Social Security
Essentials
for
OPERS Employees
Earning Credits
40 Credits for retirement
Maximum 4 credits in 1 year
$1,130 earnings = 1 credit in 2012 ($4,520)
Retirement Benefits
Worker
Reduced benefits as early as age 62
Full benefits at age 65-67
Increased benefits after full retirement age (FRA)
Wife or Husband
As early as age 62
At any age if caring for child under age 16 or disabled
Divorced spouses may qualify if married at least 10 years
Child
Unmarried and up to age 18 or 19 if still in high school
Any age if disabled before age 22
Benefits for Dependent Spouses
Spouse may receive up to 50% of a worker’s
full Social Security benefit
A spouse benefit is reduced by amount equal
to full retirement benefit the spouse has
earned on his/her own work record
Reduced if started early (before FRA)
Survivor Benefits
Widow(er)
Reduced benefits as early as age 60 or, if disabled,
age 50
At any age if caring for child of worker under age 16
or disabled before age 22
Divorced widow(er) may qualify if married at least
10 years
Remarriage @ age 60 or later does not end benefit
Benefit at full retirement age is usually the same as
what worker was receiving at his death or would
have received at full retirement age
OPERS and Social Security
When your pension is from work not covered
by Social Security, two laws may affect your
Social Security benefit:
Government Pension Offset (GPO)
Windfall Elimination Provision (WEP)
OPERS and Social Security
Government Pension Offset (GPO)
Only applies to Social Security
spouse/widow(er) benefits
Reduces your Social Security
spouse/widow(er) benefit by 2/3 of your
OPERS pension
Does not apply to OPERS survivor pensions
Spouse Benefit Computation
Fred and Alice both paid FICA. Fred receives
$2,513/month Social Security benefit at Full
Retirement Age
Alice receives $1,400 Social Security benefit at
Full Retirement Age
Spouse 50% rate = $1,256
Alice cannot get spouse benefits because her own
Social Security benefit is greater
Alice’s own benefit offsets spouse benefit!
GPO Example: Spouse
Tom’s Social Security benefit at Full Retirement
Age is $2,513/month
Ann’s spouse benefit from Tom at her Full
Retirement Age
= $1,256
2/3 of Ann’s $2,100 OPERS
= $1,400
Ann’s Social Security spouse benefit = $ 0
Ann’s OPERS benefit offsets the spouse benefit just as any Social Security benefit she earned would
had she worked under an SSA covered job!
GPO Example: Widow(er)
Tom dies
Ann’s widow benefit
= $2,513
2/3 of Ann’s $2,100 OPERS
= $1,400
Ann’s Social Security widow benefit = $1,113
If OPERS pension is $4,975 or more, 2/3 is
greater than highest spouse/widow benefit
OPERS and Social Security
Windfall Elimination Provision (WEP)
If you have 40 credits, you will receive a
monthly Social Security benefit
Social Security benefit will likely be
computed using a modified formula due to
OPERS pension
Calculating Benefits
Lifetime Social Security earnings adjusted for
wage inflation
Add together highest 35 years
Divide total by 420 months (35 years x 12) to
calculate monthly average
Benefit reflects a percentage of lifetime average
monthly earnings figure
Calculating Benefits
Higher average lifetime Social Security
earnings produce a higher benefit but
Lower-paid workers receive larger
benefits in relation to their earnings than
higher-paid workers
% of earnings
Replacement Rates
(Approximate)
57%
Low Income Worker
$20,800 annual avg. ($10.00/hr)
$989/month benefit at full age
44.5%
Middle Income Worker
$41,600 annual avg. ($20.00/hr)
$1,543/month benefit at full age
32%
Higher Income Worker
$84,032 annual avg. ($40.00/hr)
$2,241/month benefit at full age
Why Windfall Provision?
Years with 0 earnings under Social Security
reduce average lifetime earnings figure
The result: Your average FICA earnings are
low and you look like a low-income worker
even if your PERS earnings are high(er)
Windfall reduces the higher replacement %
intended for low income workers
Windfall stops if a worker dies so survivor
benefits are not reduced
Windfall Rules
Recognizes the more years a worker has
paid Social Security taxes on substantial
earnings, the closer that person should be to
the standard benefit formula.
30+ years
21-29 years
20 or fewer years
= WEP doesn’t apply
= modified WEP
= full WEP
WEP & Your Benefit Estimate
Benefit estimates found using the “Estimate
your Benefit” option found on Social Security’s
internet home page do not figure windfall
Online WEP & GPO Calculators & webinar for
government workers are at:
www.socialsecurity.gov/gpo-wep
www.socialsecurity.gov/webinars
Medicare
Automatic if you are getting Social Security
benefits at 65
Contact SSA at age 65 if you are not getting
benefits
May apply on own Social Security record
(many OPERS employees pay Medicare tax)
or the record of a spouse -living, deceased,
disabled, or divorced
May file even if deferring cash payments
Filing for Benefits
How to File
Via the Internet at www.socialsecurity.gov
In the office or over the telephone
For an appointment, call 1-800-772-1213
When to Contact Social Security
Up to 3 months before you retire or attain age 62
If over age 62, review your work plans before
Feb. 1 to determine when benefits could start
Online Services for Beneficiaries
Change Address and Telephone*
Request Replacement Medicare Card
Request Benefit Verification Letter
Request new 1099 for taxes
Request Direct Deposit*
*Request Password
Thank You !
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