# Presentation: 471470

## Slide 1

## 1935

**1935**
**Retirement Insurance**

**History**** ****- Social Security’s Programs**

**1956**
**Disability Insurance**

**1939**
**Survivors Insurance**

**Notes:**
At the height of the Great Depression, President Roosevelt was able to obtain support for the Social Security Act. Social Security legislation was passed in 1935.  At that time, the program was solely a retirement program. The extremely high unemployment rate highlighted the vulnerabilities of older workers in America.  During tough economic times, older workers tended to be the last hired, the first fired.  The need for a social safety net: a national retirement system became more apparent and Social Security Retirement Insurance became a reality.   The basic tenets of this social insurance program are to provide:

Individual Equity – You earn and deserve the benefits you receive.  The more you earn, the higher your benefit will be.

Social Adequacy – Providing a financial foundation which protects all workers; providing a base they can build upon.

In 1939, a year before Social Security began paying monthly retirement benefits, the social safety net expanded with the Survivors Insurance Program.  Again during difficult economic times, the vulnerability of widows(ers) and children became even more apparent.

In 1956 the Social Security Disability Insurance Program became law. Then, as now, for most workers in America, Social Security is the only comprehensive disability insurance policy that workers have.  

The intent of Social Security was to help replace wages when one retires, becomes disabled or to help families after a worker dies.  Each of these social insurance programs is meant to serve as a financial foundation and to help workers and their families and supplement their individual savings and investments as well as private pensions.

Major social objectives of Social Security are to reduce poverty among the elderly and to raise the standard of living among lower income workers.  It is estimated that almost one-half of the elderly are kept out of poverty by their Social Security benefits.

Another major social objective is to help keep families together by providing dependents and survivors benefits when the worker retires, dies, or becomes disabled.  Almost 12 million wives, husbands, widows, widowers, and children currently receive such benefits. 

## 1965

**1965**
**Medicare**

**1972**
**Supplemental Security Income**

**2003**
**Medicare ****Part D**

**Notes:**
In 1965, Medicare was added to the Social Security legislation. This program is the medical coverage you get when you turn 65 or become disabled. 

In 1972, Supplemental Security Income was added to the legislation.  SSI is a program based on need for those that are 65 or older, blind or disabled.  Prior to 1972, each State had their own similar programs.  Since Social Security had a network of offices across the country and since Social Security already administered programs based on age or disability, responsibility for SSI was shifted to the Social Security Administration.  Although SSI is administered by Social Security, the SSI funds and the administrative costs of running the program come from general tax revenue and not Social Security taxes.
In 2006, the Medicare Prescription Drug Plan, or Medicare Part D, goes into effect, helping to meet drug costs for millions of Medicare beneficiaries.
The legislation requires the Social Security Administration (SSA) to work with the Centers for Medicare & Medicaid Services (CMS) to provide persons with limited income and resources extra help paying for their prescription drugs. Social Security’s role in the partnership is to help the public understand how they may qualify and apply.

## A Foundation for Planning Your Future

## 3-Legged Stool of Retirement Security

**Notes:**
This is a graphic representation of the traditional three-legged stool concept and is offered to you as a simple alternative to the previous slide.
You may wish to mention wages and health insurance as other potential legs.

## Who Gets Benefits from Social Security?

**Who Gets Benefits from Social Security?**

**30.2 million**
**Retired Workers**
**3 million**
**Dependents**

**6.4 million Disabled**
**Workers, 1.7 million**
**Dependents**

**4.8 million**
**Widows/ Widowers**

**1.9 million**
**Children**

- 6/30/2005

**Notes:**
This graph is simply meant as an overview of the number of beneficiaries that we pay.  Currently, about one in every six people in America is receiving a Social Security benefit.  It can be used to reflect the fact that the majority of our beneficiaries are retired.  This is a graphic representation of how important Social Security is to the national economy. 

It also represents the fact that Social Security is more than retirement...it is a family protection plan (1/3 of the benefits paid are for disability and survivors)

## Who Pays for Social Security?

**Payments**
** ****to **
**Beneficiaries**

**Workers**
**& **
**Employers**

**Who Pays for Social Security?**

**Notes:**
The basic concept of Social Security is that of an intergenerational transfer system; the workers of today pay the benefits of today.

Currently, over 157 million workers are paying Social Security taxes.

Another factor that has a bearing on the balance between workers paying in and beneficiaries receiving checks is life expectancy.  In 1940, the first year we paid a retirement check, the overall life expectancy in the U. S. was about age 65.  As a matter of fact, in 1940 there was no "early retirement" provision so that workers had to be 65 to receive benefits.  Reduced benefits at age 62 did not become effective for women until 1956 and men in 1961. Since people did not live as long to collect benefits, the tax rate was very low.  The maximum tax from 1937 through 1949 remained at 1% of $3,000 or a maximum tax of $30/year.  Needless to say, the trust funds were very stable because we didn't pay people very long.  In the year 2002, a woman who is currently 65 can expect to live to be about 85 on average.  The average man who is 65 this year can expect to live to be about 80 years old. 

This "pay as you go system" can be affected by many factors.  For example, when unemployment rises there are fewer workers paying in.  In 1981, at one point the unemployment rate was approaching 11%--not a good period for trust fund stability.  Currently, the unemployment rate of less than 6% is a better level for Social Security.

## U.S. Birth Rate 1920-2020

**U.S. Birth Rate 1920-2020**

**Notes:**
This graph represents the more serious problem confronting Social Security's future. As the chart depicts, the fertility rate in 1920 was about 3.2 children for all women of childbearing age.  During the depression the rate declined dramatically.  After World War II a major increase in the fertility rate took place - the baby boom generation.  Since 1960, there has been a major decline in the rate. This means there will be fewer future workers to support this large generation of potential retirees.

## 5		3		2

**The Number of Workers Per Beneficiary Is Decreasing**
**5****	****	****3****	****	****2**
**1960****	****	****2006****	****	****2030**

**Notes:**
Because of the changing demographics, over the years we have seen the ratio of workers to beneficiaries change: from 1960: 5 to 1: 3 to 1, currently.  In looking at the baby boom generation, it's easy to forecast an even reduced ratio.  When the baby boom generation is in full retirement, the ratio may be about 2 workers for each beneficiary.

The challenges posed by the prospective retiring baby boom generation, coupled with tough economic times, led to the establishment of the Greenspan Commission in the early 80’s.  This bi-partisan commission was charged with making recommendations for changing the program.  Their final recommendations were to increase taxes and to decrease benefits.  Many of their recommendations were adopted in the 1983 Amendments to the Law.  Social Security taxes were increased and some benefits were reduced...Some examples:
	--  Increased full retirement age	--  Termination of young widows(ers) benefits when the                           youngest child reaches age 16

## 1946

**U.S. Population Age 65 & Older**

**11 Million**
**1946**
**(8% of total**
**population)**

**36 Million**
**2006**
**(13% of total**
**population)**

**69 Million**
**2030**
**(20% of total**
**population)**

**Notes:**
This slide is offered as a graphic representation of the impact of changing demographics.  The combined pressures of the baby boom generation with increasing life expectancy will yield the American population with 20% of our projected population over the age of 65 by the year 2030.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African Americans****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  

## Social Security Cost-of-Living Adjustments

**	****Effective Date****	****Amount**
**	****June 1975****	****8%**
**	****June 1976****	****6.4%**
**	****June 1977****	****5.9%**
**	****June 1978****	****6.5%**
**	****June 1979****	****9.9%**
**	****June 1980****	****14.3%****	****June 1981****	****11.2%**
**	****June 1982****	****7.4%**
**	****Dec  1983****	****3.5%**
**	****Dec  1984****	****3.5%**
**	****Dec  1985****	****3.1%**
**	****Dec  1986****	****1.3%**
**	****Dec  1987****	****4.2%**
**	****Dec  1988****	****4%**
**	****Dec  1989****	****4.7%**
**	****Dec  1990****	****5.4%**

**	****Effective Date****	****Amount**
**	****Dec 1991****	****3.7%**
**	****Dec 1992****	****3%**
**	****Dec 1993****	****2.6%**
**	****Dec 1994****	****2.8%**
**	****Dec 1995****	****2.6%**
**	****Dec 1996****	****2.9%**
**	****Dec 1997****	****2.1%**
**	****Dec 1998****	****1.3%**
**	****Dec 1999****	****2.5%**
**	****Dec 2000****	****3.5%**
**	****Dec 2001****	****2.6%**
**	****Dec 2002****	****1.4%**
**	****Dec 2003****	****2.1%**
**	****Dec 2004****	****2.7%**
**	****Dec 2005****	****4.1%**

**Notes:**
Another economic factor that can affect Social Security is the rate of inflation.  Social Security will probably be the only source of your retirement income that is tied directly to the Consumer Price Index.  This is important information for your pre-retirement planning.

## Value of Inflation Protection

**pre-retirement income of ****$****30,000**
_**1st Year of Retirement**_
**	****Pension****	****$****12,000/ 57%**
**	****Social Security****	****$****9,000/43%**
**	****Inflation****	****3% per year**

**Value of Inflation Protection**

**Notes:**
This new slide is an example of how Social Security benefits being directly tied to the Consumer Price Index offers incredible long-term protection.  This slide provides the “givens” for use with the next new slide.

This assumes an annual inflation rate of 3%/ year, as measured by the CPI.

## Value of Inflation Protection

- example continued:
**Average worker**
**with pre-retirement **
**income of ****$****30,000**

**5****th**** Year of Retirement**
**	****Pension****	****$****12,000/54%**
**	****Social Security****	****$****10,130/46%**
**10****th**** Year of Retirement**
**	****Pension****	****$****12,000/51%**
**	****Social Security****	****$****11,744/49%**
**20****th**** Year of Retirement**
**	****Pension****	****$****12,000/43%**
**	****Social Security****	****$****15,783/56%**

**Notes:**
This slide clearly shows the long-term value of Social Security benefits when compared to the value of a private pension that provides little or no inflation protection.

This assumes an annual inflation rate of 3%/ year, as measured by the CPI.

## How Are Social Security Taxes Spent?

**Payments to Today’s Beneficiaries**

**Reserve for Future**
**Beneficiaries**

**Administrative  Costs**

**How Are Social Security Taxes Spent?**

**75.6%**

**23.7%**

**0.7%**

**Notes:**
The Social Security tax dollar is only spent on two things: to pay monthly benefits; and to pay for all of the administrative expenses to manage the programs.

The 1983 Amendments changed the basic concept of a “pay-as-you-go” system.  Taxes were increased so that Social Security receives more income than is necessary to pay monthly benefits.  
The balance is invested in U.S. securities.  All securities held by the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds are issued by the Federal government, and almost all are securities issued only to the trust funds.  Those securities available only to the trust funds are called special issues, while those available to the public are called public, or marketable, issues.

These reserves in government securities are very similar to U. S. Savings Bonds.  The government can use the invested money as it sees fit, much like a bank uses customer deposits.  Since U.S. treasury bonds are considered the safest of all investments, our focus is not on the use of our investment, but on the redemption of our bonds.

We are very proud of the fact that our administrative costs for operating the largest domestic Federal program is less than 1% of the total income.  We are always exploring means to further reduce our administrative costs, while increasing our “world class” service.  Some examples:

Placing a large host of public information materials on our award-winning Internet site.  (www.socialsecurity.gov)

## Social Security Trust Fund 2005

**Payroll Tax****	****84%**
**Trust Fund Interest****	****14%**
**Taxation of Benefits****	****2%**

**Social Security Trust Fund 2005**

**Notes:**
The majority of Social Security income is derived from the Social Security taxes.  However, a significant amount is derived from interest on the trust fund reserves.  At the begining of 2005,  the trust fund balance was estimated to be over $1,687 billion.

Currently, beneficiaries with Modified Adjusted Gross Incomes of between $25,000 and $34,000 ($32,000 and $44,000 for couples) pay federal taxes on up to 50% of their benefits. 

Beneficiaries with Modified Adjusted Gross Incomes above $34,000 ($44,000 for couples) pay taxes on up to 85% of their benefits.

The majority of beneficiaries are not affected by the taxation of benefits.  Revenues generated by the taxation of benefits are deposited in the trust funds.

## In 2017, Social Security Will Begin Paying

**More in Benefits Than is Collected in Taxes**

**2017**

**2027**

**Notes:**
By 2017, the OASDI outgo (benefits paid) will exceed the Social Security tax income.  The Social Security trust funds (taxes plus trust fund interest) will peak and be sufficient to pay benefits through 2027.  Taxes plus trust fund reserve principal will be sufficient to pay benefits after 2027. After 2040 we will only be collecting enough in taxes to fund about 74% of benefits.  

Adjustments in the program are needed.  The sooner the adjustments are made the more modest the changes would need to be.  Our responsibility is to help educate the public about what the program is like today, so that they can better participate in the discussions on what the program should look like in the future.

Although many options are being discussed, it is important to look closely at the inherent tradeoffs with all options.  

## In 2017, Social Security Will Begin Paying

**More in Benefits Than is Collected in Taxes**

**After 2040, only about 74%**
**of benefits could be paid with**
**the taxes from workers**

**2017**

**2040**

## You Need to Work to Earn Social Security Credits

** ****Each ****$****970 in earnings**
**   ****gives you one credit**
** ****You can earn a maximum**
**   ****of 4 credits per year**
**Example: To earn 4 credits in 2006, you must earn at least ****$****3,880. Earning 40 credits throughout your working life will qualify you for a retirement benefit.**

**Notes:**
Although we have not officially used the phrase “quarters of coverage” since 1978, many workers still refer to credits as quarters.  Prior to 1978, a worker earned a quarter of coverage for any calendar quarter in which they earned $50 or more in Social Security wages.  Beginning in 1978, wages were reported to Social Security on an annual basis via the W-2 form.  We have no idea when in the year the wages were earned.

In 2006, when a worker earns $3,880 or more, they have earned their 4 credits for the year ($980/credit).  

Since a worker only needs 40 credits throughout their working career, it is relatively easy to become insured (vested) for a Social Security Retirement Benefit.

In the year 2006, The Maximum Earnings Taxable is $94,200.

## Your Age When You Retire Affects Your Benefits

**If You’re A Worker and Retire**
** ****At age 62, you get less money permanently**
** ****At your full retirement age, you get your**
**   ****full benefit**
** ****You get even more money if you work past **
**   ****your full retirement age**

## In Addition to the Retiree,

**Who Else Can Get Benefits?**

**Your Spouse**
** ****At age 62**
** ****At any age if caring for child under 16 ****   or disabled**
** ****Divorced spouses may qualify**
**Your Child**
** ****Not married under 18**
-    (under 19 if still in high school)
** ****Not married and disabled before age 22**

**Notes:**
If a spouse is caring for a child under age 16, of the worker, the spouse could qualify regardless of their age.  When the youngest child turns 16, the spouse’s benefit will stop, even though the child’s benefit will continue.

A divorced spouse could receive a benefit as long as they were married at least 10 years.  It is possible that more than one spouse could receive a benefit, without penalty or reduction, as if they were the only spouse.

## Full Retirement Age

**	****Year of Birth****	****Full Retirement Age**
**	****1937****	****65**
**	****1938****	****65 & 2 months**
**	****1939****	****65 & 4 months**
**	****1940****	****65 & 6 months**
**	****1941****	****65 & 8 months**
**	****1942****	****65 & 10 months**
**	****1943 – 1954****	****66**
**	****1955****	****66 & 2 months**
**	****1956****	****66 & 4 months**
**	****1957****	****66 & 6 months**
**	****1958****	****66 & 8 months**
**	****1959****	****66 & 10 months**
**	****1960 & later****	****67**

**Notes:**
The increase in full retirement age was the result of the 1983 Amendments.  Full retirement age increases apply to all Retirement Benefits and to Survivors Benefits.  Although, we at Social Security have always used the term “full” retirement age, you may encounter some that now refer to “full retirement age” as “Normal Retirement Age”.

The Medicare eligibility age of 65 has not changed.

Regardless of your full retirement age, benefits can still be paid at age 62. 

## How Social Security Determines Your Benefit

**How Social Security Determines Your Benefit**

**Social Security benefits are based on earnings**
**	****Step 1****	****Your wages are adjusted for inflation**
**	****Step 2****	****Find the average of your 35 highest earnings years**
**	****Step 3****	****Result is “average indexed monthly earnings”**

**Notes:**
This graph provides an overview of the first step that we use in computing a benefit.  We are looking for the highest 35 years during a worker's lifetime of earnings, regardless of when earned.  Workers that stop working before age 62 are not penalized for so doing, they simply may not have the opportunity to replace lower year wages with the current higher amounts.

This formula also underscores how a worker could qualify for a retirement benefit with just 10 years of work.  However, since we are looking for their highest 35 years, in this example, we would be adding in 25 zero years.  Needless to say, this worker will be receiving a low benefit.  There is no such thing as a minimum benefit.

## Retirement Benefit Computation Example

**If your average monthly earnings are****	****=****	****$****4,200**
**Then your benefit would be****	****	****=****	****$****1,681**
**Average Monthly Earnings****	****	****=****	****$****4,200**
**90% of First****	****$****656****	****=****	****$****590**
**32% of the Next****	****$****3,299****	****=****	****$****1055**
**15% of the Remainder****	****$****245****	****=****	****$****36**
**	****$****4,200****	****	****$****1,681**

## What You’ll Get at Full Retirement Age

- % of earnings

- Low
- Earner

- Average
- Earner

- High
- Earner

- 57%

- 43%

- 36%

**Notes:**
The underlying principal is that Social Security provides a weighted benefit formula that is consistent with the basic tenet of social adequacy.
More information on scaled earnings can be obtained from the 2005 Trustees Report.

## Windfall Elimination Provision

**is based on work not covered by **
**Social Security, you may be affected by**
**the Windfall Elimination Provision.**

**Windfall Elimination Provision**

## Windfall Elimination Provision (WEP) - 2006

**	****Normal Computation****	****WEP Computation**
**	****90% of the First ****$****656****	****40% of the First ****$****656**
**	****32% of the Next ****$****3,299****	****32% of the Next ****$****3,299**
**	****15% of the Remainder****	****15% of the Remainder**

**Notes:**
Prior to the 1983 Amendments when workers spent most of their careers in government jobs where they did not pay Social Security taxes (non-covered employment), they received the equal benefits of the weighted benefit formula.  These workers, based on their Social Security earnings record, appeared to be low wage earners; primarily because the majority of their wages were not covered for Social Security purposes.  These federal, state, or local employees effectively were receiving a windfall from Social Security.

The 83 Amendments rectified this windfall.  Since they had their 40 credits, they will continue to be eligible for a Retirement benefit, but their benefit will be computed differently. The benefit formula is identical to the normal computation with the exception of the first level of the formula.  Instead of receiving 90% of the first level, they will receive 40%.

A simple rule to use to determine if the WEP will apply to someone is to ask, "Is any part of your government pension based on wages not covered by Social Security?"  If the answer is yes, then the WEP will apply.  

The WEP only applies to Retirement and Disability Benefits.  Survivor’s Benefits are not affected by the WEP.

Government employees that may be affected by the WEP must be reminded that the benefit estimates that they receive on  their Social Security Statement very well might be in error because the formula used in the estimate computation does not take into consideration the WEP.  Additionally, when completing a request for a Statement, government workers must be careful not to include on their estimated current or future wages, non-covered wages.

The WEP applies to the workers benefits.  Any auxiliary benefits payable on the worker's record would also be affected. 

## Exception to the Windfall Elimination Provision

**	****	****% of First Factor**
**	****Years of Coverage****	****in Benefit Formula**
**	****30 or more****	****90**
**	****29****	****85**
**	****28****	****80**
**	****27****	****75**
**	****26****	****70**
**	****25****	****65**
**	****24****	****60**
**	****23****	****55**
**	****22****	****50**
**	****21****	****45**
**	****20 or less****	****40 **

**Notes:**
This chart is a simple reflection of the major exception to the WEP and its variables.  A government worker with 21 to 30 years of significant (substantial) years of Social Security wages will have a different percentage factor used in the first level of their benefit computation.

## Government Pension Offset (GPO)

**If you receive a government pension based on work not covered by Social Security, your Social Security spouse’s or widow(er)’s benefits may be reduced.**

## Government Pension Offset (GPO)

**Example:**
**$****900 of government pension                           2/3 = ****$****600**
**Social Security Spouse Benefits                           = ****$****500**
**No cash benefit payable by Social Security**

**Government Pension Offset (GPO)**

_**Spouse’s Benefits Only**_
**2/3 of amount of Government **
**pension will be used to reduce the **
**Social Security spouse’s benefit**

**Notes:**
The Government Pension Offset (GPO) affects people who earned a pension while working in non-covered government employment.  Unless a federal worker switched to FERS and worked under FERS for at least 5 years,  the GPO will affect the amount of the wife’s/husband’s or widow’s(er’s) benefits payable to them.

Generally, the concept of spouse’s benefits have the inherent concept of dependency.  The notion that a spouse is working in non-covered employment and thereby earning a pension from that employment argues against the notion of dependency.  As a result, the GPO was passed as part of the 83 Amendments.

The fact sheet, "Government Pension Offset," provides a very good detailed overview of the GPO and all of the exceptions.

Understanding the WEP and GPO by themselves is not a problem.  Many people become confused when they mix the principles of each together.  It is very possible for a worker to be affected by the WEP on their own work record due to their government pension and to have any potential spousal benefit payable to them affected by the GPO. 

## You Can Work & Still Receive Benefits

**You Can Work & Still Receive Benefits**

**	****	****You Can****	****If You Make More,**
**	****If You Are****	****Make Up To****	****Some Benefits Will**
**	****	****	****Be Withheld**
**	****Under Full**
**	****Retirement Age****	****$****12,480 (****$****1040/mo.)****	****$****1 for every ****$****2**
**	****The Year Full Retirement**
**	****Age is Reached****	****$****33,240($2770/mo.)****	****$****1 for every ****$****3**
**Month of Full Retirement**
**         ****Age and Above****	****No Limit****	****No Limit**

**Notes:**
In the year that an individual reaches full retirement age, they are subject to a different annual earnings test.  For the months prior to attaining full retirement age, individuals can earn up to $33,240/year ($2,770/mo.) without affecting their benefits.  For every $3 in earnings above the limit, one dollar in benefits will be withheld.

The annual earnings test for beneficiaries who attain full retirement age is determined annually by the average increase in wages in the U.S.

## What Will You Need When Applying

**for Your Social Security Benefits?**

** ****Social Security number for each applicant**
** ****Proof of age **(birth certificate)
** ****Latest W-2 or self-employment tax return**
** ****Earnings estimate**
** ****Bank information for direct deposit**
** ****Information about marriages/divorces**
** ****Information about military or railroad service**

**Notes:**
This slide allows us to remind all potential applicants that we need to see the appropriate proofs when they actually file their claims.

## Who Can Get Survivors Benefits?

**Widow or Widower:**
** ****Reduced benefits at age 60**
** ****If disabled as early as age 50**
** ****At any age if caring for child under 16 or disabled**
** ****Divorced widows/widowers may qualify**
**Your Child if:**
** ****Not married under age 18 **(under 19 if still in high school)
** ****Not married and disabled before age 22**

**Notes:**
You may wish to explain how a widow or widower can receive a survivors benefit at age 60 and then switch to a benefit on their own work record at age 62.  Or, how a widow or widower could receive a  reduced survivors benefit at age 60 and then file for an unreduced benefit on their own work record at their full retirement age. 
Regardless of the change in full retirement age, a widow(er) can still receive 71-1/2% at age 60.

## Other Survivors Benefits

**Parents**
** ****Age 62 and was receiving at**
**	****least one-half support from **
**	****deceased worker**
**Lump Sum Death Payment **($255)
** ****Most spouses or children**

**Other Survivors Benefits**

**Notes:**
Although parents’ benefits are included, the number of parent beneficiaries is negligible.

The description of eligibility for the LSDP is rather direct.  This could be used as an opportunity to address the misleading advertising used by some insurance companies that imply that the only benefit payable is the LSDP, without regard to the monthly widow’s(er’s) benefits.

## Social Security’s Disability Definition:

**A***** *****medical condition preventing substantial **
**work for at least 12 months, or expected to **
**result in death.  The determination also **
**considers age, education & work experience.**

**Notes:**
The actual disability definition is offered on this slide to make the clear distinction between SSA’s disability requirements compared to others.

## Who Can Get Disability Benefits?

**Worker**
** ****Must have paid into Social Security ****	****five out of last 10 years**
**Spouse**
** ****At age 62**
** ****At any age if caring for child**
**	****under 16 or disabled**
** ****Divorced spouses may qualify**

**Notes:**
The discussion of factors of entitlement is rather direct.  SSA's disability definition is based on your medical condition and the fact that you are not expected to be able to do any work for at least 12 months or your condition is terminal.  This determination is based on your age, education and work experience.

For people that pay into Medicare only (e.g., CSRS employees), and not Social Security, it is important to remember that they should file for a Social Security disability decision, since they could become eligible for Medicare 25 months after we otherwise could have paid them a cash benefit.

After becoming eligible for a disability benefit, the law requires us to review the continuing disability (CDRs) generally every 3 to 7 years depending on the severity of the disability. 

## Who Can Get Disability Benefits?

**Child**
** ****Not married under 18**
-    (under 19 if still in high school)
** ****Not married and disabled **
**   ****before age 22**

**Notes:**
The children’s category is offered here as in the Retirement and Survivors Benefits Sections.

## Who Can Get Medicare?

- -or-
**Receiving Social Security disability **
**benefits at least 24 months**
- -or-
**Permanent kidney failure**
- -or-
**Amyotrophic Lateral Sclerosis (ALS)**

**Who Can Get Medicare?**

**Notes:**
You may wish to remind your audience that although the full retirement age has been increased above age 65, Medicare eligibility is still at age 65.

## When Can I Sign Up for Medicare?

**When Can I Sign Up for Medicare?**

**Medicare Enrollment Periods:**
** ****Initial - at age 65**
** ****Special - if still working**
** ****General - January-March**

**Notes:**
The Initial Enrollment Period starts 3 months before the month that you turn age 65 and extends 3 months past the month that you turn 65.  If you are not receiving benefits, you should inquire about filing for Medicare 3 months prior to turning age 65 so that your coverage can start the month you turn 65.  If you are receiving benefits, you will receive your Medicare card generally about a month before turning age 65, reflecting your Part A and Part B coverage (by far, most people want Part B, even though it's optional).

The Special Enrollment Period is for people (and their spouses) that continue to work past age 65.  Since Medicare pays second after their employer group health plan pays first, they are not required to file for Part B.  Since Medicare pays second there may be no need for Part B coverage.  It is extremely important for workers to check with their employer group health plan for specific guidance.  For this reason,  they are offered a special period in which to file for Medicare.  As a general rule, we can recommend that people file for Part A 3 months prior to turning age 65, and then on the day they stop working call SSA to file for Part B.

The General Enrollment Period is for those people that missed their Initial or Special Enrollment Periods.  The window to file is January to March with coverage not beginning until July.  If one files in the General Enrollment Period, they will be assessed a 10% penalty for each year after their Initial period.

## Medicare Coverage

**Part A****	****Hospital  Insurance**
**Covers most inpatient hospital expenses. **
**	****2006 Deductible ****$****952**
**Part B****	****Supplementary Medical Insurance**
**Covers 80% doctor bills & other outpatient medical ****expenses after 1****st**** ****$****124 in approved charges.**
**	****2006 Monthly Premium ****$****88.50**
**Part D****	****Medicare Prescription Drug Plan**
**Covers a major portion of prescription drug costs**
**	****for Medicare**** ****beneficiaries. **
**	****2006 average Monthly Premium ****$****32**

**Notes:**
You may wish to remind your audience that there is no monthly premium for Part A if you are insured for retirement benefits.

Many people question the need to file for Part B of Medicare.  They should be reminded that their health insurance when they retire will pay only after Medicare pays.  Many supplemental plans actually require people to file for Part B.  The Medicare premium that beneficiaries pay represents 1/4 of the actual cost; the federal government (covers the balance of the cost.
Part D Medicare Prescription Drug Plan covers a major portion of prescription drug costs for Medicare beneficiaries. Average monthly premium $32.

## How Will the Prescription 

**Drug Plan Affect You?**

** ****Available January 2006**** **
**You will pay the first ****$****250 (called a “deductible”)**** **
** ****Medicare will pay 75% of costs between ****$****250 & ****$****2,250****   in drug spending.  You will pay only 25% of these costs.**** **
** ****You will pay 100% of the drug costs above ****$****2,250 until****   you reach ****$****3,600 in out-of-pocket spending**** **
** ****Medicare will pay about 95% of the costs after you have****   spent ****$****3,600**
** ****Extra help is available through Social Security for **
**   ****low-income beneficiaries to meet premium, deductibles **
**   ****and copayment costs of program**

## 1-800-MEDICARE

- www.medicare.gov

## Supplemental Security Income

**Who Can Get SSI?**
** ****Age 65 or older**
** ****Blind - any age**
** ****Disabled - any age**
** ****Limited income**
** ****Limited resources**

**Supplemental Security Income**

**Notes:**
2006	           		    Individual	Couple
Federal Payment Standard	     $603/mo.	$904/mo.

Resource Limits	                        $2,000		$3,000

SSI paid over 6.5 million recipients in 2005...over 2 million elderly and about 4.5 million disabled (including almost 875,000 children).

## What Should You Do toPrepare for Your Retirement?

**What Should You Do to****Prepare for Your Retirement?**

**1-800-772-1213**
**TTY 1-800-325-0778**

**Call the year**
**BEFORE**
**you retire**
***All information***
***can be obtained by phone***

_***www.socialsecurity.gov***_

**Notes:**
It is important to remind all people over the age of 62 to contact us before January about filing for benefits.  Since there is no retroactivity, if “charge off” months are involved, they may have to file in January, even if they plan to stop working some months after January.  Based on their estimate of earnings, we will be able to advise them exactly when they should file.

All new applicants will be paid their benefit on the 2nd, 3rd, or 4th Wednesday of the month.

## Find Out About Your Social Security

**Request Your ****Social Security Statement for:**
**Estimates of benefits at different retirement ages**
**Different wage estimates**
_***www.socialsecurity.gov***_

**Notes:**
We can remind our audience that they all will receive their Social Security Statement on an annual basis, but they can still request an individual Statement if they would like to have an idea of how much they would receive at different retirement ages or how future income could impact their benefits.
Social Security has various, easy to use calculators that you can use to estimate potential benefit amounts using different retirement dates and different levels of potential future earnings. The calculators will show retirement benefits as well as disability and survivor benefit amounts on a worker’s record.

## Social Security’s Online Services

**Social Security’s Online Services**

** ****Retirement & Disability Applications**
** ****Retirement/Survivors/Disability Planner**
** ****Medicare Card Replacements**
** ****Request a Statement**
** ****Request a Benefit Verification Letter**
** ****Change of Address**

**Notes:**
Depending on your audience, you may wish to briefly describe the quick calculator, online calculator and the detailed estimate.

## Visit Our Website or Call!

_***www.socialsecurity.gov***_
- -or-
**1-800-772-1213**
**TTY 1-800-325-0778**

**Notes:**
You may wish to use this slide as a segway into our online services offered on the next slide.

## Importance of Social Security

**to African Americans**

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.

## Importance of Social Security

**to African Americans**

** ****Fewer covered by pensions**
** ****Benefits continue for life**
** ****Benefits tied to inflation**

**Notes:**
This slide can be used to highlight the fact that Social Security is race neutral but due to other factors Social Security tends to be more important to African Americans than other segments of the population. 
Social Security is the only source of retirement income for 40% of elderly African Americans, compared to 20% for the population at large.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African Americans****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  Additionally, it could be used to reflect the impact of various programmatic changes that have been discussed, i.e., raising retirement ages.

## Importance of Social Security

**to American Indians**

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.  This slide is presented, as such, in keeping with our online fact sheets.

## Importance of Social Security

**to American Indians**

** ****Fewer covered by pensions**
** ****Benefits continue for life**
** ****Benefits tied to inflation**

**Notes:**
This slide can be used to highlight the fact that Social Security is race neutral but due to other factors Social Security tends to be more important to American Indians than other segments of the population. 
Social Security is the only source of retirement income for 33% of elderly American Indians, compared to 20% for the population at large.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African American****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  Additionally, it could be used to reflect the impact of various programmatic changes that have been discussed, i.e., raising retirement ages.

## Importance of Social Security

**to Asians & Pacific Islanders**

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.

## Importance of Social Securityto Asians & Pacific Islanders

** ****Longer life expectancy**
** ****Benefits tied to inflation**
** ****Benefits continue for life**

**Importance of Social Security****to Asians & Pacific Islanders**

**Notes:**
This slide can be used to reinforce the fact that Asians and Pacific Islanders will live longer and their benefits will be tied to inflation and last for life.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African American****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  Additionally, it could be used to reflect the impact of various programmatic changes that have been discussed, i.e., raising retirement ages.

## Importance of Social Security to Hispanics

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.

## Importance of Social Security to Hispanics

** ****Fewer covered by pensions**
** ****Benefits tied to inflation**
** ****Benefits continue for life**

**Notes:**
This slide can be used to highlight the fact that Social Security is race and ethnic neutral but due to other factors Social Security tends to be more important to Hispanics than other populations.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African American****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  Additionally, it could be used to reflect the impact of various programmatic changes that have been discussed, i.e., raising retirement ages.

## Projected Growth of Hispanic Community

**Projected Growth of Hispanic Community**

** ****2000**** ****–**** ****13% of total population**
** ****2050 – 24% of total population**
** ****350,000 net immigrants/year**

**Notes:**
This slide can be used to display that while the Hispanic population grows, the importance of Social Security to the community intensifies.

## Importance of Social Security to Women

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.

## Importance of Social Security to Women

**Importance of Social Security to Women**

** ****58% of all aged beneficiaries**
** ****71% of all aged beneficiaries over age 85**
** ****92% of beneficiaries with minor children**

**Notes:**
This slide is intended to reflect the higher percentage of women in benefit status due to their numbers in the population.

## Importance of Social Security to Women

**Importance of Social Security to Women**

** ****Fewer covered by pensions**
** ****Benefits tied to inflation**
** ****Continue for life**

**Notes:**
This slide can be used to highlight the fact that Social Security is gender neutral but due to other factors, Social Security tends to be more important to women than men.

Since women are more likely to take time out of the workforce for child rearing or for the care of parents, they have fewer computation years and consequently a lower benefit.

## Women and Social Security

** ****74% of unmarried elderly women**
**   ****Social Security represents at least 1⁄2 of their total income**
** ****29% of unmarried elderly women**
**   ****Social Security is their only source of income**

**Notes:**
Social Security benefits comprise only 38% of unmarried elderly men’s retirement income and only 35% of elderly couples’ income.

## Women & Social Security

**Average Monthly Benefits (1/04)**
**	****Women****	****Men**
**Retirement****	****$****798****	****$****1,039**
**Disability****	****$****735****	****$****966**

**Notes:**
This slide is a simple reflection of the fact that since women earn lower wages, their benefits will be lower.

Since women are more likely to take time out of the workforce for child rearing or for the care of parents, they have fewer computation years and consequently a lower benefit.

## Life Expectancy for Those Age 65 Today

**	****Men****	****Women**
**U.S. Population****	****82****	****84**
**White****	****80****	****84**
**African American****	****79****	****83**
**Hispanic****	****84****	****88**
**Asian****	****84****	****88**
**American Indians****	****83****	****88**

**Notes:**
This slide provides a comparative chart of life expectancy.  Additionally, it could be used to reflect the impact of various programmatic changes that have been discussed, i.e., raising retirement ages.

## Importance of Social Security

**to Young Americans**

**Notes:**
This slide is provided for you as a title page if you are tailoring your presentation.

## Importance of Social Security

**to Young Americans**

** ****Almost 3 in 10 of today’s 20-year-olds will**
**   ****become****  ****disabled before reaching age 67**
** ****About one in seven of today’s 20-year-olds**
**   ****will die prior**** ****to age 67**

**Notes:**
Seventy-five percent of the private sector workforce has no long-term disability insurance.

This slide can be used to underscore the significance of Social Security to younger workers in particular.  Please keep in mind that the projected disability rate is not the same as the percentage of future Social Security Disability beneficiaries.  This is only offered for means of perspective.

## How Social Security Protects You with 

**Disability & Survivors Insurance**

**Under age 31 - Must have paid Social Security taxes for half the elapsed time since turning age 21**
**	****	****	**** **_**Age**_**	****      **_**S.S. Taxes**_**EXAMPLE:****	****  24****	****      1-1/2 Yrs.**
**	****	****	****  ****29****	****      4 Yrs.****	****	**

**Notes:**
This slide is offered to explain how easy it is to become insured.  Examples are provided to reflect insured status at two different ages.

## Social Security and Young Beneficiaries

**More than three million young people under age 18 were receiving Social Security benefits at the end of 2003.**
**The average monthly benefit was ****$****411.**

**Notes:**
This slide can be used to help dispel the notion that Social Security is only for older people.

## The Social Security Statement

**Notes:**
This slide was created as an introduction for the Statement.

## The Social Security Statement

**The Statement provides you with estimates of monthly Social Security retirement, disability and survivors benefits**
**The Statement allows you to check your earnings history for accuracy**

**Notes:**
This can be used to reinforce that Social Security is more than retirement.

You can also use this slide to remind your audience that the Social Security estimates are all based on the reported wages.

## The Social Security Statement

**Notes:**
This slide is offered as a summary piece to your presentation