Want to File-and-Suspend and Can’t Contact the Social Security Administration?

File-and-Suspend Deadline

Today is the last day for baby boomers who are at least 66 years old to submit a File-and-Suspend application using the “Old Rules”. The Old Rules File-and-Suspend application allows the Social Security number holder to delay collecting their own benefits but permits their spouse (if he or she is at least 62 before January 2, 2016) or young or disabled children to collect benefits on that person’s work record while their own benefit is in suspension.

To take advantage of the File-and-Suspend strategy eligible couples (and singles) must file today. Here are the steps to file an online application according to Larry Kotlikoff, a professor of economics at Boston University and a Social Security expert:
1. File online at the Social Security Web site located at www.ssa.gov
2. Fill out the application as if you will immediately claim benefits
3. The application asks “What date should benefits start?” Enter April 2016.
4. Next the online form will ask if you want to delay receipt of retirement benefits and take spousal benefits only. Answer “no”. (You are claiming and suspending benefits for yourself.)
5. In the box labeled “Remarks”. Enter the following statement, “I want to file for my retirement benefits effective April 2016 and I want to suspend all my retirement benefits effective April 2016”.

If you are not the type of person to complete an online form there two alternatives for you. You can apply via telephone or submit a Form 795. According to Mary Beth Franklin of Investment News, telephone waits for the Social Security Administration (800-772-1213) can be an hour or more.

According to Mary Beth Franklin, individuals can file a “Protective Filing Statement using Form 795”. Click here to download the form
http://www.compassioninaction.us/product_links/Statement%20of%20Claimant%20SSA-795.pdf

In the space provided write the following, “I intend to File-and-Suspend on my own record by the April 29th deadline. However, I have been having difficulty obtaining an appointment. I would like to file and suspend as soon as an appointment is available.” According to Mary Beth Franklin’s source this should at least buy you an extra six months to get the actual filing done because you are making you intentions clear prior to the deadline.

What happens if you don’t make the deadline? If you voluntarily suspend after the April 29, 2016 deadline and have “auxiliaries” (a spouse, minor dependent children or disabled children) they will not be able to receive benefits during the time period that you have suspended benefits. However, a divorced spouse is an exception and can continue to receive benefits.

Posted in Blog Writing | Comments Off on Want to File-and-Suspend and Can’t Contact the Social Security Administration?

GCSRi Publishing Releases a New Social Security Book about the New Rules and How to Maximize Benefits

Social Security: Maximize Your Benefits (2nd Edition)

Over the next 20 years, each day 10,000 people in the US will be turning 65 years-old. Many of these folks are unaware of the Social Security retirement benefits to which they are entitled. For example, April 29, 2016, is the last day for qualified couples to submit a File-and-Suspend application for benefits. If you were at least 62 as of December 31, 2015, you are eligible to file a Restricted Application if you file before December 31, 2019. Are you unfamiliar with these types of Social Security applications? Get all the details you need in “Social Security: Maximize Your Benefits (2nd Edition)”.

The Social Security Handbook has over 2,700 rules governing benefits. The Program Operating System (POMs) has thousands more. It is no wonder that many people do not have a good understanding of their Social Security benefits. Frequently, because of a lack of insights these individuals will not receive all the benefits they could receive. Knowing the right questions to ask is critical to maximizing Social Security benefits. Bestselling Wall Street Journal author Kathleen Sindell, Ph.D. has taught and written about financial management for the last 20 years. Sindell’s latest book “Social Security: Maximize Your Benefits, 2nd Edition” is easy-to-understand and provides “just the facts” about getting the highest retirement benefits possible.

You’ll discover how same-sex, married and unmarried couples can coordinate claiming strategies to gain the maximum benefits. Find out how delaying Social Security benefits can have a direct effect on the financial well-being of a surviving spouse. Understand what divorced spouses need to do to receive the highest amount of lifetime benefits and how to choose between claiming their own or their ex-spouses benefits. Get a hold of how singles need to decide the true value of not claiming until 70. Become aware of how families with minor dependent children (or disabled children) should investigate the start-stop-start strategy to decide if it is best for boosting income when it is needed most. Grasp how survivors can optimize benefits by being flexible when determining the order in which they claim benefits.

Social Security: Maximize Your Benefits (2nd Edition)” by Kathleen Sindell, Ph.D., a bestselling Wall Street Journal author, shows how to select the optimal claiming strategy that apply to your personal financial circumstance. Follow step-by-step instructions to maximizing your Social Security benefits. You can quickly select what works best for you from dozens of examples, figures, tables, and graphs.
Take advantage of “Social Security: Maximize Your Benefits (2nd Edition)”, GCSRi Publishing (April 2016) ISBN10: 0692685316, ISBN-13:978-0692685310, Paperback: $9.75, Kindle: $2.99. Available at Amazon.com and through local bookstores.

Posted in Blog Writing | Comments Off on GCSRi Publishing Releases a New Social Security Book about the New Rules and How to Maximize Benefits

Exciting News! The Second Edition is Here!

Social Security: Maximize Your Benefits (2nd Edition)

Social Security: Maximize Your Benefits (2nd Edition) is here! The second edition has been thoroughly revised and includes over 100 more pages. Some of the Social Security deadlines are quickly approaching. You may be eligible to receive more than you think. Additionally, there are many benefit maximum strategies that are still available.

REMEMBER THESE DATES

April 29, 2016 is the last day for qualified couples to submit a File-and-Suspend application for benefits. If you were at least 62 as of December 31, 2015 you are eligible to file a Restricted Application if you file before December 31, 2019. You will find all the details in Social Security: Maximize Your Benefits (2nd Edition).

Click on the link and get the book today! Social Security: Maximize Your Benefits

Posted in Blog Writing | Comments Off on Exciting News! The Second Edition is Here!

Clarification About the New Social Security Rules

New Social Security Rules The new rules for Social Security were passed in Section 831 of the Bipartisan Budget Act of 2015. At that point Congress effectively eradicated the File-and-Suspend and Restricted Application claiming strategies for optimizing Social Security benefits. Individuals under age 62 in 2015 (born January 2, 1954 or later) are not eligible for the File-and-Suspend and Restricted Application claiming strategies.

The new rules do not take effect immediately. Also, the new rules do not impact those that already receive benefits. For example, I have a friend who receives Social Security benefits on a restricted application, her benefits will not change. Individuals who are at full retirement age (FRA) or will reach FRA by April 29, 2016 will have an opportunity to File-and-Suspend before the shutdown. (If you are eligible, you must file by April 29, 2016 or lose your benefits forever.) Moreover, anyone who was born in 1953 or earlier (or January 1, 1954) will still be able to apply for benefits on a Restricted Application for spousal (or divorced ex-spousal) benefits, even if the claimant does not file until years from today.

Posted in Blog Writing | Comments Off on Clarification About the New Social Security Rules

Social Security Claiming Strategies for Non-Married Couples

Non-Married couples

Non-Married Opposite-Sex and Same Sex-Couples are Eligible for Spousal and Survivor Benefits

The Social Security Administration (SSA) in 2014 updated its rules about eligibility for both opposite-sex and same-sex spousal and survivor benefits for non-married couples. The SSA looks at each state to see if inheritance rights exist for the relationship, such as a domestic partnership or civil union. If the state recognizes the individual in the relationship and treats that person as a spouse when the other partner dies with no will in place, then the SSA will recognize that person as a spouse. This means that individuals in a domestic partnership or civil union may not have to get married to be entitled to Social Security spousal and survivor benefits. At the end of this post is an image of the SSA’s listing of states that recognize spousal inheritance rights. Click on this image for an enlarged view. For details see https://secure.ssa.gov/poms.nsf/lnx/0200210004.

The SSA provides the following two examples of how non-married same-sex applications for spousal benefits can be granted or denied.

Example for determining that the non-marital legal relationship is recognized for benefit purposes
Nicole, the “number holder” or worker and Penny (claimant) established a civil union in Colorado. Colorado appears in the chart below. In this section, which shows “Civil Unions” as a “Relationship Type.” Penny indicates that the relationship establishment date was after the “Effective Date” shown in the chart. Colorado’s civil union law would allow Nicole and Penny to inherit as each other’s spouse, according to the information under “Inheritance Rights” in the chart. When Penny applied for aged spouse benefits, Nicole was still domiciled in Colorado. The SSA will treat Penny and Nicole as spouses for purposes of determining entitlement.

Example for determining that the non-marital legal relationship is not recognized for benefit purposes
Tony, the “number holder” or worker and Tim (claimant) entered a domestic partnership in Rhode Island. Rhode Island appears on the chart below. In this section; however, the only type of relationship listed on the chart for Rhode Island is a “Civil Union.” Therefore the SSA will treat the claimant as unmarried for benefit purposes. Tony and Tim’s application will be denied.

Note: The Supreme Court’s June 2015 ruling states that married same-sex couples are eligible for Social Security benefits regardless of which state they reside. To be eligible for spousal benefits, the claimant must be continuously married for a least one year and currently married to the wage earner when the spousal benefit application is filed.

Click on this image to enlarge

States with Non-Married Inheritance

Posted in Blog Writing | Comments Off on Social Security Claiming Strategies for Non-Married Couples

Do I have to Pay State Income Taxes on My Social Security Benefits?

Income Taxes on Social Security Benefits

Some Retirees pay both Federal and State Taxes on Social Security Benefits

According to the Social Security Administration (www.ssa.gov) some claimants have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.

Federal Income Taxes on Social Security Benefits
If your Social Security retirement benefits are your only source of income. You will likely not have to pay Federal or State income taxes. Additionally, no one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:

• file a federal tax return as an “individual” and your combined income* is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits. If your income is more than $34,000, up to 85 percent of your benefits may be taxable.

• file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits. If your income is more than $44,000, up to 85 percent of your benefits may be taxable. If you are married and file a separate tax return, you probably will pay taxes on your benefits.

*Note:
Your adjusted gross income + Nontaxable interest + ½ of your Social Security benefits
= Your “combined income”

Each January you will receive a Social Security Benefit Statement (Form SSA-1099) showing the amount of benefits you received in the previous year. You can use this Benefit Statement when you complete your federal income tax return to find out if your benefits are subject to tax. If you do not receive From SSA-1099, you can order a replacement form online at SSA Form 1099 Replacement

State Taxes on your Social Security Benefits
There are three primary categories of state Social Security taxation:

1. SOCIAL SECURITY BENEFTS ARE STATE TAX EXEMPT: According to the Kiplinger Personal Finance Magazine (www.kiplinger.com) there are 36 states exclude benefits from state taxes (or have no income tax). Seven states that do not tax individual income are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two other states (New Hampshire and Tennessee)only tax dividends and interest (5 percent for New Hampshire and 6 percent for Tennessee for 2014 and remain the same in 2015)

2. STATES THAT TAX SOCIAL SECURITY BENEFITS: According to Kiplinger Personal Finance (www.Kiplinger.com) there are five states that tax Social Security benefits in the same way the Federal government taxes benefits. These states are Minnesota, North Dakota, Rhode Island, Vermont and West Virginia. Like the federal government, up to 85% of Social Security benefits can be taxed. (See above for details.)

3. STATE TAXATION OF SOCIAL SECURITY BENEFTIS USING AN ASSORTMENT OF ELEMENTS: According to The Tax Foundation (www.taxfoundation.org) some states determine Social Security benefit exemptions based on a variety of factors, such as income, age, or as a certain percentage of Social Security income. States that use categories of exemptions include Connecticut, Kansas, Missouri, Colorado, Utah, Montana, New Mexico, and Nebraska. The following are a few of the details:
Connecticut allows taxpayers to fully exempt Social Security income from state income tax if income is less than $60,000 (for joint filers).
Kansas exempts Social Security benefits from state income tax if federal adjusted gross income is if $75,000 or under.
Missouri allows taxpayers with adjusted gross income of less than $100,000 (for joint filers) to deduct all of taxable Social Security benefits from income.
• If a Colorado household meets certain age requirements, qualifying retirement income can be excluded from income if it is taxable under the federal income tax (it’s called the “pension exclusion” and is subject to a maximum amount).
• A similar program exists in Utah, but it is administered as a credit and is phased-out once income exceeds a certain level.
• In Montana, some Social Security benefits may be taxable, and the state advises taxpayers to fill out a worksheet to determine how the state taxable amount differs from the federally taxable amount. In general, if total income is below $32,000 for joint-filers, benefits will not be subject to tax.
• In New Mexico, benefits are taxable but a person can qualify for an exemption if he or she is 65 years or older, which is based on income level.
Nebraska taxes Social Security benefits for taxpayers with an adjusted gross income of $58,000 or less for married persons filing jointly, and $43,000 or less for all others are exempt from Nebraska’s personal income tax beginning in 2015.

Posted in Blog Writing | Comments Off on Do I have to Pay State Income Taxes on My Social Security Benefits?

CFPB Releases “Planning for Retirement” Tool to Help Consumers Decide When to Claim Social Security

CFPB Report Shows Many Consumers Base Critical Claiming Decision on Limited Information
CFPB Report Shows Many Consumers Base Critical Claiming Decision on Limited Information

Recently the Consumer Financial Protection Bureau (CFPB) released “Planning for Retirement,” an interactive, online tool designed to help older Americans decide when is the optimum time to claim Social Security retirement benefits. According to a report released by the CFPB, greater numbers of individuals are relying on Social Security for more of their income for longer periods of time, but end up receiving lower monthly benefits by claiming early. Often, the claiming-age decision is based on limited information about the financial impact of that choice. The new CFPB tool allows consumers to estimate how much money they can expect to receive at different ages and provides tips to help consumers evaluate the trade-offs.
“Millions of Americans are likely to face financial insecurity in their retirement years,” said CFPB Director Richard Cordray. “Deciding when to start claiming Social Security benefits is one of the most important financial choices a consumer will make. The CFPB’s ‘Planning for Retirement’ tool can help consumers clearly see their options.”

The “Planning for Retirement” Tool
Americans are eligible to claim Social Security retirement benefits without any reduction at their “full retirement age (FRA),” according to the Social Security Administration (SSA). For people born after 1942, full retirement age ranges from 66 to 67, depending on the year the person was born. Consumers can also claim their benefits several years before, agreeing to take less money each month. Or they can claim several years after, and get bigger monthly checks. Generally, the amount a consumer receives from Social Security is a one-time choice. This means if a worker claims the reduced or increased benefit, they receive that amount for the rest of their life, with annual cost-of-living adjustments (COLA). This decision also impacts the benefits an older consumer’s surviving spouse will receive after their death.

The “Planning for Retirement” Tool can be found at: http://www.consumerfinance.gov/retirement/

CFPB Report Shows Many Consumers Base Critical Claiming Decision on Limited Information
Today, the CFPB released a report indicating that many consumers may not be taking advantage of their option to receive higher Social Security income and a more secure retirement. Specifically, the report highlights:
1. Many Americans collect early despite living longer: Studies show that many retirees start collecting their benefits at their earliest eligibility age. In 2013, nearly 46 percent of claims were submitted at age 62. But, on average, Americans reaching age 65 today will live to age 85. This means consumers will likely need sufficient income and savings to cover 20 years or more in retirement.
2. Millions of Americans face financial insecurity in retirement: Many consumers at and near retirement are unprepared financially. For example, four in 10 late boomers – currently ages 51-59 – are reaching retirement with limited or no savings, and are projected to face a savings shortfall.
3. Retirees rely on Social Security for income: With the decline in coverage from traditional pension plans, Social Security is the only guaranteed monthly income for a majority of older consumers. Approximately two thirds of the nearly 40 million Americans aged 65 and older who receive Social Security benefits depend on it for 50 percent or more of their retirement income. Social Security is particularly important for the growing number of beneficiaries aged 80 and older for whom it accounts for 70 percent or more of their income.
4. Consumers lack awareness and information about the claiming-age choice: Studies have shown that people claiming Social Security before their full retirement age have less knowledge about their benefits than those who claim at or after their full retirement age. Several recent surveys show that a significant portion of pre-retirees are confused about or lack basic knowledge of information about Social Security benefits. For example, one study found that only 22 percent of pre-retirees surveyed knew their full retirement age. Only 12 percent knew how their benefits would change if they claimed before, at, or after their full retirement age. And only about 5 percent of those surveyed said that they knew how their benefits are calculated.

The CFPB report about Social Security can be found at: http://files.consumerfinance.gov/f/201511_cfpb_issue-brief-social-security-claiming-age-and-retirement-security.pdf

Posted in Blog Writing | Comments Off on CFPB Releases “Planning for Retirement” Tool to Help Consumers Decide When to Claim Social Security

New Budget Deal will Cut Two Popular Social Security Claiming Strategies

Changes to Social Security Claiming Options

The Bipartisan Budget Act of 2015 will Reduce Benefits for Millions of Americans

There are two popular Social Security maximization strategies that many Americans have used to make the most of Social Security retirement benefits. The file and suspend approach will be eliminated around May 1, 2016 and the Restricted Application Method will be crammed down at the end of 2015 due to the Bipartisan Budget Act of 2015 which was passed last week without any public hearings.

File and Suspend

The File and Suspend Strategy allows the Full Retirement Aged (FRA) spouse to file for Social Security retirement benefits and immediately “suspend” his or her application. This allows the 62 year-old spouse to claim spousal benefits (usually half of the FRA wage earners benefit) while the wage earner continues to work (or delays claiming benefits) to gain 8 percent per year in Delayed Retirement Credits (DRCs).

The Bipartisan Act of 2015 will become effective in about six-months. This means that folks getting benefits now can continue using the File and Suspend Strategy will continue to receive benefits. Others must be at least age 66 to use this approach, and the window of opportunity will close around May 1, 2016.

Currently, single individuals and married couples can use the File and Suspend approach to collect benefits retroactively. For example, if you File and Suspend then continue to work you can collect benefits retroactively to the date you suspended your benefits. For example, let’s say that you you are single and file and suspend when you are age 66. You work until you become ill at age 69. You can retroactively claim three-years of past Social Security benefits and forfeit the Delayed Retirement Credits (DRCs) you have earned. The new Budget Deal will eliminate this option for most future claimants.

Restricted Applications

Many working couples will be affected by the Budget Bill. In the past, an individual who was eligible for a spousal benefit and a benefit based on their own work record could choose which Social Security benefit they wanted to claim. If a working spouse claimed a “restricted” spousal only benefit he or she could accumulate Delayed Retirement Credits (DRCs) of 8 percent per year until age 70.

The New Budget Deal eliminates this option for individuals born before January 2, 1954. However, anyone age 62 or older at the end of 2015 can continue to have this option and at age 66 they can restrict an application to spousal benefits only.

Therefore a couple could use the following method to claim Social Security benefits. For example, Jane’s FRA benefit is $500 a month, her husband John’s FRA benefit is $2,000 per month. Both are FRA and 66 years old.

1. Currently Jane could use the Restricted Application approach and claim $1,000 per month in spousal only benefits (half of John’s monthly benefit) and earn DRCs on her own work record.

2. John could claim spousal only benefits on Jane’s work record of $250 per month and earn DRCs until he is 70 years old.

3. If the couple are equal earners they may want to delay claiming Social Security benefits so they can both claim DRCs.

The New Budget Deal does not affect the ability of widow’s to file for spousal only benefits and to later switch to other Social Security benefits.

Posted in Blog Writing | Comments Off on New Budget Deal will Cut Two Popular Social Security Claiming Strategies

No 2016 Social Security Cost of Living Increase

No 2016 Social Security COLA increase
Law Does Not Provide for a Social Security Cost-of-Living
Adjustment for 2016

According to the Social Security Administration (SSA) with consumer prices down over the past year, monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016. In other words, there will be no increase to monthly Social Security retirement benefits for 2016.

The SSA goes on to state that the Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016. (For details see https://www.ssa.gov/oact/STATS/cpiw.html.)

Other adjustments that would normally take effect based on changes in the national average wage index also will not take effect in January 2016. Since there is no COLA, the statute also prohibits a change 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 2016. For more information see the Social Security 2016 Fact Sheet located at https://www.ssa.gov/news/press/factsheets/colafacts2016.pdf.

Posted in Blog Writing | Comments Off on No 2016 Social Security Cost of Living Increase

Getting Married Soon? Give Social Security Your New Name

Change your name after the wedding
The Social Security Administration (www.ssa.gov) has this reminder for all newlyweds.

The Social Security Administration (SSA) notes that weddings mark exciting changes for newlyweds. While the happy couple works out the details, Social Security wants them to remember one detail that’s extremely important — and that’s the “record” Social Security keeps of their life’s earnings.

A wedding usually means a name change is in order, and one task the happy couple should have on their to-do list is to contact Social Security and their employers. If you are legally changing your name, you need to apply for a Social Security card reflecting your new name. That way, Social Security can keep track of your earnings history as you go about living your wonderful new life. So, go to the Social Security Administration Web site at www.ssa.gov/ssnumber/ for details about the documentation you will need.

An Overview of the Process
If you are legally changing your name because of marriage, divorce, court order or any other reason, you need to tell Social Security so that you can get a corrected card. If you are working, also tell your employer. If you do not tell the SSA when your name changes, it may prevent your wages from being posted correctly to your Social Security record, which may lower the amount of your future Social Security benefits. Additionally, not correcting your name may cause delays when filing your taxes.

What documents SSA can and cannot accept
SSA cannot accept photocopies or notarized copies. SSA cannot accept a receipt showing you applied for the document. All documents must be current (not expired). SSA may use one document for two purposes. For example, SSA may use your U.S. passport as proof of both citizenship and identity.

What original documents do I need to show proof of U.S. citizenship?
The SSA can accept only certain documents as proof of U.S. citizenship. These include a U.S. birth certificate or a U.S. passport. You must present your birth certificate. If one exists, you must submit it. If a birth certificate does not exist, SSA may be able to accept your:
• Religious record made before the age of 5 showing your date of birth
• U.S. hospital record of your birth
• U.S. passport

Anyone age 12 or older requesting an original Social Security number must appear in person for an interview. SSA will ask for evidence to show you do not have a Social Security number. Here are examples of documents you can use to prove a Social Security number was never assigned:

If you lived outside the United States for an extended period, a current or previous passport, school and/or employment records, and any other record that would show long-term residence outside the United States could be used to show you do not have a Social Security number.

If you have lived in the United States and you are applying for an original Social Security number, SSA may ask you for information about the schools you attended or SSA may ask you to provide copies of tax records that would show the SSA that you were never assigned a Social Security number.

Providing proof of identity
The SSA can accept only certain documents as proof of identity. An acceptable document must be current (not expired) and show your name, identifying information (date of birth or age) and preferably a recent photograph. For example, as proof of identity Social Security must see your:
• U.S. driver’s license
• State-issued non-driver identification card
• U.S. passport

If you do not have one of these specific documents or you cannot get a replacement for one of them within 10 days, SSA will ask to see other documents, including:
• Employee identification card
• School identification card
• Health insurance card (not a Medicare card)
• U.S. military identification card

Posted in Blog Writing | Comments Off on Getting Married Soon? Give Social Security Your New Name