Hello, friend, I work for the Social Security administration. And today, I want to tell you what you absolutely need to know about the Social Security, SSI and Medicare programs. Programs that directly affect you and your family. Let’s begin with Social Security, which is a familiar part of nearly every American life.
I’m sure, for example, that everyone knows their Social Security number by heart. Therefore, I want to give you some basic information to help you understand what Social Security can mean to you and your family’s financial future. Social Security is the foundation for a secure retirement. Notice I said foundation, because you will need other income if you wish to maintain the same lifestyle you’ve become accustomed to during your working years. Consider just a couple of numbers. Financial advisors would tell you that you need at least 70% of your pre-retirement income to enjoy a comfortable retirement. An average worker can expect Social Security retirement benefits to replace about 42% of your pre-retirement earnings. So that’s a big part of your 70% goal. Your retirement benefit is based on how much you earned during your working career. Your benefit is also affected by the age at which you decide to retire. One basic question people ask about Social Security is: when can I retire? You can get Social Security retirement benefits as early as age 62.
However, you will receive a reduced benefit if you retire before your full retirement age. For example, if you retire at age 62, your benefit would be about 30% lower than what it would be if you waited until your full retirement age. If you were born from 1943 to 1960 and later, the age at which full retirement benefits are payable increases gradually to age 67. The following chart lists the full retirement age by year of birth. The information on this chart is available at: www.socialsecurity.gov/retire2/retirechart.htm you also need to understand that Social Security is not just a retirement program, the fact is that about a third of our beneficiaries are not retirees. Our beneficiaries include disabled workers and their families, or the surviving family members of insured workers. This is why we often call Social Security America’s family protection plan. As you can imagine, when a family wage earner dies, it is not just an emotional blow to survivors, but can also be a financial burden to the family.
However, about nine out of every ten children are eligible for Social Security survivor’s benefits. Social Security disability protection is equally valuable. Not many workers have an employer-provided long-term disability policy. However, nearly all of us do have Social Security disability protection. That is important when you consider that a 20-year-old worker stands nearly a three in ten chance of becoming disabled before age 65. How do you earn all of these Social Security benefits? Simply by working and paying Social Security taxes. Nearly all jobs in the country are covered by Social Security. You become entitled to retirement benefits with 40 credits, ten years of work. In addition, you may earn disability and survivors coverage. Let me now take a moment to talk about another income program that Social Security administers, the supplemental security income program, or SSI. SSI provides monthly payments to people who are age 65 or older, blind or disabled, and have low income and few resources.
However, SSI benefits are not based on a person’s work. The benefits are based on need. SSI is often a program of last resort, and the safety net that can protect folks from poverty. Unlike Social Security benefits, SSI benefits are funded by general funds from the U.S. Treasury, not from the Social Security trust funds. What many people don’t realize is that many SSI recipients have worked long enough to collect Social Security. But their Social Security benefit is so low that they also qualify for SSI. Nearly one-third of adult SSI recipients are under age 65, and almost three-fifths of recipients over 65 also get Social Security benefits. The basic monthly SSI benefit for 2013 is $710 for an individual, and $1,066 for a couple. Other income can reduce the basic monthly SSI benefit. Now, let me turn to Medicare. Medicare is our country’s health insurance program for people age 65 or older, and certain people younger than age 65 can qualify for Medicare, too, including those who receive disability benefits for two years and those who have permanent kidney failure. The Medicare program helps with the cost of health care, but it doesn’t cover all medical expenses or the cost of most long-term care. Medicare is financed by a portion of the payroll taxes paid by you and your employer. It’s also financed in Part By monthly premiums paid by Medicare beneficiaries. Medicare has several parts. Hospital insurance Part A helps pay for inpatient hospital care and certain follow-up services. Medical insurance Part B helps pay for doctor services, outpatient hospital care and other medical services. Part d, prescription drug coverage helps pay for prescription medicines for Medicare beneficiaries. Medicare beneficiaries with limited income and resources may qualify for extra help with their Medicare prescription drug plan costs. When you turn 65, if you are already receiving benefits, you will be enrolled in Medicare Part A and B automatically. However, because you must pay a premium for Part B coverage, you have the option of turning it down. If you are not already getting retirement benefits, you should contact us about three months before your 65th birthday to sign up for Medicare.
Remember you can sign up for Medicare online even if you do not plan to retire at age 65. While the Centers for Medicare and Medicaid services, CMS, is the federal agency in charge of Medicare, you apply for Medicare at Social Security. And we can give you general information about the Medicare program. For more specific information about Medicare, contact CMS. What I have just told you is important information about Social Security, Medicare and SSI. However, you aren’t expected to remember all of this. And the truth is, what I’ve just told you is only some of the basics about these three programs. You may have questions about other aspects of these programs or about a particular situation that you or someone in your family faces.
So here is something very important I want you to remember. Our website address and phone numbers. Our website at socialsecurity.gov is a valuable resource for information about all of Social Security’s programs. There are a number of things you can do online. Apply for retirement, disability, Medicare, estimate your retirement benefits, plus get your Social Security statement, find answers to frequently asked questions and much more. In addition to going online, you may call us, toll-free, at 1-800-772-1213. We treat all calls confidentially. We can answer specific questions from 7:00 am to 7:00 pm Monday through Friday. Generally you’ll have a shorter wait time if you call during the week after Tuesday. Again, the website address is socialsecurity.gov. The toll-free number is 1-800-772-1213. So remember, get any questions you have about Social Security, Medicare or SSI answered by the people who know and who care.
Thank you.