amount) at FRA (Full Retirement Age) 2010
    • 90% of AIME up to $761
    • 32% of AIME between $762 - $4,586
    • 15% of AIME above $4,586
    • (Bend Points) : Maximum $2,323 in 2010
  • Calculating Your 2010 Benefit
    • Total Indexed Wages/420 months =
    • $5,200 average monthly wages
    • 90% of first $761 = $ 685
    • 32% of next $3,825 = $ 1,224
    • 15% of remainder = $ 92
    • SS Benefit (FRA) = $2,001/month
  • New Language on Form
    • “ Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2037 , the payroll taxes collected will be enough to pay only about 76 percent of scheduled benefits. ”
  • Full Retirement Age (FRA)
    • Born:
    • 1937 earlier 65 years old
    • 1938 65 and 2 months
    • 1939 65 and 4 months
    • 1940 65 and 6 months
    • 1941 65 and 8 months
    • 1942 65 and 10 months
    • 1943-1954 66 years old
  • Full Retirement Age (FRA)
    • Born:
    • 1955 66 and 2 months
    • 1956 66 and 4 months
    • 1957 66 and 6 months
    • 1958 66 and 8 months
    • 1959 66 and 10 months
    • 1960 or after 67 years old
  • Early Retirement
    • Retire before your full retirement age
    • Earliest retirement is 62 years old
    • Can retire anytime between age 62 and your full retirement age or later
    • Can I retire early and keep on working?
    • YES – but….
  • Social Security Benefits
    • Income limit on work if you retire before full retirement age ($1 SS for $2 wage offset - $14,160 )
    • Benefit can be taxable if your income is high enough (including pensions)
    • If you work after retirement, you will pay FICA and benefits could increase at FRA
  • Three Key Amounts
    • $14,160 – wage limit on earning until FRA
    • $1,120 – wages required to earn one-quarter credit toward 40 quarters to qualify for SS
    • $25,000/$32,000 – up to 50% of benefits are taxable – could be as high as 85%
    • Deferring money into 457 does not reduce Social Security benefits
  • Early Retirement
    • Before Full Retirement Age:
    • Reduction in your monthly benefit
    • Affects SS COLA
    • Causes reduction in spouse benefit if spouse uses your SS benefit
    • (If FRA is 67 – retire at 62 – there is a 30% reduction [maximum] and a reduction in spouse benefits of 67% at age 62)
  • Early Retirement
    • Born between 1943-1954:
    • Age 62 75% of benefit
    • Age 66 100% of benefit
    • Age 70 132% of benefit
  • Spouse Benefit
    • Higher of earned Social Security benefit or 50% of the spouse’s or former spouse’s benefit (if divorced)
    • If your spouse’s benefit is $1,800/mo = $900/mo OR
    • If your earned benefit is $1,100/mo
    • You would get the $1,100/mo
    • Can you qualify before your spouse retires?
  • Spouses and Marriage
    • Currently married
    • Marriage lasted 10+ years (divorce)
    • Ex-spouse 62 or older and unmarried
    • Spouse’s benefit has no effect on your Social Security benefit
  • Death Benefits
    • Death payment of $255
    • Greater of earned Social Security benefit or your spouse’s full benefit
    • Married
    • Remarry (after death or divorce)
    • Divorced spouse
    • Dependent children also qualify until age 18 or 19 if still in K-12 school
  • Disability Benefit
    • If you become disabled before full retirement age, you can receive disability benefits after six months if you have:
    • enough credits from earnings; and
    • physical or mental impairment that’s expected to prevent you from doing “substantial” work for a year or more or result in death.
  • Medicare
    • Qualify for coverage at age 65
    • (whether retired or not)
    • Must sign-up for Medicare at age 65 or there is a penalty (even if you are working)
    • Can qualify for Medicare through spouse’s coverage
  • What about government employees?
    • If you pay into Social Security –
    • No offsets apply to you
    • If your spouse works and doesn’t pay into Social Security – there could be an offset in the spouse’s benefits
    • [GPO = Government Pension Offset]
  • Applying for SS and Medicare
    • Apply about 4 months before you reach FRA or your early retirement date
    • Apply online
    • SS paid throughout month – and one month delay
    • Medicare starts first day of month of birthday
  • For More Information
    • www.socialsecurity.gov
    • www.medicare.gov
    • Apply for benefits online
    • Under each section, they have FAQ (frequently asked questions)
    • Shows updates to questions
    • Can receive email when question is updated
  • For More Information
    • www.ssa.gov - Social Security website
  • For More Information
    • Visit the Social Security office
    • 3201 W Commercial Blvd Suite 100 Fort Lauderdale, FL 33309
    • 8:30 am – 3:30 pm (M-F)
    • 1-800-772-1213 (7am-7pm, M-F)
    • Make an appointment
  • What do you need?
    • Social Security card (apply for replacement if you can’t find it)
    • Birth certificate (original)
    • Official photo identification
    • Last two years of tax returns
    • Marriage/divorce/military information
    • Bank account for direct deposit