Bad things only happen to other people

Of course you have heard the saying “Bad things only happen to other people.” However, we are all “other people” to everyone else.

This brings me to the reminder that Social Security is much more than retirement. Nationally, about 10 percent of SSA monthly benefits go to survivors of all ages due to a death in the family and about 19 percent go to disabled workers and their families.

You can obtain both survivor and disability estimates on your record by creating a personal, pin and password protected, my Social Security account at www.socialsecurity.gov/myaccount/ and viewing your Social Security Statement.

Hoping that you never need this information is different from planning in case you, or your family, do.

Learn more about Social Security disability and survivors benefits now. Make that information part of your family financial planning.

Then you can tell other people about them.

Social Security benefits by state and county

The annual publication “OASDI Beneficiaries by State and County” was recently released with information as of December 2014. OASDI is the Social Security retirement, survivors and disability benefits.

From the preface:

This annual publication focuses on the Social Security beneficiary population—people receiving Old-Age, Survivors, and Disability Insurance (OASDI) benefits—at the local level. It presents basic program data on the number and type of beneficiaries and the amount of benefits paid in each state and county. It also shows the numbers of men and women aged 65 or older receiving benefits. … “ 

As of December 2014, approximately 18.5 percent of the United States population received a monthly Social Security benefit with about 91 percent of people aged 65 or older receiving benefits.

How many people receive Social Security benefits in your state?

In your county?

How much money does that involve?

Find out here. For a specific state and county as of December 2014, click on the state information. Then scroll down to Table 4 to seen the number of beneficiaries in that state, with individual county data. Scroll down to Table 5 for the amount of benefits involved. Note that amounts are shown in thousands of dollars. 2014-SSA-state&county

When eligible as widow and retiree

Q: Does starting Social Security as a widow prevent me from receiving my own retirement?

A: No. If eligible for SSA survivors benefits as widow or widower and also eligible for your own retirement, you can start the smaller one first and switch to the higher later on. Based on age, survivors benefits can start as early as age 60 and retirement at age 62.

You can estimate Social Security retirement amounts online but estimated survivors benefits are not available online.

Get survivors estimates from your local SSA office and of your own retirement online at the SSA retirement planner, www.socialsecurity.gov/planners/retire/. To consider your options, my suggestion is to get estimates for each type of benefit at different ages.

Some options to consider are in the Social Security survivors planner section. The following is from the “if you are the worker’s widow or widower / how much would your benefit be?” pages.  

“If you receive benefits as a widow or widower or as a surviving divorced spouse, you can switch to your own retirement benefit as early as age 62. This assumes you are eligible for retirement benefits and your retirement rate is higher than your rate as a widow, widower or surviving divorced spouse.  

In many cases, a widow or widower can begin receiving one benefit at a reduced rate and then, at full retirement age, switch to the other benefit at an unreduced rate.” 

Having the option to start with the lower benefit and then switching to a higher one later is useful but what you decide is based on your personal situation. Many people choose the largest amount immediately available, even if a reduced amount, and do not switch benefit types.

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

survivorsplanner

 

The start of Social Security disability benefits

The original Social Security disability benefits did not provide monthly payments.

As signed into law by President Dwight D. Eisenhower in the Social Security Amendments of 1954, originally disability benefits provided for a “freeze” to a person’s record during the years when they were unable to work. This was to help prevent periods of disability from reducing or wiping out retirement and survivor benefits due to reduced earnings.

On August 1, 1956, the Social Security Act was amended to provide monthly cash benefits to permanently and totally disabled workers aged 50-64 and to pay child’s benefits to disabled children aged 18 or over of retired or deceased workers, if their disability began before age 18.

More changes came later.

Learn about today’s Social Security disability program here.

 

 

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

What is a typical Social Security disability amount?

Q: What is a typical Social Security disability amount?

A: As of May 2015, the average monthly Social Security disability amount to a disabled worker was $1,165. This does not include benefits paid to eligible family members.

Also as of May, the average monthly amount paid to the eligible spouse of a disabled worker was $316 and the average amount to an eligible child was $350.

These and other amounts are in Table 2 shown here.

Rather than using a national average, a more accurate and personal estimate is on your Social Security Statement. In the “Your Estimated Benefits” section is “If you become disabled right now, your payment would be about $XXX a month.”

This estimate is based on your actual work record, which is included on the Statement so that you can check it for accuracy.

Obtain your personal Statement online at any time by creating your personal, pin and password controlled, my Social Security account.

The Statement is also mailed on a limited basis. In September 2014, the Social Security Administration began mailing Statements to workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 and over, who are not receiving Social Security benefits and do not yet have a my Social Security account. Statements are mailed three months prior to your birthday.

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/.

 

Divorced spouse benefits

Q: My ex-husband always earned much more than I did and I anticipated receiving Social Security through his record when he retired.

His retirement plans changed after our divorce and now he expects to continue working for several more years, or at least until he is much older than 62.

Can I receive Social Security as a divorced spouse from his Social Security record before he retires?

A: Yes, this is possible assuming all requirements are met. General requirements to receive Social Security benefits as a divorced spouse are here and include that:

  • the marriage lasted 10 years or longer
  • you are unmarried
  • you are age 62 or older and
  • you are not eligible for a higher Social Security through your own work than you would through the record of your ex-spouse.

When receiving benefits through an ex-spouses record, that person is usually receiving benefits too but an exception exists which could let you receive benefits  before your former husband starts Social Security.

If your ex-spouse has not applied for retirement benefits, but can qualify for them, you potentially could receive benefits through his record if you have been divorced for at least two years. To qualify for benefits means that your ex-spouse has enough work and has reached age 62.

You would be known as an “independently entitled divorced spouse” for SSA benefit purposes if you receive benefits this way.

 

Medicare for spouse, without monthly benefits

Q: I receive Social Security and will be eligible for Medicare in 2017. My wife will be 65 at that time. She has not been employed long enough to receive her own Social Security retirement and does not want to start receiving as a spouse through my record until she is age 66.

Will my wife be able to get Medicare in 2017 on my work record at age 65 even if she has not applied for monthly Social Security benefits?

A: If a person is receiving Social Security benefits, his or her spouse can file for Medicare through their record at age 65 without filing for monthly cash benefits. Medicare Part A (Hospital) does not have a monthly premium. Medicare Part B (Medical) has a monthly premium.

At the Social Security website, www.socialsecurity.gov, is the following:

“If you are within three months of age 65 or older and not ready to start your monthly cash benefits yet, you can use our online retirement application to sign up just for Medicare and apply for your retirement or spouses benefits later.” 

Information about benefits to a spouse is here. Age based benefits to a spouse can be started as early as age 62, at a reduced amount, so she does not need to wait until age 66 to begin monthly Social Security benefits. The choice is hers.

Note that future legislation can change existing rules.