UNCOVERING SOCIAL SECURITY SECRETS - Success CE

1 UNCOVERING SOCIAL SECURITY SECRETS COPYRIGHT 2013, 2014, 2016 AFFORDABLE- Success -FIRSTCHOICE-CLIENTELL CONTINUING EDUCATION 2 Corporate Plaza Drive, Suite 100 Newport Beach, CA 92660 (949) 706-9425 (A member of the Success CE Family of Companies) 2 Copyright 2013, 2014, 2016 All Rights Reserved. No part of this publication may be used or reproduced in any form or by any means, transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Success Continuing Education. This publication is designed to provide general information on the topic presented. It is sold with the understanding that the publisher is not engaged in rendering any legal or professional services. Although professionals prepared this content, it should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

2 TABLE OF CONTENTS INTRODUCTION .. 1 UNCOVERING SOCIAL SECURITY SECRETS .. 1 CHAPTER 1 .. 3 WHAT IS SOCIAL SECURITY ? .. 3 THE BASICS .. 3 PRECURSORS TO THE SOCIAL SECURITY PROGRAM .. 4 THE SOCIAL SECURITY ACT OF 1935 .. 5 FEDERAL INSURANCE CONTRIBUTIONS ACT (FICA) .. 9 FICA Contribution and Benefit Bases 1937-2016 .. 10 Higher-Income Taxation Thresholds .. 12 Self-Employed Individuals .. 13 SOCIAL SECURITY TRUST FUNDS .. 13 ORGANIZATIONAL STRUCTURE OF THE SOCIAL SECURITY ADMINISTRATION .. 16 ETHICAL COMMITMENT .. 17 Confidentiality .. 17 Ethics Training Programs .. 18 Acting Commissioner s Message .. 19 SOCIAL SECURITY ADMINISTRATION ANNUAL PERFORMANCE REPORT .. 19 SOCIAL SECURITY Administration Values .. 20 Summary of Goals and Objectives .. 20 Agency Priority Goals .. 22 MEMBERS OF CONGRESS ARE THEY EXEMPT FROM SOCIAL SECURITY PROGRAM PARTICIPATION? .. 22 SOCIAL SECURITY STATEMENT AND MYSOCIALSECURITY ONLINE ACCOUNT.

3 23 HOW BENEFITS ARE ESTIMATED .. 26 BENEFITS CALCULATORS .. 27 Quick Calculator .. 28 Online Calculator .. 29 Detailed Calculator .. 29 Windfall Elimination Provision (WEP) .. 29 Government Pension Offset (GPO) Calculator .. 30 OVERVIEW OF INDIVIDUAL RETIREMENT BENEFITS .. 31 Differences Between Two Individual Benefit Amounts .. 33 OVERVIEW OF SURVIVORS BENEFITS .. 34 OVERVIEW OF DISABILITY BENEFITS .. 34 SOCIAL SECURITY Disability Insurance (SSDI) .. 35 Supplemental SECURITY Income (SSI) .. 35 2 OVERVIEW OF MEDICARE .. 35 MEDICAID .. 36 Children s Health Insurance Program .. 36 LONG-TERM CARE INSURANCE .. 37 POINTS TO PONDER SOCIAL SECURITY BASICS .. 39 CHAPTER 1 REVIEW QUESTIONS SOCIAL SECURITY BASICS .. 40 CHAPTER 2 .. 41 THE SOCIAL SECURITY CARD AND NUMBER .. 41 THE HISTORY BEHIND THE SOCIAL SECURITY CARD .. 41 APPLYING FOR A SOCIAL SECURITY CARD .. 43 REQUIRED DOCUMENTATION.

4 44 Proof of Identity .. 44 Proof of Age .. 46 Citizenship or Immigration Status .. 46 APPLICATION FOR A SOCIAL SECURITY CARD (FORM SS-5) .. 47 REQUESTING A SOCIAL SECURITY NUMBER FOR A CHILD .. 49 Requesting a SOCIAL SECURITY Number for a Newborn .. 49 Requesting a SOCIAL SECURITY Number for an Adopted Child .. 50 REQUESTING A REPLACEMENT SOCIAL SECURITY NUMBER .. 50 Requesting a Replacement SOCIAL SECURITY Card for an Adult .. 51 Requesting a Replacement SOCIAL SECURITY Card for a Child .. 51 REQUESTING A DIFFERENT SOCIAL SECURITY NUMBER .. 51 Requesting a Name Change .. 52 Correcting an Error on a SOCIAL SECURITY Card .. 52 REQUESTING A COPY OF AN ORIGINAL APPLICATION .. 53 Costs .. 53 PROTECTING YOUR SOCIAL SECURITY NUMBER AND CARD .. 54 Fraud Alert Fraud or Misuse of Your SOCIAL SECURITY Number .. 54 Misleading Advertising .. 54 CRIMINAL PENALTIES AND PROSECUTION .. 55 Making False Statements.

5 56 Fraud .. 56 POINTS TO PONDER THE SOCIAL SECURITY CARD AND NUMBER .. 58 CHAPTER 2 REVIEW QUESTIONS THE SOCIAL SECURITY CARD AND NUMBER .. 59 CHAPTER 3 .. 60 YOUR RESPONSIBILITIES TO SOCIAL SECURITY .. 60 CHANGES THAT NEED TO BE REPORTED TO THE SOCIAL SECURITY ADMINISTRATION 61 When Estimated Earnings Change .. 61 Reporting a Change of Address .. 61 Reporting a Name Change .. 62 Changing Direct Deposit Accounts .. 62 3 Change in Marital Status .. 62 Caring for a Child .. 62 Criminal Activity .. 63 If a Beneficiary Leaves The United States .. 64 Office of International Operations .. 64 THE DEATH OF A BENEFICIARY .. 65 Railroad Retirement Benefits .. 65 OVERPAYMENTS .. 65 PENSION PAYMENTS .. 67 SOCIAL SECURITY CLAIM NUMBERS .. 67 SOCIAL SECURITY Claim Identification Codes .. 69 POINTS TO PONDER YOUR RESPONSIBILITIES TO SOCIAL SECURITY .. 70 CHAPTER 3 REVIEW QUESTIONS YOUR RESPONSIBILITIES TO SOCIAL SECURITY .

6 71 CHAPTER 4 .. 72 RETIREMENT BENEFITS .. 72 HOW WORK CREDITS ARE EARNED .. 73 RETIREMENT AGES .. 74 Maximum SOCIAL SECURITY Benefit .. 75 Early Retirement Age 62 to FRA .. 76 Retirement Benefit Reductions at Age 62 .. 77 Retirement Benefit Reductions at Age 63 .. 78 Retirement Benefit Reductions at Age 64 .. 79 Retirement Benefit Reductions at Age 65 .. 80 Full Retirement Age (FRA) .. 80 Full Retirement Age (FRA) According to Birth Year .. 81 VOLUNTARY SUSPENSION .. 81 The File and Suspend Strategy No Longer Applies .. 82 The Bipartisan Budget Act of 2015 .. 83 Delayed Retirement After FRA .. 84 Percentile Increase For Delayed Retirement .. 85 Delayed Retirement Credits After Age 66 .. 86 Delayed Retirement Credits After Age 67 .. 87 Delayed Retirement Credits After Age 68 .. 88 Delayed Retirement Credits After Age 69 .. 89 FILLING THE INCOME GAP .. 89 A Brief Note about Reverse Mortgages.

7 90 THE BENEFICIARY S PRIMARY INSURANCE AMOUNT (PIA) .. 91 PIA Formula Bend Points .. 92 Special Minimum Benefits .. 94 OLD-LAW BENEFIT CONTRIBUTION .. 95 COST OF LIVING ADJUSTMENTS (COLA) .. 96 Projected COLA and AWI Increases .. 98 4 COLA History 1975-2015 .. 99 2016 SOCIAL SECURITY Changes .. 100 Tax Rate .. 100 Maximum Taxable Earnings .. 100 Retirement Earnings Test Exempt Amounts .. 101 SOCIAL SECURITY Disability Thresholds .. 101 Maximum SOCIAL SECURITY Benefit .. 101 Supplemental SECURITY Income .. 102 Estimated Average Monthly SOCIAL SECURITY Benefits .. 102 ESTIMATE YOUR RETIREMENT BENEFITS .. 103 Estimate Your SOCIAL SECURITY Benefits Examples .. 103 HOW THE SOCIAL SECURITY ADMINISTRATION POSTS EARNINGS .. 104 Correcting Your SOCIAL SECURITY Earnings Record .. 105 SOCIAL SECURITY RETIREMENT BENEFIT WORKSHEET .. 106 Sample Benefit Worksheet .. 107 FAMILY MAXIMUM BENEFIT.

8 108 Determination of Family-Maximum Bend Points for 2016 .. 110 FACTORS THAT CAN CHANGE RETIREMENT BENEFIT AMOUNTS .. 110 Are You Still Working? .. 111 Does Longevity Run in Your Family? .. 111 Will You Continue to Have Health Insurance? .. 112 Are You Eligible For Benefits on Someone Else s Record? .. 112 Will You Have Other Income Such as Pension Plans or IRAs Available? .. 112 Will Other Family Members Qualify For Benefits on Their Own Record or on Your Record? .. 112 APPLYING FOR BENEFITS .. 113 When Benefits are Paid .. 113 RECEIVING BENEFITS WHILE STILL WORKING .. 114 The Earnings Test Exemption .. 114 Annual Retirement Earnings Test Exempt Amounts .. 115 Special Earnings Limit Rule .. 117 Special Payments After Retirement .. 118 Self-Employed Individuals .. 119 If You Worked for Salary/Wages .. 120 Domestic Service Workers .. 120 Special Provision for Reporting Wages Paid to Household Workers.

9 123 Family Employment .. 123 HOW UNEMPLOYMENT COMPENSATION AFFECTS BENEFITS .. 124 HOW MILITARY SERVICE AFFECTS BENEFITS .. 125 Special Earnings Credits for the Military .. 126 WORKING FOR A NONPROFIT ORGANIZATION .. 127 STATE AND LOCAL GOVERNMENT EMPLOYEES .. 127 SAME-SEX COUPLES AND COMMON-LAW MARRIAGES .. 128 5 Basic Requirements for a Common-Law Marriage .. 128 IF YOU ARE LIVING OUTSIDE THE UNITED STATES .. 129 TAXATION OF BENEFITS .. 129 Substantial Earnings Thresholds .. 130 Taxation Thresholds .. 131 CHECKING THE STATUS OF YOUR BENEFIT APPLICATION .. 133 Benefit Verification Letter .. 134 APPEALING A DECISION ON A CLAIM .. 134 Step 1 Reconsideration .. 135 Step 2 Hearing .. 135 Step 3 Review .. 135 Step 4 Federal Court .. 135 WAYS TO RECEIVE BENEFITS .. 136 Electronic Deposits .. 136 Direct Express Card .. 136 Information for the Blind .. 137 RIGHT TO REPRESENTATION ASSIGNING A REPRESENTATIVE PAYEE.

10 137 Representative Payee Fiduciary Responsibilities .. 142 Beneficiary Banking Accounts .. 143 Changes to Report to the SOCIAL SECURITY Administration .. 145 If a Representative Payee Resigns their Payee Position .. 147 If the Beneficiary Dies .. 147 A Special Note About Blind or Disabled Children Receiving SSI Benefits .. 147 Representative Payee Fee Agreements .. 148 WHAT EVERY WOMAN SHOULD KNOW .. 151 Marital Status and Poverty .. 153 If You Change Your Name .. 153 Victims of Family Violence .. 154 THE KEY ROLE OF ADVISORS .. 155 POINTS TO PONDER RETIREMENT BENEFITS .. 158 CHAPTER 4 REVIEW QUESTIONS RETIREMENT BENEFITS .. 159 CHAPTER 5 .. 160 SOCIAL SECURITY SURVIVORS BENEFITS .. 160 FULLY INSURED VS. CURRENTLY INSURED .. 161 LUMP SUM DEATH BENEFITS .. 163 WHAT TO DO WHEN A FAMILY MEMBER DIES .. 163 Surviving Spouses Benefits .. 164 Surviving Divorced Spouses Benefits.