Social Security Announces 1.7 Percent Benefit Increase for 2015

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 64 million Americans will increase 1.7 percent in 2015, the Social Security Administration announced today. 

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2014. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics. 

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $118,500 from $117,000. Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum.  

Information about Medicare changes for 2015 is available at www.medicare.gov 

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola 

A fact sheet showing the effect of COLA related automatic changes for 2015 is here.

Using your SSA Statement

In previous posts, I have encouraged readers to create a personal my Social Security account at www.socialsecurity.gov/myaccount/. Whether or not you now receive Social Security monthly benefits, online services are there for use. To create a my Social Security account, you must be at least 18 years old, have an email address and a United States mailing address. There are no fees to do this. As of September 30, nearly 14.5 million people had opened their free my Social Security account. 

If not yet receiving ongoing benefits, the major tool available is your Social Security Statement.

Many people think only of retirement when Social Security is discussed, but, in fact, the program includes disability and survivors benefits too. Including family member benefits, retirement represents about 70 percent of national Social Security benefits, survivors about 11 percent, and disability about 19 percent.Nationally, about 18.3 percent of the entire United States population, including adults and children of all ages, receive monthly Social Security benefits. 

Of course, retirement is the desired Social Security benefit, but studies show that just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67 and people die at all ages.   

For all of these possibilities, your Social Security Statement is a great family financial planning tool. After creating your my Social Security account, look at your Statement (sample here), especially your earnings record and estimated benefits sections, at least annually. 

Directly from your actual Social Security work record as reported by employers, your earnings record for many years is shown. This is the only place where you can see your personal earnings history. Future Social Security benefits on your record are based on your lifetime earnings. Review your record for accuracy. If there is an error, follow the correction instructions. 

Now look at the estimated benefits section. The Social Security website retirement planning section, contains tools to estimate retirement amounts but disability and survivors estimates, potentially to your children and other family members, are only on your Statement. Useful at all ages and especially for young families with dependent children, these current estimates can be a foundation for your other family financial planning. 

Creating your personal my Social Security account lets you access your Statement whenever desired. Starting for December birthdays, this past September the Social Security Administration resumed periodic mailings of paper Statements. Workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving Social Security benefits and who are not registered for a my Social Security account will receive the Statement in the mail about 3 months before their birthday. After age 60, people will receive a Statement every year. The agency expects to send nearly 48 million Statements each year.

 

 

 

Boomers, Social Security and Someday

Are you a Baby Boomer?

Boomers have been filing for Social Security retirement for several years already.

On October 15, 2007, at an event hosted by Michael J. Astrue, then the Commissioner of Social Security, the nation’s first Baby Boomer, Kathleen Casey-Kirschling, filed for her Social Security retirement benefits online at www.socialsecurity.gov 

Ms. Casey-Kirschling, who was born one second after midnight on January 1, 1946, was eligible for benefits beginning January 2008 and graciously helped promote filing for Social Security retirement online. 

Here is a photo of Ms. Casey-Kirschling from that 2007 event:

Today, nationally over 50 percent of all Social Security retirement  applications are filed online. Learn how here.

Over the next 20 years, nearly 80 million Boomers will retire.

Someday, do you plan to retire? Boomer or not, Social Security should be part of your planning.

Lots of SSA retirement planning information is on the Social Security website, www.socialsecurity.gov, in the Retirement Benefits section and especially in the Retirement Planner area. Different calculators to help your planning are there including the Retirement Estimator, that connects to your own work record to provide an individual estimate.

Someday is closer than you think. Create your personal my Social Security account for additional estimates and to check your earnings record for accuracy.

Medicare Part D (Prescription Drug Coverage) Open Season & Extra Help

The Medicare Part D (prescription drug coverage) plan open enrollment period runs from October 15 to December 7.   

Review your existing Part D plan each year. A plan that previously fit your needs might not be your best choice now. You need a list of your medicines, including dosages and frequency, to compare plans.  Spouses can choose different plans.  

Social Security representatives cannot help you choose a Part D plan.  

Learn about Part D at the Medicare website, www.medicare.gov. To find a Part D plan, go to the “Find health & drug plans” section. 

Everyone currently enrolled in Medicare can purchase a Part D prescription drug plan. Unlike Medicare Part A (Hospital) or Part B (Medical), Part D plans are purchased through private insurers. You shop for the plan that best suits your needs. Joining a Medicare prescription drug plan is voluntary and participants pay an additional monthly premium for the coverage.  

Although Social Security representatives cannot help you choose a Part D plan, the agency does administer the Extra Help portion of Part D for people with limited income and resources. 

Extra Help is an income and resource based subsidy to help pay for part of monthly premiums, annual deductibles, and prescription co-payments.  

People with Medicare and receiving Supplemental Security Income (SSI) are automatically eligible for Extra Help and should not apply.   

Applying for the Part D Extra Help program does not enroll you in a prescription drug plan. 

Part D details and an application are at www.ssa.gov/medicare/prescriptionhelp/, or call the SSA national toll-free number, 1-800-772-1213 (TTY 1-800-325-0778), or your local office.

Medicare Part B premiums for 2015

Medicare Part B premiums will remain the same in 2015 as for 2014.  

As announced on October 9th by the Department of Health & Human Services (DHHS), the agency that administers Medicare, the standard 2015 Medicare Part B (Medical) premium remains unchanged from the 2014 amount of $104.90 per month. Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.  

Not everyone pays the standard Medicare Part B (Medical) premium amount. Based on the amount of their Federal tax return modified adjusted gross income (MAGI), some people pay a higher Part B premium. 

Medicare Part B premium information for 2015 is on the Medicare website, www.medicare.gov. 

The detailed DHHS press release about 2015 Medicare Part B premiums is here.

Does it matter if I retire in December or January?

Q: I am 63, work full time, and plan to retire effective either this December 31 or January 2, 2015. Is there any difference as far as how much I can earn while on Social Security either way? I may work occasionally at my present job after retiring.   

A: At age 63 there is no difference between retiring at the end of December compared to the beginning of January. Either way, you work all through December, and probably start Social Security retirement effective with January. Payment for January arrives in February.  

For the annual retirement test in any given year, how much you can earn without penalty is based on whether you will be younger than your full retirement age (FRA) the entire year, reach FRA during the year, or are older than FRA. For your birth year, FRA is 66.Since you will be younger than FRA all of 2015, the lowest retirement test limit will apply before reducing benefits. In 2014, that amount is $15,480. 

Retirement test earnings amounts for calendar year 2015 are not yet available. When announced they will be posted in the SSA retirement planner at www.socialsecurity.gov/retire2/.    

Although this person will be retired for the full 2015 calendar year, people retire all months of the year with many earning over their earnings test amounts before retiring. So that these people can start their Social Security retirement, a one-time special rule using monthly earnings, rather than calendar year earnings, is usually applied during the year that SSA retirement benefits are started.  

Annual retirement test earnings include only your own calendar year gross wages and net self-employment.

Fast Facts about Social Security

Did you know that 65% of aged beneficiaries received at least half of their income from Social Security in 2012 or that 55% of adult Social Security beneficiaries in 2013 were women?

Fast Facts & Figures About Social Security, 2014 is available online. This annual chartbook highlights data on the most important aspects of the Social Security and Supplemental Security Income programs—the people they serve and the benefits they provide.

From the Preface: 

Fast Facts & Figures answers the most frequently asked questions about the programs administered by the Social Security Administration (SSA). It highlights basic program data for the Social Security (retirement, survivors, and disability) and Supplemental Security Income programs.

The tables and charts illustrate the range of program beneficiaries, from the country’s oldest to its youngest citizens. In all, about 63.2 million people receive some type of benefit or assistance.  

I thought the sections about beneficiary age and sex interesting. Perhaps you will too.

Social Security & SSI payment dates for 2015

The annual schedule of payment dates for Social Security benefits and the separate Supplemental Security Income (SSI) program has remained a very popular topic ever since I started these posts. 

The 2015 schedule of payment dates is now available for viewing or downloading as a pdf file at http://www.socialsecurity.gov/pubs/EN-05-10031-2015.pdf 

Until 1997, all routine monthly Social Security payments arrived on the same day. No more. Now they arrive on different days of the month. Back then, “check week” was a very hectic time for local Social Security offices and financial organizations, post offices and businesses including grocery stores.  

Multiple payment dates help spread out related workloads. Widespread use of direct deposit (electronic fund transfer) has also greatly reduced the number of payment problems formerly seen with paper checks. 

Most people starting to receive Social Security since 1997 receive their routine benefits on one of four days throughout the month: on the third of the month and on the second, third and fourth Wednesdays of the month. What day will yours arrive? 

With several exceptions, Social Security payment dates now depend 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.  

As noted on the 2015 schedule, 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. 

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

 A link to the 2015 calendar has been added to my Areavoices homepage blogroll.

Living apart and Social Security spousal benefits

Q: My husband and I are not divorced but have lived apart for many years. Can I still receive Social Security through his record?  

A: Living together is not required for Social Security spousal benefits as a wife or husband. Your individual SSA retirement amounts might prevent spousal benefits but living apart while married will not.   

In addition, having lived apart will not prevent either of you from potentially receiving future survivor benefits as widow or widower.  

Should you divorce, SSA benefits might be payable as a divorced spouse or surviving divorced spouse if the marriage lasted at least ten years and other requirements are met.  

More about Social Security benefits for a current or former spouse is in the SSA website Retirement Planner section. See “how members of your family may qualify for benefits.”  

You can file an online application for benefits as a spouse. Details are here 

Go here to learn more about Social Security survivors benefits.

 

Agency Resumes Mailing Social Security Statements

Tuesday, September 16, 2014 

News Release

SOCIAL SECURITY ADMINISTRATION

Agency Resumes Mailing Social Security Statements

Encourages People to Create a Secure my Social Security Account to Obtain Their Statement Online, Anytime

Carolyn W. Colvin, Acting Commissioner of Social Security, today announced the agency will resume the periodic mailing of Social Security Statements–once every five years for most workers–while encouraging everyone to create a secure my Social Security account to immediately access their Statement online, anytime. The Statement is a valuable financial planning tool providing workers age 18 and older with important individualized information regarding their earnings, tax contributions, and estimates for future retirement, disability, and survivors benefits.

“We have listened to our customers, advocates, and Congress; and renewing the mailing of the Statement reinforces our commitment to provide the public with an easy, efficient way to obtain an estimate of their future Social Security benefits,” Acting Commissioner Colvin said. “I encourage everyone to create their own secure my Social Security  account to obtain immediate access to their Statement online, anytime.” 

Beginning this month, workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving Social Security benefits and who are not registered for a my Social Security account will receive the Statement in the mail about 3 months before their birthday.  After age 60, people will receive a Statement every year.  The agency expects to send nearly 48 million Statements each year.

The Social Security Statement helps people plan for their financial future.  In addition to providing future benefit estimates, the Statement highlights a person’s complete earnings history, allowing workers to verify the accuracy of their earnings. This is important because an individual’s future benefit amount is determined by the amount of their earnings over their lifetime.  To date, more than 14 million people have established a personalized my Social Security account at www.socialsecurity.gov/myaccount.

With a my Social Securityaccount, people may access the Statement from the comfort of their home, office or library whenever they choose. Individuals who currently receive benefits should sign up for a my Social Security account to manage their benefit payments and, when the need arises, get an instant benefit verification letter, change their address and phone number, and start or change direct deposit of their benefit payment.

Acting Commissioner Colvin reinforced that “whether conducting business with Social Security via the Internet, mail, telephone or face-to-face, we will continue to provide convenient, cost-effective, secure and quality customer service to meet the needs of the public we serve.” 

*****

You can see a sample Social Security Statement here.