Ask Deanna: Social Security Questions
Sue Winder asks a couple of questions about Social Security benefits, and gets a great answer from John Bishop.
Deanna Sauceda: It is Tuesday and time for Ask Deanna. This week’s questions comes from Sue Winder: “I’m 53 and my husband is 65. If something were to happen to him, would I be eligible to receive his Social Security? And then once I reach retirement age, do I get both benefits?
Phone Voice: Please try your call again later.
Deanna Sauceda: Well, that’s what I got on one of my calls to the most obvious place to find the answer – the 1-800 number for the Social Security Administration. And if I was more patient I probably would probably would have found the answer there eventually. I tried 2 more times and I got this:
Phone Voice: Okay, I’ll transfer you for agent service. Your estimated wait time is greater than 10 minutes.
Deanna Sauceda: So I went to the yellow pages and called Action Disability Representatives and talked with John Bishop.
John Bishop: The answer is probably. If he has earned enough credits by paying enough into Social Security for her to be eligible, she would get benefits from whichever account would pay higher (pay more money).
Deanna Sauceda: Alright. So Sue, you would get his SSA until you were eligible and then the Social Security Administration does an assessment and gives you the higher of the two, but not both.
And next week’s question has to do with a favorite subject around here: fishing. [...]
Will Social Security Be There For You?
Tim Rosen shares his thoughts on how to protect yourself from the consequences of a dwindling Social Security trust fund.
Tim Rosen: Today, the U.S. News & World report came out with their findings that Social Security is broke. And to most of you, that is no surprise. They’ve actually updated the numbers that, as of last year, they reported that Social Security is good through 2017, referring to the trust fund for Social Security. They’ve now changed that and updated it to 2016. What I’ve tried to do here at TimRosen.tv and Conservative Money Talk, is to take the news and interpret it and to share it with you in a way that you can either benefit from it or protect yourself from it. So what do we do with this news that most of you knew anyways that Social Security is broke? What do we do with that?
Well, one, if you’re already retired, you have priority here as far as your Social Security benefits go. You’re already drawing, you’re pretty much safe. For those of you that are still working and are hoping to get Social Security at some point, well, you’ve got a challenge there. Expect to see them increase the amount of Social Security that you pay into as a percentage of every pay check. Right now it’s 7.5%; you could expect that to go to 8.5% so they can make up for this deficit. You should also expect to see them draw out and extend the date, the age that you qualify for Social Security benefits.
Bottom line, what does it all mean? Don’t count on Social Security for your retirement. When it first came out it was designed to keep you from being destitute, from being hungry. And if you’re lucky enough to get some, maybe that’s what it will do. But my encouragement to you… what does it all mean? Pay yourself, build up your wealth. You can pay yourself monthly and nowadays, with online banking, ING and Direct Capital One, maybe your credit union has a savings that you can add to automatically every month. Out of sight, out of mind. You can make it happen. You can also invest in the market. There are great opportunities if you have time to be in the free markets right now and benefit over time to keep ahead of inflation and to have some resources from which to draw from to create your retirement income.
That’s today’s news.
Ron Paul: “Politicians Must Stop Stealing from Seniors and Our Future”
Here’s a great commentary by Congressman Ron Paul. He quotes an economist who says that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today!
Ron Paul: There has been a lot of talk in Washington recently about senior citizens, mostly about how various healthcare reform models would help or hurt them. But there is another critical issue that has quietly devastated seniors financially over the last few decades. It concerns how the cost of living is calculated. How does the administration justify not giving a cost of living increase to Social Security recipients this year?
According to the official Consumer Price Index calculation, life has gotten cheaper for the first time in decades. If the government can show statistically that the cost of living has gone down, not up, then they can make the case for not giving a cost of living increase to social security recipients. But does this match reality? Using older calculations of CPI, the cost of living has actually increased – by roughly 5 percent!
The CPI (Consumer Price Index) is a calculation based on the average price of a fixed basket of goods that was initially designed to help businesses adjust for inflation. The government eventually started using it to determine cost of living adjustments for entitlement programs. Couple that with politicians’ discovery that they could raid the social security trust fund to pay for new spending programs, and you have a perfect storm to deny seniors what they were promised, while hiding the true size of the deficit. For politicians, it is a win-win.
For seniors, it is a different story. Economist John Williams of Shadow Government Statistics has estimated that if the original methodology of CPI had not changed, Social Security checks would be nearly double what they are today. This represents a lot of money that politicians have been able to literally steal from seniors, to spend on their own wasteful programs. One example of how they do this is to substitute hamburger for steak, which lowers the average price of that basket of goods. But living on hamburger, or maybe dog food, instead of steak does not represent a constant standard of living. This renders the measurement virtually meaningless, even though politically it comes in very handy.
I have introduced legislation to keep politicians in Washington from ever raiding the Social Security trust fund again. HR 219 The Social Security Preservation Act would assure that all monies collected by the Social Security Trust Fund would only be used in payments to beneficiaries, or be placed in interest bearing certificates of deposit. This would at least stop the bleeding of the fund, and take away some incentive to tease and torture the numbers in order to give seniors the minimal amount. This would also cut off a source of funding for government growth, so it is not likely to get easy support from many politicians.
It is bad enough that Washington imposes high payroll taxes on American workers. The least Congress could do is use the tax dollars for their stated purpose. Instead, seniors will have a harder and harder time trying to survive on a fixed income in an economy based on variables and deception. For them, it is too late to start over. Today’s young people will be forced to pay into the system for years to come. The first step towards solving the impending crisis facing Social Security is to stop politicians from raiding the trust fund and to significantly cut federal government spending.
Pump Up Your Social Security
A few days ago, CNBC’s Sharon Epperson shared her helpful advice on how to maximize your Social Security benefits.
Reporter: This morning on today’s Fountain of Youth: Maximizing Social Security Payouts. More than 52 million Americans who draw Social Security will not see a cost of living increase next year. But according to US News and World Report’ Fall Money Issue, there are ways to pump up your benefits. Sharon Epperson is the MSNBC’s personal finance correspondence. Sharon, good morning.
Sharon Epperson: Good morning.
Reporter: First, before we get to the ways to pump up your benefits, let’s talk about why no cost of living increase this year.
Sharon: No cost of living increases because it’s tied to consumer prices and consumer prices have been going down. This is the first time that there’s not going to be a cost of living increase since 1975. But President Obama is trying to urge Congress to have a $250 one-time fee paid to retirees.
Reporter: To compensate for that.
Sharon: To compensate for that, but there’s a lot of debate.
Reporter: But that may or may not pass.
Sharon: It may or may not pass.
Reporter: Okay, so let’s talk about what we need to do, then we’ll know what we need to do in terms of pumping up our benefits. You talk about delay claiming benefits and we’ve got a graphics here to tell you why it’s so important. Read more
No Social Security Benefit Increase In 2010
For the first time in 30 years, Social Security recipients in the United States will not receive an annual adjustment in benefits. More than 52 million older Americans depend on Social Security for all or part of their retirement income. As pension funds and the stock market have declined in the last decade, Social Security has become the primary – rather than supplemental – income for many retirees. VOA’s Jeff Swicord introduces us to one Social Security recipient who is trying to stay afloat.
Social Security Confirms: No COLA in 2010!
Prompt Passage of Economic Recovery Act Payment for 2010 Needed
Law Does Not Provide for a Social Security Cost-of-Living Adjustment for 2010
With consumer prices down over the past year, monthly Social Security and Supplemental Security Income benefits for more than 57 million Americans will not automatically increase in 2010. This will be the first year without an automatic Cost-of-Living Adjustment (COLA) since they went into effect in 1975.
“Social Security is doing its job helping Americans maintain their standard of living,” Michael J. Astrue, Commissioner of Social Security said. “Last year when consumer prices spiked, largely as a result of higher gas prices, beneficiaries received a 5.8 percent COLA, the largest increase since 1982. This year, in light of the human need, we need to support President Obama’s call for us to make another $250 recovery payment for 57 million Americans.”
The Social Security Act provides that Social Security and Supplemental Security Income benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year to the third quarter of the current year. This year there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009. In addition, because there was no increase in the CPI-W this year, under the law the starting point for determinations regarding a possible 2011 COLA will remain the third quarter of 2008.
Some other changes that would normally take effect in January 2010 based on the increase in average wages also will not take effect, even though average wages did increase. Since there is no COLA, the statute prohibits an increase in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2010. The attached fact sheet provides more information on 2010 Social Security changes.
Information about Medicare changes for 2010, when available, will be found at www.Medicare.gov. The Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2010. Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects about 93 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2010. On September 24th, the House passed legislation by 406-18 that would, on a fully paid-for basis, prevent abnormally large premium increases. The President is calling on the Senate to enact this legislation before it becomes too late for the Social Security Administration to update its computer systems to implement this needed change.
For additional information about the 2010 COLA, go to www.socialsecurity.gov/cola.
No COLA for SS Beneficiaries = Lower Benefits?
There will be no COLA this year because officially there is no inflation. But in reality, many prices — above all healthcare costs — continue to rise.
What is your experience? Are your costs of living going up? Should COLA be redefined so that it is more consistent with reality?
Mr. Shepard Smith: For many, many years, some would argue when it’s politically expedient to do so, critics on both sides of the aisle have claimed that Social Security was going to go completely bankrupt. I mean, bankrupt, it’s over, unless the entire system is drastically overhauled. We’ve all heard it.
Well, today, there’s a preview of things to come again. For the first time since the 1970s, the Federal government will not be giving seniors a cost of living increase (COLA). The amount on the checks will instead stay the same, but as healthcare costs rise, what this basically amounts to is a smaller Social Security check for seniors. I mean, if you look at it, that’s what it is.
Complicating matters, millions of babyboomers are now preparing to become senior citizens and it’s the babyboomers that we’ve known all about for decades and all of a sudden, it’s a crisis. With us now is financial consultant and money manager, Rodney Anderson. Rodney, it’s great to see you. Thank you.
Mr. Rodney Anderson: Thanks, Shep.
Mr. Shepard Smith: It’s not as if we didn’t know that babyboomers were about to get older, they are. We’ve known it for decades that it was coming. I mean, please don’t tell me this is the end of Social Security because we all know better. Every time they say it, they just find more money for it and make it work. Otherwise, they’d get voted out of office, right?
Mr. Rodney Anderson: Well, the decision to freeze Social Security is like putting a band aid on a compound fracture. We’re seeing where seniors are having their benefits cut and their cost of healthcare go up. We’re seeing them where they’re having their investments, which are the 401ks or IRAs just plummet down but not only that, we’re seeing their investments such as their CDs and their savings rates go down and this is where they lived off of. But many of these seniors through healthcare are having to finance their debt, debt that they’ve never had to finance before and that is being taken on by credit cards and then we have the banks raising everybody’s credit card rates and it’s killing the seniors and that’s why more and more are going into bankruptcy right now.
Mr. Shepard Smith: Well, it’s killing everybody to bankruptcy. And quite frankly it’s killing the seniors, but I don’t know… I don’t know how that leads us to say that this is the beginning of the end of Social Security because I’m not going to listen to it for a long time anyway because I’ve been hearing it for so many decades and it never happens. I mean, why would it happen this time?
Mr. Rodney Anderson: Well, in 2016, we don’t have enough money going into Social Security to fund it. But in the year 2037…
Mr. Shepard Smith: Yeah, well, in the previous administration, it was a different year, then in the administration before that, it was different year. It doesn’t matter if you have an R or a D after your name. They say this every few years, here it comes, and then we fund it. I mean, what’s different? Help me.
Mr. Rodney Anderson: Well, what’s different this time is truly because this healthcare crisis is going out of control that they have two major crises in front of them; one of them is healthcare. We’re hearing about it every day every minute of the day. The next one is Social Security. They keep wanting to print money, but pretty soon, Shep, the money is not going to be printed anymore.
Mr. Shepard Smith: And so because we’re not printing anymore money, Social Security is going to go away?
Mr. Rodney Anderson: No, Social Security will not go away, but what seniors will see is they’ll see no cost of living adjustment and what they’ll see is those paychecks, those monthly checks go down.
Mr. Shepard Smith: So…
Mr. Rodney Anderson: It may not go away, but it’s just going to be like Medicare where the benefits are cut every year.
Mr. Shepard Smith: So are you saying that an overhaul of the healthcare system is urgent and must happen to keep Social Security from falling apart? We’ve got the cost down?
Mr. Rodney Anderson: I think it’s a must happen… yeah, it’s a must happen. We have to get the costs down because seniors are being hurt from every side right now.
Mr. Shepard Smith: Well, it sounds like the President agrees with you on this, right? He’s the one who said we got to get the costs down. We’ve got to overhaul. We’ve got to overhaul the whole healthcare system and we’ve got to have a government option in there, that is what he used to say. Is that your sense that that would help save Social Security?
Mr. Rodney Anderson: Well, yeah, I think it will help Social Security in a lot of ways, Shep. But here’s what’s going to happen. I talked to my mom on my way here and mom knows best and mom says, “People can’t even or buying food right now, instead of buying medicine. It is a problem and right in my own family, because the fact of the matter is none of us or we’re all living older and that’s going to bankrupt Social Security.”
Mr. Shepard Smith: Well, I’m not well. We’ve known this was coming. This is not brand new information. We’ve known babyboomers were going to get older. We’ve known it forever. Now, all of a sudden, it’s a crisis. Well, yeah, it is. Babyboomers, they’re getting older. We got to do something about it. The President says he has a plan and the Republican say it’s a bad plan and we’ll see what happens. Rodney Anderson, let’s hope something happens. It’s good to see you. Thank you.
Will my Social Security benefits change at full retirement age?
Senior Citizen: I received Social Security disability benefits. Will my Social Security benefits change when I reached full retirement age?
Social Security Representative: The benefit information will change, but you won’t really see it. The interesting thing that some of our clients don’t understand is that Social Security disability is calculated, you know, the amount, is how much an individual would get at full retirement.
So if you get disability, say you’re 55 and you go on disability, then when you get to be 62 and you start thinking about a retirement benefit, the retirement benefit is your full retirement reduced. Well, you went and switched over to your retirement benefit. So our client doesn’t have to do anything while they are on disability. What we do is that when they get to be full retirement age, then we change the disability wording on their record to say retirement, because nothing works than sending somebody a disability update package and they’re 70.
Senior Citizen: Right.
Social Security Representative: You know, that’s why we take that information off. We correct our records because we keep track of our clients based on what we need to do for them and if they’re past full retirement age, we never need to update their disability information.
Senior Citizen: Okay.
Online Application for Social Security Retirement Benefits
Senior Citizen: What type of information will I need to complete my online application for retirement benefits?
Social Security Representative: This is a good time with that last question about retirement age because we’re really encouraging individuals to take advantage of the fact that we have improved our computer access that individuals can go to our website, not only plan for retirement for the future, you know, to see what amount they’d have, to see what happens to their amount if they decide to work more or if they work with amounts reduced as they get older.
What you can do is when you get ready for retirement? You can then actually make decisions to do the paperwork right there on the computer. You don’t have to go into an office. You don’t have to talk to somebody on the phone. This whole situation that we’ve done in the past was that we were the guardians of the benefit amount and really we’re the secretaries. We were just typing in the information, helping people get through the process and now we’ve laid the process out for you.
You’ve got your number. You can just go right into Social Security website. You can apply. You can tell us what bank you want the money to go to. You can tell us your information about military service, who you’ve been working for, how you’re going to be retiring, how you’re going to cut back on your amount, so that you’d be eligible if you want early retirement.
We don’t even ask all those same questions if you want your benefit with full retirement, because there is no reduction that you have to do in your work to start your benefit once you get to be of full retirement age. But the best thing for people to do, so that they can make those long-term plans is do the planning and then actually do the application right on the website because it’s your time and it’s your money. Why come into a Social Security office or have to go through all this with us because, you know, if you can ask for a mortgage on the computer and act of getting your retirement.
You know, we’re trying to make it simpler and I’ve got some good news for you in the future. Hopefully this next time we get together, we’ll talk about how our website is going to be much more convenient. We’re going to make it easier to use and it’s right now, it’s been cleaned up a bit so as to make it easier to follow, easier to use things, but we’re going to make the computer programs a little easier to work with.
Senior Citizen: Okay, we’ll see some of our $4 guess.
Social Security Representative: You know, that’s a big thing that I talked to our clients about is that when gas prices go up, people decide to cut back on, you know, extra, miscellaneous travel, and save a trip. That’s the one thing that I recommend to people is that if you can do a lot of these things on our website, why not do it?
Senior Citizen: Right.
Social Security Representative: Do it at home or I will just add a senior fare and every other person I talked to said, “Oh, I don’t have my own computer at home.”
I say, “Well, but you’ve got kids. You’ve got, you know, your daughter or your son and they’ve got a computer at their house. Our computers are open on the weekends.” You can come to our website and do so many things; change your address, get a replacement Medicare card. You can look up the pamphlets and you can print a pamphlet right from our website. So a lot of this is there on our website. You can save the trip. You know, try it. That’s the biggest thing to do. Just try it and see how you like working on our website and it might be convenient that you’re going to enjoy it and continue dealing with us that way.
Senior Citizen: Okay.
Social Security Increases for 2010 and 2012 Uncertain; Stimulus Check Coming In 2009
This year’s 5.8% cost-of-living adjustment, the largest increase since 1982 when there was a 7.4% increase, might be the last one until 2012, predicts the Congressional Budget Office.
Though accurate estimates are difficult to make at this moment, the Congressional Budget Office (CBO) envisions that only after 2012 will there be any cost-of-living adjustments and that those adjustments will be as small as 2% per year, until 2019.
The increases in cost-of-living are annually adjusted according to the consumer price index. This index measures the prices paid by an urban consumer for goods and services. Since 1975, every year brought cost-of-living increases: as high as 14.3% in 1980 and as low as 1.3 percent in 1986 and 1998.
Though we cannot expect impressive cost-of-living increases in 2010 and in the following years according to the CBO, Social Security beneficiaries will receive a onetime payment in May due to the American Recovery and Reinvestment Act issued this year. The amount of money each Social Security recipient will receive as a stimulus check or deposit is $250.
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