Sep 12, 2011|
Our resident Social Security guru chimes in with some helpful tips.
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
During this segment we're gonna try to teach to a few things about Social Security that you may not have already known our guest mr. Kurds are now -- from. These are now ski consulting curt how you doing today. Very great to be back with you. Well thanks for taking time I know you're busy man working on your golf game and all you pay. Right now would -- based on. Current payment schedules in the Social Security when does the fund that went to the Social Security fund run out of money. Well it's important point that it never completely runs out of money but the projection is that by the year 2030. There. The system won't have enough money to pay a 100%. Of promised benefits. Okay but just about the time on the I'll be collecting and I won't be able to work anymore that time. We'll debate it but think what most people don't realize is that. Even at that point you Social Security will still have in common source from the -- get taxes being collected that's projected to be -- to pay. But 77%. Of the benefits going forward so you're talk about Social Security going bust going bankrupt. Younger folks particularly at the mistaken impression that Social Security will have no money whatsoever. They'll always be your revenues street the question is. Is it sufficient to pay -- percent of products benefit the projections -- that by the year 2036. Yeah it won't be. And so we -- need to bring some more in coming in or -- money out go forward. -- what about this 6% holiday that's gonna occur next year congress approves it the president wants to take 3% out there you are give give the workers -- 3%. Reduction with -- and the your tax rate and also the employers another 3%. Will that mean that we're gonna run out of money faster -- Well I don't believe so don't get buried this year employees. Have received 82%. Reduction. In the like attack that they've been -- part of the enactment of that legislation was that. The Social Security funds will be held harmless. And that any money loss. Because of that 2% reduction in the like the tax rate. Will be transferred back to Social Security by the treasury I would anticipate that the same thing. Will take place if the president's legislation get passed Social Security will be held harmless and general revenues will be transferred back the Social Security to make up for those like get tax dollars that may be -- -- now let me ask you about. I see the fight it taxes I think we -- a fight -- taxes on what a 106000. Dollars of income this year. In 2011 that's exactly right you pay six point 2%. If you're an employee your employer matches that if you're self employed you have the privilege of paying the combined rate which you -- that up to the first 106800. Dollars the Jamaica. Anything you make beyond that you'll continue to -- one point or 5% Medicare. Hospital insurance -- but for. Social Security benefit calculation purposes you'll pay tax on the first one -- they. Okay so why do Max it out Sam highway journal -- a 106000 dollars or more. Do I get much of a benefit as a compared to say that guy this vacant 40000 dollars a year or 50000 dollars year. Well -- wouldn't -- -- I -- people lead understand Social Security has always had a progressive. Benefit calculation what I mean by that old system has always been about the trying to help people who have been at the lower end of the scale. In terms of providing a benefit -- replaces a higher percentage. Of their pre retirement income Social Security was never supposed to be somebody's sole source of income always intended to be a base. Should be supplemented through pensions saving -- -- to recognize the people at lower paying jobs may not be able. The -- it's much they may not be the position with a gonna have a private pensions so the system replaces a higher percentage. A pre retirement earnings -- nobody has been historically lower wager whatever. Percent of their pre retirement -- for somebody who's been on taxable wage earner yup they get. More on a monthly basis. But if you look at what that benefited in relation with. And earnings that -- It set up so replaces a lower percentage somewhere in the neighborhood they 2627%. Figure provoked that -- just. 2011. And maximum. Social Security benefit being paid -- somewhat. 2000 366. Dollars per month that's going to be someone who was that -- time. Emanate this year who reached the past 35 years as head according that are about that statutory. And they get more they go to age seventy ranked. As we talked several times when your show that if you differ collecting pastor full retirement -- you weren't delayed retirement credit. -- 8% per year increase but those ERC's. -- -- -- through age seven. But you don't happen not collect purple here at those delayed retirement credit. You get an increase of two thirds percent reached -- that you don't drop in the past or. Let's assume Kurd share of the Bank of America announced they're going to be laying off 40000 people. Let's assume you're one of those workers or does have to be Bank of America be any employee. -- your 62 years old or older He knew collect your social security and also collect your unemployment insurance benefits simultaneously. Well here in the Commonwealth of Massachusetts and albeit through it absolutely yes previously there had been an -- on the unemployment compensation side. From the Social Security perspective the the only thing that impacts your ability to collect under your full retirement ages were you. So unemployment benefits the tension. Or one K distributions that has never impacted your ability to collect. Up until a few years ago. That'll on the unemployment side if you're collecting Social Security that impacted your ability to collect unemployment but that was changed -- messages that -- short although it. Are some states where. If you're collecting social security and you can't collect the. Now if you collect safe collector Social Security at age 63. And you're unemployed and you you've lost your job -- collecting unemployment insurance and your. Not collecting Social Security just say can pay your bills and stand topping your mortgage. What happened the are you allowed to. A year later -- you find work again can you quit your Social Security meaning stop -- suspended I don't you'd call it but stop your Social Security from coming in every month. And go back to work. You betcha and you their element that all you have to do is let Social Security overture return to work -- Can be stopped right then and there the good news is assuming then. Don't to collect any benefits. Don't port up until your full retirement age actor full retirement age Social Security does go back. And and because future payment because. Collecting at 63 year benefit has been reduced from what should -- full retirement age based on the assumption you collect for all. 36 months up until here or retirement -- -- that hasn't been the case if you return to work there's been a period of time you haven't collected payments. Your full retirement age you bet it is just about where to reflect the fact that you had not collected. So good idea period. So good idea to go back to work if He can find. I think it's always that -- it'll work if you find it you know that you're Social Security benefit is calculated based on your ideas. 35 years of work earnings regardless of when they are so if you continue to work -- But if you're collecting payment He did you're collecting -- -- retirement you continue to work pay into the system at. Higher than the lowest -- the 35 years that it had been used to calculate about it at that point. Social Security dropped about that lol you're plug and in the year results the benefit. Increase or you and those additional -- years. Never written to loose your -- that they can't always they can only help increase that. If they're hired -- below the 35 years but it never hurt Q. From you can only help talent right. All right I'm gonna ask this question on behalf of all senior citizens who are retired in have been collecting Social Security for the last two years. Social Security has not given a raise. Out to social to -- retirees I think since the year 2000 and what 8299. About not start to rapidly with the last year 20092000. Then there was no -- No raises. No raises are we going to get art I'm not in that group but -- Our senior citizens going to get a raise in their Social Security January 1 2012. Well wolf certainly know the answer for shore. At the measuring period closes at the end of September. Any increase its gonna be given -- going to be based on. Whatever increase has occurred and that consumer. Right index for urban wage earners you measured by the Bureau of Labor Statistics. Measuring period closes at the end of this month. Official announcement will come in the middle of October but if I were a betting man I'd say probably battle one. One and a half percent increase will be given again because. Over the course the past couple years. The CP IW has increased back above the level where at a lot -- increased to be given -- which. But in my understanding of this -- is that back could be absorbed by the increased Medicare premium. I have been doing my homework and crunch in my numbers I thought He might say that I had. I would check his map that son of a gun and I think. Based on that number if it's -- 1% bump I think seniors still are gonna end up with any -- their paychecks because of the cost of Medicare. Well it'll at the same time that or roughly the anti Social Security announces the holy increasing benefits that. Centers for Medicare Medicaid Services announced what the what the part B Medicare premium will be work. Next year. Now the -- I'm -- it generally about the same time but they're based on different measures Social Security increases based on that. CP IW which measures all market basket of goods and services. The Medicare part B premium increases based on the increase in medical office. Explicitly they'll medical ought to be an increase in the greater rate than prices in general -- that. Generally eight. Disconnect between the increase in the the percentage increase the part B premium in the percentage increase in the Social Security benefit but good news is that there is they hold harmless clause in there. That protects. Social Security beneficiaries that if the increase in the part B premium XE. The increase in their Social Security payment there held harmless they don't see a reduction in their monthly benefit and that provision basically. They -- Or held harmless Social Security a vast majority Social Security beneficiaries each of the past two years when there has been no increase in the payment. -- -- Kurt thank you very much for your time -- -- appreciate your information. Very. Folks outskirts czar announced He used to work at the department of Social Security that's why he's so well versed on the program joining us today on lunch money talking to us about how the program works.