As you near retirement, it's likely you'll have many questions
about Social Security. Here are a few of the most common questions and answers
about Social Security benefits.
Will Social Security be around when you need it?
You've probably heard media reports about the worrisome
financial condition of Social Security, but how heavily
should you weigh this
information when deciding when to begin receiving benefits? While it's very
likely that some changes will be made to Social Security (e.g., payroll taxes
may increase or benefits may be reduced by a certain percentage), there's no
need to base your decision about when to apply for benefits on this information
alone. Although no one knows for certain what will happen, if you're within a
few years of retirement, it's probable that you'll receive the benefits you've
been expecting all along. If you're still a long way from retirement, it may be
wise to consider various scenarios when planning for Social Security income,
but keep in mind that there's been no proposal to eliminate Social Security.
If you're divorced, can you receive Social Security
retirement benefits based on your former spouse's earnings record?
You may be able to receive benefits based on an ex-spouse's
earnings record if you were married at least 10 years, you're currently
unmarried, and you're not entitled to a higher benefit based on your own
earnings record. You can apply for a reduced spousal benefit as early as age 62
or wait until your full retirement age to receive an non-reduced spousal benefit.
If you've been divorced for more than two years, you can apply as soon as your
ex-spouse becomes eligible for benefits, even if he or she hasn't started
receiving them (assuming you're at least 62). However, if you've been divorced
for less than two years, you must wait to apply for benefits based on your
ex-spouse's earnings record until he or she starts receiving benefits.
If you delay receiving Social Security benefits, should you
still sign up for Medicare at age 65?
Even if you plan on waiting until full retirement age or
later to take your Social Security retirement benefits, make sure to sign up
for Medicare. If you're 65 or older and aren't yet receiving Social Security
benefits, you won't be automatically enrolled in Medicare Parts A and B.
You can sign up for Medicare when you first become eligible during
your seven-month Initial Enrollment Period. This period begins three months
before the month you turn 65, includes the month you turn 65, and ends three
months after the month you turn 65.
The Social Security Administration recommends contacting them
to sign up three months before you reach age 65, because signing up early helps
you avoid a delay in coverage. For your Medicare coverage to begin during the
month you turn 65, you must sign up during the first three months before the
month you turn 65 (the day your coverage will start depends on your birthday).
If you enroll later, the start date of your coverage will be delayed. If you
don't enroll during your Initial Enrollment Period, you may pay a higher
premium for Part B coverage later. Visit the Medicare website, www.medicare.gov to learn more, or call the
Social Security Administration at 800-772-1213.
Will a retirement pension affect your Social Security
benefit?
If your pension is from a job where you paid Social Security
taxes, then it won't affect your Social Security benefit. However, if your
pension is from a job where you did not pay Social Security taxes (such as
certain government jobs) two special provisions may apply.
The first provision, called the government pension offset
(GPO), may apply if you're entitled to receive a government pension as well as
Social Security spousal retirement or survivor's benefits based on your
spouse's (or former spouse's) earnings. Under this provision, your spousal or survivor's
benefit may be reduced by two-thirds of your government pension (some
exceptions apply).
The windfall elimination provision (WEP) affects how your
Social Security retirement or disability benefit is figured if you receive a
pension from work not covered by Social Security. The formula used to figure
your benefit is modified, resulting in a lower Social Security benefit.
Broadridge Investor Communication
Solutions, Inc. Copyright 2016.
