Medicare Part D and other scam warnings

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

Part D open season is an important time. You should review your existing Part D plan to be sure it fits your needs. One that was previously good might not be your best choice now. Learn about Part D at the Medicare website, To find a Part D plan, go to the “Find health & drug plans” section. 

Now is also a time to be especially alert for scams targeting you.  

For example, one making the rounds now involves people being called by a scammer. The crook asks for personal information, such as your Social Security number and birthdate, so that they can allegedly send you an updated Medicare card. Do not give out this type of information. Protect yourself. 

Medicare Part D (prescription drug coverage) coverage information is not on your Medicare card since Part D policies are sold by private insurance companies.  

Social Security does not make cold calls or send emails to you offering a Medicare card. Replacement Medicare cards are not sent unless you ask for one. You can request one online or by contacting Social Security directly, at no cost, but you are doing the requesting.  

Medicare is not the only popular basis for scams. 

Social Security does not make cold calls to verify your bank account for direct deposit. Do not give out bank account information. If you get a letter saying that SSA has changed where your payment goes, and you did not make the change, contact Social Security immediately.  

The upcoming cost-of-living adjustment (COLA) increase is another scam topic. Social Security does not cold call for personal information related to the COLA. If you receive Social Security or Supplemental Security Income (SSI), no special update is needed from you. The COLA will be received automatically. 

When someone contacts Social Security, whether by phone or in-person, the SSA representative asks questions to verify identity. This helps protect you. However, the big difference is that you contacted SSA first. This is not an unexpected cold call to you. 

For online information, be sure you are at the real Social Security website, There are no charges for program services. Guard yourself online too.

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 

The Social Security Act provides for how the COLA is calculated. To read more, please visit 

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

The first Social Security retirement payment

Today is the anniversary of a major event in Social Security history. 

On January 31, 1940, the first monthly recurring Social Security retirement check was issued, going to Ida May Fuller of Ludlow, Vermont.   

Born in 1874, Ida May Fuller worked as a schoolteacher before becoming a legal secretary in 1905. Never married, she worked for about three years under the Social Security program before retiring in 1939 and starting her Social Security retirement at age 65 in January 1940. 

She was the first beneficiary of recurring monthly Social Security payments. Her retirement amount was $22.54 per month. 

Final decisions on early applications for Social Security benefits were completed in Washington D.C. with benefit amounts then certified for payment by the Treasury Department. Claims were grouped in batches of 1,000 and a Certification List for each batch was sent to Treasury.  

Ms. Fuller’s claim was the first one on the first Certification List. As a result, the first Social Security monthly benefit, check number 00-000-001 dated January 31, 1940 was issued to her.

For her, and the millions of other Social Security beneficiaries like her, the amount of that first benefit check was the amount they could expect to receive for life. It was not until 10 years later with the 1950 Amendments that Congress first legislated an increase in benefits. Automatic cost-of-living adjustments (COLAs) did not begin until 1975.

Ms. Fuller lived to be 100 years old, dying in 1975 with a secure place in Social Security history.

Here is a photo of Ms. Fuller from October 1950, when the first cost-of-living adjustment was received.

 Ms. Fuller received the first monthly Social Security retirement check but not the first SSA payment. More about this next week.


Your letter with 2014 SSA amounts – more information

Yesterday I wrote about an important letter going to everyone receiving Social Security retirement, survivors or disability benefits.  If you receive Social Security, the letter tells you specific information about changes to your personal benefit amount due to the 2014 cost-of-living increase. Details about the letter are in yesterday’s post.

Keep this letter with your other important financial documents. You can use this letter when you need to prove the amount of your Social Security benefit amount. 

As mentioned yesterday, you, your spouse and your friends will probably receive your individual letters on different days. If you have not received your own letter, you should receive it soon.

Moving to today’s topic, what if you do not receive this letter?  

As with all letters to you during the year from Social Security, the letter about your 2014 amount is mailed to your address as shown on Social Security records.

If you moved but did not report your new mailing address directly to Social Security, your letter will be delayed by the time needed for the Post Office to forward it.

Even when your benefit payment continues going to the same bank, credit union or other financial organization without change, it is important to inform Social Security of changes to your mailing address.

Are you a snowbird? You can easily change your mailing address with the seasons while leaving your bank information unchanged.

Now is the time to update your mailing address, if needed. Contact Social Security by calling the national SSA toll-free number, 1-800-772-1213 or TTY 1- 800-325-0778, to report your new address.

People receiving Social Security benefits can go online and print a letter to verify their amount, and even update their address, after creating a personal my Social Security account. Before establishing your own account, read How We Verify and Protect Your Identity in the my Social Security section. It explains the questions that you will be asked.

Today’s post is obviously more for people receiving Social Security benefits now. However, a my Social Security account is useful for other purposes even if you are not receiving benefits yet.

Whether or not receiving Social Security benefits right now, learn more at and create your my Social Security account today.   



How much is your 2014 Social Security benefit?

The 1.5 percent cost-of-living adjustment (COLA) will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014.

Across the entire country, everyone receiving a Social Security retirement, survivors or disability benefit will receive a letter about the 1.5 percent cost-of-living increase for 2014. This letter will explain how much they will get per month in 2014 along with other important information.

Keep this letter. It is very important. Use it when you need to prove the amount of your Social Security benefit. Whether used to obtain financial help from housing and energy assistance programs or to qualify for a new vehicle bank loan, keeping this letter will simplify the process. Put it with your other important financial documents.

The letter contains much more than just the amount of your Social Security amount. It includes your monthly benefit before any deductions, the amount deducted for your Medicare Part B coverage, other deductions if any, and the net amount received each month. On the letter, this information will look something like this:

 How Much Will I Get And When?

Your monthly amount (before deductions) is ___________.

• The amount we deduct for Medicare medical insurance is ___________.

(If you did not have Medicare as of Nov. 14, 2013

or if someone else pays your premium, we show $0.00.)

The amount we deduct for your Medicare prescription drug plan is ___________.

(If you did not elect withholding as of Nov. 1, 2013, we show $0.00.)

The amount we deduct for voluntary federal tax withholding is ___________.

(If you did not elect voluntary tax withholding as of

Nov. 14, 2013, we show $0.00.)

After we take any other deductions, you will receive

Perhaps you already received this letter. If not, you should receive it soon. It is likely that you, your spouse and your friends will receive your individual letters on different days.

 Keep this letter with your other important financial documents. It is very important. Use it when you need to prove the amount of your monthly Social Security benefit.

Does disability amount increase if health gets worse?

Q: My wife has received Social Security disability for several years because of a progressive illness. Her health recently took a turn for the worse and we were wondering if she might receive a larger benefit amount because of this.

A: Declining health will not change her Social Security disability amount. Eligibility requirements for SSA disability include having the needed amount of work and meeting a strict definition of medical disability based on inability to work.

While details are in the disability section of the Social Security website, basics of the disability definition for Social Security are that a person cannot do the work previously done, cannot perform other work due to their medical condition and must have a disability that has lasted, or is expected to last, at least a full year. Social Security pays only for total disability. No benefits are payable for partial or short-term impairments. 

Since your wife already meets this work related definition of disability, and because her current benefit amount is based on her past work history, becoming more disabled will not change her benefit amount.

Social Security administers the different, need based, Supplemental Security Income (SSI) program. Worsening health will not change the SSI amount either but non-medical changes might. For example, changes in income, marital status or where a person lives can result in a changed SSI amount.

Even though her Social Security disability amount will not change because her health has worsened, your wife will soon receive a larger benefit amount due to the cost-of-living adjustment (COLA) for 2014. 

Including your wife, more than 57 million Social Security beneficiaries will receive the 1.5 percent COLA increase with benefits received in January 2014. Increased payments to more than 8 million Supplemental Security Income beneficiaries will begin on December 31, 2013.




Social Security newsletter

You can read and subscribe to a free, monthly, Social Security Administration electronic newsletter at

The current Social Security Update mentions the testimony of Glenn Sklar, SSA Deputy Commissioner for Disability Adjudication and Review, before Congress on November 19, 2013. He testified about Social Security’s efforts to improve the management of the disability appeals process. You can link to his testimony from the newsletter.

Another article is about Social Security Administration improvements in written communications. As reviewed by The Center for Plain Language, Social Security is the only federal agency that got straight A’s on the 2013 Plain Writing Report Card and the only one to get an A in plain writing. The Center for Plain Language grades federal agencies each year in two subject areas: Plain Writing and Compliance with the Plain Writing Act of 2010.

 Other topics of the current newsletter are:

     Beneficiaries Celebrate the New Year with a COLA

     Keep in Mind our Holiday Hours

     Get Benefit Verification Online

Read and subscribe to this free Social Security newsletter at

Working & benefits: the 2014 retirement earnings test

The 2014 Social Security cost-of-living adjustment (COLA) changes more than just the amount of monthly benefits received. Another change increases the annual retirement earnings test amounts for 2014. You can earn more in 2014 than in 2013 before benefits are reduced.

The annual retirement earnings test concerns how your own employment earnings in a year affect your Social Security in that year. The earnings test includes only your personal gross wages or net self-employment for the full calendar year. Your other income or the income of a spouse is not applicable.

So, in 2014 how much can you earn before your Social Security benefits for the year are reduced? Amounts depend on your age.

Three annual earnings levels exist, all based on your full retirement age (FRA).  

Earnings test amounts for 2014 are:  

  • If under full retirement age (FRA) for the entire calendar year, $1 in benefits will be deducted for each $2 earned above the 2014 limit of $15,480.
  • If you reach FRA in 2014, $1 in benefits will be deducted from each $3 earned above the 2014 limit of $41,400, but only for earnings before the month you reach FRA.
  • No earnings limit exists starting with the month you reach full retirement age.

Do you plan to start Social Security retirement in 2014? Often people retiring mid-year have already earned over the annual limit for their age. To allow the start of SSA retirement regardless of expected calendar year earnings, there is a special one-time rule based on monthly earnings. This applies for one year, usually the first year of retirement, and lets people receive Social Security for months that they are retired.

For example, a person retiring in 2014, at least age 62 but younger than full retirement age the entire year, can receive Social Security retirement for months that gross wages do not exceed $1,290 even though overall calendar year earnings will be far above retirement test amounts. Similar rules apply for self-employment. 

Learn about the earnings test at As of today, 2014 retirement test amounts were not shown there but these amounts are on a fact sheet of 2014 Social Security changes at

See for more about the special, one-time, monthly test.

The earnings test does not apply to people receiving Social Security benefits due to their own disability. If receiving benefits due to disability, contact Social Security before working.

Social Security taxable earnings and tax rates for 2014

When you have wages or self-employment income that is covered by Social Security, you pay Social Security payroll taxes each year up to a maximum amount that is set by law. This continues even when a person receives monthly SSA benefits. Taxable amounts have changed frequently over the years, with changes for 2014 announced with cost-of-living adjustment (COLA) information. 

Related to the 2014 cost-of-living-adjustment and the increase in average wages, the maximum amount of earnings subject to Social Security tax is $117,000 in 2014. You will not see a change in Social Security tax paid unless working in 2014 and earning over the 2013 taxable earnings base of $113,700.

Dating back to 1939 legislation, the Federal Insurance Contributions Act (FICA) is the official Internal Revenue Code name for Social Security payroll tax. Whether called FICA or Social Security payroll tax, it is the same thing.

Changes in the yearly maximum taxable earnings amounts from 1937 to 2014 are shown at

While amounts of maximum taxable earnings have changed frequently, worth mentioning is that the tax rate has stayed the same (see notes at bottom) since 1990. Tax rates from 1937 to 2014 are shown at

The combined tax rate for Social Security and Medicare is 7.65 percent, paid by both employers and employees, and 15.3 percent paid by the self-employed. This tax money helps fund Social Security and Medicare. For 2014, covered wage or self-employment tax rates are:

  • Employers and Employees: the Social Security tax rate is 6.2 percent on earnings to $117,000. The Medicare tax rate is 1.45 percent on all earnings.
  • Self-employed: the Social Security tax rate is 12.4 percent on earnings to $117,000. The Medicare tax rate is 2.9 percent on all earnings..

Medicare payroll tax does not have a maximum taxable base limit. It continues for all applicable wage and self-employment income during the year even after Social Security tax ends.

 If you have more than one job in a year, each employer must withhold Social Security taxes from your wages without regard to what the other employers have withheld. A result is that you may potentially have Social Security taxes withheld that exceed the maximum. You can claim a refund of the overpaid taxes when you file your personal income tax return with the Internal Revenue Service.

Note 1 – Social Security: Temporary economic stimulus legislation reduced the Social Security payroll tax rate paid by employees and self-employed workers by 2 percent in 2011 and 2012. Amounts equal to the tax revenue not received were transferred to Social Security from the General Fund of the Treasury. 

Note 2 – Medicare: As of January 2013 and separate from the payroll tax, individuals with earned income of more than $200,000 ($250,000 for married couples filing joint income taxes) pay an additional 0.9 percent in Medicare taxes.

Did Social Security always have a COLA?

Unlike the protection provided by Social Security benefits, many pensions do not include any cost-of-living adjustment (COLA) provision. For these, your starting pension amount is your final pension amount, even if you receive the pension for many years. What about yours? 

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. In fact, automatic COLAs had not yet begun when I started working for the Social Security Administration.

The first automatic COLA’s began in 1975, based on 1972 legislation. Before then, benefits increased only when Congress enacted special legislation for the purpose. Although the first SSA benefit was paid in January 1940, the first COLA increase was received in October 1950 followed by a second in 1952. Part of the 1950 Amendments, the first Social Security COLA was signed into law by President Truman.

Signed into law by President Nixon, the 1972 legislation provided for a special COLA effective September 1972 and, beginning in 1975, established the procedures for issuing automatic COLA’s based on the annual increase in the consumer price index, if any.

Using Department of Labor data, Social Security and Supplemental Security Income (SSI) COLAs are based on the percentage of increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase in the CPI-W Consumer Price Index, there can be no COLA. 

 Since 1975, the automatic cost-of-living adjustment has increased Social Security benefits in every year except 2010 and 2011. Learn COLA percentages for 1975-2014 here.