Healthy Living for Life – Do You Understand Social Security Retirement Benefits? (Full Version)

Updated : Nov 08, 2019 in Articles

Healthy Living for Life – Do You Understand Social Security Retirement Benefits? (Full Version)


– [Narrator] Living longer, living healthier,
living better than ever before. Welcome to Mountain Pacific’s Healthy Living
for Life, – After putting in decades of hard work, retirement
is a well-earned light at the end of a long tunnel, but when is the right time to retire? When should you claim Social Security, and
what if you end up going back to work after retirement? Welcome to Healthy Living for Life, a show
dedicated to helping you do just that. I’m your host, Lisa Sather. Today, we look at Social Security retirement
benefits, and the cost of working after retirment. Stay with us. – Welcome back. Earning a paycheck means paying into Social
Security, and we hope to get those benefits when we retire. Here to help us understand some of those Social
Security benefits is Richard Fowler, district manager the Helena, Montana Social Security
office. Richard, thanks for being here. – Thanks for having me. – Absolutely, so for those of us who work
and pay into Social Security, we see this withholding on our pay stubs, can you talk
about what exactly Social Security is? – Sure, Social Security is a federal program
that provides financial benefits for older Americans, workers who become disabled, and
families in which a parent or a spouse dies. In 2017, about 173 million people paid into
Social Security, and about 62 million Americans received monthly Social Security benefits. Most of these people being retirees, but it’s
important to note that Social Security was not intended to be the sole source of income
after retirement. – [Lisa] I’m glad you stated that. For those of us that are working, Social Security’s
this tax that comes out of our paycheck. Can you talk about how much that tax is right
now? – Yeah, the overall amount is 12.4%, so if
you work for an employer, you pay 6.2% which is what you see coming out of your taxes,
and then your employer pays the additional 6.2%. If you’re self-employed, you pay the full
12.4%, but you only pay Social Security taxes on your earnings up to $132,900. Any earnings over that aren’t taxed. – From there, how then does Social Security
work? What does paying those taxes earn us? What does that mean? – Your Social Security number is used to track
your earnings while you’re working, and your benefits after you’re getting Social Security. So as you work and pay taxes, you earn Social
Security credits. In 2019, you’re earning one credit for every
$1,360 that you make, and you get a maximum of four credits per year. To retire, you need at least 40 credits, or
10 years of work. – So what happens when I retire? What’s the process? – So you’ll receive monthly payments based
on how much you earned during your working career. Obviously higher lifetime earnings result
in higher benefits. We look at your highest 35 years of work and
earnings to determine what your monthly benefit amount will be. – Social Security benefits also depend upon
the age in which you retire, I understand, so can you explain that? – Yes, full retirement age depends on when
you were born. If you visit our website, www.SocialSecurity.gov,
there’s a chart that shows the years you were born, and what your corresponding full retirement
age would be. But just for an average, if you born from
1943 to 1960, the age varies between 66 and 67, and now if you’re born after 1960, your
full retirement age is 67. – To round out our conversation about Social
Security benefits, a widow or a widower can receive a deceased spouse’s Social Security
benefits. Is that right? – There is a possibility for receiving survivor’s
benefits on a deceased spouse’s record. I would recommend, if you’re receiving retirement
benefits, and you think you may be eligible for deceased spouse’s benefits, to contact
your local Social Security office to check. – So someone is thinking about retiring. When exactly should that person retire for
Social Security benefits? – The earliest you can apply for benefits
is up to four months prior to when you want benefits to begin. Even if you’re not ready to retire, obviously
you can visit our website, again www.SocialSecurity.gov, and look at the information that we have about
benefits, when to file, and even how to apply. – Can you actually apply online for retirement
benefits then as well? – Absolutely. Social Security offers an online retirement
application. The online application is user friendly, and
it’s really easy to navigate. The website gives you information about what
you need for filling out the application. The benefits to filing online are you can
do it in your home. In most cases, it probably takes longer to
drive to the Social Security office than it actually does to fill out the application. If you’re stuck, or if you need to look something
up, you can close the application at that point and save it, and then go back into it
at a later time and finish it. And then if more information is required once
you submit it to the Social Security Administration, a representative from the agency will call
you and get any updates that we need. – Cool, that sounds great. So whether a person chooses to actually physically
go down to the Social Security office or apply online for benefits, are there specific documents
they’re going to need in order to do that? – The easy answer is it depends, but most
of the time, you need your Social Security number, not necessarily the card. You just need to know your number. Direct deposit information, we could sometimes
need to see a birth certificate. If you weren’t born a U.S. citizen, proof
of your U.S. citizenship would potentially be needed, and then just depending on the
application, other documents. For example, if you’re self-employed, we may
need your most recent W2, or your most recent tax return. – And for those documents like a birth certificate,
and you’re physically going in, is that something that has to be certified? I think that’s a question that people don’t
just necessarily wanna show up and not have it how it should be. – Absolutely, yes, all the documents either
need to be the original or a certified copy. – Okay, perfect. Well, we’re gonna pause here, take a quick
break, so stay with us. Coming up next, we’re gonna take a look at
the Social Security website, and how you can accomplish quite a lot online when it comes
to Social Security retirement benefits. Don’t go away. We have much more to talk about after these
messages. – Welcome back. If you know how to get online, or know someone
who can help you do so, the Social Security website offers many features to help you prepare
for retirement and better understand retirement benefits. We’re going to walk through some of these
features with Rich. Rich, thanks again for being here. – Again, thanks for having me. – Absolutely, so what is a My Social Security
Account? – A My Social Security Account is an online
feature that allows you to access your Social Security statement to check your earnings
record, and to get benefit estimates. You can create a My Social Security Account
if you’re over age 18, and you have a Social Security number, a valid U.S. mailing address,
and an email address. You can create a account by going to the SocialSecurity.gov/MyAccount
website. You’ll need to supply some personal information,
and create a user name and password. The account’s completely secure, and some
of the features that it has behind that portal is you can request a replacement Social Security
card as long as you’re not doing a name change. If you receive benefits, you can get your
benefit verification letter that tells how much you’re receiving in Social Security benefits
monthly. You can change your address and phone number. You can request a replacement Medicare card. You can request replacement forms during tax
season, like your 1099, and then you can start or change direct deposit as well. – [Lisa] Awesome, so I understand the Social
Security website also has a retirement toolkit. Can you talk about what people can learn about
by taking a look at the retirement toolkit on there? – The toolkit provides several different things. It has a list of publications that help with
retirement planning. For example, the top ten ways to prepare for
retirement, how to file a claim for retirement benefits, and information for financial planning
to set goals for your future. The tools in the toolkit help you make timely
decisions and, if necessary, make changes while you still have time before retirement. It gives you contacts who can answer questions
that you might have, and information about health plans as well. – Awesome, so on the heals of health plans,
the toolkit also discusses Medicare and health plans. How are Medicare and Social Security related? – Social Security and Medicare are separate
programs, but they work closely together. They’re both federal programs designed to
help older Americans and the disabled. Social Security provides the financial help,
and Medicare is a federal health insurance program. So Social Security informs people about Medicare
enrollment periods, processes their applications, and collects premiums for Medicare. You can find more information about Medicare
on their website at www.Medicare.gov. – Great, so in a similar vein, Medicare and
Social Security are alike in that the taxes for those are both paid out of our paychecks. Is that right? – That’s correct. The total amount is 2.9%, and so just like
when you’re working for an employer, you pay 1.45%, and your employer pays the additional
1.45%, and if you’re self-employed, just like as with the other, you pay the full 2.9%. The only unusual thing is, unlike Social Security,
there’s no cap to how much you pay in premiums for Medicare. – Okay, well thank you for explaining that. Going back to the features on the website,
people can also find Social Security benefit calculators. What are those? – There are a variety of calculators on the
website. I’ll just go over just a couple of them. One of the good calculators is called the
retirement age calculator, and basically what that does, as we discussed earlier about how
the retirement age varies depending on when you were born, so this allows you to put your
date of birth in, and then tells you what your full retirement age is. The other one we have is a retirement estimator,
and this estimates your monthly benefits based on your Social Security earnings record. And then there’s another calculator called
the life expectancy calculator which estimates how long you or your spouse may live to help
you to determine how much money you will likely need for retirement. Now, obviously, it doesn’t take into account
any health or thing like that. It’s just a basic estimate. – You just plug the information in there,
and it gives you what you need to know. – Exactly. – Cool. How about talking about if there’s any other
information or advice you feel that’s important for individuals to know when planning their
retirement? And the sky’s the limit. What would you wanna share with us? – The easy answer is it depends on you. Obviously you can draw benefits early. You can wait ’til your full retirement age. You can wait ’til after. Like I talked earlier, it’s not really designed
to be a stand-alone benefit, so you wanna look at your physical well-being, your financial
well-being to determine when is the best time to draw benefits. – We’re gonna pause here for a break, and
I wanna thank you for sharing all that valuable information. It’s been outstanding. But we’re gonna come back here in a few minutes
and finish up, so stay with us. Coming up next, are you retired and thinking
about going back to work? While working can bring in extra income, going
back to work after retirement could also have its costs. We’ll talk about what you need to consider
before taking a job after retirement. We’ll be right back after these messages. Stay tuned. – Some Americans retire and decide to go back
to work even part-time, but what happens to your Social Security benefits if you go back
to work? Richard Fowler is still here with us. Hi, Richard. – Hey. – Welcome back again. So before we get into that, I want to go back
to a couple of other questions that I had about the website. Can we talk a little bit more about the life
expectancy tool, and maybe you can elaborate a little bit more on how that works. – Sure, the way the life expectancy tool works
is a man reaches age 65 today can expect to live, on average, until 84. A woman who turns age 65 can expect to live,
on average, ’til almost 87. Obviously those are just averages. Again, they don’t take into consideration
people’s health, family history, things like that. And about one in every four 65-year olds will
live past the age of 90, so that has to be a factor when you’re deciding when to start
receiving benefits because you need to figure out how long you could live, and you also
wanna consider whether or not you have enough money to take care of yourself for as long
as you need to. – That sounds like a really valuable for folks
to get in there, dig around, and play around with that. – Absolutely. – [Lisa] Perfect, and then I had another question
too following up to that, making an appointment. If somebody is not comfortable going online
and checking all this out, and they feel more comfortable talking to someone in person,
is that an option? – Oh, absolutely. We are the face of the government, so you
can call us. You can call your local office. You can come into the office if you want. Obviously, for retirement purposes, you wanna
call us and set up an appointment to come in and see us. – [Lisa] Are there offices throughout the
state, or just located here in Helena? – They’re throughout the state. I don’t have a complete list on me but there
are several in every state so they’re everywhere. – All right, so getting back on topic here
then again, if someone applied for Social Security and they retired, but later then
decided he or she needed or wanted to return to work, what happens to the person’s Social
Security retirement benefits at that point? – Well, it depends on how old you are when
you return to work. If you’re receiving benefits before full retirement
age, Social Security would deduct $1 for every $2 you go over the earnings limit, which in
2019 is $17,640. In the year you’re gonna reach your full retirement
age, that deduction goes down to $1 for every $3 you earn over the limit, and the earnings
limit goes up to $46,920 for this year. The month you reach your full retirement age,
there’s no longer an earnings limit. – So if you do decide to go back to work,
do you have to notify Social Security that you’re doing that? – If you return to work, you’re required to
report changes to the Social Security Administration. You can do that by phone or by visiting your
local office. – And then are your earnings automatically
tracked through that process? – We interface with the IRS to track those
earnings. – Okay, that makes sense. So what if someone doesn’t retire but they’re
over the age of 62, and they’d like to apply for Social Security, can they receive Social
Security benefits and keep working? – Yes, you can, but again like we talked earlier,
depending on your age, Social Security would reduce your benefits, and then we would also
look at your earnings to make sure you’re not exceeding the limits that we talked about. The same rules and limits apply whether you’re
retired, whether you went back to work and kept working, and applied for Social Security
benefits. – Okay, that makes sense. So if you’re working and collecting Social
Security benefits, whether it’s a post-retirement job, or you never stopped working, do you
still pay Social Security taxes out of your paycheck? I mean, is there a way we can get out of that? – Unfortunately, no, and so yes, you will
have to keep paying Social Security taxes while you work. – How can someone find out whether his or
her Social Security benefits could be taxable? What would be the options there? – I would recommend either contact the IRS
or your tax advisor. They should be to assist you with determining
whether your Social Security benefits are taxable. – In our final conversation here, is there
any additional advice you’d give our viewers who are thinking about retiring or going back
to work after receiving retirement benefits, and again, whatever you think is information
our viewers would be needing to hear. – I kind of alluded to it earlier. Making the decision really depends on the
individual’s financial circumstances, their personal health and lifestyle. The best advice I can give is to make sure
you’re prepared. One way to do that is obviously by exploring
our website, again, www.SocialSecurity.gov, or speaking with a Social Security representative
about your retirement options. – [Lisa] I’m also assuming, we haven’t really
mentioned it here but if you have employed the expertise of a financial planner along
the way, before you’re getting ready to take Social Security, I assume that’s probably
a good thing to do if folks are looking at not relying completely on Social Security
for their entire retirement gig, right? – Right, I mean always getting expert advice
is a good thing. I’m not gonna advocate for everybody going
out and getting a financial expert, but it always is good to have that kind of overall
look at your financial well-being, your physical well-being, and then using our estimator to
project your longevity of life to just say, okay, this is where I think I’m gonna be. How do I get there? – [Lisa] Absolutely, so I really like the
idea of being able to go out there and work with those tools, and so thanks for explaining
all of that. I think there’s some good information out
there. – All right, well thanks for having me today. I appreciate being here. – Thank you so very much. We really appreciate it. Thank you for being with us today, and thank
you for tuning in this week. Be sure to join us again next week. Until then, stay fit, stay well, and stay
healthy for life with Healthy Living for Life. – [Narrator] Healthy Living for Life is brought
to you by Mountain-Pacific Quality Health. We’d love to hear from you. If you have suggestions for future programs,
visit our website at MPQHF.org, or call us at 406-443-4020. You can also catch us on YouTube by visiting
our website and clicking on the YouTube icon. Special thanks to Fire Tower Coffee House
and Roasters. Production facilities provided by Video Express
Productions.

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