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.

When did SSA retirement at age 62 begin?

Are you thinking of starting Social Security retirement at age 62, or at any time when younger than your full retirement age (FRA)? Did you know that this option was not always available?

Early retirement was not part of the original 1935 Social Security Act. At that time, SSA retirement could not start before age 65. No option for reduced retirement benefits existed.

The ability to start Social Security reduced retirement at age 62 came in later years and at different times for women and men. Signed by President Eisenhower in August 1956, the Social Security Amendments of 1956 provided women the option of starting reduced retirement at age 62. The Social Security Amendments of 1961, signed by President Kennedy on June 30, 1961, extended the option of starting early retirement at age 62 to men.

Whether you are considering retirement at age 62 or later, go to the SSA Retirement Planner website to estimate your Social Security retirement amount.

August 14 is the 80th anniversary of the signing of the historic Social Security Act in 1935 by President Franklin D. Roosevelt. To help commemorate this date and engage the public in this milestone, the Social Security Administration has launched a commemorative 80th anniversary website at www.socialsecurity.gov/80thanniversary/.

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

 

More about the WEP

Today continues the Windfall Elimination Provision (WEP) topic started this week.

To recap, pensions generally do not reduce your Social Security retirement. The Windfall Elimination Provision (WEP) is an exception to this general rule. In very limited cases, mainly involving people who have had government employment, your pension can result in a lowered Social Security retirement amount based on your own work record.

The WEP could involve you 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. A pension based on earnings not covered by Social Security can affect the amount of your own Social Security retirement.

Key here is that the employment was not covered by Social Security. Most pensions are based on employment that is covered by Social Security. If you pay Social Security tax on your wages or self-employment, you are in covered employment.

For government employment, note that any level of government from federal to local can be involved. Here are some examples:

  1. Federal employment: people who began working for the Federal government in 1984 or later are covered by Social Security. Before then, Federal employees were covered by the old Civil Service Retirement System (CSRS) and did pay into Social Security. The Windfall Elimination Provision (WEP) affects CSRS retirees.
  2. State employment: sometimes a specific type of state employee, such as law enforcement, is not covered by Social Security. If so, the WEP can apply.
  3. Local government: do you work for a city government? City government employees are usually covered by Social Security. If not, the WEP can apply.
  4. School Districts: school districts are local government entities. Many, but not all, school district employees are covered by Social Security. As with the other examples, if not covered, then the WEP can apply.

When applicable, the Windfall Elimination Provision affects the amount of your own Social Security retirement. This means that, in addition to the work not covered by Social Security, you also had enough other employment in work covered by Social Security to be eligible for your own SSA retirement. Depending on the amount of annual earnings, a person needs at least 10 years of work to be insured for a retirement benefit.

So, if you are not eligible for Social Security retirement on your own work record the Windfall Elimination Provision would not apply. However, the Government Pension Offset (GPO), my next topic, might.

WEPa

 

Social Security and your other pensions – WEP

His question was “Will his military retirement will reduce his Social Security retirement?” It will not as explained below but the question brings up a topic that I have not mentioned for a while, the Windfall Elimination Provision (WEP).

As a general rule, pensions are not considered in the amount of your Social Security benefit. Pensions are not counted towards annual earnings test amounts and they do not reduce your SSA retirement amount.

The Windfall Elimination Provision (WEP) is an exception to this general rule. In very limited cases, mainly involving people who have had government employment, their pension can result in a lowered Social Security retirement amount based on your own work record.

In summary, the WEP could be important to you 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. A pension based on earnings not covered by Social Security can affect the amount of your own Social Security retirement.

Key here is that the employment was not covered by Social Security. Most pensions are based on employment that is covered by Social Security. If you pay Social Security tax on your wages or self-employment, then you are in covered employment.

Military service has been covered employment for Social Security for many years so a military retirement pension does not reduce Social Security retirement.

The WEP is not a direct reduction of your own Social Security retirement. It is a change in the formula used to compute a retirement amount that results in a lower retirement benefit. As a result, estimates of your SSA retirement amount on your Statement or from the online Retirement Estimator will not be accurate. Instead, use the WEP Calculator for your retirement estimate. The WEP Calculator is in the Retirement Planner portion of the Social Security website, www.socialsecurity.gov.

The Windfall Elimination Provision is not new. It dates 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.

I will write more about the Windfall Elimination Provision later this week. Additional WEP information is here.

WEP

Medicare claim number

Q: I have Medicare through my own Social Security retirement and my Medicare number is based on my Social Security number (SSN). If I eventually receive benefits through my husband’s Social Security record, will my Medicare claim number change to show his SSN?

A: No. Even if you start to receive Social Security through his record, your Medicare claim number will remain based on your own SSN.

If your Medicare coverage was only through his record, then your Medicare claim number would be based on his Social Security number.

On April 16, 2015, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, which became Public Law 114-10. Pertinent to this question, a section of this legislation directs the Secretary of Health and Human Services, the agency responsible for Medicare, to establish procedures to ensure that a Social Security number is not displayed on the Medicare card. I have no other information about this topic.

General Medicare information is on the Social Security website at www.socialsecurity.gov/medicare/.

Details about Medicare coverage is on the Medicare website, www.medicare.gov.

 

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.

 

Social Media and Social Security

The official Social Security Administration website, www.socialsecurity.gov, is just one online channel used to reach the public. Many other venues are available for your use.

Agency use of social media supports the SSA mission to “deliver Social Security services that meet the changing needs of the public,” and a vision to “provide the highest standard of considerate and thoughtful service for generations to come.”

A full directory of Social Security social media channels to help reach a broader audience and engage citizens is at the website social media hub. From there, here are some of the main social media sites. More are there for you to use.

Started very recently, read the SSA blog, Social Security Matters. It gives readers information about a variety of topics, including programs, online services, current events, and human-interest stories, usually in greater detail than typically shared on other social media platforms. The blog encourages discussion and offers important retirement and disability related solutions.

Social Security is on Facebook to share information about SSA programs, policies, and services with our vast network of followers and advocacy groups. It is monitored to provide quick-turnaround responses to select questions and comments that people post.

Follow Social Security on Twitter (@SocialSecurity). This is the Twitter account for the SSA Office of Communications.

Go to SSA on YouTube for videos and public service announcements to increase program awareness. Several include cats.

For more, go to www.socialsecurity.gov/socialmedia/.

A personal thank you to readers sharing my Areavoices posts with others. I appreciate it.

SocialMediaHub

Leading to the Social Security Act of 1935

SSAHistory

A lot of planning took place leading to the Social Security Act of 1935.

On June 8, 1934, President Franklin D. Roosevelt, in a message to the Congress, announced his intention to provide a program for Social Security.

Then, on June 29, 1934, the President created by Executive Order the Committee on Economic Security, which was composed of five top cabinet-level officials chaired by Frances Perkins, Secretary of Labor. The committee was instructed to study the entire problem of economic insecurity and to make recommendations that would serve as the basis for legislative consideration by the Congress. The CES assembled a small staff of experts borrowed from other federal agencies and immediately set to work.

In November 1934 the Committee on Economic Security sponsored the first-ever national town-hall forum on Social Security at which outside experts and the general public could offer their input in the development of the legislative proposal.

The CES did a comprehensive study of the whole issue of economic security in America, along with an analysis of the European experience with these perennial problems. Their full report was the first comprehensive attempt at this kind of analysis in many decades and it stood as a landmark study for many years. In slightly more than six months, the CES developed a Report to the Congress and drafted a detailed legislative proposal.

Information for today’s post is from the History section of the Social Security website.

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