Annual Trustees Report for 2015

Yesterday the Social Security Board of Trustees released its annual report for 2015 with the following news release.

The full 2015 Trustees Report is at http://www.socialsecurity.gov/OACT/TR/2015/

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Wednesday, July 22, 2015 – For Immediate Release

Social Security Board of Trustees: Trust Fund Reserve Gains One Year for Projected Depletion Date 

The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one year later than projected last year, with 79 percent of benefits payable at that time. The DI Trust Fund will become depleted in 2016, unchanged from last year’s estimate, with 81 percent of benefits still payable.

In the 2015 Annual Report to Congress, the Trustees announced:

  • The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2034 – one year later than projected last year. At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.68 percent of taxable payroll — 0.20 percentage point smaller than in last year’s report.

While the projected depletion date of the combined OASDI trust funds gained a year, the Disability Insurance Trust Fund’s projected depletion year remains 2016. I agree with President Obama, we have to keep Social Security strong, protecting its future solvency. President Obama’s FY 2016 budget proposes to address this near-term Disability Insurance Trust Fund’s reserve depletion. By reallocating a portion of payroll taxes from Old Age Survivors to the Disability Trust Fund – as has been done many times in the past – would have no adverse effect on the solvency of the overall Social Security program,” said Carolyn W. Colvin, Acting Commissioner of Social Security.

We believe that Congress must take action to reallocate a portion of the payroll tax rate between the trust funds to avoid deep and abrupt cuts or delays in benefits for individuals with disabilities who paid into the system while they worked and now need the benefits they earned to support themselves and their families,” Colvin said.

Other highlights of the Trustees Report include:

  • Income including interest to the combined OASDI Trust Funds amounted to $884 billion in 2014. ($756 billion in net contributions, $30 billion from taxation of benefits, $98 billion in interest, and less than $1 billion in reimbursements from the General Fund of the Treasury—almost exclusively resulting from the 2012 payroll tax legislation)
  • Total expenditures from the combined OASDI Trust Funds amounted to $859 billion in 2014.
  • Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
  • The asset reserves of the combined OASDI Trust Funds increased by $25 billion in 2014 to a total of $2.79 trillion.
  • During 2014, an estimated 166 million people had earnings covered by Social Security and paid payroll taxes.
  • Social Security paid benefits of $848 billion in calendar year 2014. There were about 59 million beneficiaries at the end of the calendar year.
  • The cost of $6.1 billion to administer the program in 2014 was a very low 0.7 percent of total expenditures.
  • The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.6 percent in 2014.

The Board of Trustees comprises six members. Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Sylvia M. Burwell, Secretary of Health and Human Services; and Thomas E. Perez, Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.

View the 2015 Trustees Report at www.socialsecurity.gov/OACT/TR/2015/.

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Same-sex marriage update

On June 26, 2015, the Supreme Court issued a decision in Obergefell v. Hodges, holding that same-sex couples have a constitutional right to marry in all states. As a result, more same-sex couples will be recognized as married for purposes of determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments.

The Social Security Administration is working with the Department of Justice to analyze the decision and provide instructions for processing claims. Local offices are receiving updated instructions for different states on a flow basis.

Information for same-sex couples is on the Social Security website at http://www.socialsecurity.gov/people/same-sexcouples/.

A  direct link to this section is at the bottom of the SSA website homepagesame-sex website

Survivor benefits go to official widow or widower

Q: After the children were grown, my husband and I separated but remained married even though he was living with another woman for the last decade. He died recently. Can I receive Social Security benefits as his widow even though we have been apart for years?

A: If monthly Social Security survivor benefits are payable, they would be paid to you as the legal widow.

Since you were not living together, usually a one-time payment of $255 originally intended to help offset funeral costs would not be paid to you or the other woman.

Survivor benefits based on your age can begin as early as age 60. For younger widow or widowers with a severe disability, survivor benefits can begin as young as age 50. They are also payable at any age if eligible children are involved. More information is here.

Have you worked enough to be eligible for Social Security retirement on your own work record? If so, you have options to consider. For example, you can start the smaller benefit first at a reduced for age amount and switch to the larger one when you are older and past age reductions for the benefit involved. Discuss your options with a SSA representative.

When eligible for two different types of Social Security benefit, such as your own retirement and as a widow or widower, you receive up to the larger amount, not all of one plus all of the other.

Always contact Social Security about possible benefits when there is a death in the family. You cannot report a death or apply for survivors benefits online. Call the Social Security national toll-free number, 1-800-772-1213 (TTY 1-800-325-0778) from 7:00am – 7:00pm local time or contact your local SSA office.

 

 

Are SSA amounts based on where you live?

Q: Do Social Security retirement amounts change based on what state you live in?

A: No. Your retirement amount is based on your personal work history over many years and your age when starting benefits, not on where you live. It will not change if you move to a different state.

Your best 35 years of work are key when your retirement benefit is computed. These best 35 years, often including years immediately before retirement but selected from your full work history, are weighted for inflation and used to compute your Social Security retirement amount as if you were full retirement age (FRA). If you do not have 35 years of work, zeros are added in to reach 35 years.

When your full retirement age amount is known, the specific amount for the month you are starting Social Security is determined by reducing or increasing the FRA amount, depending on if you are younger or older than FRA for the month when benefits start. Go to the SSA Retirement Planner section to estimate your own Social Security retirement amount.

Once receiving Social Security benefits, any cost-of-living increase is computed nationally based on changes in a consumer price index from one year to the next, not where you live.

In a related manner, benefits to you if disabled or survivors benefits to your family if you die are also based on your personal work history and not where you live.

Your Social Security work record is based on employer W-2 reports or your Schedule SE tax return if self-employed. Check it for accuracy by creating a personal my Social Security account at http://www.socialsecurity.gov/myaccount/ and viewing your SSA Statement.

Earnings for 2014 will not show on your record until approximately October 2015. It is very important for your future benefits that your work record be accurate. If it has an error, contact your local office to correct it.

Social Security and your other pensions – GPO

Pensions generally do not reduce the amount of your Social Security but a pension based on earnings not covered by Social Security can do so.

The previously mentioned Windfall Elimination Provision (WEP) could affect the amount of your own Social Security retirement if you work for a federal, state or local government agency, a nonprofit organization or in another country and do not pay into Social Security.

What if you do not have enough Social Security covered employment to receive your own retirement benefit but you are eligible for Social Security benefits as a spouse or widow / widower? Then, if you will receive a pension from work not covered by Social Security, the Government Pension (GPO) will likely interest you.

Unlike the WEP, which involves a changed method of computing benefits, the Government Pension Offset (GPO) is a direct reduction of the SSA benefit amount as described on the SSA website, in part shown below. Some GPO exemptions apply. More about these exemptions are on the website.

From the website:

“If you receive a pension from a government job in which you did not pay Social Security taxes, some or all of your Social Security spouse’s, widow’s or widower’s benefit may be offset due to receipt of that pension. This offset is referred to as the Government Pension Offset, or GPO. 

The GPO will reduce the amount of your Social Security spouse’s, widow’s or widower’s benefits by two-thirds of the amount of your government pension. For example, if you receive a monthly civil service pension of $600, two-thirds of that, or $400, must be used to offset your Social Security spouse’s, widow’s or widower’s benefits. If you are eligible for a $500 spouse’s benefit, you will receive $100 per month from Social Security ($500 – $400 = $100).”  

Go here for more about the Government Pension Offset (GPO).

Just like the Windfall Elimination Provision, the Government Pension Offset is not new. Both date back to the Social Security Amendments of 1983, signed into law by President Reagan on April 20, 1983. Designed to resolve short-term funding problems faced at the time, that legislation made significant changes to the Social Security and Medicare programs.

GPO

 

From wife to widow

Q: My dad died this month at age 89 and is survived by his wife, my stepmother. She is in her 80’s and her Social Security amount is less than his. What does she need to do to get his Social Security benefits?

A: Before getting to this question, two points must be emphasized.

First, always contact Social Security when there is a death in the family. Call the national SSA toll-free number at 1-800-772-1213 (TTY 1-800-325-0778) or your local office. If additional benefits are payable, action can begin to start them and, if not, other information can be given.

Second, when eligible for SSA benefits on two records, such as your own retirement and as a widow or widower, you receive the higher benefit amount and not all of one plus all the other.

Since her Social Security amount is less than his, it is probable that her amount will increase to about what his had been.

If she now receives Social Security benefits as a spouse on her husband’s record, changing to a widow’s benefit will take place automatically once his death is reported to Social Security. This is because information about her is already part of his record, including evidence of marriage.

If not yet receiving benefits as a spouse, and therefore not yet connected to his record, she will need to complete an application for survivors benefits as his widow. This is easy to do and can be completed during a telephone or personal interview however she prefers. Evidence of their marriage and his death will be requested. All documents are returned to her.

In addition to increased ongoing benefits, she will probably be eligible for a one-time Social Security benefit of $255 to help towards funeral costs. This is arranged with the monthly survivors benefits.

Your dad would not be eligible to Social Security for the month of his death. Benefits for a month are paid in the following month. If received, these are usually returned to Treasury by the bank. However, she will be eligible for the widow’s benefit for the month of death.

More about Social Security survivors benefits is at http://www.socialsecurity.gov/survivors/.

 

Anniversary of Social Security payment date change

Payment Schedule 2015Today is the anniversary of the change to having several different Social Security payment dates throughout the month. All Social Security payments were issued on the third of the month until 1997. On June 11, 1997, the first Social Security benefits were issued based on birthdate.

Since payment date is always a popular topic, I have a link to the Social Security 2015 payment date schedule in the blogroll section of this post.

With several exceptions, since 1997 Social Security payment dates 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 paid in the following month. This means the benefit for May is received in June.

 

A new way to replace your Medicare card online

ReplaceMedicareCard

Today a Social Security Administration press release announced that now you can replace your Medicare card through your personal my Social Security account.

In the release, Carolyn W. Colvin, Acting Commissioner of Social Security, announced that Medicare beneficiaries can now obtain a replacement card if they have lost, damaged, or simply need to replace it online using a my Social Security account.

I’m excited about this newest online feature to the agency’s my Social Security portal and the added convenience we’re providing Medicare beneficiaries,” Acting Commissioner Colvin said. “Any my Social Security account holder who misplaces their Medicare card will be able to request a replacement card using their online my Social Security account.”

With services for you whether already or not yet receiving Social Security benefits, my Social Security is a secure, online hub for doing business with Social Security that you personally control by pin and password.

Current Social Security beneficiaries can use it to manage their account. For example, you can change an address, adjust direct deposit, obtain a benefit verification letter, request a replacement SSA-1099, and now to replace a Medicare card.

People not yet receiving monthly benefits can verify their earnings and obtain estimates of future benefits by viewing their Social Security Statement.

Learn more about my Social Security at www.socialsecurity.gov/myaccount/. There you can read how to create your own account and learn how Social Security verifies and protects your identity when you do.

mySSA

When to report work for the annual earnings test

Q: I retired last year, started Social Security, and expect to work part-time this year on a fill-in basis. If I reach the retirement earning limit amount for the year, is it my responsibility to notify Social Security? Are benefits reduced for work immediately or resolved at years’ end. I am 63.

A: Yes, it is your responsibility to contact Social Security. Report your estimated earnings for the calendar year as soon as you think your earnings will exceed the annual limit for your age. You can provide updated estimates during the year as needed for changes up or down.

Providing an estimated earnings amount to Social Security is needed when you expect to earn more than your earnings limit amount during the calendar year. For example, at age 63 in 2015, you are under full retirement age (FRA) for the entire year and must provide an estimate if expected gross wage earnings will exceed $15,720. An estimate is not needed when annual earnings are expected to below the earnings limit.

Adjustments based on your estimated earnings will take place as soon as possible in order to avoid having you incorrectly paid. The usual suggestion to people expecting to earn over the annual limit for their age is to provide an estimate as accurate as possible, but to the high side.

Later, when you receive your W-2 form at the end of the year, report your actual earnings for the year directly to Social Security. Based on your actual earnings, final adjustments are made to either send you benefits due or to withhold those incorrectly paid.

A list of your various Social Security reporting responsibilities is in the booklet, What You Need to Know When You Get Retirement Or Survivors Benefits, available online. Work activity is a topic discussed over several pages of the booklet and an excerpt from page 17 includes:

“Your earnings estimate and your benefits

We adjusted your benefits this year based on the earnings you told us you expected to receive this year.

If other family members get benefits on your record, your earnings may affect the total family benefits. But, if you get benefits as a family member, your earnings affect only your benefits.”   

“Revising your earnings estimate

When you work, you should save your pay stubs. If during the year, you see your earnings will be different from what you estimated, you should call us to revise the estimate. This will help us pay you the correct amount of Social Security benefits.”  

More about working while receiving Social Security retirement or survivors benefits is here.

SSA Annual Statistical Supplement, 2014, available

The Social Security Annual Statistical Supplement, 2014, is available now.

Prepared annually since 1940, the Supplement is a major resource for data on our nation’s social insurance and welfare programs. The majority of the statistical tables present information about programs administered by the Social Security Administration—the Old-Age, Survivors, and Disability Insurance program (OASDI), known collectively as Social Security, and the Supplemental Security Income (SSI) program.

In addition, data are presented on the major health care programs—Medicare and Medicaid—and social insurance programs, including workers’ compensation, unemployment insurance, temporary disability insurance, Black Lung benefits, and veterans’ benefits. The Supplement also includes program summaries and legislative histories that help users of the data understand these programs.

There is a wealth of useful information in the Supplement. View the Table of Contents and find the topics of interest to you.

Here are some tidbits from the Highlights and Trends section:

Social Security:

About 58.0 million persons received Social Security benefits for December 2013, an increase of 1,220,425 (2.2 percent) since December 2012. Seventy percent were retired workers and their spouses and children, 11 percent were survivors of deceased workers, and 19 percent were disabled workers and their spouses and children.

  • Seventy-three percent of the 37.9 million retired workers received reduced benefits because of entitlement prior to full retirement age. Relatively more women (75.4 percent) than men (70.3 percent) received reduced benefits.

Supplemental Security Income:

  • In December 2013, 8,363,477 persons received federally administered SSI payments—100,600 more than the previous year. Of the total, 2,107,524 (25.2 percent) were aged 65 or older; 4,934,272 (59.0 percent) were blind or disabled aged 18–64; and 1,321,681 (15.8 percent) were blind or disabled under age 18.

Medicare:

Number of enrollees in July 2013 (one or both of Parts A and B)   52.4 million

Aged                                     43.6 million

Disabled                                   8.8 million

Unemployment: Total payments, 2012    $42.6 billion

Workers Compensation: Benefit payments, 2012  $61.8 billion

Veterans’ Benefits:

Number of veterans with disability compensation or pension, 2013

Service-connected disability                     3,734,000

Nonservice-connected disability                   305,000

Poverty Data:

Percentage of population with income below poverty level, 2013

All ages                                                              14.5 percent

Children under age 18 living in families              19.5 percent

Persons aged 65 or older                                     9.5 percent

2014 Statistical Report