Stan Fromuth & Joe Olenski www.socialsecurityretirementconsultants.com (267) 684-6270 Providing guidance and assistance to the American public in making decisions on their Social Security eligibility and continuing Social Security issues.

Qualifications – Stan Fromuth & Joe Olenski Former employees of the Social Security Administration Retired with 76+ years of service with agency Regarded as program and policy experts on Social Security issues Both involved in writing and interpreting Social Security policies and procedures Both spent many years as District Managers working directly with public on Social Security issues and problems

Why do people need assistance and guidance in making decisions related to Social Security? Social Security programs are very complex Avalanche of baby boomers becoming eligible for Social Security benefits is overwhelming the Social Security Administration Changes in Social Security Regulations make it more difficult for applicants/beneficiaries to amend their decisions YOU MAY LOSE A SIGNIFICANT AMOUNT OF MONEY IF YOU FAIL TO MAKE THE BEST DECISIONS

Social Security Retirement Benefits

3 Requirements for Entitlement to Social Security Retirement Benefits You have worked long enough under Social Security covered employment You have attained retirement age You are retired within the meaning of the Social Security Act

Insured Status Requirement Measured using a provision called “quarters of coverage” In 2017, you earn one quarter of coverage for every $1300 you earn You need 40 quarters of coverage (~10 years of work) to qualify for a benefit

Attainment of Retirement Age Full unreduced benefits are paid at Full Retirement Age (FRA) FRA is based on your year of birth Benefits can begin as early as age 62 If you begin receiving benefits prior to attaining FRA, your retirement benefit amount will be permanently reduced (with one exception)

Full Retirement Age Year of Birth 1943 – 1954 1955 1956 1957 1958 1959 1960+ FRA 66 66 + 2 months 66 + 4 months 66 + 6 months 66 + 8 months 66 + 10 months 67

‘Retired’ Within the Meaning of the SS Act You do not need to stop working to be considered “retired” for Social Security purposes Social Security has set up certain income limits to determine if or to what extent an individual is retired The income limits depend on your age

Full Retirement Age and Older At full retirement age, individuals can receive their Social Security benefits no matter how much they earn

In the Year of FRA Attainment and for Months Prior to Attaining FRA Individuals reaching FRA in 2017 Can earn up to $44,880 during the months prior to the month they reach FRA with no effect on their Social Security benefit If earnings exceed the $44,880 limit in months prior to the month they reach FRA, $1.00 in benefits will be withheld for every $3.00 earned over the limit

Example An individual attains FRA in April 2017. He will work entire year and earn $120,000 ($10,000 per month) Q In which months can he receive a Social Security check? A He can receive a check for every month in 2017. He is due a check for all months beginning in April because he attains FRA in April. He is due a check for January, February and March because his earnings for those months ($30,000) are below the $44,880 allowable limit.

In the Years Prior to the Year of Attaining FRA In 2017, individuals under FRA for the entire year Can earn up to $16,920 during the year with no effect on their Social Security benefit If earnings exceed the $16,920 limit, $1.00 in benefits will be withheld for every $2.00 earned over the limit

Q A Example Can he receive any Social Security benefits for 2017? Yes A 64-year-old worker has been receiving Social Security Retirement benefits of $1,000 per month. He returns to work in January 2017 and will earn $30,000 in 2017. Q Can he receive any Social Security benefits for 2017? A Yes Earnings $30,000 Less Allowable Limit – $16,920 $13,080 over the limit Social Security withholds $1 for every $2 over the limit. $13,080 divided by 2 = $6,540 The worker will receive all his Social Security benefits except for the first $6,540.

Amount of your Social Security Benefit Benefit amount is computed using your highest 35 years of earnings The higher your earnings, the higher your SS benefit Average benefit for a retired worker in the U.S. – $1360 Maximum benefit for individual attaining FRA in 2017 – $2687

Increases in the Retirement Benefit Amount Cost of living increases Additional work and earnings Delayed Retirement Credits 2/3% of 1% increase per month (8%/year) Beginning with FRA up to age 70 Change in the reduction factor

How to Maximize Retirement Benefit Maximize your earnings and work as long as you can Do not take reduced benefits prior to FRA Defer taking retirement benefits until age 70 If you are eligible, collect another type of Social Security benefit prior to FRA or age 70 where deemed filing is not an issue.

Filing for Benefits Make an appointment! Call 1-800-772-1213 4 months prior to entitlement On-line Face-to-face at local office By phone Make an appointment! Call 1-800-772-1213

Considerations for Filing The decision of when to begin Social Security benefits is an individual one based on the individual’s unique circumstances. There is no “one size fits all option” that applies

Some Other Types of SSA Benefits That Could Affect Filing Decisions for Retirement Benefits Spouse’s benefits - Husband or wife who is at least age 62 or has a child under age 16 in care. Divorced spouse’s benefits – Divorced spouse who is at least age 62. Marriage must have lasted 10 years. Widow/widowers benefits - at least age 60 (age 50 if disabled). Divorced widow/widower benefits - at least age 60 (50 if disabled). Marriage lasted at least 10 years. Mothers/fathers benefits and divorced mothers/fathers benefits – surviving spouses who have child under age 16 in care. Disability benefits – Wage earner disabled and unable to work

Deemed Filing for Benefits Deemed filing means that an application for one type of Social Security benefit is an application for all types of benefits. Applicants cannot restrict their claims for benefits to exclude other types of benefits. Example: An application for retirement benefits is also an application for spouse’s benefits.

Benefits Where Deemed Filing Does Not Apply Widow’s/Widower’s Benefits Divorced Widow’s/Widower’s Benefits Spouse’s Benefits based on having a child in care Disability Benefits Claims for Spouse’s Benefits based on age where the applicant attains age 62 prior to January 2, 2016 and the applicant is FRA or older

Other Issues Relating to Monthly Benefits Multiple Entitlements Family Maximum Limitation Divorced Spouse Effect on Family Max Deemed Filing for Benefits Independently Entitled Divorced Spouses File and Suspend

How to obtain information and/or contact the Social Security Administration www.socialsecurity.gov 1-800-772-1213

Taxation of Social Security Benefits Part of your Social Security benefits may be taxable If you file your tax return as a couple and your combined income* is: <$32,000 $32,000-$44,000 >$44,000 no part of your SS benefit is taxable up to 50% of your SS benefits may be taxable up to 85% of your SS benefits may be taxable

Taxation of Social Security Benefits Part of your Social Security benefits may be taxable If you file your tax return as an individual and your combined income* is: <$25,000 $25,000-$34,000 >$34,000 no part of your SS benefit is taxable up to 50% of your SS benefits may be taxable up to 85% of your SS benefits may be taxable

Medicare Premiums Standard Part B premium for 2017 - $134.00 Premium amounts are higher for higher income beneficiaries 10% penalty for each year you refuse Medicare Part B and you are not covered under an employer group health plan based on your current employment or your spouse’s current employment

SSRC Q & A

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