Social Security
Frank Van Nostrand
Public Affairs Specialist
Retirement
Insurance
Survivors
Insurance
Disability
Insurance
Social Security Programs
Supplemental
Security
Income
Medicare
Other Programs
Retirement
Income
Social Security
Cost-of-Living Adjustments
Effective Date
June 1975
June 1976
June 1977
June 1978
June 1979
June 1980
June 1981
June 1982
June 1983
June 1984
June 1985
Dec 1986
Dec 1987
Dec 1988
Dec 1989
Dec 1990
Dec 1991
Amount
8.0%
6.4%
5.9%
6.5%
9.9%
14.3%
11.2%
7.4%
3.5%
3.5%
3.1%
1.3%
4.2%
4.0%
4.7%
5.4%
3.7%
Effective Date
Dec 1992
Dec 1993
Dec 1994
Dec 1995
Dec 1996
Dec 1997
Dec 1998
Dec 1999
Dec 2000
Dec 2001
Dec 2002
Dec 2003
Dec 2004
Dec 2005
Dec 2006
Dec 2007
Dec 2008
Amount
3.7%
2.6%
2.8%
2.6%
2.9%
2.1%
1.3%
2.4%
3.5%
2.6%
1.4%
2.1%
2.7%
4.1%
3.3%
2.3%
5.8%
Social Security
Retirement
Insurance
Benefits
2007 Earnings
Lower
$18,182
Average $40,405
Maximum $97,500
Worker &
Worker (65/10mo) Spouse (65/10mo)
$863
$1,421
$2,185
$1,294
$2,131
$3,277
How Credits
Are Earned
2009:
--1 credit for each $1,090 in
covered employment
--maximum of 4 credits/yr
($4,360)
Credits Needed For Retirement:
Who Can Get
Retirement Benefits
Worker
 Reduced benefits at 62 (must be insured; 40 credits/10 yrs)
 Full benefits at age 65 (age 67, if born after 1960)
Full Retirement Age
Year of Birth
1937
1938
1939
1940
1941
1942
1943-1954
1955
1956
1957
1958
1959
1960 & later
Full Retirement Age
65
65 & 2 months
65 & 4 months
65 & 6 months
65 & 8 months
65 & 10 months
66
66 & 2 months
66 & 4 months
66 & 6 months
66 & 8 months
66 & 10 months
67
Who Can Get
Retirement Benefits
Worker
 Reduced benefits at 62 (must be insured; 40 credits/10 yrs)
 Full benefits at age 65 (age 67, if born after 1960)
 Increased benefits for retirement after full retirement age
Wife or Husband
 At age 62
 At any age if caring for child under 16 or disabled
 Divorced spouses may qualify
Child
 Unmarried under 18 (under 19 if still in high school)

Unmarried if disabled before age 22
How Social Security
Retirement Benefits Are Figured
Social Security benefits are based on
earnings:
Step 1 - Adjust wages for inflation
Step 2 - Average over most of your working
lifetime--(Your highest 35 years)
Step 3 - Result is “average indexed
monthly earnings”
Retirement Benefit
Computation - 2009
90% of first $744
32% of the next $3, 739
15% of remainder
over $4,483
Example:
AIME = $4700

90% X
32% X
15% X

Primary Insurance Amount


744
3739
217
=
=
=
669.60
1196.48
32.55
1898.63
Replacement Rates
Low Income Worker: 55%
Average Income Worker: 40%
Upper Income Worker: 25%
Retirement
Income
Total Retirement Income
Social Security Represents:
90%
80%
Lower 1/3
70%
60%
Middle 1/3
50%
40%
30%
20%
10%
0%
Higher 1/3
Early Retirement Benefits
(earliest - age 62)

First Three years




5/9 of 1% per month
6.66% per year
20% for first three years
Each additional year


5/12 of 1% per month
5% per year
Reduction is permanent
The Cost of Early Retirement
Year of Birth
1937
1938
1939
1940
1941
1942
1943-1954
1955
1956
1957
1958
1959
1960 & later
You will turn
age 62 in:
% of Benefits
Received at
Age 62
1999 and before
2000
2001
2002
2003
2004
2005-16
2017
2018
2019
2020
2021
2022 & later
80%
79 1/6%
78 1/3%
77 1/2%
76 2/3%
75 5/6%
75%
74 1/6%
73 1/3%
72 1/2%
71 2/3%
70 5/6%
70%
Full Retirement Age
65
65 & 2 months
65 & 4 months
65 & 6 months
65 & 8 months
65 & 10 months
66
66 & 2 months
66 & 4 months
66 & 6 months
66 & 8 months
66 & 10 months
67
If you elect reduced
Benefits and die...
Your widow
inherits
the reduction!
Your benefits may be taxed!



Good news: only 30%
have to pay taxes
Bad news: you’re
probably in that 30%
If your 1040 adjusted
gross income
(INCLUDING ½ of your
Social Security) is over
$25,000 for individual or
$32,000 for a couple,
you’ll pay taxes.
Delayed Retirement Credits
Year of Birth
1927-28
1929-30
1931-32
1933-34
1935-36
1937-38
1939-40
1941-42
1943 or later
Yearly Rate of
Increase (%)
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
How Work Affects
Social Security
Benefits - 2009
Age
Full Retirement Age
(FRA) & Above
Earnings Limit
Withheld/
Above
No Limit
Under FRA
$14,160 ($1180/mo.)
$1 for every $2
Year attaining FRA
$37,680 ($3,140/mo.)
$1 for every $3
Who Can Get Survivors Benefits
Widows/Widowers
Reduced benefits at age 60
As early as age 50 if disabled
At any age if caring for a child
of worker under 16 or disabled
Divorced widows/widowers qualify
Child
Unmarried child under 18, or
under 19 if still in high school
Unmarried child disabled before
age 22 who continues to be disabled
Who Can Get Survivors Benefits
Parents
Age 62 and was receiving
at least one-half support from
deceased worker
Lump Sum Death Payment
($255)
Living with or
entitled spouse
Entitled child
Survivors Benefits
Percentage
Full Retirement Age
100.0
Age 60
71.5
Age 50 (Disabled)
71.5
Young Widow(er)
75.0
Child
75.0
Who Can Get Disability Benefits
Worker
 Must be insured (20/40)
 Any age
Spouse
 Age 62 or older
 Any age if caring for a
child of worker under age 16
 Divorced spouses qualify
Who Can Get Disability Benefits
Child
 Unmarried child under 18, or under 19
if still in high school
 Unmarried child disabled before age 22
who continues to be disabled
Medicare Coverage



65 and older
Receiving Social Security
Disability benefits at least
24 months (Except ALS)
Permanent kidney failure
Hospital Insurance

In Patient Hospital Coverage




Skilled Nursing Facilities




Hospital Deductible: $1068
Coinsurance: Day 61-90: $267 per day
Lifetime Guarantee days (60): $534 per day
Day 21-100: $133.50 per day
Home Health Care
Hospice Care
Premium - $443

$244 with at least 30 QCs
Medical Insurance






Doctors and other Providers
Hospital Outpatient Services
Home Health Services
X-ray and Laboratory Services
Durable Medical Equipment
Ambulance
What Does It Cost You?

Monthly Premium: $96.40
Wealthier Seniors will Pay
More for their Part B in 2009
Beneficiaries who file an
individual tax return with
income:
Beneficiaries who file a
Joint tax return with
income:
Income Related
Monthly
Adjustment
amount
Total
Monthly
Premium
amount
Less than or equal to
$85,000
Less than or equal to
$170,000
$0.00
$96.40
Greater than $85,000 and
less than or equal to
$107,000
Greater than $170,000 and
less than or equal to
$214,000
$38.50
$134.90
Greater than $107,000 and
less than or equal to
$160,000
Greater than $214,000 and
less than or equal to
$320,000
$96.30
$192.70
Greater than $160,000 and
less than or equal to
$213,000
Greater than $320,000 and
less than or equal to
$426,000
$154.10
$250.50
Greater than $213,000
Greater than $426,000
$211.90
$308.30
What Does It Cost You?





Monthly Premium: $96.40
Yearly Deductible: $135
Medicare pays 80% of Approved Charge
You pay 20% of Approved Charge
By law, Physician cannot charge more
than 15% on top of Approved charge
Medicare Enrollment Periods
Initial
General
Special
What is the MediGap?




Part A Deductibles and Coinsurance
Hospital Care after day 150
Part B Deductible and Coinsurance
Non-covered Services
How Do I Close the “Gap”

Self Insure

MediCal

Medicare Supplement

Medicare Advantage
And Now There’s Part D!




You may NOT need it!
When you become eligible for Medicare,
you can purchase Part D Prescription Drug
Plans
You want to sign up when first eligible, or
you will pay more
Program is voluntary
1- 800 – 434 - 0222
The Social Security Statement
“The Future’s In Your Hands”
VERIFY
REVIEW
PLAN
Online Services
 Online retirement
application
 Retirement/
Survivors/Disability
Planner
 FAQ’s
 Medicare Card
Replacements
 Request a Statement
Call or
Visit our Website
1-800-772-1213
www.socialsecurity.gov
That’s All
Folks!!
Questions?