America Saves Week 2015

America Saves Week, February 23 – 28, 2015, reminds us all to focus on the importance of saving and investing for the future. The Social Security Administration is one of many public and private organizations participating in America Saves Week.

Steps toward achieving financial goals include saving, investing and planning throughout an entire career.

What is the status of your savings? According to the America Saves Week website, www.americasavesweek.org/, you should assess your savings annually to make sure you are saving for all the right things and it provides several questions to help you do this.

Someday you will want to retire. Prepare for it. Now is the perfect time to examine your saving habits. Are you on track for a comfortable retirement?

Estimate 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.

Create a my Social Security account and view your Social Security Statement. Along with your Social Security earnings record, the Statement provides estimated retirement amounts plus family benefits should you become disabled or die. 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 www.mymoney.gov, the official U.S. government website dedicated to teaching Americans the basics of finances, and the Ballpark Estimator at www.choosetosave.org/ballpark, 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.

To help your planning, here is a Test Your Savings Knowledge question from the American Saves Week website:

Q: About how much more do families with a savings plan save than those without such a plan?

A: According to one study, if family incomes are the same, those families with a plan save about twice as much as those who do not have one.

Why is school information asked on a disability application?

Q: The online Social Security disability asked for my school background. Why does this matter if my doctor says I am disabled? 

A: There are two basic areas considered when someone applies for Social Security disability. First, they must have worked long enough and recently enough to be insured. Second, they must meet the Social Security definition of disability. Asking about school and work experience helps determine if a person meets the disability definition. 

The definition of disability for Social Security is different than other programs. No benefits are payable for partial or short-term disability. 

The disability definition emphasizes ability to work. In addition to the work requirement, to be found disabled under Social Security rules you cannot do the work that you did before, you cannot adjust to other work because of your medical conditions, and your disability has lasted or is expected to last for at least one year or expected to result in death. Age, work experience and education are considered in the decision.  

You are asked about your work experience and education to help determine your ability to work. Making this decision follows a national step-by-step process. Opinions of your doctor and other medical providers are important but generally only one part of making a decision.  

Broadly speaking, two people with the same medical condition might receive different decisions based on their age, work experience or educational backgrounds. For example, compare someone age 50 having a high school diploma and work experience involving heavy lifting to someone age 30 with a college degree and a desk job. The ability of each to do work previously done, or to adjust to new work, could be very different and result in different decisions for the same medical condition.

This is a broad example. There are injuries and illnesses that are routinely approved based on medical diagnosis alone. 

Learn more or file an application at the Disability section of the Social Security website, www.socialsecurity.gov.  From there, go to the Disability Planner section. 

In the Disability Planner, learn how you qualify for Social Security disability benefits including work requirements, disability definitions and the steps followed in making the decision.   

Completely different from Social Security retirement, survivors and disability programs, Social Security administers the need-based Supplemental Security Income (SSI) program, also having disability benefits.  

Social Security launches new fraud facts webpage

The Social Security Administration has launched a new web page to highlight the agency’s many efforts in fighting fraud and protecting every worker’s investment in the Social Security program. See it at www.socialsecurity.gov/antifraudfacts. 

Visitors to this site get a behind-the-scenes glimpse into the hard work done every day to fight fraud, waste, and abuse in Social Security and Supplemental Security Income (SSI) programs.  

The website includes information on the tools used to fight fraud, spotlights some of highly successful anti-fraud efforts, and provides materials you can use to help spread the word that Social Security has zero tolerance for fraud. 

One of several links from this new fraud facts webpage is to the Social Security Office of Inspector General (OIG) webpage. The direct OIG link is http://oig.ssa.gov/ and it can also be easily reached through the “contact us” links on the Social Security homepage, www.socialsecurity.gov. From the “contact us” page, click on “Report Fraud, Waste or Abuse.” 

The OIG website has lots of information including some situations, with examples, that may be considered as fraud, waste or abuse against the Social Security administration. You can report possible fraud situations there and read about some recent investigations.

Update – replacement 1099 for 2014

Replacement 1099’s for 2014 are now available online. The way to get one is different from past years. 

When a 1099 replacement was previously requested online, it was mailed to the person’s address as shown on Social Security records. Receipt would take about 10 business days. 

Now, replacement 1099’s are available as a new service for people with a my Social Security account. Through your my Social Security account, the 1099 is available for downloading as a pdf for immediate printing or saving as a file. There is also be an option to have it mailed as in past years. 

Create your personal my Social Security account at www.socialsecurity.gov/myaccount/.

When will 1099’s for 2014 be mailed?

The new year always brings questions about taxation of Social Security benefits and receipt of 1099’s.

Earlier this week, I wrote about when people might have to pay federal income taxes on their Social Security benefits. No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. 

The SSA-1099 for Tax Year 2014 will be mailed by January 31, 2015.  

Referring to my post of January 5, these are sent to your mailing address as shown on Social Security records so I hope yours is correct. 

You can request a replacement SSA-1099 for Tax Year 2014 on or after February 1, 2015. 

If you need a replacement SSA-1099 for Tax Year 2013 or earlier, see instructions here.

Do I pay income tax on my Social Security benefits?

Q: Do I pay income tax on my Social Security benefits? 

A: Perhaps. Here is information from the Social Security website, www.socialsecurity.gov. Including links to IRS information, more details are at www.socialsecurity.gov/planners/taxes.htm 

Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits. 

No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. 

If you file a federal tax return as an “individual” and your combined income is

·  between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.

·  more than $34,000, up to 85 percent of your benefits may be taxable. 

If you file a joint return, and you and your spouse have a combined income that is

·  between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits

·  more than $44,000, up to 85 percent of your benefits may be taxable. 

If you are married and file a separate tax return, you probably will pay taxes on your benefits.

 

Receiving Social Security? Have you moved?

When benefit amounts change for a person receiving either Social Security or Supplemental Security Income (SSI), a letter is sent by regular Post Office mail telling the new amount and reasons for the change. 

As routinely done, recently the Social Security Administration has been mailing letters to beneficiaries explaining the 2015 cost-of-living increase benefit changes. Many of those letters cannot be delivered because Social Security records had an old address and Post Office mail forwarding requests were either not done or had expired.

One result is that the people involved do not receive important benefit information sent to them unless they contact Social Security to ask about it. These recontacts create more work for both the person and Social Security representatives. 

Have you moved this year while receiving either Social Security or SSI benefits? Did you report your new mailing address so that your records stay accurate? If not, do this now. 

Update your address in several ways.  

Online: Social Security beneficiaries can update their address online at any convenient time if they have a personal my Social Security account. SSI recipients cannot update their address this way but other my Social Security services such as getting an online letter to prove your benefit amount remain available. For your convenience, this is the suggested method. Create your my Social Security account at www.socialsecurity.gov/myaccount/.

By phone: you can telephone the Social Security national toll-free number, 1-800-772-1213 / TTY 1-800-325-0778, from 7:00am – 7:00pm local time. National numbers are answered at different sites across the country. Representatives there can help you with other Social Security business as well.  

In person: You can phone or visit your local Social Security office. Local office hours vary but most have public hours of 9:00am – 3:00pm on Monday, Tuesday, Thursday and Friday and 9:00am – noon on Wednesday. Learn local office hours and locations here, in the “Find an Office” section. 

Even when your benefit payment continues going to the same bank, credit union or other financial institution, be sure to notify Social Security of mailing address changes. This helps you. It helps Social Security. 

By whatever method you choose, keep your mailing address current when you receive Social Security or SSI benefits. Important information is mailed to you during the year. Make sure you receive the news.

Did Social Security always have a COLA?

With the 1.7 percent cost-of-living adjustment (COLA) for 2015 about to begin, it is worth noting that many pensions do not have a cost-of-living adjustment (COLA) provision. Unlike the inflation protection provided by Social Security retirement, survivors and disability benefits, for pensions lacking a COLA your starting amount is your final amount, even if you receive the pension for many years. 

One of the many valuable aspects of Social Security benefits, the annual, automatic review of Social Security amounts for a possible cost-of-living adjustment (COLA) is now such an accepted feature of the program that it is difficult to imagine a time when there were no COLAs. However, such a time existed. Social Security beneficiaries did not originally receive cost-of-living adjustments.  

Although the first SSA benefit was paid in January 1940, the first cost-of-living adjustment related increase was not until 1950 followed by a second in 1952. Part of the 1950 Amendments, the first Social Security COLA was signed into law by President Truman. Neither of these two increases was automatic. Both times, Congress enacted special legislation for the purpose.  

Automatic Social Security COLAs began in 1975, based on 1972 legislation. Signed into law by President Nixon, this legislation established automatic COLAs based on the annual increase in the consumer price index, if any. 

Since then the automatic cost-of-living adjustment has increased Social Security benefits in almost all years. Learn COLA percentages for 1975-2014 at www.socialsecurity.gov/cola/automatic-cola.htm 

The 1.7 percent cost-of-living adjustment for 2015 begins with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million Supplemental Security Income (SSI) beneficiaries will begin on December 31, 2014.

Details about the 2015 COLA are here.

More than monthly payment amounts change due to a COLA. Other related changes are here.

 

 

 

Reminder about 2015 Social Security & SSI payment dates

I posted the 2015 schedule of payment dates for Social Security and Supplemental Security income in September. As 2015 gets closer, I am getting many requests for the schedule so here it is again. The link is http://www.socialsecurity.gov/pubs/EN-05-10031-2015.pdf.

A link to the 2015 payment calendar is on my Areavoices homepage blogroll. 

With several exceptions, since 1997 Social Security payment dates are based on the number holder’s (NH) date of birth. You are the NH if receiving Social Security on your own work record. If receiving based on the work of someone else, that person is the NH.    

Therefore, if you receive Social Security retirement or disability through your own work, the payment date is based on your birth date. A child or spouse receiving benefits on your record will also have a payment date based on your birth date. 

 A couple can receive Social Security payment on different days if each person is receiving his or her own retirement benefit.   

Social Security benefits are generally paid on the second Wednesday if the number holder was born within the first 10 days of a month, the third Wednesday if born within the 11-20th days and on the fourth Wednesday if born within the 21-31st days.  

Not all Social Security payment dates are birth date based. If you received Social Security before May 1997, your payment date remained the third of the month. People eligible for both Social Security and Supplemental Security Income (SSI) generally receive SSI on the first and their Social Security on the third of the month.  

Supplemental Security Income (SSI) funds are usually paid on the first of a month. 

Regular payment dates for both Social Security and Supplemental Security Income (SSI) are advanced if the usual date falls on a day when financial institutions such as banks or credit unions are closed so, for example, SSI payments for January 2015 will arrive on December 31, rather than on January 1. 

One more item about payments: routine Social Security retirement, disability and survivors benefits are paid in the following month, meaning benefits for January arrive in February. Routine Supplemental Security Income (SSI) payments are for the month paid so SSI arriving in February is for February.

 

 

 

 

 

Savings will not prevent Social Security disability benefits

Sometimes a topic suddenly starts to generate questions. The following question came up three separate times while I was teaching recently. Perhaps it will interest you too.  

Q: How much money can I have in savings before my Social Security disability stops?  

A: Your savings will not stop Social Security disability benefits. Whether rich or poor, your financial value does not matter for Social Security retirement, survivors or disability benefits.  

Work is at the base of all Social Security benefits, not financial need. Requirements vary with type of benefit but the person whose Social Security number record is involved needs enough work to be insured or benefits are not payable. Learn more about Social Security benefits at www.socialsecurity.gov 

If you receive Social Security through your own record, then your work record was used. If you receive benefits through another person’s record, such as a child eligible through a parent, then that person had to have enough work. 

What can confuse people on this topic is that the Social Security Administration is responsible for more than Social Security retirement, survivors and disability benefits.  

Eligibility for the low-income Supplemental Security Income (SSI) program does include income and resource requirements. SSI can provide benefits to those over age 65 as well as blind or disabled children or adults. SSI is very different from Social Security, but both programs are administered by the Social Security Administration. 

People receiving SSI must stay below certain income and resource levels to remain eligible. Resources include savings and other items of financial value that you own and can turn into cash but not everything you own is counted toward the resource limit. For an eligible individual the total level of counted resources is $2,000. For an eligible couple, this amount is $3,000. These resource levels will continue for 2015. If exceeded, the person is no longer eligible.

Some types of resources that do not count toward these totals are the house you live in and household goods, usually one vehicle, some insurance policies and some burial funds. This is not a complete list. An overview of Supplemental Security Income resources is here 

Since Social Security and SSI are completely different programs, one person can receive both of them if the separate requirements are met.

In summary, if a person receives both Social Security and Supplemental Security Income (SSI), his or her savings or other resources will not stop Social Security benefits but they can end SSI benefits.