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About Howard Kossover

I am the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Based in Grand Forks ND, I work with organizations, government agencies and businesses concerning all aspects of the Social Security programs.

FRA and the SSA Amendments of 1983

Regular readers know that your full retirement age (FRA) is based on year of birth and ranges from age 65 for people born in 1937 or earlier, to age 67 for people born in 1960 and later. FRA is age 66 for people born in 1943 – 1954.

Full retirement age is the age at you can first become entitled to full or unreduced retirement benefits. Starting Social Security retirement when younger than FRA results in a reduced benefit amount. Starting retirement when older than FRA results in an increased amount.

While not that often anymore, I continue to meet people who are not aware that FRA varies and they usually ask when this came about. Learning that this change was part of the 1983 Social Security Amendments is a second surprise to them, especially when they realize that these FRA changes are still being phased in.

Why was full retirement age changed in 1983?

In the early 1980’s the Social Security program faced a serious short-term financing crisis. President Reagan appointed a blue-ribbon panel, the National Commission on Social Security Reform, known as the Greenspan Commission, to study the financing issues and make recommendations for legislative changes.

Resulting legislation, Public Law 98-21, the Social Security Amendments of 1983, was signed into law on April 20, 1983, by President Ronald Reagan (signing ceremony photo). It included the changes to full retirement age.

In addition to increasing full retirement age over many years, the 1983 Amendments made numerous other changes in the Social Security and Medicare programs including the taxation of Social Security benefits and the first coverage of Federal employees.

The 1983 Amendments also provided Social Security coverage for all Members of Congress, the President and Vice-President, Federal Judges and other executive-level political appointees of the Federal Government.

There were many other provisions to the legislation. You can read a summary of the 1983 Amendments here.

Today is the 32nd anniversary of the signing of the 1983 Amendments by President Reagan.


Remembering the Oklahoma City Bombing

On April 19, 1995, at 9:02am CST, our nation experienced a profound tragedy in the terrorist bomb attack on the Alfred P. Murrah Federal Office Building in Oklahoma City.

Sixteen SSA employees and 24 visitors in the Social Security office there were among the 168 people who lost their lives in the bombing.

Sunday is the 20th anniversary of the bombing.

April is Financial Literacy Month

April is Financial Literacy Month, a time to evaluate efforts to save, invest, and plan for your future. Planning for retirement is an essential long-term goal and a critical step on the road toward financial health. Now is a good time to start planning, no matter what your age so that time and compound interest works to your advantage.

Get a good estimate of your future SSA retirement amount with the Social Security online Retirement Estimator, one part of the SSA retirement planner. The estimator connects to your actual work record to provide a personal estimate. You can change the default estimates for those more in tune with your actual plans.

For those years from retirement, create a my Social Security account and use it to view your Social Security Statement. The Statement shows the earnings on your Social Security record but, more to the point of financial planning, has estimated personal and family benefits should you become disabled or die as well as for retirement. This information helps you arrange other parts of your financial planning.

Social Security personnel cannot assist with financial planning. Select your own helpers for this. Two websites to help you get started are, the official U.S. government website dedicated to teaching Americans the basics of finances, and the Ballpark Estimator at, part of the American Savings Education Council program, which includes the Social Security Administration.

These sites, and others like them, are not just about savings for retirement. There are reasons to save for every stage of life.

April is Financial Literacy Month. Now is a good time to review your existing plan, or start one.

Disability is Social Security

I participate in a listener call-in radio show and a recent caller asked about Social Security disability. At age 53, he was found eligible for Social Security disability benefits and wanted to know what effect this would have on his future “real” Social Security, meaning retirement. His question provides today’s topic.

First, Social Security disability benefits are real Social Security, just another part of the program. The three parts of Social Security are retirement, survivors and disability.

Full retirement age (FRA) is a frequent topic when discussing Social Security retirement. Based on year of birth, it is the specific age that a person becomes eligible for a retirement amount that is neither reduced nor increased from the full retirement age amount. Benefits started prior to FRA are reduced by the number of months involved while benefits started afterward are increased in a similar way.

When determined eligible for Social Security disability, a person is essentially said to have reached full retirement age and their benefit amount is not reduced for age, even if they are actually much younger than their retirement FRA. Benefit amounts for disability are based on your career earnings, much as they are for retirement or survivors benefits.

Assuming a person remains eligible for Social Security disability, there is no change in benefits received once they actually reach their retirement FRA. All that would take place is an internal SSA change moving them from disability to retirement, without any visible change to the person’s benefits.

If a person went off disability and later became eligible for retirement, the years of none or low earnings while on disability would not be used to compute the retirement amount.

Medicare coverage begins after a person receives disability benefits for two years. Whether based on disability or retirement, the Medicare coverage is the same.

To estimate your own Social Security disability amount, create a my Social Security account and view your personal Statement. It contains an estimated amount that assumes you become disabled this year.

Learn more about Social Security disability here.

Reduction percentages for early retirement

If you start Social Security retirement before your full retirement age (FRA), how much of a monthly reduction will you take?

It depends on far away you are from FRA, at times called normal retirement age on the Social Security website, Starting your retirement when younger than FRA is called early retirement.

Regular readers know that Social Security retirement amounts are partly based on the number of months that you are younger than full retirement age. For example, if starting benefits 19 months before FRA, they are reduced by 19 months.

Based on year of birth, full retirement age ranges from age 65 to 67. It is age 66 for birth years 1943 – 1954. From the FRA chart you can see the amount of monthly retirement payable after reduction for age from age 62 to FRA for any given year of birth.

A recent question made me realize that I have not recently discussed the actual percentage amount of a monthly reduction. For retirement, two different monthly percentages could apply, depending again on the number of months that you are younger than full retirement age.

For early retirement, a benefit is reduced 5/9 of one percent for each month before full retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month.

For example, if the number of reduction months is 60 (the maximum number for retirement at 62 when full (normal) retirement age is 67), then the benefit is reduced by 30 percent. This maximum reduction is calculated as 36 months times 5/9 of 1 percent plus 24 months times 5/12 of 1 percent.

Today’s topic was just about early retirement, when starting benefits before reaching full retirement age. Up to age 70, retirement benefits increase at a monthly rate of 2/3 of 1 percent for delayed retirement, when started after FRA. Called delayed retirement credits, this works out to an eight percent annual increase.

Looking for Social Security retirement information? Go to the SSA Retirement Planner at for information, calculators, and ideas to consider. All of today’s information is there, and much more.


Voluntary tax withholding from Social Security benefits

People filing application to start Social Security benefits often ask if taxes are withheld from their monthly payments. They are not. Taxes are not routinely withheld from Social Security benefits.

Especially during this time of year as people pay their Federal income tax, another popular question is whether taxes can voluntarily be withheld from Social Security payments. Yes, you can arrange this.

If desired, you can request voluntary Federal tax withholding from your monthly Social Security benefits. You may find doing this easier than paying quarterly estimated tax payments. See

To start voluntary Federal tax withholding you need to complete Internal Revenue Service (IRS) Form W-4V, Voluntary Withholding Request, and return it to your local Social Security office. To change or end an ongoing voluntary withholding, complete another form W-4V.

Withholding is by your selected percentage of monthly benefits, not a flat dollar amount. When completing the W-4V you select the percentage of benefits for tax withholding. Available options are to have 7 percent, 10 percent, 15 percent or 25 percent of your monthly benefit withheld.

The Social Security Administration has no authority to withhold state or local taxes from your benefit. Voluntary withholding is only for Federal taxes.

Social Security employees cannot provide tax advice. If voluntary withholding interests you, discuss it with your tax preparer or call IRS at 1-800-829-3676 (TTY 1-800-829-4059). To start voluntary tax withholding, complete and provide IRS Form W-4V to your local Social Security office.

Funding Social Security – payroll tax, income tax & more

Social Security funding information is on the website in the solvency section and in the annual Trustees Report section. Much of the today’s information is from the 2014 Trustees Report. OASDI means Old Age, Survivors and Disability Insurance (Social Security).

The primary portion of Social Security funding is from payroll tax. According to the 2014 Trustees Report (section B – Trust Fund Financial Operations in 2013), “In 2013, net payroll tax contributions accounted for 85 percent of total trust fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum annual amount, which was $113,700 in 2013.”

What many people do not realize is that a portion of income tax helps fund Social Security, and Medicare too. No one pays income tax on all of their SSA benefit. Some people pay no tax on their benefits, some on up to 50 percent of benefits and some on up to 85 percent of benefits. Information about income tax and Social Security benefits are here.

Beginning in 1984, Federal law subjected up to 50 percent of an individual’s or a couple’s OASDI (Social Security) benefits to Federal income taxation under certain circumstances. Treasury allocates the revenue derived from this provision to the OASI (Old Age & Survivors Insurance) and DI (Disability Insurance) Trust Funds on the basis of the income taxes paid on the benefits from each fund.

Beginning in 1994, the law increased the maximum percentage from 50 percent to 85 percent. The HI Trust Fund (Health Insurance = Medicare) receives the additional tax revenue resulting from the increase to 85 percent.

This portion of income taxes returns to help fund Social Security retirement, survivors and disability. Again referring to the 2014 Trustees Report, in 2013 about two percent of combined Trust Fund income was from income tax paid on portions of Social Security benefits.

The third major funding source for Social Security is interest on the Trust Funds. There are two separate Social Security funds, the OASI Trust Fund and the DI Trust Fund.

Per the 2014 Trustees Report, “Interest earned on investment of trust fund asset reserves accounted for 12 percent of OASDI income. The Department of the Treasury invests trust fund reserves in interest-bearing securities issued by the U.S. Government. In 2013, the combined trust fund reserves earned interest at an effective annual rate of 3.8 percent.

Less than one percent of combined Trust Fund income was from the General Fund of the Treasury in 2013. Most of this was to reimburse funds for the loss of revenue due to temporary economic stimulus reductions in Social Security payroll taxes.

See the 2014 Trustees Report (section B – Trust Fund Financial Operations in 2013) for more details.

The most misused SSN of all time – a true story for April 1

April 1 is often a day for jokes but this is a true story about the most misused Social Security number (SSN) of all time. Source is the Social Security website history section.

As you read this, remember that a personal Social Security number was still a relatively new concept. The first SSN was issued sometime in mid-November 1936.

This is the story of the Social Security number that came to be known as “issued by Woolworth.”

In 1938, a wallet manufacturer in Lockport, New York, decided to promote its product by showing how a Social Security card would fit into its wallets.

A sample card, used for display purposes, was inserted in each wallet. The company Vice President thought it would be a clever idea to use the actual SSN of his secretary, Mrs. Hilda Whitcher.

The wallet was sold by Woolworth stores and other department stores all over the country. Even though the card was only half the size of a real card, was printed all in red, and had the word “specimen” written across the face, many purchasers of the wallet adopted the SSN as their own.

In the peak year of 1943, 5,755 people were using Mrs. Whitcher’s number. The Social Security Administration acted to eliminate the problem by voiding the number and publicizing that it was incorrect to use it. Mrs. Whitcher was given a new number.

However, the number continued to be used for many years. In all, over 40,000 people reported this as their SSN.

As late as 1977, 12 people were found to still be using the SSN “issued by Woolworth.”

The Whitcher case is the worst involving a real Social Security number and an actual person. Over the years, more than a dozen similar cases have occurred, usually when someone publishes a facsimile of a SSN card using a made-up number.

Social Security Administration as independent agency

Information today is from the history section of the Social Security website.

On March 31, 1995, the Social Security Administration became an independent agency.

The original 1935 Social Security Act, signed into law by President Roosevelt on August 14, 1935, created the three-member independent Social Security Board. This was an entirely new entity with no staff, no facilities, and no budget. Responsibilities included performing “… the duties imposed upon it by this Act and shall also have the duty of studying and making recommendations as to the most effective methods of providing economic security through social insurance … . “

The Social Security Board lost independent status in 1939 when it became part of the new Federal Security Agency (FSA). In 1946 the Board was renamed the Social Security Administration.

Changes by President Eisenhower in 1953 abolished the FSA and created the Department of Health, Education and Welfare (DHEW). The Social Security Administration was made part of this new cabinet agency.

When DHEW became the Department of Health & Human Services (DHHS) in 1980, Social Security became a major DHHS component.

On August 15, 1994, the anniversary of the 1935 legislation, President Clinton signed legislation restoring the Social Security Administration to its original status as an independent agency (photo here).

This independent status was effective March 31, 1995, twenty years ago today.

You can learn more about the organizational history of Social Security here.

Average Social Security and SSI amounts in February 2015

For February 2015, following are three easily understood tables providing Social Security and Supplemental Security Income (SSI) information. These tables are online here.

Supplemental Security Income (SSI) is a separate, low-income program for the aged over 65, disabled or blind children, and disabled or blind adults that is administered by the Social Security Administration. Since SSI is completely different from Social Security, a person meeting the individual rules for each could become eligible for both programs. Income from Social Security reduces SSI amounts.

Learn more about Social Security and SSI at

Table 1 shows the number of people, in thousands, receiving Social Security and Supplemental Security Income (SSI) divided by Social Security only, SSI only, and people receiving both.

The “notes” in table 1 explain the difference in total Social Security beneficiaries shown between table 1 and table 2.

2015-02 table 1

Table 2 shows Social Security benefit information for February 2015, separated by number of beneficiaries receiving specific types of benefits and the average dollar amount of those benefits. The number of beneficiaries is again shown in the thousands, with total benefits shown in the millions and average amounts in dollars.

Social Security was never intended to provide full retirement income and this table emphasizes that fact. In February 2015, the average SSA retirement benefit, for the retiree only and excluding any family benefits, was $1,331.44.

2015-02 table 2

Table 3 shows Supplemental Security Income (SSI) benefit information for February 2015, separated by number of recipients receiving specific types of benefits and the average dollar amount of those benefits.  As above, the number of recipients are shown in the thousands, total benefits shown in the millions and average amounts in dollars.

In February 2015, the average SSI amount was $539.61. The 2015 maximum payable to an eligible individual is $733 per month. This maximum is reduced by other income, including Social Security benefits.

2015-02 table 3

These tables are online here.