CURITY WANDA WORKER 456 ANYWHERE AVENUE MAINTOWN, USA 11111-1111 Your payment would be about $2,061 a month at full retirement age January 2, 2021 Your Social Security Statement Are you thinking about retirement? Are you ready for retirement? We have tools that can help you! Estimate your future retirement benefits at socialsecurity.gov/estimator Apply for retirement, spouse's, Medicare, or disability benefits at socialsecurity.gov/applyforbenefits And once you receive benefits, manage your benefits at myaccount.socialsecurity.gov Your Social Security Statement tells you about how much you or your family would receive in disability, survivor, or retirement benefits. It also includes our record of your lifetime earnings. Check out your earnings history, and let us know right away if you find an error. This is important because we base your benefits on our record of your lifetime earnings. Social Security benefits are not intended to be your only source of income when you retire. On average, Social Security will replace about To view your Social Security Statement online anytime create a my Social Security account today! COMING my Social Security myaccount.socialsecurity.gov 40 percent of your annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably when you retire. To see your Statement online anytime, create a my Social Security account at myaccount.socialsecurity.gov. Social Security Administration Follow the Social Security Administration at these social media sites.f Your Estimated Benefits "Retirement Disability "Family "Survivors Medicare You have earned enough credits to qualify for benefits. At your current carnings rate, if you continue working until.... your full retirement age (67 years), your payment would be about age 70, your payment would be about. age 62, your payment would be about. You have earned enough credits to qualify for benefits. If you became disabled right now, your payment would be about. If you get retirement or disability benefits, your spouse and children also may qualify for benefits You have earned enough credits for your family to receive survivors benefits. If you die this year, certain members of your family may qualify for the following benefits Your child Your spouse who is caring for your child. Your spouse, if benefits start at full retirement age. Total family benefits cannot be more than $ 2,061 a month $2,561 a month S 1426 a month $ 2,027 a month $ 1,520 a month $ 1.520 a month $ 2,027 a month S 3,700 a month Your spouse or minor child may be eligible for a special one-time death benefit of $255. You have enough credits to qualify for Medicare at age 65. Even if you do not retire at age 65, be sure to contact Social Security three months before your 65th birthday to enroll in Medicare Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2035, the payroll taxes collected will be enough to pay only about 80 percent of scheduled benefits We based your benefit estimates on these facts: Your date of birth (please verify your name on page 1 and this date of birth). Your estimated taxable earnings per year after 2018 Your Social Security number (only the last four digits are shown to help prevent identity the April 5, 1961 $52,369 XXX-XX-1214 How Your Benefits Are Estimated To qualify for benefits, you carn "credits" through your work up to four each year. This year, for example, you earn one credit for each $1,470 of wages or self-employment income. When you've earned $5,880, you've earned your four credits for the year. Most people need 40 credits, earned over their working lifetime to receive retirement benefits. For disability and survivors benefits, young people need fewer credits to be eligible. We checked your records to see whether you have earned enough credits to qualify for benefits. If you haven't earned enough yet to qualify for any type of benefit, we can't give you a benefit estimate now. If you continue to work, we'll give you an estimate when you do qualify. What we assumed-If you have enough work credits, we estimated your benefit amounts using your average earnings over your working lifetime. For 2021 and later (up to retirement age), we assumed you'll continue to work and make about the same as you did in 2019 or 2020. We also included credits we assumed you earned last year and this year. Generally, the older you are and the closer you are to retirement, the more accurate the retirement estimates will be because they are based on a longer work history with fewer uncertainties such as earnings fluctuations and future law changes. We encourage you to use our online Retirement Estimator at www.socialsecurity.gov/estimator to obtain immediate and personalized benefit estimates We can't provide your actual benefit amount until you apply for benefits. And that amount may differ from the estimates stated above because: (1) Your earnings may increase or decrease in the future. (2) After you start receiving benefits, they will be adjusted for cost-of-living increases (3) Your estimated benefits are based on current law. The law governing benefit amounts may change. (4) Your benefit amount may be affected by military service, railroad employment or pensions earned through work on which you did not pay Social Security tax. Visit www.socialsecurity.gov to learn more Windfall Elimination Provision (WEP) In the future, if you receive a pension from employment in which you do not pay Social Security taxes, such as some federal, state or local government work, some nonprofit organizations or foreign employment, and you also qualify for your own Social Security retirement or disability benefit, your Social Security benefit may be reduced, but not eliminated, by WEP. The amount of the reduction, if any, depends on your carnings and number of years in jobs in which you paid Social Security taxes, and the year you are age 62 or become disabled. For more information, please see Windfall Elimination Provision (Publication No. 05-10045) at www.socialsecurity.gov/WEP Government Pension Offset (GPO)-If you receive a pension based on federal, state or local government work in which you did not pay Social Security taxes and you qualify, now or in the future, for Social Security benefits as a current or former spouse, widow or widower, you are likely to be affected by GPO If GPO applies, your Social Security benefit will be reduced by an amount equal to two-thirds of your government pension, and could be reduced to zero. Even if your benefit is reduced to zero, you will be eligible for Medicare at age 65 on your spouse's record. To learn more, please see Government Pension Offset (Publication No. 05-10007) at wwww.socialsecurity.gov/GPO R Your Earnings Record Vinir Tased Years You Social Sty Medic Worked Secseity Med 1977 226 226 35,205 1978 621 353 120 1,208 MOM 1980 2,258 38364 34,364 40041 3,36 3361 1982 4293 4293 44208 1983 347 5,473 420 1984 7287 7287 44M 1945 44,665 9,0 1966 10,453 10,453 41727 45721 400 1947 4 12.223 12.223 4560 1988 13,894 11,394 1989 15,441 15,441 1990 50217 56277 17,064 174 1991 S350 18,522 18,522 51,462 1992 20.238 51462 20,238 1993 51,990 SLW 21,076 21,076 52.445 SL445 1994 22,237 22,237 1995 23,674 23,674 1996 25.364 25,364 1997 27321 27,321 1998 29,204 29,204 1999 31,254 31.254 2000 33,373 33,373 2001 34,514 34.514 Total Social Security and Medicare taxes paid over your working career through the last year reported on the chart above: Estimated taxes paid for Social Security: You paid Your employers paid: $73,110 $75,047 Estimated taxes paid for Medicare You paid: Your employers paid $17,585 $17,585 Note: Currently, you and your employer each pay a 6.2 percent Social Security tax on up to $142,800 of your earnings and a 1.45* percent Medicare tax on all your earnings. If you are self-employed, you pay the combined employee and employer amount, which is a 12.4 percent Social Security tax on up to $142,800 of your net earnings and a 2.9 percent Medicare tax on your entire net earnings. "If you have earned income of more than $200,000 ($250,000 for married couples filing jointly), you must pay 0.9 percent more in Medicare taxes Help Us Keep Your Earnings Record Accurate You, your employer and Social Security share responsibility for the accuracy of your earnings record. Since you began working, we recorded your reported earnings under your name and Social Security number. We have updated your record each time your employer (or you, if you're self-employed) reported your earnings. Remember, it's your earnings, not the amount of taxes you paid or the number of credits you've earned, that determine your benefit amount. When we figure that amount, we base it on your average earnings over your lifetime. If our records are wrong. you may not receive all the benefits to which you're entitled Review this chart carefully using your own records to make sure our information is correct and that we've recorded each year you worked. You're the only person who can look at the earnings chart and know whether it is complete and correct. Some or all of your earnings from last year may not be shown on your Statement. It could be that we still were 3 processing last year's earnings reports when your Statement was prepared. Your complete earnings for last year will be shown on next year's Statement. Note: If you worked for more than one employer during any year, or if you had both earnings and self-employment income, we combined your earnings for the year. There's a limit on the amount of earnings on which you pay Social Security taxes each year. The limit increases yearly Earnings above the limit will not appear on your earnings chart as Social Security earnings. (For Medicare taxes, the maximum carnings amount began rising in 1991. Since 1994, all of your carnings are taxed for Medicare) Call us right away at 1-800-772-1213 (7am-7pm. your local time) if any earnings for years before last year are shown incorrectly. Please have your W-2 or tax return for those years available. (If you live outside the US, follow the directions at the bottom of page 4) Some Facts About Social Security About Social Security and Medicare... Social Security pays retirement, disability, family and survivors benefits. Medicare, a separate program run by the Centers for Medicare & Medicaid Services, helps pay for inpatient hospital care, nursing care, doctors' fees, drugs, and other medical services and supplies to people age 65 and older, as well as to people who have been receiving Social Security disability benefits for two years or more. Medicare does not pay for long-term care, so you may want to consider options for private insurance. Your Social Security covered earnings qualify you for both programs. For more information about Medicare, visit www.medicare.gov or call 1-800-633-4227 (TTY 1-877-486-2048 if you are deaf or hard of hearing). Retirement If you were born before 1938, your full retirement age is 65. Because of a 1983 change in the law, the full retirement age will increase gradually to 67 for people born in 1960 and later. Some people retire before their full retirement age. You can retire as early as 62 and take benefits at a reduced rate If you work after your full retirement age, you can receive higher benefits because of additional earnings and credits for delayed retirement. Extra Help with Medicare-If you know someone who on Medicare and has limited resources and income, Extra Help is available for prescription drug costs. The Extra Help can help pay the monthly premiums, annual deductibles and prescription co-payments. To learn more or to apply, visit www.socialsecurity.ger or call 1-800-772-1213 (TTY 1-800-325-0778) Receive benefits and still work... You can work and still get retirement or survivors benefits. If you're younger than your full retirement age, there are limits on how much you can earn without affecting your benefit amount, When you apply for benefits, we'll tell you what the limits are and whether work would affect your monthly benefits When you reach full retirement age, the earnings limits no longer apply. Before you decide to retire... Disability If you become disabled before full retirement age, publication, When To Start Receiving Retirement Benefits you can receive disability benefits after six months if you have: enough credits from earnings (depending on your age, you must have earned six to 20 of your credits in the three to 10 years before you became disabled); and a physical or mental impairment that's expected to prevent you from doing "substantial" work for a year or more or result in death. If you are filing for disability benefits, please let us know if you are on active military duty or are a recently discharged veteran, so that we can handle your claim more quickly. Family If you're eligible for disability or retirement benefits, your current or divorced spouse, minor children or adult children disabled before age 22 also may receive benefits. Each may qualify for up to about 50 percent of your benefit amount. Survivors When you die, certain members of your family may be eligible for benefits: your spouse age 60 or older (50 or older if disabled, or any age if caring for your children younger than age 16); and your children if unmarried and younger than age 18, still in school and younger than 19 years old, or adult children disabled before age 22. If you are divorced, your ex-spouse could be eligible for a widow's or widower's benefit on your record when you die. Carefully consider the advantages and disadvantages of early retirement. If you choose to receive benefits before you reach full retirement age, your monthly benefits will be reduced To help you decide the best time to retire, we offer a free (Publication No. 05-10147), that identifies the many factors you should consider before applying, Most people can receive an estimate of their benefit based on their actual Social Security earnings record by going to www.socialsecurity.gov/estimator You also can calculate future retirement benefits by using the Social Security Benefit Calculators at www.socialsecurity.gov. Other helpful free publications include: Retirement Benefits (No. 05-10035) Understanding The Benefits (No. 05-10024) Your Retirement Benefit How It Is Figured (No. 05-10070) Windfall Elimination Provision (No. 05-10045) Government Pension Offset (No. 05-10007) Identity Theft And Your Social Security Number (No. 05-10064) We also have other leaflets and fact sheets with information about specific topics such as military service, self-employment or foreign employment. You can request Social Security publications at our website, www.socialsecurity.gov, or by calling us at 1-800-772-1213. Our website has a list of frequently asked questions that may answer questions you have, We have easy-to-use online applications for benefits that can save you a telephone call or a trip to a field office. You also may qualify for government benefits outside of Social Security. For more information on these benefits, visit www.benefits.gov If you need more information-Visit www.socialsecurity gov on the Internet, contact any Social Security office, call 1-800-772-1213 or write to Social Security Administration, Office of Earnings Operations, PO. Box 33026, Baltimore, MD 21290-3026. If you're deaf or hard of hearing, call TTY 1-800-325-0778. If you have questions about your personal information, you must provide your complete Social Security number. If your address is incorrect on this Statement, ask the IRS to send you a Form 8822. We don't keep your address if you're not receiving Social Security benefits SOCIAL CURRE ADMINIST Thinking of retiring? www.socialsecurity.gov Some things to consider Avoid a Medicare Penalty Retirement can have more than meaning these days. It can mean that you have applied for Social Security retirement benefits or that you are no longer working. Or it can mean that you have chosen to receive Social Security while still working, either full or part-time. All of these choices are available to you. Your retirement decisions can have very real effects on your ability to maintain a comfortable retirement If you retire early, you may not have enough income to enjoy the years ahead of you. Likewise, if you retire late, you'll have a larger income, but fewer years to enjoy it. Everyone needs to try to find the right balance, based on his or her own circumstances. We hope the following information will help you as you plan for your future retirement and consider your retirement options. What is the best option for you? Everyone's situation is different. That is why Social Security has created several retirement planners to help you decide what would be best for you and your family. Social Security has an online calculator that can provide immediate and accurate retirement benefit estimates to help you plan for your retirement. The online Retirement Estimator is a convenient, secure, and quick financial planning tool. It uses your own earnings record information, thereby eliminating any need to manually key in years of earnings information. The estimator also will let you create "what if" scenarios. You can, for example, change your "stop work date or expected future earnings to create and compare different retirement options. To use the Retirement Estimator, go to our website at www.socialsecurity.gov/estimator. Monthly benefit amount $1,500 $1,200 T Monthly benefit amounts differ based on the age you decide to start receiving benefits This example assumes a benefit of $1,000 at a full retirement age of 66 $1,240 $1360 $1,080 $1,000 $933 5900 $800 $866 $750 5600 $300 50 62 63 $1,320 64 65 66 67 68 69 70 Age you choose to start receiving benefits Sign Up at Age 65 Even if you don't plan to receive monthly benefits, be sure to sign up for Medicare three months before turning age 65. If you don't sign up for Medicare Part B (medical insurance) when you're first eligible, your coverage may not start right away and you may have to pay a late enrollment penalty for as long as you have it. You can apply online. Visit www.socialsecurity.gow medicareonly for information and to apply. There is one more thing you should remember as you crunch the numbers for your retirement. You may need your income to be sufficient for a long time, because people are living longer than ever before, and generally, women tend to live longer than men. For example: The typical 65-year-old today will live to age 83; One in four 65-year-olds will live to age 90; and One in ten 65-year-olds will live to age 95. Once you decide on the best age for you to actually retire, remember to complete your application three months before the month in which you want retirement benefits to begin. It's so easy to apply online for benefits The easiest way to apply for Social Security retirement benefits is to go online at www.socialsecurity.gow applyforbenefits. If you do not have access to the Internet, you can call 1-800-772-1213 (TTY number, 1-800-325-0778) between 7 a.m. and 7pm, Monday through Friday, to apply by phone. You also can apply at any Social Security office. To avoid having to wait, call first to make an appointment Receiving benefits while you work Need more When you reach your full retirement age, you can work and earn as much as you want and still receive your full Social Security benefit payment. If you are younger than full retirement age and if your earnings exceed certain dollar amounts, some of your benefit payments during the year will be withheld. This does not mean you must try to limit your earnings. If we withhold some of your benefits because you continue to work, we will pay you a higher monthly benefit amount when you reach your full retirement age In other words, if you would like to work and earn more than the exempt amount, you should know that it will not, on average, reduce the total value of lifetime benefits you receive from Social Security and may actually increase them. Here is how this works; after you reach full retirement age, we will recalculate your benefit amount to give you credit for any months in which you did not receive some benefit because of your earnings. In addition, as long as you continue to work, we will check your record every year to see whether the additional earnings will increase your monthly benefit, Many people can continue to work and still receive retirement benefits. If you want more information on how earnings affect your retirement benefits, ask for How Work Affects Your Benefits (Publication No. 05-10069), which has current annual and monthly earnings limits, and is available on our website. Retirement age considerations Full retirement age For persons born during the years 1943-1954, the full retirement age is 66. If you were not born in this period, you can find your full retirement age on page 2 of your Social Security Statement. Retiring early If you've earned 40 credits (credits are explained on page 2 of your Statement), you can start receiving Social Security benefits at 62 or at any month between 62 and full retirement age. However, your benefits will be reduced based on the number of months. you receive benefits before you reach full retirement age. If your full retirement age is 66, benefits will be reduced: 25 percent at age 62; 20 percent at age 63; 13% percent at age 64; or 6% percent at age 65. Delaying retirement You may decide to wait beyond your full retirement age before choosing to receive benefits. If so, your benefit will be increased by a certain percentage for each month you don't receive benefits between your full retirement age and age 70. This table shows the rate your benefits increase if you delay retiring. Year of birth Yearly increase rate 1941-1942 1943 or later 7.5% 8.0% Rules that may affect your survivor If you are married and die before your spouse, he or she may be eligible for a benefit based on your work record. If you start benefits before your full retirement age, we cannot pay your surviving spouse a full benefit from your record. Also, if you wait until after your full retirement age to begin benefits, the surviving spouse benefits based on your record will be higher. information? You can find answers to frequently asked questions about Social Security, learn about factors that could affect your benefits, and much more by visiting Social Security online at www.socialsecurity.gov. If you do not have access to the Internet, you can get information about Social Security by calling 1-800-772-1213 (1-800-325-0778 for the deaf or hard of hearing) or by visiting a local Social Security office. Other useful websites www.mymoney.gov This website contains calculators for financial planning and information on money-related matters, such as retirement planning and starting a small business. www.dol.gov/agencies/ebsa/ workers-and-families/ preparing-for-retirement Have you determined how much money you'll need in retirement? There are many tools available to help you, such as the Taking the Mystery Out of Retirement Planning Workbook available at this link www.sec.gov/investor/ seniors.shtml Are you looking for information about the investment options available to you as you enter retirement? The Securities and Exchange Commission has a wealth of information on different investment products and topics available at this website. www.usa.gov/retirement This website has a variety of retirement-related resources for seniors including information on Social Security, saving for retirement, and protecting one's private pension benefits Social Security Administration SSA Publication No. 05-10054 January 2019 (Destruy prior editions) Fictional fact set: Use the Social Security statement provided for our good friend, Wanda Worker (available in the online course resources for the week). Wanda is beginning to think about retiring and has come to you for advice. In addition to information provided on that statement, assume the following about Wanda and the Worker family: Wanda is married to William Worker. Their children are grown, successful, and out of the home. Wanda's parents passed away at age 95, 3 years ago. Both Wanda and William are active and in excellent health. Assume a life expectancy of 95 for both. Wanda inherited $3,000,000 that is all invested in an account that guarantees a of 3% rate of return indefinitely. She considers these funds as part of their joint net worth for retirement. In addition to that money, Wanda and William have another $750,000 saved together in various brokerage and retirement accounts, also earning an average return per year of 3%. They have no debt. They are fully insured in all areas of long-term care, life insurance, disability, property, and casualty. In other words, based on the previous bullets, you can define the Worker family as independently wealthy. They love their town and their home and therefore they plan to stay where they are during retirement. Wanda loves her job at the high school teaching Algebra so she's in no hurry to retire, however she'd like to know what to do about Social Security. Specifically, should she draw benefits early, at full retirement age (FRA), or delay benefits? Wanda will continue to draw the same teaching pay each year (as listed on her SS statement) from now through the time she retires from employment. 8. (3 points) What age is considered full retirement age (FRA) for Wanda? 9. (3 points) What is the earliest age Wanda can draw Social Security benefits? 10. (3 points) What is the reduced benefit if she draws benefits early? 11. (3 points) There are two portions of the formula for calculating a reduced benefit (refer to the book). Show each portion of the formula here. 12. (10 points) Read the following article on delaying Social Security. a. https://www.kitces.com/blog/social-security-delay-reversible-six-month-retroactive- application-full-retirement-age/ b. What is the latest age Wanda can draw Social Security benefits? c. What is the benefit of waiting? d. What is the increased benefit if she draws benefits late? e. There is a formula for the increased benefit called a "delayed retirement credit" (refer to your book). Show the formula here. 13. (5 points) Wanda wants to know whether it is possible to keep working and also draw Social Security benefits at the same time. Provide information (complete sentences) to answer her question. 14. (10 points) Read the following articles on break-even age in a Social Security analysis. a. https://smartasset.com/retirement/social-security-break-even- age#:-text-The%20break%2Deven%20point%20represents, taking%20them%20at%20a ge%2062. b. https://www.kiplinger.com/article/retirement/1051-c032-s014-how-to-calculate-social- security-break-even-age.html c. Using the statement for Wanda Worker, and a google search for "ss break-even calculator," complete a break-even analysis and include the printout with your submission. d. What age will allow Wanda to break-even (early, FRA, late)? 15. (20 points) Using all of your answers so far and considering that she and William do not have a current need for the funds, which option from your answers above would allow the Worker family to maximize the return on Social Security as a retirement asset? Explain to Wanda, how/why you think this. Format your answer as if you are replying to an email that she sent asking this question. (two paragraphs in complete sentences)