Tag Archives: Social Security

Financial Perspectives: Does your social security just go away when you die?

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By Dave Stanley
Integrity Financial Services, LLC

“Those planning their retirements should consider what, if any, Social Security benefits could be available if you are the spouse, child, or parent of a worker who dies.” Dave Stanley

Many people planning for when they no longer work forget to include potential Social Security Survivors Benefits.

Photo from pxhere.com

In 2021, workers can earn up to four credits per year, one credit for each $1,470 in wages or self-employment income. If a worker has hit $5,880 in wages, they have earned their maximum four credits the year.

How do those credits work?

Depending on a workers’ age at the time of death, the number of credits necessary to provide survivors’ benefits varies. The younger a decedent is, the fewer credits are needed for family members to get survivors’ benefits.

When a worker dies, benefits may be disbursed to their children and the surviving spouse still caring for the children, even if that worker doesn’t have enough credits. These survivors can receive benefits as long as the worker has credit for at least one and one-half years of work, or six total credits, in the three years preceding their death. If there is no surviving spouse, payments typically go to a child eligible for benefits on the deceased worker’s record. However, you will want to talk to a Social Security expert or claims representative about your options because of everyone’s unique situations.

Who can get monthly survivor benefits?

Typically, these family members are eligible to receive monthly benefits when you pass away.

  • Your widow or widower who is at least age 60. Or a disabled widow or widower aged 50 or older.
  • In certain strict circumstances, your surviving former spouse may be eligible.
  • Your widow or widower of any age who is caring for your child younger than age 16. Or if disabled and receiving a child’s benefits.
  • An unmarried child aged 18 or 19 and a full-time student in elementary or secondary school.
  • A child 18 or older with a disability that began before they turned 22 may qualify.

What do you do when a family member passes away?

As of 2021, you still cannot report that death or apply for survivors’ benefits online. That’s why you need to contact Social Security and your financial advisor as soon as possible. The funeral director will often report the death to Social Security if you have provided them with the deceased’s Social Security number.

There may be instances when you want or need to speak to a Social Security representative directly. In that instance, you can call the SSA at 1-800-772-1213 during regular business hours.

What are some other considerations and caveats?

Suppose you don’t have a surviving spouse. A one-time, lump-sum death benefit of $255 might be paid to your surviving spouse if they were living with the deceased. If you were living apart, the spouse still might qualify if they received certain types of Social Security benefits on your record. In that case, the death benefit goes to any child eligible for benefits on your record in the month of death.

Suppose you were already getting benefits when you died. In that case, your survivors must return the benefits you may have received for the month of death or any later months. For example, if you passed away in September, you must return all benefits paid in October. Be sure your loved ones know they should not cash any checks received for the month in which you died or later.

Summing it up: These are just some of the many rules, regulations, deadlines, and other nuances regarding Social Security survivor benefits. That’s why it makes sense to sit with a qualified Social Security expert so that you have a basic game plan in place when you or your spouse passes away. Planning will give you and your loved ones greater peace of mind when you are no longer there to help them.

Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or  Register for Dave’s FREE Newsletter at 888-998-3463  or click this link:  Dave Stanley Newsletter – Annuity.com  Dave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.

Understanding Social Security benefits

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Courtesy Michigan State University Extension

By Scott Matteson, Michigan State University Extension


A majority of us go to work every day and probably never stop to think about when we are going to retire, let alone if we will ever collect Social Security when we do. According to the Social Security Administration (SSA) there are currently 173.5 million people working and paying social security taxes. Of the money being collected through the tax, 85 cents of each tax dollar is paid to the 62 million people currently receiving benefits of which 46 million are retirees and their families. In addition, 15 cents of each tax dollar goes into a trust fund and less than one penny per tax dollar is spent to manage the program.


How do you qualify for Social Security? First, you should apply for a social security number if you do not already have one; this allows the SSA to track your earnings while you are working and to track your benefits when you start receiving them. Qualification is based on a credit system. You earn one credit for $1,200 in earnings per year up to a maximum of four credits per year. It takes 40 credits to qualify for benefits; in other words, ten years of work.


How do you determine what your full retirement age is? Most people will tell you they think full retirement age is 65 but it’s not quite that simple. According to the SSA if you were born in or prior to 1943, congratulations! You are considered to be at full retirement age and can draw a full retirement. If you were born from 1943 to 1960, your age of full retirement increases gradually as shown in the following chart:

When should you begin taking SSA Benefits? It really comes down to how comfortable you feel and what you can afford to live on. You can elect to begin receiving benefits as early as age 62. For example, if you begin receiving benefits at age 62 and your retirement age is 66 you can expect your benefit to be 30% less than if you would have waited. The opposite is true if you wait until age 70. If you delay receiving benefits, they will increase by a certain percentage depending on date of birth as shown in the chart below.

For further help in determining when you may want to begin taking SSA benefits visit www.socialsecurity.gov/myaccount and sign up for a free account. The site will give you estimated figures for early, full and delayed benefits. Along with this you will be able to see disability benefits if you were to become disabled and survivors benefits when you die.


For additional information the Social Security Administration has two great publications they can be found at the following links: Retirement Benefits and When to Start Receiving Retirement Benefits.


Michigan State University Extension offers financial management and home ownership education classes. For more information of classes in your area, visit MI Money Health.


This article was published by Michigan State University Extension. For more information, visit https://extension.msu.edu. To have a digest of information delivered straight to your email inbox, visit https://extension.msu.edu/newsletters. To contact an expert in your area, visit https://extension.msu.edu/experts, or call 888-MSUE4MI (888-678-3464).



How Do You Know When It’s Time to Retire?

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Courtesy Vista Springs Assisted Living

 

By Vista Springs Assisted Living

 

The Baby Boomer generation officially arrived on the doorstep of retirement age back in 2011, and an estimated 10,000 people are now retiring daily. But while 65 is understood to be the age of retirement, many aging adults are choosing to delay retirement living. Given the unclear nature of retirement age, many people are struggling with the question of when to make the leap. Here are five factors to consider when deciding when to retire:

1. Your Health

Taking a hard, honest look at your health can be difficult, but knowing exactly what is happening with your body and mind should be a priority when considering retirement. If you’re hale and hearty, working for a few more years could mean more savings for a long and enjoyable retirement, but if your health is less than ideal, it may be worth it to retire earlier than later in order to get started on all the experiences you’ve put off until you had the time. In addition, keep in mind the health of your spouse, friends, and family members: you may not want to work through their healthy years, regardless of how much longer you’re able to.

2. Your Finances

While some experts are questioning the four percent rule, and it may not apply to some people’s specific situations, it still offers a basic guideline for how to plan your finances for retirement. The four percent rule states that in your first year of retirement, you should budget 4% of your savings for your annual spend; for every subsequent year, budget 4% with inflation factored in. You should also include any investments into your calculations, and keep a sharp eye on the markets – investment returns can be critical during the first ten years of retirement.

3. Healthcare Costs

$275,000: that’s Fidelity’s estimate for how much a retired couple will spend on healthcare over the course of their retirement. While that number may be shocking, it’s also a very real part of the costs of retirement, and something you need to plan for. Ensuring that you have the insurance and the savings to deal with general health care as well as any health issues that may arise is crucial to choosing a time to retire.

4. Social Security Benefits

Another factor to consider is the possibility of social security benefits. If you were born after 1943, you can expect an eight percent increase in benefits for each year you work after 65; if you choose to retire earlier, benefits are reduced. Increases cease at age 70, so waiting to claim benefits until then would yield maximum benefits. But be strategic: depending on other factors retiring at 70 could be unrealistic or even impossible.

5. Your Family

While the decision of when to retire is highly personal, you should also factor in the important relationships in your life. Be sure to have clear and honest discussions with your spouse or significant other as to what you want your retirement to look like. Retirement living can take the shape of traveling or relaxing, being with family or spending time on personal goals, and if you and your spouse have different visions of retirement, you may want more time for planning.

 

Your health, personal finances, investments, and relationships all factor into when you retire, and the truth is that there’s no longer a single age at which people can expect to retire. Talk with your family, doctors, and financial advisors on what time works best for you.

 

Reprinted with permission from Vista Springs Assisted Living.

The Importance of Guaranteed Retirement Income

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Courtesy Vista Springs Assisted Living

By Vista Springs Assisted Living

 

For most adults reaching retirement age, finances are looking pretty grim. By most studies, more than half of the Baby Boomer generation isn’t financially prepared for retirement, and as many as 30% have no retirement savings at all. Experts are worried about how new retirees will fare, or if retirement as we currently think of it will even still exist. So if savings can’t save the day, what can?

Why do you need it?

While many of the people who have been retired for a while have managed to maintain their nest egg while enjoying pre-retirement lifestyles and spending habits, younger retirees and adults approaching their full retirement age shouldn’t count on the same fortune. Americans nearing retirement have a median retirement savings of about $147,000, which is more than $500,000 shy of the amount that experts project is necessary for a comfortable, financially stable retirement.

 

Sources of retirement income are one way that current and future retirees are dealing with their finances. From estimated medical costs as high as $280,000 to cost of living to travel and entertainment, there’s so many aspects of retirement that require financial security. So what can you do?

What are your options?

Social Security

The in’s and out’s of Social Security can be difficult to navigate. If you’ve already claimed your benefits and have been receiving monthly payments for a year or more, the amount you can receive each month is more or less locked in aside from cost-of-living increases. If you haven’t claimed yet, or if you’ve been receiving benefits for less than a year, you have some choices to go over with your financial advisor.

 

First, the age at which you claim benefits has a huge effect on how much money you’ll receive each month. At the minimum age of eligibility, 62, your benefit could be reduced by as much as 25-30%, depending on your full retirement age (FRA). Then, at your FRA, you can receive your full benefit with no reductions. Or, for every year you wait to claim after your FRA and up to age 70, you can earn an 8% bonus to your benefit. Everyone’s situation is different, so one age is not necessarily always better than another, but many financial planning experts advise waiting and betting bonuses if your health and financial situation will allow.

 

Employer Pensions

Today, employer pensions are becoming rare, but they do still exist. Public service workers, such as the police force, firefighters, judges, and public teachers have always had pension plans, and other government positions also offer pensions. Because pensions are part of an employee’s compensation package, the amount of retirement income they provide varies based on industry, position, and even from person to person.

Retirement Accounts

While you can open your own retirement accounts, they are generally associated with employer-provided benefits. These benefits, such as 401(k)s, 403(b)s, deferred comp plans, SIMPLE or SEP IRAs, and more, may not be income like pensions are, but function in much the same way after retirement. You are required to withdraw a minimum amount per year after age 70½, though earlier withdrawals may help reduce your lifetime tax bill. Transfers can be done in a lump sum (though we don’t recommend it), quarterly, monthly, or on a different schedule as long as the minimum is met annually.

Savings Accounts

Your personal savings aren’t actually guaranteed income, but barring emergency expenses, you should treat money you withdraw about the same as you treat Social Security payments or retirement account withdrawals. Budget your spending and pay yourself a monthly paycheck from your savings account, and don’t go over that budget. The main difference is that you can withdraw more money if you need to, in case of an emergency medical expense for example, whereas other sources of retirement income generally pay out a regular amount that you have little to no control over.

Annuities

Annuities are somewhat unique in this list, as they can be obtained after you’ve already retired, and some, like fixed indexed annuities, have the option to be truly guaranteed retirement income, meaning that you will always receive income from them regardless of your financial situation, the markets, and other variable factors. There are different types of annuities that may be better or worse for your needs, which you should discuss with a financial advisor.

Part-time Work

And of course, one way to earn retirement income is simply by earning income from a job. There are many part-time work opportunities that allow retirees to supplement their savings while still maintaining a retirement lifestyle, and more retirees are becoming entrepreneurs for enjoyment and income. Continuing to work isn’t part of the traditional picture of retirement, but it’s quickly becoming more common.

 

While retirement savings across the board aren’t where they should be, a financially stable retirement is possible with enough planning. Take stock of your options for retirement income, and speak with a financial advisor to get the clearest picture of your finances.

 

Reprinted with permission from Vista Springs Assisted Living.

 

Senior Living: Open Enrollment Season for Medicare Starts Oct. 15

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By Amanda Haberlein,

Public Relations/Communications Coordinator for the Area Agency on Aging of Western Michigan

 

Each year Medicare offers an Open Enrollment period for those who have a Medicare Part D prescription drug program. Open Enrollment begins Oct. 15 and lasts through Dec. 7 and is the time when Medicare beneficiaries are encouraged to review their current plan and determine if it is still the best option to fit their current needs. This is the only time during the year that beneficiaries can make changes to their prescription coverage so it’s important that they review all the factors when making their decision.

 

areaonagingIn fact, the Michigan Medicare/Medicaid Assistance Program (MMAP) which utilizes volunteers to help people make informed health care decisions, including choosing a prescription coverage plan, recommends people follow the five steps below during Open Enrollment.

 

Five Steps to Choosing the Best Medicare Part D Prescription Coverage:

 

Review your current plan. Experts recommend that everyone reviews their current plan, even if you are happy with the coverage you have received. Plan information can change each year resulting in changes to medications that are covered, premium prices and even the co-pay amounts. Just because your current plan has met your needs, doesn’t mean it will continue to for the next year. Make note of any changes you see in your current plan and if they don’t work for you be sure to look at the other options available. If you are still happy with your current plan after you’ve reviewed any updates, simply do nothing and you will remain enrolled in the same plan.

 

Consider ALL your medications. It’s not uncommon to be prescribed a medication that you weren’t taking at this same time last year. Be sure to have a current list of all the medications you are taking and check each one against the plan you are considering to see if it’s covered and what the cost will be. Don’t assume that just because it is a low cost medication or well known drug that it will be covered in all plans. A simple way to start is to visit www.medicare.gov and input all your medications. They will then generate a list of plans that will cover those prescriptions. Again, you need to review those plans for things such as premiums, co-pays and coverage amounts before making a final decision.

 

See if you qualify for help. Experts encourage those on a fixed income to see if they qualify for help through the Extra Help, Medicare Savings or the Medigap Subsidy Program. Extra Help is a Social Security program that helps to reduce or eliminate prescription plan premiums, deductibles and copays for covered medications. The income limit for the Extra Help program is $1,505 for a single and $2,023 for a couple (asset limits of $13,640 for single and $27,250 for a couple). The Medicare Savings Program is a Medicaid program that will pay the Medicare Part B premium, with income limits of $1,010 for single and $1,355 for a couple (assets must be below $7,280 for single and $10,930 for a couple). The Medigap Subsidy Program through the Michigan Health Endowment Fund will provide assistance with Medigap premiums if the beneficiary has a participating policy. The income limits for this program are $1,485 for a single and $2,003 for a couple, with no asset limit. The financial assistance plans can make prescription costs more affordable for those on fixed incomes. Experts say often people are unaware that these programs are available to help and can often make a big difference for those who qualify.

 

Don’t procrastinate!  Even though Open Enrollment seems like a long time, experts encourage people not to procrastinate and to start researching early. “We encourage people to start right away, this way if they run into questions they have time to get their questions answered and they aren’t left scrambling,” said Bob Callery, Program Coordinator at MMAP. “During Open Enrollment, our volunteers across the state as well as those that work at Medicare receive a lot of phone calls and it may take a day or two to return calls and sometimes longer, depending on the call volume. Any technical glitches with the medicare.gov website can make people anxious, so we always encourage starting early.”

 

Ask questions! Changes to your Medicare Prescription coverage can only be made during open enrollment, which means if you make a mistake you will be stuck for the rest of the year. Mistakes can translate into increased costs and confusion about coverage.  Experts encourage asking questions to make sure you understand your coverage. “Medicare and the Prescription Drug Plans can be confusing for a lot of people, which is why we have volunteers to help,” said Callery. “If you have questions, you can look at the Medicare.gov website, call Medicare directly or call MMAP. We just ask that you understand we may not be able to return your phone call the same day, depending on call volume, but we do everything we can to answer all the questions that come to us.”

 

Experts also encourage those with the Blue Cross Blue Shield Legacy Medigap plans to contact MMAP today as Blue Cross Blue Shield announced this summer that they are raising the monthly premium for these plans starting January 2017.  For many people, these premium prices can be a significant increase to their monthly budget.  MMAP volunteers can help individuals review their options if they are enrolled in one of the BCBSM Legacy plans and wish to find a better option.

 

The Michigan Medicare/Medicaid Assistance Program (MMAP) is a free and unbiased statewide program made up of volunteers who can help you sort through Part D information. Volunteer counselors have gone through extensive training and can help navigate the maze of Medicare and Medicaid. To speak with a counselor, contact 1-800-803-7174.

 

Have questions on services for older adults and caregivers? Contact the Area Agency on Aging of Western Michigan at 616-456-5664 or 888-456-5664 or visit  www.aaawm.org for more information and resources.

 

Senators Cosponsor Resolution to Commemorate and Protect Social Security

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U.S. Senators Gary Peters and Debbie Stabenow announced today that they have cosponsored a resolution commemorating the 80th anniversary of the Social Security Act, which established the Social Security program that provides elderly and disabled Americans, and their spouses and children, with a financial safety net. President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935.

US Senate Seal“Social Security has helped reduce poverty and provide financial security for millions of Americans, whether they are retirees leaving the workforce, disabled Americans who can no longer work or children whose parents have died,” said Senator Peters. “I’m honored to help celebrate the 80th anniversary of this essential safety net program, and I will continue working to protect and strengthen Social Security so that it can help support future generations of Americans, including our most vulnerable citizens.”

“Social Security has lifted a generation of senior citizens out of poverty and created economic security for millions of Americans,” said Senator Stabenow. “Americans have earned these benefits and should be able to count on them when they retire. As we celebrate this important anniversary, I am committed more than ever to continuing the fight to protect and strengthen this critical program for current and future retirees.”

Social Security offers two types of essential benefits—retirement benefits and disability benefits—that are earned by workers paying Social Security taxes on their wages. Nine out of ten Americans age 65 and older receive modest benefits that help provide financial security in retirement. The average retirement benefit is $1,300 per month and the average disability benefit is $1,200 per month. In 2014, more than 48 million Americans received retirement and survivors benefits, and 11 million received disability benefits. Michigan is home to more than 2 million beneficiaries.

The resolution urges Congress to protect and strengthen Social Security so it can continue delivering benefits that provide a safety net for workers and their families, and to ensure that the program remains solvent past its currently projected shortfall in 2034. To read the resolution, click here.