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Social Security Questions

Old 06-17-21, 10:35 AM
  #26  
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Chewy, I'm signing up for Medicare part A only tonight. I just turned 65 and still have a good full time job with two pensions and good health plan. Signing up for Medicare is required at 65 so the health insurance can tap into that for hospitalization. All the part B,D stuff is not until I actually retire. Any health insurance company that provides these plans is required by law, I believe, to provide certified non-shyster counselors to guide people through this process. Free retirement seminars are easy to find and attend. I've been to several although they can be a little boring.
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Old 06-17-21, 02:49 PM
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When you hit 65 you sign up for part A which is Free. It covers some hospital costs with a deductable.

If you or your spouse continues to work and receives good medical coverage it is not necessary to sign up for part B at this time. Part B costs about $150 per month and the money is taken from your SS check. When you finally lose that medical coverage from your or your spouses employer you will need to get a letter stating that you had coverage, when it started and when it ended. This will allow you to sign up for Part B then without penalty and as a special signup not during the annual signup window. There is a form you fill out on the SS site and you can attach a pdf of that coverage proof to the form.

Additional coverage through medicare supplemental plans or medicare advantage plans all require that you are signed up for part B before signing up for more. For them you have to shop around and or getting an advisor to help you find the best for you plans.

I'm going through all this right now at age 75 because my wife is retiring at the end of this month. I've been collecting since age 66 but have not been paying for part B because we had good alternate insurance from her employer. My part B coverage begins July 1 as her coverage ends on June 30. He part B coverage begins on the same date.
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Old 06-17-21, 02:56 PM
  #28  
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Originally Posted by big john
If you're working and don't need the extra money, it's probably better to wait.
It's better to actually do the analysis. Figure out the date at which the total payout from the early/smaller choice equals the later/bigger choice, and then decide if it's worth waiting.

eg: $2000/month now at age 62 vs $2800/month starting at age 67, both equal about $400,000 total at age 78. The longer you live, the better deal it is to wait... assuming you don't need the money. This doesn't include the value of investing the money you don't need. I'm tempted to start now and fund an additional IRA with it, maybe buy my daughter a house one day.
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Old 06-17-21, 03:09 PM
  #29  
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Originally Posted by DiabloScott
It's better to actually do the analysis. Figure out the date at which the total payout from the early/smaller choice equals the later/bigger choice, and then decide if it's worth waiting.

eg: $2000/month now at age 62 vs $2800/month starting at age 67, both equal about $400,000 total at age 78. The longer you live, the better deal it is to wait... assuming you don't need the money. This doesn't include the value of investing the money you don't need. I'm tempted to start now and fund an additional IRA with it, maybe buy my daughter a house one day.
He's talking about collecting while still working. In that case he would also need to figure whatever taxes might affect him and the penalty for collecting before his full retirement age.
In my case I think they subtracted around $3k from my SS the first year because I worked for part of the year.
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Old 06-17-21, 03:44 PM
  #30  
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.
...I worked for those SSA bastards for about 8 years as a Claims Rep. At the time. I used to answer questions like yours every day...maybe 50 times a day, Monday through Friday for 8 years. I did those "retire now at a reduced benefit versus waiting" calculations so many times in the first few years, I could literally do them in my head. Mostly, it used to turn out the majority of people were ahead in the money they got paid out for between 12 and 14 years by taking their reduced benefit at 62. But the full benefit was paid then at 65, and a lot of it has to do with whether you like what you're doing, and how long you think you'll live. Everyone, of course, anticipates living forever. But if you like your job, why not keep on doing it ? I hated work, have no American work ethic, and am a poor example in this regard.

I would not choose to give you free internet answers to your questions. It is not unreasonable to ask for these answers, in writing, from the people who currently administer the program, and to request that the answers be in writing as well, signed by someone with his or her real name and position. The law changes every time Congress meets and decides to change aspects of it. For example the work reduction provisions were much more stringent back in the 80's when I was doing this for a living.

As well, some situations are quite unique, and yours might very well be one of them. The interview questions to decide on whether you might be exceptional took about ten or fifteen minutes in and of themselves.

Even working in a real, live, paid position in an SSA field office, I was constantly amazed at the amount of misinformation that went out on a daily basis...not from me, but from people who were less sophisticated in their appreciation for exceptions to the general rules. Sometimes, it even went out in official correspondence, in computer generated letters that were unsigned by a real person. It's difficult to hold a computer that spits out letters accountable.

The official SSA website does have good information on all your questions, and someone linked it. But I have, in my professional life, worked many hours sorting out some ****up or another, all of which might have been avoided with some care in information giving and gathering in the initial stages of the process. This is the best I got for you.
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Old 06-17-21, 03:56 PM
  #31  
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Originally Posted by chewybrian

As a side note, how good is Medicare, when do you get it, and how much do you pay for a supplemental plan? If you buy the plan and keep it paid up, are you covered for good, or are you still at risk of tapping out if you get sick?
...Medicare A and B are pretty solid. The supplemental policies that are provided either through previous employment or sold by hucksters on late night TV run the gamut from pretty solid to not worth the premiums.

A is "free" (paid for by contributions to the fund from people still working and contributing). Part B is costing me upwards of $150-170 bucks monthly (I think....I have it coming automagically out of a bank account as one less thing to worry about). My own Medicare supplement plan is pretty good, because covered by previous employment by the City here. But there is a a max deductible per year that I am responsible for....if I go over that, everything else is supposedly covered.


But the whole thing is terribly misleading, because long term care is only covered under Medicare for 60 day (I think that's the limit now). You can still go broke easily if you require long term care. Once again, everyone who plans on living forever can't imagine they'll ever need long term care. I mean, how does that happen to people, right ?
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Old 06-17-21, 05:09 PM
  #32  
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You're welcome.

Last edited by leftthread; 06-17-21 at 05:21 PM.
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Old 06-17-21, 05:15 PM
  #33  
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Originally Posted by 3alarmer
..
But the whole thing is terribly misleading, because long term care is only covered under Medicare for 60 day (I think that's the limit now). You can still go broke easily if you require long term care. Once again, everyone who plans on living forever can't imagine they'll ever need long term care. I mean, how does that happen to people, right ?
I was pretty sure this was gonna be one of the possible outcomes. I guess I'll just have to decide to become super rich, then, just in case.
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Old 06-17-21, 06:55 PM
  #34  
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Originally Posted by chewybrian
I guess I'll just have to decide to become super rich, then, just in case.
I wish I had thought of that.
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Old 06-17-21, 06:56 PM
  #35  
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The answers to all your questions are readily available on the web..with just a bit of searching. Google each of your questions and you're well on your way. For medicare info..see the book "Medicare for Dummies"(in addition to simple searches). A used copy can be had for a couple bucks(3rd edition..a 4th edition is now out, but things haven't changed that much). It's a very good book..covers everything you need to know, and then some, in an easily understood format.

You get heavily taxed on post SS earning as they want you out of the workforce..sort of the idea..
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Old 06-18-21, 06:14 AM
  #36  
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As others said, set up an account with SS. They have all the info you need. Their basic estimate assumes you will keep working at your current salary until retirement but they have worksheets that will allow you to plug in expected future salaries to do what if calculations. On your question number three, if you retire before your full retirement age (e.g if you go at 62). They begin to reduce your payment $1 for every $2 you earn over $18.960 (2021, that will go up each year). If you expect to earn significantly more that the limit, it makes no sense to claim early. If some opportunity arises by surprise and you earn more that you expected the penalty cuts will kick in. But all is not lost - SS will make up the missing amounts by increasing your payments after you reach FRA.
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Old 06-19-21, 11:15 AM
  #37  
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Originally Posted by rumrunn6
...what do you mean they ask for it back?
In my case they just paid me to much. I was working for other providers and made too much money that year. My mistake. REM: If SS pays you too much they will ask for it back even if its thier mistake. And they can ask for it back years after they have paid you.

On the plus side, every thing worked out fair and square, and apart from my finances being kinda messed up for about 10 months they got me back on track. It could have been real bad if I did not have other income to rely on so be careful...
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Old 06-19-21, 12:53 PM
  #38  
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https://secure.ssa.gov/RIL/SiView.action
If you have not already created a SSI account, now is the time.
I started getting SS payments while still working at Full Retirement Age, which was 66. If I had waited till 70, benefit would have continued to increase till then.
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Old 06-19-21, 01:07 PM
  #39  
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Good information here, especially on Medicare. I'm 60, retired but still working part-time. I collect a pension from a local government job which was exempt from Social Security. I have more than enough quarters worked from previous full time and many years of part time work paying into SS but have less than 20 years of "substantial earnings". Retirees in my situation get hit with a penalty called the Windfall Elimination Provision. For me it could be a reduction in SS payments by as much as 60%. Bipartisan legislation is introduced occasionaly to eliminate the WEP but is never seems to get out of committee.

https://www.ssa.gov/pubs/EN-05-10045...a%20government
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Old 06-20-21, 07:56 AM
  #40  
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We (wife and I) went to an advisor when starting on Social Security. Sure there are some in your area, and most (at least ours) do not charge a fee. The one we went to advised which had the best rx coverage, and other things that would have been very difficult to find on our own. Was well worth the time and very happy we did! I did the math, on taking SS later, but figured it wasn't worth the wait--would have taken many years before I would have broken even and started to actually make more. And those years, I could put the money to use, and maybe even make more on it (which I have). You may wish to find an advisor in your area, a good one can provide info you might not find otherwise.
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Old 06-20-21, 09:36 AM
  #41  
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Took SS at age 62. The payments are set so that you collect the same cumulative amount, whether you start at age 62 or wait til 70, up to about the ages of 78-80. Then if you waited. your higher payment starts kicking in big time. For example, I believe the current maximum payments are around $18K at age 52 and $31K at age 70. However, the SS people know that half the people who are age 62 are dead 17 years later. For them, it makes no difference when you start, Their total payouts are designed that way. For you and I, how lucky do you feel.

Actually, I didn't feel lucky at age 62 about hitting 80, but I do 10 years later. At my wife's 40th HS reunion one of her old classmates was a doctor who retired at age 55 from medicine, but found a new passion as a financial planner. He told all of us old guys to take SS early. Said the same thing...too many of us would not be attending the 50th, Kind of a downer.
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Old 06-20-21, 11:58 AM
  #42  
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Originally Posted by chewybrian
I was pretty sure this was gonna be one of the possible outcomes. I guess I'll just have to decide to become super rich, then, just in case.
One good pick six could make all the difference.
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Old 06-21-21, 09:17 PM
  #43  
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The $1 loss of SS payments for $2 in earnings ends at 65, IIRC. After age 65 (or whatever the age is now), you collect you salary and your SS payment, unless, of coure, you delay SS until you're older than 65. Or did that great bi-partisan tax bill of a couple of years ago reinstitute the subtraction?
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Old 06-22-21, 03:05 PM
  #44  
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There is some correct, some almost correct, and some flat out (I'll be nice) misperceptions in this thread. But overall, a needed discussion as you approach retirement age.
Some acronyms to throw out that you'll see in your educational searches: FRA = full retirement age, which for the OP is 67. Your PIA (primary insurance amount) is the benefit you are due at your FRA.
And working while drawing? You're subject to the "Earnings Test" up through the year you reach FRA. But the earnings test limit changes (much higher) in the year of your FRA, and also only applies to earnings earned up until the month of your attaining FRA.
(Current earnings limits for 2021 are $18,960 and $50,520.) Any "loss" of SS benefits due to the earnings test are paid back to you over your actuarial lifetime - so if you live long, you could get more back than you "lost".

As a planner, the most common [incorrect] train of thought we run across is: I'm drawing Social Security for My Lifetime. I'll put a big MAYBE on that one.
If you are the primary breadwinner in your household, and you are married, especially to a younger spouse, you [as a couple] are drawing Your Benefit until your Your Spouse's mortality - NOT yours. A married couple only gets to keep one benefit (the higher one) when one of you dies. So the earlier you draw, the lower your spouse's survivor benefit will be for life. Now there are ways to mitigate this - life insurance for one. But depending on your personal family circumstances, you may need to rewire your thinking.
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Old 06-22-21, 06:20 PM
  #45  
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Keep in mind also rules if you are / were married. But things are a bit simpler now, they took away some ways you could game the system. (Example, I was born in Nov 53 so at my FRA I started taking my spousal benefit (based on my wife's benefit) while I still let my personal benefit grow (not taking it until age 70).) Note that "SSI" is a welfare program for the poor administered by the SSA. It's not old age / survivor insurance. (And don't forget, you received the "benefit" of survivor insurance even though you didn't have to use it). SSA also administers disability insurance program.

As far as medicare, at age 65 you have to start paying for Part B unless you are still covered at your workplace. If you don't start paying for Part B, you pay a pretty hefty penalty if you want/need to start it after eligible. I guess there's a similar penalty for Part D drug coverage. Also, there's an income "look back" test for Part B (two years), and if you made "too much" they plus up your premium. Medicare Advantage AKA Part C basically "wraps" Part B. I view it as just alternative to a supplement plan and can also provide the Part D drug plan as well. Another wrinkle on the Part B, is if you haven't started your old age pension, in years where there isn't a COLA increase in SS, by law they can't increase Part B on annuitants, and make up the difference by increasing Part B payment for those who haven't started their pension (unless Congress changes the law).

Also Medicare does not coordinate with VA, so if you are in the VA system you need to keep that in mind (in particular if you might want Part B).

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Old 06-24-21, 03:35 AM
  #46  
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Originally Posted by scott967
Keep in mind also rules if you are / were married. But things are a bit simpler now, they took away some ways you could game the system. (Example, I was born in Nov 53 so at my FRA I started taking my spousal benefit (based on my wife's benefit) while I still let my personal benefit grow (not taking it until age 70).) Note that "SSI" is a welfare program for the poor administered by the SSA. It's not old age / survivor insurance. (And don't forget, you received the "benefit" of survivor insurance even though you didn't have to use it). SSA also administers disability insurance program.

As far as medicare, at age 65 you have to start paying for Part B unless you are still covered at your workplace. If you don't start paying for Part B, you pay a pretty hefty penalty if you want/need to start it after eligible. I guess there's a similar penalty for Part D drug coverage. Also, there's an income "look back" test for Part B (two years), and if you made "too much" they plus up your premium. Medicare Advantage AKA Part C basically "wraps" Part B. I view it as just alternative to a supplement plan and can also provide the Part D drug plan as well. Another wrinkle on the Part B, is if you haven't started your old age pension, in years where there isn't a COLA increase in SS, by law they can't increase Part B on annuitants, and make up the difference by increasing Part B payment for those who haven't started their pension (unless Congress changes the law).

Also Medicare does not coordinate with VA, so if you are in the VA system you need to keep that in mind (in particular if you might want Part B).

scott s.
.
If you are covered by other insurance such as that provided by your or your spouses work place and you delay purchasing part B there should be no penalty if at the time you switch over to part B due to the retirement of yourself or your spouse so long as you provide proof of prior coverage. I just went through this at age 75 as I've been insured by my wife's insurance which will go away at the end of this month when she retires. A letter from her employer proving coverage attached to my request to apply for part B was all that was required. The same applied to her and we were both approved without penalty.
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Old 06-29-21, 05:38 PM
  #47  
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I am 66 soon to be 67. I got my Medicare at 65 and that saved me $1500 a month because I am self employed and self insured. Then I got my Aerospace retirement check the following month so I had supplemental income. Then, when I turned 66 (full retirement age for me) I started SS and because I was a sole proprietor for over 30 years and paid a lot into it, I draw a decent check. I get no penalty for continuing to work at my shop. I do recommend waiting for full retirement age for the main bread winner of the household. I like my shop and the work I do and I get paid well for my services, plus I have a place for all my bicycles! I can take off for a lunch ride to the harbor a couple of times week . I sold my CNC machines to make room because I don’t want production work anymore, just custom tooling. Some of my customers thought I was going into the bicycle business when they saw the bike racks going in.
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Old 06-29-21, 06:10 PM
  #48  
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The maximum social security payment at full retirement age is currently $3148 per month and $2324 per month at age 62. About $800 per month less. So, the early dipper at 62 collects about $140,000 before his full retirement age. How long does it take to make that back? What is the ROI on that? What is inflation? How long you going to live? How long will SSA remain solvent? Are you still working? Do you need the extra $800 per month? By my analysis, break even is at least 83 years old. My dad died at 83, mom at 78 and all grandparents were dead before those ages. For me, it is an absolute no brainer. We started collecting at age 62.
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Old 06-29-21, 07:21 PM
  #49  
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Originally Posted by GhostRider62
So, the early dipper at 62 collects about $140,000 before his full retirement age. How long does it take to make that back?
If you ignore inflation and survivor benefits, the calc is trivial:

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Old 06-30-21, 03:17 PM
  #50  
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Originally Posted by DiabloScott
If you ignore inflation and survivor benefits, the calc is trivial:

I am sorry but I do not understand your graph. Much information is missing.

What rate of return are you assuming for the $140,000 collected for the early dipper and what is the true rate of inflation? When will I die, please?

These are not trivial assumptions. The cost increases on social security are much less than the actual, real rate of inflation.

In my assessment, those who do not need the money are probably better taking it earlier than later whereas those who need the money are probably best served by working longer. The 78 year old break even is what they are selling. I did not buy.
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