JustCare

Category: Social Security

  • Social Security benefits will rise 2.8 percent in 2019, but checks may not

    Social Security benefits will rise 2.8 percent in 2019, but checks may not

    As a result of inflation, people on fixed incomes find that their incomes decline in value over time.  One extremely important feature of Social Security is that its benefits are adjusted every year automatically to offset increases in inflation, so that the modest, but vital, benefits do not erode over time.  It is important to understand that these adjustments are not increases.  They are intended to simply allow people to tread water, to maintain their purchasing power.

    Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers and not by retirees and people with disabilities who are unable to work. Older people and people with disabilities have, on average, higher health care costs; those costs tend to rise considerably faster than overall inflation.  For that and other reasons, Social Security beneficiaries generally experience higher costs of living than workers, so Social Security adjustments are often inappropriately low.  Consequently, Social Security beneficiaries are not even treading water, but rather losing ground. Nevertheless, even inadequate adjustments are better than none.

    For 2019, Social Security beneficiaries will receive a cost of living adjustment or COLA of 2.8 percent, an average of $39 a month or $468 a year.  That is good news for Social Security beneficiaries, many of whom have little or no other income.  The bad news is that millions of people likely will not experience that full increase.

    Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost of living adjustment or COLA.  (An exception to this rule is if you are higher income and subject to the Income-Related Higher Income Amount.)

    People who are protected can’t lose some of their Social Security benefits, but they can certainly see no cost of living adjustment, despite the 2.8 percent increase.  In 2018, about one quarter of beneficiaries saw no increase whatsoever and another 18 percent received a monthly benefit that was only $5.00 or less.

    People who do not have their Medicare premiums deducted automatically from their Social Security benefits can, indeed, wind up with less net income, despite the increase.  And, of course, in addition to premiums for health insurance covering doctors’ costs, there are premiums for prescription drugs, as well as costs for copays and deductibles.  As a result, instead of treading water, people are sinking below the surface.  Indeed, bankruptcies among those aged 65 and older are skyrocketing.

    This is unacceptable.  After a lifetime of work, Americans should have enough guaranteed Social Security to maintain their standards of living.  The solution is three-fold. First, Congress should enact a better, more accurate measure of inflation for people receiving Social Security benefits. In addition, benefits, which are modest, but vital, should be increased. Finally, Congress should improve Medicare by expanding it to cover such vital services as hearing aids, dental work, and vision care.  Premiums, copays, and deductibles should be eliminated.  And everyone should be covered.  Improved Medicare for All will improve the nation’s health outcomes while costing a fraction of what we pay today.

    It is long past time to enact a more accurate cost of living adjustment for Social Security, expand its benefits, improve Medicare, and extend it to everyone.  That is profoundly wise policy.  It also represents the views of the vast majority of us.

    If you want Congress to expand Social Security, please sign this petition.

    Here’s more from Just Care:

  • How to maximize Social Security benefits

    How to maximize Social Security benefits

    The Pew Charitable Trust released a report explaining how to maximize Social Security benefits. The report focuses on auto-IRAs, but the strategy applies to retirement savings more generally. If possible, it advises spending retirement savings to cover your needs after you retire, as a way to postpone claiming Social Security benefits.

    If you can delay claiming Social Security benefits from age 62 to age 70, you can increase your monthly benefits significantly. But even if you cannot hold off eight years, delaying four years to a full retirement age of 66, means about a 25 percent larger monthly Social Security check. And, even delaying one year can gain you between seven percent and eight percent more in Social Security benefits, depending upon your age.

    Today, most employer retiree plans are defined contribution plans, meaning that a particular amount of money is set aside for your retirement. Unlike defined benefit plans, which guarantee you a particular retiree income each year, defined contribution plans can go up or down with the stock and bond markets and offer no guarantees. So, the question becomes how to use your retiree funds wisely.

    If your employer does not offer you a retiree savings plan, many states are setting up auto-IRAs or “Secure Choice” programs. These programs automatically enroll you in a retiree savings plan that puts a percentage of your salary or wages into your retiree savings plan each month. You can opt out or change the percentage if you like. California, Connecticut, Illinois, Maryland and Oregon are in the midst of putting these auto-IRAs into place. In Oregon, employees automatically put 5% of their gross pay into their auto-IRAs in year one and 1% more each new year, with a 10% auto-contribution cap.

    The auto-IRAs, much like 401(k) plans and other employer retiree plans, would permit you to use the money in those accounts to postpone signing up for Social Security.  You could withdraw the amount you otherwise would have received from Social Security had you enrolled.

    By using auto-IRA or employer retiree plan funds to pay for expenses post-retirement, instead of enrolling in Social Security, you can increase your total retirement benefits. Married couples can benefit even more because when one of them dies, the surviving spouse will receive the higher of the couple’s individual benefits.

    Of course, not everyone will be able to make use of this strategy or benefit from it. For example, people in poor health or people with shorter life expectancies may want or need to claim Social Security benefits sooner. Moreover, if they delay claiming benefits and live a shorter than average life, their total lifetime benefits may be less than they would have received had they enrolled earlier.

    Here’s more from Just Care:
  • People with Medicare spend an average of $5,500 on health care annually

    People with Medicare spend an average of $5,500 on health care annually

    Medicare works to ensure people access to quality affordable health care, but average out-of-pocket health care costs are still considerable. A new report from the Kaiser Family Foundation finds that individuals typically spend more than $3,200 a year just on Medicare premiums, deductibles and coinsurance. When you add in costs for services Medicare does not pay for, people spend an average of $5,500 a year out of pocket on health care or, put differently, more than 40 percent of their Social Security benefits.

    Juliet Cubanski and Tricia Neuman analyzed data from 2013 to determine the amount people with Medicare spend on health care. All in, they found that spending on health care eats up about 41 percent of the average monthly Social Security check, $1,115. Average annual Social Security benefits were $13,375 in 2013 and average total income for a person with Medicare was $35,317.  Their report establishes that people with Medicare have far higher annual average out-of-pocket health care costs than the Center for Retirement Research found based on 2014 data, 41 percent of their Social Security benefits as compared to 33 percent.

    To be sure, the percentage of income spent on health care is far higher for people who rely exclusively or almost exclusively on Social Security for their retirement income. And, a notable portion of the 62 million people receiving Social Security benefits rely almost exclusively on Social Security for their income. More than one in five married couples and more than four in ten individuals rely on Social Security for more than 90 percent of their income, according to the Social Security Administration.

    When the Kaiser Family Foundation researchers dug deeper, they found that people over 85 and women typically spent an even higher share of their Social Security income on health care than men and people under 85. People 85 and older spent on average 74 percent of their Social Security benefits on health care costs Medicare does not cover. Women over 85 spent more than men, 83 percent of their Social Security benefits as compared to 58 percent. Because Medicare does not pay for custodial nursing home care or most other long-term care services and supports, the oldest cohort of people with Medicare have especially high out-of-pocket costs.

    Out-of-pocket costs for people in poor health and people with lower incomes were also higher than other people. People in fair or poor health spent an average of $6,128 on health care as compared to $5,246 for people in excellent, very good or good health. Put differently, people who could perform all the activities of daily living–bathing, feeding, toiletting, dressing and transferring–spent on average $4,673 out of pocket a year on health care, whereas people who needed help with activities of daily living spent on average $6,946.

    The researchers found that one in four people with traditional Medicare spent almost 30 percent of their total income on health care costs Medicare does not cover. And, one in ten people spent just under 60 percent of their total income.

    We need to increase Social Security benefits if we want to ensure retirees can make ends meet and keep older adults from falling into poverty. Their situation is projected to get even worse as health care costs continue to grow.

    If you want Congress to expand Social Security benefits, please sign this petition.

    Here’s more from Just Care:

  • 2018 Social Security benefits should rise, but checks may not

    2018 Social Security benefits should rise, but checks may not

    One of the strengths of Social Security is that benefits are adjusted annually to offset increases in inflation, so that the modest, but vital, benefits do not erode over time. Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers and not by retirees and people with disabilities receiving Social Security benefits. Older people and people with disabilities generally experience higher costs of living than workers, so Social Security adjustments are often inappropriately low.

    Indeed, Social Security benefits have increased microscopically or not at all in the last several years. For 2018, however, the Medicare and Social Security Trustees project an increase of 2.2 percent.  (We won’t know the actual adjustment for another month.) That adjustment of 2.2 percent would make it the biggest increase in Social Security benefits in six years.

    The good news is that if this increase goes into effect, benefits for individuals should increase on average $28 each month The bad news is that millions of people likely will not see that full increase in their Social Security checks  — and some may not see any increase at all because their Part B Medicare premiums may increase.

    Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost of living adjustment.

    People whose Medicare Part B premiums did not increase these last few years when their Social Security benefits did not increase–thanks to that so-called hold-harmless provision in the law–will likely now see an  increase in their Part B premium. They no longer will be held harmless. Unfortunately, the Medicare premium increase may absorb part or all of their Social Security inflation adjustment.  Consequently, the 70 percent of people with Medicare who have been paying an average monthly premium of $109 because their Social Security benefits have barely increased over the last few years will likely see no bigger Social Security checks despite the automatic increase.

    The solution is three-fold. First, Congress should enact a better, more accurate measure of inflation for people receiving Social Security benefits. In addition, benefits, which are modest, but vital, should be increased. Finally, Congress should expand and improve Medicare and move toward a more efficient health care system, with lower premiums. Though Medicare covers the most expensive part of the population, older adults and people with disabilities, it is much more efficient than private sector health insurance.

    With these solutions in place, Social Security benefits will be more adequate, will not erode over time, and will not be swallowed up by expensive health care costs.

    If you would like Congress to expand Social Security, please sign this petition.

    Here’s more from Just Care:

  • When to claim Social Security benefits

    When to claim Social Security benefits

    When deciding when to stop working and when to claim Social Security benefits, there is a lot to consider. Individuals and families should weigh personal circumstances, health, financial need, and marital and family status. The National Academy of Social Insurance’s toolkit on When to Claim Social Security Benefits includes a new brief, Different People, Different Choices, that walks you through a range of possible scenarios and decisions about when to claim benefits to help you get started on this important decision.

    If you need benefits to make ends meet: Take them – you’ve earned the benefits and Social Security is there for you. But if you can wait, doing so can increase your monthly benefit for the rest of your life. Here are some helpful tips:

    If you claim Social Security benefits before your full retirement age because you are not working: If you get a job and do not need your Social Security benefits, you can request at your full retirement age that your benefits be suspended. When you reclaim Social Security benefits, you will get a higher benefit based on the number of additional months you delayed receiving benefits.

    If you’re working and claim Social Security benefits before your full retirement age: Social Security may withhold some of your benefits temporarily, depending upon how much you earn. But, Social Security will increase the amount of your benefit when you reach your FRA, to take account of the number of months in which benefits were not paid.

    If you’re working and claim Social Security benefits after you reach your FRA: Social Security will not reduce your benefits, no matter how much you earn. However, if you have an adequate income, you might consider waiting beyond your FRA to claim benefits to increase your monthly benefits for the rest of your life.

    If you are married: Each partner is entitled to up to 50% of his/her spouse’s Social Security benefit, or his/her own worker benefit, whichever is higher. (A surviving spouse is entitled to up to 100% of his/her spouse’s Social Security benefit or his/her own worker benefit, whichever is higher.)

    If you are divorced: If your marriage lasted at least 10 years, you may be eligible for the same benefits as if you were married, based on your ex-spouse’s work record.

    If you are a widow or widower: You may be eligible for Social Security ‘life insurance protection,’ known as survivor benefits.

    If you are under 18 and have a parent or sometimes a grandparent who retires, becomes disabled or dies: You may be eligible for Social Security dependent benefits.

    Claiming benefits at the appropriate time can help you and your family members achieve a more financially secure retirement. Social Security is the safest and most secure income that many retirees have, and benefits last for life and keep up with inflation. Download Different People, Different Choices to get more information relevant to your particular personal circumstances, health, financial need, and marital and family status; you can also find details on the above claiming decisions. Visit the Academy’s toolkit, When to Take Social Security, for more information.

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  • Social Security and Medicare benefits for people with disabilities

    Social Security and Medicare benefits for people with disabilities

    About 10 million people qualify for Social Security and Medicare on the basis of a disability.  Here’s what you need to know about Social Security and Medicare benefits for people with disabilities:

    Apply for Social Security Disability Income at your local Social Security office or online. Call Social Security at 1-800-772-1213 to find out where to go. If you qualify for railroad disability annuity income, go to your local Railroad Retirement Board. (To learn more about Social Security disability policy and how it relates to the recent budget deal, click here.)

    Medicare: You automatically qualify for Medicare when you are under 65 once you have been receiving Social Security Disability Income for 24 months or railroad disability annuity checks. And, there is a five-month waiting period before your Medicare benefits kick in. You do not need to do anything to get Medicare Part A and B.  Your Part B premium will be deducted from your Social Security check. You should not turn down Part B unless you have primary insurance coverage through your or your partner’s current job and you confirm that with the employer offering the coverage and Social Security. You want to avoid being without medical coverage or paying a premium penalty for Part B. (And, keep in mind that Medicare covers only about half your health care costs, so you’ll need supplemental coverage. If your income is low, there are several programs that can help.)

    If you have ALS or Lou Gehrig’s disease, you will automatically be enrolled in Medicare the first month you receive Social Security Disability Income or railroad disability annuity income. There is a five-month waiting period after you are determined to be disabled until you begin receiving benefits. Be sure to make clear that you have ALS to avoid the additional 24-month waiting period for Medicare.

    If you have End Stage Renal Disease (ESRD), you should apply for Medicare through your Social Security office, even if you are a railroad worker. Social Security will need supporting documentation about your disease from your doctor and dialysis center. When Medicare begins depends on your treatment.

    • If you are in a self-dialysis training program, Medicare begins on the first day of the month you begin the program. You must begin the program before the third month of your dialysis and you will need support from your doctor that you will complete the training program and do self-dialysis. Otherwise, Medicare begins the first day of fourth month of your dialysis.
    • If you are receiving a kidney transplant, Medicare begins when you begin receiving health care services for the transplant. Medicare coverage begins no sooner than the two months before the month you receive the transplant.