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

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

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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 ( 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.

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 ( 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 ( 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 ( 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.

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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:

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:

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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.

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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

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

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Getting Married Soon? Give Social Security Your New Name

Change your name after the wedding
The Social Security Administration ( 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 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

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Social Security Offers Many Services in Spanish

Social Security for Hispanic Seniors

Hola! September 15 to October 15 is Hispanic Heritage Month

Social Security is proud to offer many services in Spanish. The Social Security Administration ( invites you to look at their Spanish Web site located at

With 57 million people, the Hispanic population in the United States is the largest ethnic minority group in the U.S. According to the Census Bureau, between 2000 and 2010, the Hispanic population grew by 43 percent. And more than half of the growth in the total population of the United States between 2000 and 2010 was due to the increase in the Hispanic population.

The Social Security Administration (SSA) aims to meet the needs of a growing Hispanic population by providing a range of online services. On most pages of the SSA’s main site, you can select a tab at the top of the page to have the language appear in Spanish. From there, Spanish speakers can use SSA’s online services – Servicios por Internet. Spanish speaking seniors can apply for retirement, survivors, or disability benefits, and extra help with Medicare prescription drug plan costs. The SSA also has a Spanish language option when you call 1-800-772-1213. SSA has many automated services available in Spanish, and from 7 a.m. to 7 p.m., Monday through Friday, you can speak to a Spanish-speaking Social Security representative. In addition, many of the SSA field offices have free Spanish interpreter services available.

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How Your Bank Account Social Security Funds are Protected from Debt Collectors

Protecting your Social Security Payments

Can a Debt Collector Take my Social Security Benefits?

The Social Security Administration (SSA) states that your Social Security funds have protection from judgment creditors who can garnish or levy funds in your bank account to collect on their judgments. According to Federal regulations effective May 1, 2011, your bank must protect your Social Security direct deposit benefits for the last two-months. If your account has more than two-months’ worth of benefits, your bank can freeze the extra-funds.

Your Bank Account is protected for Two-Months of Social Security Benefits
When the bank receives the paperwork from a judgment collector it will establish an account review of all your bank accounts (such as your personal, savings, and business accounts). The bank “looks back” for two-months. For example, the paperwork is received on October 1, 2015 and the bank will look back to August 1, 2015. If you received two direct Social Security payments, of say $1,500 each, your bank account is protected for $3,000. The bank can freeze any funds over $3,000. However, you can use the $3,000 for your daily living expenses and cash withdrawals as usual.

The Exceptions
1. Automatic protection does not apply to Social Security payments using paper checks.
2. Funds transferred from the Social Security direct deposit account to another account (such as, a savings account) are not protected.

If the Bank Freezes Your Money
The bank can freeze the excess funds in your bank accounts. In other words, any funds that are over twice your monthly Social Security payment (such as, the $3,000 discussed in the earlier example). If the bank freezes your money, the bank must notify you of the garnishment. The judge then decides if the money should be given to the judgement collector based on factors such as State law and your income. It is important for the judge to know exactly where your money comes from. You may need to enlist a lawyer.

You may Qualify for Free Legal Help
According to the Consumer Finance Protection Bureau (CFPB) Federal and state laws may protect the money you receive from other sources from garnishment. This can include money from a pension or retirement plan, Federal student loans, child or spousal support payments. Consumer laws in your state may protect some of your money and assets. The CFPB suggests finding legal help. The following are a few resources:

• The Center for Elder Rights Advocacy can refer you to a local agency that provides free legal help to seniors who qualify. You can call the Center for Elder Rights Advocacy at (866) 949-2372 or visit at

• The American Bar Association can assist you in finding help in your state, click here .

• The Consumer Finance Protection Bureau provides a list of local legal services programs or attorney referral programs at

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Can a Divorced Spouse Collect Social Security on the Ex-Spouse’s Work Record?


Social Security Benefits for Divorced Spouses

Lawrence J. Kotlifoff (2015) provides the following information about divorce, marriage and re-marriage. The statistics indicate that between 40 and 50 percent of all American first marriages end in divorce. Next between 50 and 67 percent of this population find their second marriages ending in divorce. And 75 percent of this population end-up with their third marriages ending in divorce. Kotlifoff concludes by stating that the average length of time for first marriages is eight years and in the United States two-thirds of the divorce cases are filed by women. Kotlifoff quickly points out that this is a tactical mistake. Ex-spouses need to be married for ten-years to qualify for spousal and survivor benefits.

Eligibility for Ex-spousal Social Security Benefits
Social Security regulations state that a divorced spouse may qualify for the same spousal benefits as a married spouse. There are three requirements that make ex-spouses eligible to collect on their former spouses work records:
1. You must be at least 62-years old
2. You must be single
3. The marriage to your former spouse must have been for at least 10-years.
What’s important to keep in mind, is that you collecting Social Security retirement benefits on your former spouses work record does not affect the current spouse and their children.

Of Course there are Exceptions….
The Social Security eligibility rules attempt to cover all types of situations that ex-spouses may encounter. For example, Social Security recognizes common-law marriages if they are legally entered into. This is how it works, once the common-law marriage is recognized by the state, it is recognized by other states and the Social Security Administration (SSA).

The following are a few more exceptions:

• The Rewards of Being an Ex-Spouse
If you are eligible for benefits based on your ex-spouses work record you should apply (if you have been divorced for two years). In contrast, the current spouse cannot apply for Social Security benefits until the record holder spouse applies for his Social Security benefits.

• Ex-Spouse Survivor Benefits
If you are 60 years old, single or re-married, and were married for 10-years or more, you are entitled to 100 percent of the amount of your deceased ex-spouse’s benefits, the same amount as the current widow or widower. Again, you collecting benefits will not affect the amount that others can collect.

• If you only had One Spouse Be Wary of the Penalties of Early Retirement
The spousal benefit is 50 percent of the Full-Retirement Age (FRA) benefit of the worker. If you were born between 1943 and 1954 decide to take early retirement this 50 percent amount is permanently reduced. The rate of reduction for the first 36 months is 25/36 of 1 percent. For any additional early months the benefit is reduced 5/12 of 1 percent for each month. For example, James’ basic monthly (spousal benefits do not include Delayed Retirement Credits) is $1,000. Sarah the ex-spouse files at age 62. That’s $1,000 X .50 = $500 for a FRA benefit. The early retirement reduces this benefit by 30 percent ($500 X .30 = $350). Sarah will receive $350 at age 62.

• Another Reason to Consider Waiting to File for Benefits
Because benefits go up by about 8% a year between the ages of 66 and 70, waiting to collect your own benefit could mean a significantly higher payout down the road. Just for the record, the spousal or ex-spousal benefit doesn’t go up after you reach your FRA, so there’s no advantage to waiting beyond that date to file your claim for Ex-Spousal benefits.

• Something to Think About: You Have Two Ex-Spouses and Each Marriage was over 10-Years
To be eligible for the divorced spouse benefit you must currently be single, at least 62 years old, and your work record benefit is less than the monthly Social Security benefit of your ex-spouse. If you qualify for benefits for both spouses, you can select the benefits from one spouse (usually the highest earner). You can choose to collect from either spouse but you cannot collect from both. Additionally, the amount you collect on your ex-spouses work record will not affect the ability of the current spouse to collect benefits.

Here’s a maximization strategy for individuals with two ex-spouses and each marriage was over 10-years
Let’s say that you are a baby boomer that has never worked. A neat strategy is to file for early retirement benefits on Spouse #1’s work record at age 62. If you file at age 62 you will receive 35 percent of Spouse #1’s basic FRA benefit. Then when you turn FRA, you can claim spousal benefits on Spouse #2’s work record. You will receive 50 percent of Spouse #2’s basic FRA benefit. Filing at FRA on Spouse #2’s work record will give you a raise in your monthly benefit. (You can only claim one spousal benefit at a time.) Your previously reduced filing will not carry-over to your new claim.

Note: The length of marriage rule changes if you are caring for the worker’s entitled child.

How and when you apply for ex-spousal benefits will have a direct impact on your economic well-being. What is right for others, may not be right for your personal situation. Therefore, before you make any claims for ex-spousal benefits, it is best to contact a financial adviser ( ) or Social Security representative (call toll-free at 1-800-772-1213 or via email at

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2015 Social Security Trustees Report Released

2015 Social Security Trustees Report

Report Shows that Urgent Changes are Needed

The 2015 Social Security Annual Trustees Report has been released. Like last year, there is bad news for the future of Social Security retirement benefits. The Social Security Administration (SSA) has provided a summary of the 2015 Social Security Trustees Report at

A highlight of the report indicates:
“Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period. The Trustees project that this annual cash-flow deficit will average about $76 billion between 2015 and 2018 before rising steeply as income growth slows to its sustainable trend rate after the economic recovery is complete while the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.”

“Interest income and redemption of trust fund assets from the General Fund of the Treasury, will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits until 2034. Since the cash-flow deficit will be less than interest earnings through 2019, total income will exceed expenditures and reserves of the combined trust funds will continue to grow but not by enough to prevent the ratio of reserves to one year’s projected cost (the combined trust fund ratio) from declining. (This ratio peaked in 2008, declined through 2014, and is expected to decline steadily in future years.) After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of total trust fund reserves in 2034, one year later than projected in last year’s Trustees Report. Thereafter, tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2089.”

The last five Trustees Reports ( ) have indicated that Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) Trust Fund reserves would become depleted between 2033 and 2037 under the intermediate set of economic and demographic assumptions provided in each report. If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three fourths of the scheduled benefits after trust fund depletion.

The Committee for a Responsible Federal Budget ( points out that when today’s 48-year olds reach normal retirement age or when today’s newest retirees turn 81 they can expect to receive 75 percent of the retirement benefits due them as a result of the shortfall.

The 2015 Social Security Trustees Report is a call to action. Determining a solution and implementing that solution nationwide will take time and effort. Policymakers need to act now to put Social Security on a path to solvency. Delays will increase the difficulties of implementing the needed changes.

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