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Social Security Guide, 2012

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Page 2 • Social Security Guide • August 9, 2012 ________________________________________________________________________________
Meet your Rapid City Social Security team
To contact the Rapid City Social Security office, call 1-866-964-7416.
Gay Klima Tollefson Attorney at Law
“Owned by those served” Bison, SD 605-244-5211 West River Cooperative Telephone Company 605-244-5213
•Wills •Probates •Powers of Attorney
Tollefson Law Office
(605) 859-2783
PO Box 848
Philip, SD 57567
Fax: (605) 859-2743 Email: grekt@gwtc.net
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Get the facts about Social Security
The Rapid City staff answers the most frequently asked retirement questions uestion: My wife and I both worked under Social Security. Her benefit estimate says she can get $850 a month at full retirement age and mine says I would get $1450. Do we each get our own amount? Someone told me we could only get my amount, plus one-half of that amount for my wife. Answer: Since your wife's own benefit is more than one-half of your amount, you will each get your own benefit. If your wife's own benefit were less than half of yours (that is, less than $725), she would receive her amount plus enough on your record to bring it up to the $725 amount. Question: My spouse and I both worked under Social Security. He's currently receiving benefits but I want to wait until age 70 so the delayed retirement credits will make my benefits higher. Someone told me that, when I reach full retirement age (66) later this year, I can just apply for benefits as a spouse. Are they right? Answer: Yes. If you are between full retirement age and age 70, and your spouse is receiving Social Security benefits, you can choose to file and receive benefits on just your spouse's Social Security record. If you only collect benefits as a spouse, you can continue to earn delayed retirement credits up until age 70. Question: I'm retiring early, at age 62, and I receive investment income from a rental property I own. Does investment income count as earnings? Answer: No. We count only the
Q
wages you earn from a job or your net profit if you're self-employed. Non-work income such as annuities, investment income, interest, capital gains, and other government benefits are not counted and will not affect your Social Security benefits. Most pensions will not affect your benefits. However, your benefit may be affected by government pensions earned through work on which you did not pay Social Security tax. Question: Will my retirement pension from my job reduce the amount of my Social Security benefit? Answer: If your pension is from work where you also paid Social Security taxes, it will not affect your Social Security benefit. However, pensions based on work that is not covered by Social Security (for example, the federal civil service and some state, local, or foreign government systems) probably will reduce the amount of your Social Security benefit.
Get Direct Deposit
How to contact Social Security
Visit the website at www.socialsecurity.gov
Doing business with Social Security online is fast, convenient, and secure. You can get a quick and accurate estimate of your future retirement benefits, use the online planners to prepare for retirement and even apply for Social Security retirement, disability, and Medicare only online. It is also a valuable resource for information about all of Social Security’s programs.
Call the toll-free number
You can call Social Security toll-free at 1-800-772-1213. All calls are confidential. Specific questions are answered from 7 a.m. to 7 p.m., Monday through Friday. Information is provided by automated phone service 24 hours a day. (The automated response system can be used to change an address, get proof of your benefit amount, or request a replacement Medicare card or direct deposit.) If deaf or hard of hearing, call Social Security’s TTY number, 1-800-325-0778.
Visit a local office
605 Main Street, Suite 201 Rapid City, SD 57701 Phone toll free 1-866-964-7416; Fax 605-342-7840 The Rapid City office is open to the public Monday – Friday 9 a.m. to 3:30 p.m., except Federal holidays.
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What is the difference between Social Security disability and Supplemental Security Income (SSI) disability?
ocial Security is responsible for running two major programs that provide benefits based on disability. Social Security Disability Insurance (SSDI) is based on prior work and the taxes you pay into the Social Security program. To be eligible for a SSDI benefit, the worker must earn sufficient credits based on taxable work to be "insured" for Social Security purposes. SSDI benefits are payable to eligible blind or disabled workers, the widow(er)s of a disabled worker, or adults disabled since childhood. SSI dis-
S
ability payments are made on the basis of financial need to adults or children who are disabled or blind, have limited income and resources, meet the living arrangement requirements, and are otherwise eligible. SSI is a program financed through general revenues. For more information, visit our website at www.socialsecurity.gov or call us toll-free at 1-800-772-1213 (TTY 1-800-3250778).
America’s life insurance program
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By Deb Imsland Hartford Social Security Claims Representative ou might worry about how to protect your family if something suddenly happens to you. But you probably have life insurance you haven’t even thought about. If you are working and paying into Social Security, your family may qualify for Social Security benefits if you die. You see, some of the Social Security taxes you pay go toward survivors insurance. In fact, its value may be more than the value of any other life insurance you may have. If you die, your family could be eligible for monthly benefits based on your earnings. Your family members who might qualify include your minor children and your spouse. Similarly, if your spouse is working and dies, you and your children may qualify for benefits on your spouse’s record. More than six million people currently receive Social Security survivors benefits. How it works: You can earn up to four Social Security credits each year. In 2012, for example, you earn one credit for each $1,130 of wages or self-employment income. When you have earned $4520, you have earned your four credits for the year. The number of credits you need for your survivors to receive benefits depends on how recently you worked at the time of death. For example, if you have worked for only one and a half years in the three years prior to death, benefits can be paid to your minor children and your spouse who is caring for them. No one needs more than 40 credits (10 years of work) to be eligible for any Social Security benefit. The benefit may be more than you think. In 2012, the average survivors benefit for a widowed parent and two children is $2,543. The best way to put a dollar figure on what the estimated benefit amount would be for your family is to go online. At www.socialsecurity. gov/survivorplan you will find three different calculators that will help you estimate how much your family might be eligible to receive. You also will find a detailed explanation of survivor’s benefits.
Get Direct Deposit
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What you may not know about Medicare
By Kathy Petersen Social Security Public Affairs Specialist
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lmost everyone knows that Medicare is a medical insurance program for retired and disabled people, run by the government. But there are probably some things you don’t know about Medicare — and should. Some people are only covered by one type of Medicare; others opt to pay extra for more coverage. Understanding Medicare can save you money. Here are some things you should know about Medicare. There are four parts to Medicare: Parts A, B, C and D. Part A helps pay for inpatient hospital care, skilled nursing care, hospice care and other services. Part B helps pay for doctors' fees, outpatient hospital visits, and other medical services and supplies that are not covered by Part A. Part C allows you to choose to receive all of your health care services through a provider organization. These plans may help lower your costs of receiving medical services, or you may get extra benefits for an additional monthly fee. You must have both Parts A and B to enroll in Part C. And Part D is the Medicare Prescription Drug Pro-
gram. Part B is the one we get the most questions about, so here are some things to know about it. Most people don’t pay a premium for Part A because they have worked and paid enough in Medicare taxes on wages over the years. However, there is a monthly premium for Medicare Part B; in 2012 the standard premium is $99.90. Some highincome individuals pay more than the standard premium. Part B is a good value for people who need medical insurance, but you need to enroll during your initial enrollment period, or when you first become eligible, unless you want to pay a penalty in the form of a higher premium. Most people first become eligible for Medicare at age 65. There are exceptions to this rule. For example, you can delay your Medicare Part B enrollment without having to pay higher premiums if you are covered under a group health plan based on your own current employment or the current employment of any family member. If this situation applies to you, you can sign up for Medicare Part B without paying higher premiums:
•Any month you are under a group health plan based on your own current employment or the current employment of any family member; or •Within eight months after your employment or group health plan coverage ends, whichever comes first. If you are disabled and working (or you have coverage from a working family member), the same rules apply. Remember: If you don’t enroll in Medicare Part B when you first be-
come eligible to apply and you don’t fit into one of the above categories, you'll have to wait until the general enrollment period, which is January 1 through March 31 of each year. At that time, you may then have to pay a higher Medicare Part B premium because you could have had Medicare Part B and did not take it. For more information about Medicare Parts A, B, C, and D, visit the Center for Medicare & Medicaid Services (CMS) Medicare website at www.medicare.gov.
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What young workers should know about Social Security and saving
By Mike Brant Social Security District Office Manager, Rapid City
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etirement is probably the last thing on your mind if you’re a young worker. But there are some basics you should know about Social Security and savings to plan for your retirement. Social Security is the foundation for a secure retirement, but was never intended to be your only source of income when you retire. While Social Security replaces about 40 percent of the average worker’s pre-retirement earnings, most financial advisors say that you will need 70 percent or more of pre-retirement earnings to live comfortably. Even with a pension, you will still
need to save. If you will not have a private pension, you will need to save more—and start saving sooner. Today’s young workers can expect to spend 20, 30 or even more years in retirement, so saving is critical. The sooner you start to save, the more time your savings will have to grow. Whether you’re able to save $5 or $500, it’s in your interest to start saving now. Want to start planning your future now? There are some easy ways to do so. Visit Social Security’s online Retirement Estimator at www.socialsecurity.gov/estimator, which allows you to try
out different retirement scenarios, based on your personal earnings record. You can also go to www.mymoney.gov for information on getting credit, paying for education, buying a home, creating a budget, starting a business as well as financial calculators and planning tools. Don’t forget that Social Security coverage is not just for retirement, but also for disability and survivor benefits in the event that you are unable to work, or you leave behind a family that depends on your income when you die. Read more about retirement, disability, and survivors benefits at www.socialsecurity.gov.
All about retirement
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By Shayla Hadley Social Security District Office Supervisor, Rapid City When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits. If you were born in 1929 or later, you need 40 credits (10 years of work) to qualify for retirement benefits. However, the amount of your benefit is determined by how long you work and how much you earn. Higher lifetime earnings result in higher benefits. If there were some years when you did not work or had low earnings, your benefit amount may be lower than if you had worked
ocial Security is as American as baseball and apple pie. Not everyone likes apples or baseball games, but almost every American who reaches retirement age will receive Social Security retirement benefits. In fact, 94 percent of Americans are covered by Social Security. If you’re ready to retire in the near future, this article is for you. We’d like to share with you a few important items about Social Security retirement benefits and how to apply for them.
steadily or earned more. Also, your age when you retire makes a difference in your benefit amount. The full retirement age (the age at which full retirement benefits are payable) has been gradually rising from age 65 to age 67. You can retire as early as age 62, but if benefits start before you reach your full retirement age, your monthly payment is reduced. Find out what your full retirement age is by referring to the convenient chart in our publication, Retirement Benefits, at www.socialsecurity.gov/pubs/10035.h tml. It’s in the second section. Just as you can choose an early
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retirement and get a reduced payment, you also can choose to keep working beyond your full retirement age to take advantage of a larger payment. Your benefit will increase automatically by a certain percentage from the time you reach your full retirement age until you start receiving your benefits or until you reach age 70. The decision of when to retire is an individual one and depends on a number of personal factors. To help you weigh the factors, we suggest you read our online fact sheet, When To Start Receiving Retirement Benefits, available at www.socialsecurity.gov/pubs/10147.html. You may want to consider your options by using our Retirement Estimator to get instant, personalized estimates of future benefits. You can plug in different retirement ages and scenarios to help you make a more informed retirement decision. Try it out at www.socialsecurity.gov/estimator. When you decide to retire, the easiest and most convenient way to do it is right from the comfort of your home or office computer. Go to www.socialsecurity.gov where you can apply for retirement benefits in as little as 15 minutes. In most cases, there are no forms to sign or documents to send; once you submit your electronic application, that’s it! In addition to using our awardwinning website, you can call us tollfree at 1-800-772-1213 (TTY, 1-800-325-0778) or visit the Social Security office nearest you.Either way you choose to apply, be sure to have your bank account information handy so we can set up your payments to be deposited directly into your account. To learn more, please read our publication, Retirement Benefits, at www.socialsecurity.gov/pubs/10035. html.
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Electronic payments for all by March 1, 2013
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eople who apply for Social Security benefits after May 1, 2011, must receive payments electronically. Nearly everyone currently receiving benefits who has not signed up for electronic
payments must switch to electronic payments by March 1, 2013. If you don’t, the U.S. Treasury Department may send your benefits via the Direct Express card program to avoid an interruption in payment. Here are
three options: Sign up for direct deposit If you have a bank account, you can sign up for direct deposit by visiting http://www.godirect.org, contacting your financial institution, going to www.socialsecurity.gov (you’ll need a password), or calling Social Security at 1-800-772-1213. Prefer a debt card? The Direct Express® card is a debit card you can use to access your benefits, and you don’t need a bank account. With the Direct Express® card program, we deposit your federal benefit payment directly into your card account. Call the toll-free
Direct Express® hotline at 1-877212-9991. Sign up online at www.USDirectExpress.com or Social Security can help you sign up. Electronic Transfer Account If you don't have an account, some financial institutions offer low-cost Electronic Transfer Accounts (ETA) that feature a maximum cost of $3.00 per month and at least four cash withdrawals per month. For more information about the ETA or to locate an ETA provider near you, visit the Department of the Treasury, ETA website at http://www.etafind.gov/ or contact the ETA call center at 1-888-382-3311.
Make sure you get the right amount
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By Shayla Hadley Social Security District Office Supervisor, Rapid City www.socialsecurity.gov/pubs/10153. html Learn all about the sorts of things to report when you receive SSI by reading over this online publication: www.socialsecurity.gov/pubs/ 11011.html If you’re underpaid in any given month, once we verify the information that caused you to be underpaid, we will send you any money you are due. If you’re overpaid, read our online fact sheet to learn what happens next: www.socialsecurity.gov/pubs/ 10098.html With your help and by diligently reporting any applicable changes, we’ll achieve a goal we can all agree on: paying you the right amount, on time, every month.
t Social Security, our goal is to make sure you are paid the correct amount, on time, every month. You certainly don’t want to be paid less than you’re entitled to receive. But what can be even more difficult, in the long run, is to be overpaid — in which case you’ll probably have to pay us back, cutting your payment down each month until the debt is repaid. What can cause an overpayment? Sometimes an overpayment (or even an underpayment) occurs because the person receiving benefits did not report a change to us. For example, if you receive Social Security retirement or survivors benefits and are under your full retirement age and working, we usually ask you to estimate your earnings for the year. If you realize your earnings will be higher or lower than you estimated, let us know as soon as possible so we can adjust your benefits. If you receive Social Security disability benefits, you should tell us if you take a job or become self-employed, no matter how little you earn. You also need to report if you begin receiving or have a change in any worker’s compensation or other public disability benefits — or if your disabling condition improves. If you receive SSI, you need to report any changes that can increase or reduce the amount of your benefit, such as changes in address (even if you get electronic payments), changes in living arrangements, income, or increased savings that inch over the resource limit ($2,000 for an individual, $3,000 for a couple). Any changes in your living arrangements, income, or resources could change your SSI payment amount. Learn more about the kinds of things you need to report when you receive Social Security retirement and survivors benefits by reading our online publication: www.socialsecurity.gov/pubs/10077.html Read about reporting responsibilities for people receiving Social Security disability benefits here:
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Page 8 • Social Security Guide • August 9, 2012 ________________________________________________________________________________
Social Security introduction for funeral homes
f you don't find the information you are looking for in the below paragraphs, or would like more specific information on a topic, you can order a booklet from the government at this web site: www.ssa.gov/pub/ The following checklist is designed to help you file for your Social Security benefits correctly so that prompt payments may be made. Eligibility The number of credits needed to provide benefits for your survivors depends on your age when you die. The younger a person is, the fewer credits he or she must have for family members to receive survivors benefits. But no one needs more than 40 credits (10 years of work) to be eligible for any Social Security benefit. However, benefits can be paid to your children and your spouse who is caring for the children even if you don't have
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the required number of credits. They can get benefits if you have credit for one and one-half years of work (6 credits) in the three years just before your death. The deceased worker must have credit for work covered by Social Security, ranging from 1-1/2 to 10 years depending on his or her age at death. Who May Receive Monthly Benefits? A widow or widower age 60 or older (50 if disabled), or at any age if caring for an entitled child who is under 16 or disabled. •An unmarried child of the deceased who is: *Younger than age 18 (or up to age 19 if he or she is a full-time student in an elementary or secondary school); or *Age 18 or older with a disability that began before age 22; •Parents, age 62 or older, who were dependent on the deceased for at least
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half of their support; and A surviving divorced spouse, under certain circumstances *A divorced widow or widower age 60 or older (50 if disabled) if the marriage lasted 10 years, or if caring for an entitled child who is under 16 or disabled. *Unmarried children up to 18 (19 if they are attending a primary or secondary school full lime). *Children who were disabled before reaching 22, as long as they remained disabled. *Dependent parent or parents 62 or older. Lump-Sum Death Payment A one time payment of $255 is paid in addition to the monthly cash benefits described above. The lump-sum death payment (LSDP) is paid in the following priority order: •A surviving spouse who lived in the same household as the deceased person at the time of death. •A surviving spouse eligible for or entitled to benefits for the month of death. •A child or children eligible for or entitled to benefits for the month of death. Applying for Benefits •How you sign up for survivors benefits depends on whether or not you are getting other Social Security benefits at the time you apply. •If you are not getting benefits, you should apply for survivor benefits promptly because, in some cases, benefits
may not be retroactive. You can apply by calling or visiting any Social Security office or making an appointment through our toll-free number, 1-800-772-1213 (TTY 1-800-325-0778). •If you are getting benefits on your spouse's or parent's record when he or she dies, you should report the death to us. We will change your monthly payments to survivors benefits. If you are getting retirement or disability benefits on your own record, you will need to apply for the survivor benefits. Call or visit us. We will check to see whether you can get a higher benefit as a widow or widower. You must apply in order to receive benefits. You may apply at any Social Security office or, if you wish, you may apply by telephone. Just dial the toll-free number 1-800-772-1213 and the operator will schedule an appointment for you or arrange for the local Social Security office to take your claim by telephone. Social Security Teleservice Doing Business By Telephone You may call Social Security tollfree, 365 days a year, 24 hours a day. The number to use is 1-800-772-1213. To speak with a representative, call between the hours of 7:00 am and 7:00 pm on regular business days. At other times and on weekends and holidays, you may leave a message and they will call you back, in most cases, the next business day. You may use the toll-free number to make an appointment either in a Social Security office or telephone to apply for benefits, transact other Social Security business, or just ask
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Social Security lifeline
Earliest age at parents apply Birth ManySocial Security Age 25 SocialaSecuritySe- Age 60 which non-dismails Social for a card for their newborn as part of the hospital’s birth registration process curity statement to workers three months before their birthday. Workers can check their statement, which provides estimates of future benefits, anytime at www.socialsecurity.gov/mystatement ify for Medicare Age at which inAge 65 dividuals without a disability can qualify for SSI abled widow(er)s can receive reduced benefits Earliest age at which workers can receive reduced benefits, regardless of their full retirement age Average age Age 63.4 women begin collecting retirement benefits
Age 18
A disabled child who is ineligible for SSI due to the income/resources of the parents may be able to get SSI when he/she turns age 18 Student benefits cease for unmarried children of retired, disabled and deceased workers; monthly benefits can continue if they became severely disabled before age 22
Age 62
Age 50 Earliest age at which disabled
widow(er)s can receive reduced benefits
month of full retirement age, you can get benefits with no limit on earnings Age at which Age 70 dividuals can inno
Age 65-67 Starting with the
Age 18 or 19
workers already receiving benefits
Age 52.4 Average age of disabled
Age 63.5 Age 65
Average age men begin collecting retirement benefits Age at which most people qual-
longer earn “extra” credit by delaying retirement, even if s/he continues to delay taking benefits Average age of Age 74 retired workers already receiving benefits
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Be wary of scams
By Deb Imsland Hartford Social Security Claims Representative
hese days, everyone needs to be cautious of scams – Internet, mail, and even phone scams – which can damage your credit score and pocketbook. Any time someone asks for your personal information, you should be wary. Particularly cruel are swindles that target Social Security beneficiaries. You may think you’re safe simply by not carrying your Social Security card with you and not providing your personal information over the Internet or by email. But scam artists have become shrewd. Never reply to an email claiming to be from Social Security and asking for your Social Security number or personal information. Be alert when dealing with people who want your personal information, such as your bank account number, date of birth, and Social Security number. As a rule of thumb, Social Security will not call you for your personal information such as your Social Security number or banking information. If someone contacts you and asks for this kind of information, do not give it. By using a little caution, you can protect yourself from scams. Identity theft is one of the fastest-growing crimes in America. If you think you’ve been the victim of an identity thief, you should contact the Federal Trade Commission (FTC) at www.ftc.gov/bcp/edu/microsites/ idtheft. Or, you can call 1-877-IDTHEFT
Some homework before going back to school
T
(1-877-438-4338); TTY 1-866-653-4261. Some people who receive Social Security and Supplemental Security Income (SSI) benefits are often victimized by misleading advertisers. Often, these companies offer Social Security services for a fee, even though the same services are available directly from Social Security free of charge. These services include getting a: •corrected Social Security card showing a bride's married name; •Social Security card to replace a lost card; •Social Security Statement; and •Social Security number for a child. Some direct scammers suggest that Social Security is in dire financial shape and that people risk losing their Social Security or Medicare benefits unless they send a contribution or membership fee to the advertiser. If you receive or see what you believe is misleading advertising for Social Security services, send the complete mailing, including the envelope, to: Office of the Inspector General, Fraud Hotline, Social Security Administration, P.O. Box 17768, Baltimore, MD 21235. Also, advise your State's attorney general or consumer affairs office and the Better Business Bureau. Learn more about identity theft at www.socialsecurity.gov/pubs/ 10064.html. Read about misleading advertising at www.socialsecurity. gov/pubs/10005.html.
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o you have a son or daughter who is turning 18 soon, collecting monthly Social Security benefits, and returning to high school this fall? If so, then we have a bit of homework for you. To make sure Social Security benefits continue beyond age 18, eligible students must submit the necessary form to school officials. The school will use these documents to certify your child is still enrolled in school. Otherwise, monthly Social Security payments automatically stop when a student turns 18. This is the case regardless of the type of Social Security benefit received. Some students get Social Security survivors benefits because a parent is deceased. Others may receive dependent benefits because their parent receives Social Security retirement or disability benefits. Benefits for minor children generally continue until age 18 (or 19 if they’re still in high school) unless they are disabled and eligible for childhood disability benefits. In that case, a separate application for benefits is required.
For more information about Social Security student benefits, visit www.socialsecurity.gov/schoolofficials. The website outlines how the process works and explains what the student and school official must do to ensure benefits continue past the student’s 18th birthday. With the appropriate certification from the school, Social Security generally does not stop benefits until the month before the month the student turns 19, or the first month in which he or she is not a full-time student, whichever is earlier. The website also includes: •a downloadable version of the required SSA-1372 form — Students’ Statement Regarding School Attendance — that must be completed by the student, certified by the school and returned to Social Security; •answers to Frequently Asked Questions for school officials and students; and •a field office locator to find the address of a local Social Security office If you do not have access to the Internet, call Social Security at 1800-772-1213 (TTY 1-800-325-0778).
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______________________________________________________________________________Social Security Guide • August 9, 2012 • Page
11
Online services if you receive Social Security benefits you can …
Without a password:
Change your address or telephone number (unless you receive SSI also) Get a replacement Medicare card Request a proof of income letter Get a replacement form 1099/1042S—Social Security benefit statement
With a password:
Check your information and benefits Change your address or telephone number Start or change your direct deposit Change your password or block electronic access to your personal information
Read our newspapers online!
www.RavellettePublications.com
Page 12 • Social Security Guide • August 9, 2012 ______________________________________________________________________________
Get your Social Security statement online
By Mike Brant Social Security District Office Manager, Rapid City
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f you would like to get a Social Security Statement, which provides estimates of your future benefits, it is now available online at www.socialsecurity.gov. “Our new online Social Security Statement is simple, easy-to-use and provides people with estimates they can use to plan for their retirement,” said Michael J. Astrue, Commissioner of Social Security. “The online Statement also provides estimates for disability and survivors benefits, making the Statement an important financial planning tool. People
should get in the habit of checking their online Statement each year, around their birthday, for example.” In addition to helping with financial planning, the online Statement also provides workers a convenient way to determine whether their earnings are accurately posted to their Social Security records. This feature is important because Social Security benefits are based on average earnings over a person’s lifetime. If the information is incorrect, the person may not receive proper benefits.
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The online Statement provides you the opportunity to save or print the document for future reference, or to have handy for discussions with family members or a financial planner. To get a personalized online Statement, you must be age 18 or older and must be able to provide information about yourself that matches information already on file with Social Security. In addition, Social Security uses Experian, an external authentication service provider, for further verification. You must provide identifying information and answer security questions in order to pass this verification. Social Security will not share your Social Security number with Experian, but the identity check is an important part of this new, thorough verification process. When your identity is verified, you can create a “My Social Security” account with a unique user name and password to access your online
Statement. In addition, your online Statement includes links to information about other online Social Security services, such as applications for retirement, disability, and Medicare. For more information about the new online Statement, please visit www.socialsecurity.gov/mystatement.
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______________________________________________________________________________Social Security Guide • August 9, 2012 • Page
13
More gold in your golden years
By Kathy Petersen Social Security Public Affairs Specialist
A
lthough the Gold Rush has been over for more than a hundred years, people today are still looking for ways to put more gold into their “golden years”. Some of the ways to find more gold don’t involve picks or pans or prospecting luck. Did you know that if you work beyond your full retirement age before beginning to draw your Social Security benefits, the amount of your monthly benefit check will increase? For example, if you were born between 1943 and 1954, your full retirement age is 66. This means that if you start receiving benefits at age 66, you will get 100 percent of your monthly benefit. However, if you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase. For example, the yearly rate of increase in Social Security retirement benefits for anyone born after 1943 is 8 percent. This 8 percent increase compares fa-
vorably with current average interest earnings rates on bank savings accounts. Of course, the total benefits increase you would receive would depend on the number of months you delay the start of your retirement benefits: •At age 67, you would get 108 percent of the monthly retirement benefit because you delayed getting benefits for 12 months; and •At age 70, you would get 132 percent of the monthly benefit because you delayed getting benefits for 48 months. When you reach age 70, your monthly benefit stops increasing, even if you continue to delay receiving benefits. And once you reach full retirement age, your income does not affect your Social Security benefits. In other words, there is no additional advantage to putting off benefits once you’ve reached age 70. It is also important to re-
member that each additional year you work adds another year of earnings to your Social Security record. Higher lifetime earnings may mean higher benefits when you retire. But don’t forget about Medicare. If you decide to wait until after you are age 65 to apply for retirement benefits, most people should apply for Medicare coverage at age 65. If you’d like to begin your Medicare coverage,
you should apply within four months of reaching age 65. Social Security has a couple of handy online calculators that can quickly give you an idea of how much extra money you could expect by working beyond your full retirement age. Just visit Social Security’s website at www.socialsecurity.gov/OACT/quickcalc/ early_late.html#late
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Page 14 • Social Security Guide • August 9, 2012 ______________________________________________________________________________
E
What is the best retirement option for you?
veryone’s situation is different. That is why social Security has created several retirement planners to help you decide what would be best for you and your family. Social Security has on online calculator that can provide immediate and accurate retirement benefit estimates to help you plan for your retirement. The online Retirement Estimator is a convenient, secure, and quick financial planning tool. It uses your own earnings record information, thereby eliminating any need to manually key in years of earnings information. The estimator also will let you create “what if” scenarios. You can, for example, change your “stop work” date or expected future earnings to create and compare different retirement options To use the Retirement Estimator, go to our website at www.socialsecurity.gov/ estimator. There is one more thing you should remember as you crunch the numbers for your retirement. You many need your income to be sufficient for a long time because people are living longer than ever before, and generally, women tend to live longer than men. For example: • The typical 65-year-old today will live to age 83; • One in four 65-year-olds will live to age 90; and • One in 10 65-year-olds will live to age 95. Once you decide on the best age for you to actually retire, remember to complete your application three months before the month in which you want retirement benefits to begin.
Divorced? Some basic Social Security facts to remember
f you are divorced, there are several things you should know about Social Security. A divorced spouse may be eligible for benefits on more than one work record. Some divorced people may get a higher benefit based on their ex’s work. The benefits paid to a divorced spouse or a surviving divorced spouse will not affect the benefit amount paid to other family members who receive benefits on the same record. If your ex-spouse is living, you can receive benefits based on his or her work if — •Your marriage lasted 10 years or longer; •You are unmarried; •You are age 62 or older; •The benefit you are entitled to receive based on your own work is less than the benefits you would receive on your ex’s work (unless you are full retirement age); and •Your ex is entitled to Social Security retirement or disability benefits. If your ex has not yet applied for the benefit, you may be able to receive a benefit if you have been divorced from your former
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spouse for at least two years. If your ex-spouse is deceased, you can receive benefits — •At age 60, or age 50 if you are disabled, if your marriage lasted at least 10 years, and you are not entitled to a higher benefit on your own record; or •At any age if you are caring for your ex-spouse’s child who also is your natural or legally adopted child and younger than 16 or disabled and entitled to benefits. Your benefits will continue until the child reaches age 16 or is no longer disabled. In this case, you can receive this benefit even though you were not married to your ex-spouse for 10 years. If you remarry after age 60 or after age 50 and at the time of remarriage you are entitled to disability benefits, we disregard the marriage. If you would like to receive an estimate of benefits you may receive as a divorced spouse or a surviving divorced spouse, you may contact our representatives at our toll-free number, 1-800-7721213.
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______________________________________________________________________________Social Security Guide • August 9, 2012 • Page
15
Misunderstandings about Social Security retirement benefits
Hunting for a prescription drug plan is no game
By Kathy Petersen Social Security Public Affairs Specialist
S
ocial Security is a vital program that touches the lives of almost everyone in the country. In part because of its size and in part because of its national impact, there are many misunderstandings about the program. vvvvvvvv Myth: My Social Security benefits will be based on my last three years of earnings. Fact: Social Security retirement benefits are based on a lifetime of earnings. To figure your benefit, we will add up your highest 35 years of earnings after adjusting each year for inflation. Assuming you earn an average income, your retirement benefit would represent about 40 percent of your pre-retirement earnings. vvvvvvvv Myth: I can take my reduced retirement benefits at age 62 and
later switch to full retirement benefits at my full retirement age. Fact: If you take an early retirement benefit, you generally will live with a permanent reduction. Your benefit does not increase when you reach your “full retirement age.” (A handy chart on our website at www.socialsecurity.gov can tell you what your full retirement age is.) vvvvvvvv Myth: If I take my own Social Security benefit, I am always locked into it. If my husband later dies, I cannot switch to a widow’s benefit on his record. Fact: A woman who becomes a widow can switch to benefits on her husband’s record if it is to her advantage to do so. (A widower also can make the switch if it pays him more money.)
“O
New compassionate allowances conditions mean faster decisions for thousands of disabled people
I
pen season” is right around the corner for the Medicare Part D prescription drug plan. Hunting down the best plan for you is no game. Newly eligible Medicare beneficiaries, and current beneficiaries who are considering changes to their Medicare Part D plan, should mark their calendars for October 15. The “open season” will run from October 15 to December 7. The Medicare Part D prescription drug program is available to all Medicare beneficiaries to help with the costs of medications. Joining a Medicare prescription drug plan is voluntary, and participants pay an additional monthly premium for the coverage. While all Medicare beneficiaries can participate in the prescription drug program, some people with limited income and resources also are eligible for “Extra Help” to pay for monthly premiums, annual deductibles, and prescription co-payments. The Extra Help is worth about $4,000 a year. To figure out whether you are eligible for the Extra Help, Social Security needs to know your income and the value of any savings, investments, and real estate (other than the home you live in). To qualify, you must be receiving Medicare and have:
n April, Social Security announced 52 new Compassionate Allowances conditions to the growing list of severe medical conditions that qualify for expedited medical decisions. Since then we’ve added several more conditions. The new conditions include many neurological disorders, cancers, and rare diseases. The Compassionate Allowances initiative is a way of quickly identifying diseases and other medical conditions that invariably qualify as “disabled” based on minimal medical information. Compassionate Allowances allow Social Security to quickly identify the most obviously disabled individuals for allowances based on objective medical information that we can obtain quickly. The announcement of 52 new conditions, effective in August, will increase the total number of Compassionate Allowances conditions to 165. That list continues to grow as Social Security, the National Institutes of Health, and a number of patient organizations help identify new
conditions that clearly warrant quick approvals. “Social Security will continue to work with the medical community and patient organizations to add more conditions,” Commissioner Astrue said. “With our Compassionate Allowances program, we quickly approved disability benefits for nearly 61,000 people with severe disabilities in the past fiscal year, and nearly 173,000 applications since the program began.” Social Security develops the list of Compassionate Allowances conditions from information received at public outreach hearings, comments received from the disability community, counsel of medical and scientific experts, and research with the National Institutes of Health. Also, we consider which conditions are most likely to meet our definition of disability. For more information on the Compassionate Allowances initiative, please visit www.socialsecurity.gov/compassionateallowances.
•Income not over $16,755 for an individual or $22,695 for a married couple living together. Even if your annual income is higher, you still may be able to get some help with monthly premiums, annual deductibles, and prescription co-payments. Some examples where your income may be higher include if you or your spouse: —Support other family members who live with you; —Have earnings from work; or —Live in Alaska or Hawaii; and •Resources not over $13,070 for an individual or $26,120 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. We do not count your house or car as resources. You can complete an easy-to-use online application for Extra Help at www.socialsecurity.gov. Go to the Medicare tab on the top of the page. Then go to “Apply For Extra Help With Medicare Prescription Plan Costs.” To apply for the Extra Help by phone or have an application mailed to you, call Social Security at 1-800-772-1213 (TTY 1-800-3250778) and ask for the Application for Extra Help with Medicare Prescription Drug Plan Costs (SSA-1020). And if you would like more information about the Medicare Part D Prescription Drug Program itself, visit www.medicare.gov or call 1-800MEDICARE (1-800-633-4227; TTY 1877-486-2048). So this open season (October 15 to December 7), after you track down the perfect prescription drug plan for you, hunt for something that could put about $4,000 in your pocket — bag the best Medicare prescription drug plan for you and see if you qualify for the Extra Help through Social Security.
Page 16 • Social Security Guide • August 9, 2012
______________________________________________________________________________
By Kathy Petersen Social Security Public Affairs Specialist dibplan/dqualify3.htm. If you have a disability that makes you unable to work, the time to get started with your application is now. That’s because it can take time to determine whether you qualify for benefits. It usually takes about three to five months for a medical decision from the state agency that evaluates your condition. Given the time it can take, it’s in your best interest to do everything you can to speed up the process. The fastest and most convenient way to apply for disability is online at www.socialsecurity.gov/applyfor disability. You can save your application as you go, so you can take a break at any time. If you prefer, you may call our toll-free number, 1-800-772-1213, to make an appointment to apply at your local Social Security office or to set up an appointment for someone to take your application over the phone. If you are approved for disability benefits, that doesn’t mean you’ll never return to work. Social Security has special rules called “work incentives” that allow you to test your ability to work. Learn more about disability benefits and take advantage of the helpful Disability Starter Kit at www.socialsecurity.gov/disability.
Disabled? Social Security can help
D
isability is something most people do not like to think about. But the unfortunate
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reality is this: the chances that you will become disabled are probably far greater than you realize. Studies show that a 20-year-old worker has a three in 10 chance of becoming disabled before reaching retirement age. Social Security pays benefits to people with disabilities through the Social Security disability insurance program, which is covered by Social Security taxes. If you qualify, you can receive a monthly disability benefit from Social Security for as long as your disability keeps you from working. The amount of your benefit is based on your average lifetime
earnings. Usually after receiving cash benefits for 24 months, you can also receive Medicare coverage. When you work and pay Social Security taxes, you earn credits. The number of credits you need to qualify for disability benefits depends on your age, and some of the work must be recent. If you become disabled after age 31, you need to have worked at least 10 years and five of the past 10 years. But if you become disabled before age 24, you need only one and a half years of work in the past three years. To learn how many credits you need, refer to the convenient chart at www.socialsecurity.gov/
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