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.

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/.

Benefits from first spouse if no longer married to second

Q: I am married for the second time and receive my own Social Security retirement. My first husband and I were married for 18 years and he earned lots more money than I did. If I was single again, could I draw Social Security from my first husband? 

A: The answer to this question could go in several directions depending on the amount of the person’s own retirement, other benefits received, if the marriages ended by death or divorce, and other items. Without more information, this question cannot be answered.  

The Social Security website, www.socialsecurity.gov, is great for general information, retirement planning and online services, including online applications, but when you have a detailed question such as this one, speak to a SSA representative to discuss your options. Having the Social Security number of all parties involved would be useful. Call the SSA national toll-free number at 1-800-772-1213 (TTY 1-800-325-0778) (7:00am – 7:00pm) or your local office 

Based on age, a widow or widower can start receiving Social Security survivors benefits as early as age 60. Remarriage before age 60 prevents payment. Remarriage after age 60 (for age based benefits) will not affect eligibility to survivors benefits. If twice widowed, benefits might be payable through the work record of either deceased spouse or the person’s own retirement work record. 

Survivor benefits might also be payable to the divorced spouse of a deceased worker if the marriage had lasted 10 years or more. 

More about Social Security survivors benefits is here. 

The original question did not specify that the first husband had died. If the couple had divorced, benefits to her through his work record might be payable since they were married at least 10 years, if she was not married. Information about benefits for divorced spouses is here. 

If the second marriage continues, there is the potential for spousal benefits.

Is there still a Social Security funeral benefit?

Q: Does Social Security still pay a funeral benefit? A friend said that none was payable when his grandmother recently died.

A: You are referring to the Lump Sum Death Benefit (LSDP) and, yes, it still exists when specific requirements are met.  

The Lump Sum Death Benefit (LSDP) is a one-time payment of $255 to help offset funeral costs. While this is a small amount towards a funeral today, the payment dates back many years to when that amount covered a more significant portion of costs. 

The benefit is payable only on the record of someone with insured status, meaning she or he had enough work for benefits to be payable on their record. Even then, the LSDP is payable to a limited group. 

When the deceased had enough work, the LSDP can first be paid to the surviving spouse if they were living in the same household at time of death, although exceptions exist.

If no spouse survives, the LSDP can be paid to a child if he or she was eligible for benefits based on the work record of the deceased for the month of death. 

Lump Sum Death Benefit (LSDP) examples:

  1. The deceased was receiving her or his own SSA retirement and lived with their husband or wife. The surviving spouse can receive the Lump Sum Death Benefit (LSDP).
  2. The deceased was eligible for Social Security as a spouse or widow / widower but not eligible based on their own work record.  A LSDP is not payable.
  3. The deceased received their own SSA retirement, has no surviving spouse but did have an adult disabled child receiving through her or his record. The surviving child can receive the LSDP because they were already receiving benefits from the parent’s record.
  4. The deceased received their own SSA retirement, has no surviving spouse but has grown children, none of whom receives Social Security child benefits. A LSDP is not payable.  

The LSDP is separate from ongoing Social Security survivor benefits 

Always contact Social Security when there is a death in the family. The SSA representative can discuss potential benefits, whether for now or the future, be sure that ongoing benefits are properly ended and answer questions.

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.