Social Security FAQs

Predetermined Amount of Income: The amount of your Social Security benefit becomes better-defined as you approach retirement age. It is based on your earnings history as it is applied to a formula. While the amount may vary depending on when you apply for benefits, the relative accuracy of the estimate makes it easier for you to incorporate it into the rest of your retirement planning.

Lifetime Income: Social Security is one of the few sources of income that you can be assured of never outliving. This helps you address the uncertainty of longevity.

Inflation-Adjusted Income: Your benefits are increased each year based on the previous year's increase in the Consumer Price Index (CPI). This helps you keep up with the cost of living.

Spousal Benefits: Benefits may be paid to a spouse during your liftime. This helps monetize the economic value of your spouse's contribution to the family outside of employment.

Survivor Benefits: Benefits continue to be paid to surviving spouse and dependents at your death. This helps ensure your plans remain in place, even after you are gone.

Social Security is essentially a 100% joint and survivor lifetime annuity with cost of living adjustments and a spousal benefit during the life of the covered worker — an attractive component to any retirement income plan.

• All benefits are derived from the Primary Insurance Amount (PIA)
• PIA is based on Average Indexed Monthly Earnings (AIME) up to the Social Security maximum ($118,500) over your lifetime earnings history indexed for inflation (highest 35 years - zero earnings years are included)
• Annual cost of living adjustments to PIA are based on CPI - W (Urban Wage Earners and Clerical Workers)

This is the age at which you may begin receiving your full, unreduced retirement benefit (PIA).

Critical decisions that could significantly impact your retirement income security will need to be made during the eight years between ages 62 and 70.

You may begin collecting benefits as early as age 62 at a reduced amount. You will receive a higher amount if you delay filing until after FRA by accruing delayed retirement credits (8% credited annually to age 70).

Example: PIA = $1,000 Monthly

Strategies to help ensure you enjoy all the benefits you are entitles to should be considered.

Filing techniques such as "file and suspend" and the use of a "restricted application" allow for the potential maximization of these strategies.

Medicare is our national insurance program beginning at age 65, and participation is mandatory if you want to have health insurance in this country. Even if you are currently covered by a retiree health plan, an individual policy, a small employer group plan, or COBRA (the only exception being if you are still employed and covered by an employer-sponsored health plan that includes at least 20 employees), you must enroll in Medicare when you turn 65.

Prior to retirement, but in no event later than age 65, ensure that you have coordinated your existing health insurance with Medicare.