The Social Security Administration (SSA) has announced that effective April 14, some individuals who want to claim Social Security benefits or change their direct deposit account information will need to visit a local Social Security field office to prove their identity in person. According to the SSA, stronger identity verification procedures are needed to prevent fraud. The new rule is already causing confusion, in part because of its hasty rollout, so here are answers to some common … [Read more...]
Have You Checked Your Social Security Statement Lately?
The Social Security Administration (SSA) provides personalized Social Security Statements to help Americans age 18 and older better understand the benefits that Social Security offers. Your Statement contains a detailed record of your earnings and estimates of retirement, disability, and survivor benefits — information that can help you plan for your financial future. You can view your Social Security Statement online at any time by creating a my Social Security account at the SSA's … [Read more...]
Would You Be Prepared for an Unplanned Early Retirement?
Most of us would prefer not to think about an unexpected (and unwelcome) early retirement, but it does happen frequently. In fact, nearly half of current retirees retired earlier than planned, and of that group, more than 60% did so due to changes at their company or a hardship, such as disability.1 For that reason, it's a good idea to take certain steps now to help prepare for the unexpected. What you can do now Save as much as possible in tax-advantaged accounts. If you're forced … [Read more...]
Sources of Retirement Income: Worker Expectations vs. Retiree Realities
About 90% of retirees say they rely on Social Security, approximately the same as the percentage of workers who expect Social Security to help them meet their retirement income needs. Similarly, about 60% of workers expect a traditional pension plan to provide income, which is only slightly higher than the percentage of retirees who say a pension helps pay their bills. In other cases, worker expectations differ dramatically from retiree realities. Source: Employee Benefit Research Institute, … [Read more...]
Birthday Benefits Quiz
Remember when you turned 16 and rushed to get your driver's license? Or earned the right to vote at 18 and enjoyed the privileges and responsibilities of adulthood at 21? There aren't many legal changes associated with birthdays after that until you turn 50, and then there are plenty. Can you match these ages to the related federal benefits and tax responsibilities? One age will be used twice. 50 55 59½ 62 65 67 70 73 75 ___ 1. Eligible for full Social … [Read more...]
Social Security 101
Social Security is complex, and the details are often misunderstood even by those who are already receiving benefits. It's important to understand some of the basic rules and options and how they might affect your financial future. Full retirement age (FRA) Once you reach full retirement age, you can claim your full Social Security retirement benefit, also called your primary insurance amount or PIA. FRA ranges from 66 to 67, depending on your birth year (see chart). Claiming … [Read more...]
When Do People Start Collecting Social Security?
There's no "right" age to begin receiving Social Security retirement benefits. It's a personal decision based on multiple factors, including how long someone wants to work and how much retirement income is needed. Workers are entitled to full benefits at their full retirement age (FRA) — 66 to 67, depending on year of birth. Claiming before FRA (as early as age 62) will result in a permanently reduced benefit, while claiming later will result in a permanently increased benefit due to delayed … [Read more...]
Closing the Social Security Funding Gap
According to the 2021 Social Security Trustees Report, the reserves that help fund Social Security retirement and disability benefits will be depleted in 2034, one year earlier than last year's projection due to the pandemic. At that time, the program will be able to pay only 78% of scheduled benefits. Numerous bills have been introduced to address the shortfall, but lawmakers have stalled because potential fixes require increased taxes and/or benefit reductions. The chart below shows the … [Read more...]
Big Boost for Social Security Payments
The Social Security cost-of-living adjustment (COLA) for 2022 is 5.9%, the largest increase since 1983. The COLA applies to December 2021 benefits, payable in January 2022. The amount is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from Q3 of the last year a COLA was determined to Q3 of the current year (in this case, Q3 2020 to Q3 2021). Despite these annual adjustments for inflation, a recent study found that the buying power of … [Read more...]
Working While Receiving Social Security Benefits
The COVID-19 recession and the continuing pandemic pushed many older workers into retirement earlier than they had anticipated. A little more than 50% of Americans age 55 and older said they were retired in Q3 2021, up from about 48% two years earlier, before the pandemic.1 For people age 62 and older, retiring from the workforce often means claiming Social Security benefits. But what happens if you decide to go back to work? With the job market heating up, there are opportunities for people … [Read more...]
