Tag: Social Security

Social security


Living Expenses Stopping New Yorkers from Saving Enough towards Retirement Benefits

A new poll has stated that Baby Boomers and Gen Xers in New York are not saving enough towards retirement benefits because they are just getting by. Many of them are worried that social security benefits won’t be enough in retirement and still, they haven’t done anything about it. The cost of food, utility bills, and housing costs are a problem for many of the people as it takes out a major chunk of their salaries.

The Poll on Living Expenses and Retirement Benefits

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The poll which states that around 70 percent of Gen Xers and baby boomers admitted that saving towards retirement benefits is a significant problem was conducted by AARP in New York. The Siena College survey for AARP was done on more than 800 New Yorkers between the ages of 35 to 70. The aim of the poll was to help AARP in pressing for federal and state solutions that would solve the problem of the lack of retirement options for all the aging New Yorkers. It concluded that New Yorkers have serious concerns regarding their retirement expenses and income but they are hardly doing anything about it.

Experts’ Speak

The Director of Siena College Polling Institute Don Levy stated that about half of the Gen Xers and Baby Boomers are just getting by and it the best they can do. He added that most Xers and about a third of baby boomers were concerned regarding the social security benefits but only a few of them were doing anything about it.

The Vital Results

The survey also found that 59 percent of Gen Xers have admitted that constantly increasing food costs are negatively impacting the finance of the middle-class people. It also highlighted that the numbers of middle-class Gen Xers who were facing difficulties in managing their finances are three times the number of baby boomers facing the same problems and with similar income.

The Problems

About 39 percent of baby boomers accepted that cost of food is a problem for them. About 58 percent of baby boomers and 68 percent of Gen Xers also said that utility bills were a problem for them. Housing costs were a big problem for 70 percent of baby boomers and 81 percent of Gen Xers. It’s no secret that New York is among the highest costs of living in the nation so the challenge of saving towards retirement benefits is also more complicated.

Many Women Fear Running Out of Money in Retirement

It is a known fact that the position of American women in the workforce has improved a lot in the last few years. They are also earning a higher number of college and graduate degrees as compared to men. The number of women business owners is also growing as more than 36 percent of American businesses are now owned by women. Yet, many women fear running out of money in retirement.


Research Claims Women Fear Running Out of Money in Retirement

A recent research conducted by Merrill Edge, the online discount brokerage service offered by Bank of America Merrill Lynch said that 59 percent of mass affluent women have a concern that they would run out of money in retirement. It also said that both men and women fear running out of money in retirement but this insecurity may be compounded for women because they have some additional challenges.

The Challenges

The additional challenges women have to face are longer life spans, varied earnings patterns, and unique careers. It is a fact that women live 5 years longer than men so they must expect to spend more in retirement. They must also remember that the retirement savings of a couple may be diminished due to the costs related to caring for a partner.

Another fact is that most women spend about 7 years out of the workforce to try alternating career paths and caring for a family member like children or elderly people. This reduces the number of total working years of women as compared to men. A thing every woman with fewer working years must understand is that if a person doesn’t have at least 35 years in the workforce, the Social Security Administration would add zero-earnings years to their record to equal 35 years which may lessen the amount of earnings and benefits considerably.

The Solution

The only solution to the problem that women fear running out of money in retirement is that they should start saving and investing as much money as they can. It would help them a lot in their golden years. The relationship status of the women should not matter when it comes to retirement savings. Whether a woman is single or has a family, she must try to save and invest a lot of money for a better future rather than depending on someone else (even their life partner) for money in the golden years.

Americans Saving Longer Towards Retirement Benefits

A new study has revealed that the Americans today are saving for longer years so that they can get retirement benefits for several more years than their predecessors. The study also highlighted the fact that Americans didn’t rely on kids for support in retirement and it also mentioned the ways in which they plan to support themselves financially after retirement. The study also revealed many other interesting facts about retirement.

Retirement Benefits
>7 Years More to Plan Retirement Benefits

The study was conducted by HSBC and named The Future of Retirement: Generations and Journeys surveyed. The study has found out that that Americans are planning to save longer for retirement. They would be saving for 7 years more than their predecessors. The survey was conducted in 17 nations and the number or respondents were over 18,000. On an average, American people work about 5 years longer than the people of other parts of the world. It is 35 years vs. 30 years.

The Reasons

The main reason for the longer time needed to save towards retirement was that the Americans didn’t want to rely on their children. About 3 percent Americans want to rely on children while at a global level this percentage is 12 percent. The people of Hong Kong and Singapore are more willing to depend on their kids as the percentage of people relying on children in these nations are 41 percent and 34 percent respectively.

Relying on Money Sources

Most of the Americans wish to reply on some cash sources for their retirement income. About 56 percent of Americans are using cash savings to survive in their retirement and 51 percent are depending on social security. About 38 percent depend on stocks, 32 percent rely on mutual funds and about 29 percent depend on the income of their spouse or partner. About 10% Americans are more likely to sell a property as compared to other retirees.

The Regret

Though Americans are saving longer for getting steady retirement benefits, about 44 percent Americans wish that they had started to save for retirement a bit earlier. About 33 percent also admitted that they regret not saving a larger portion of income towards retirement savings. Some Americans still have no savings at all. About 14 percent of working age people has not started to save for retirement. About 3 percent of these people have already crossed the age of 60 years.

Planning for Retirement in Five Years by Ron Raffino

Tips from Ron Raffino for Those Planning on Retiring in Five Years

retirement benefits

You must have heard that it’s never too late to start planning, but have you heard it’s never too early to start planning? In fact, the earlier you start your retirement planning, the better it will be for you. Retirement planning is no joke as a lot of factors need to be considered carefully. We will advise you take some assistance from your local personnel service center. Since they have your employment records, they are in a position to provide you with personalized assistance.
We all know and understand that health and life insurance are of top most priorities but still, we see a lot of retired personnel without proper coverage. This usually happens because of lack of awareness and lack of knowledge. It must be noted here that in order to carry the coverage forward, one must be covered continuously for five years before retirement.

Help from your employer
You can get all the information you need on the retirement process from your agency. It should be noted here that the agency only provides you with the information. In order to interpret it and get advice on what to do, you should contact your local personnel service center. As they have your employment records, they are in a better position to advise you on such matters.

When to start planning
This is an important question. We hear a lot of employees asking this question – when should I start planning. Well, to be honest, it’s better to start as early as possible. But just in case if you haven’t done it then make sure you start planning at least five years before retirement. We advise you to start planning five years prior to your retirement as you must have insurance coverage for five years immediately before retirement to keep it after retirement.

Keeping your health insurance benefits after you retire
Pay close attention to this part. Following are points that specify the conditions for being eligible to continue your health insurance coverage.

  • You must be covered at the time of retirement.
  • Your coverage must not fall under the category of converted individual policies.
  • The date of issuance of the first annuity check must not be later than 30 days after the retirement.
  • Prior to 5 years of the date of retirement, you must have continuous coverage.

You can also avail the benefits of optional life insurance if at the time of retirement you are eligible to continue your basic coverage, and again if you were continuously covered for a period of 5 years before your retirement date.

Waiver of the requirement for continuing life insurance coverage into retirement

Currently, there is no such provision that allows a retirement employee to bypass the stipulated conditions for continuing life insurance coverage. However, if you do find yourself in such a situation then you always have the chance to migrate to an individual policy.

Review your service history

As someone who is about to retire, it’s always a good idea to review your service history. You can find all the information in the Official Personnel Folder (OPF). The purpose of such a review is to make sure that all your service records are valid and verified. If you encounter a situation where some of the records are missing then you must report it to your employer. Your employer can help you to find the missing records and document them properly. Some employees are required to make retirement contributions. You can enquire about the consequences of payment or nonpayment of such contributions from your employer.

A complication can arise if you haven’t made payment for receiving the military credits (only if you have served in military). Such payments are to be made before you retire. You can also get advice from the Personnel Officer on waving the military retired pay.

Check your eligibility for Social Security benefits

In order to check for your eligibility to receive social security benefits, you need to visit your local Social Security Office. After you fill and submit the form SSA-7004-PC, you will be provided with a benefit estimate statement. This statement will contain all the information your future eligibility for Social Security benefits and estimates of these benefits at specified dates.

Government Pension Offset

In some cases, it has happened that the social security benefits of a retiring employee’s spouse saw some kind of offset. This mostly happens when the pension of the retired employees is not covered by social security. In such cases, there is no offset on the social security benefits of the retired employee; it happens only to the social security benefits of the retired employee’s spouse. This offset amounts to two third of the federal pension.

Such an offset does not apply universally. There are some exceptions. For example, those employees who are covered by the Federal Employees Retirement System (FERS), Civil Service Retirement System (CSRS) Offset, and those who voluntarily took transfers to the FERS before January 1988, are exempted from the Government Pension Offset.

Windfall Elimination Provision

Windfall Elimination Provision reduces the Primary Insurance Amount (PIA) of a person’s Retirement Insurance Benefits (RIB) or Disability Insurance Benefits (DIB) when that person is eligible or entitled to a pension based on a job which did not contribute to the Social Security Trust Fund. While in effect, it also affects the benefits of others claiming on the same social security record.

The Windfall Elimination Provision does not apply if:

The WEP is applied to certain beneficiaries who are receiving RIB or DIB and who also:

  • The beneficiary becomes entitled to the benefits after 1985
  • The beneficiary also first becomes eligible, after 1985, for a pension based in any way upon earnings from employment that was not covered by social security
  • The beneficiary’s entitlement to this pension has not yet ended (even if not yet claimed)
  • The beneficiary is still alive
  • The beneficiary has not obtained 30 Years of Coverage (YOCs) at the age of 62 years.

Estimating the amount of the Windfall Elimination Provision reduction

At your request, using the form SSA-7004, the Social Security Administration will send you a Personal Earnings and Benefits Statement (PEBES) that will list your earnings from employment covered by Social Security and provide a Social Security benefit estimate assuming retirement at alternative ages, 62, 65, and 70. You should contact your local Social Security office (external link) to determine the effect of the Government Pension Offset and the Windfall Elimination Provision on your Social Security benefits.

Effects on benefits

When the WEP applies, it is used in determining all benefits on the record, both for the primary beneficiary and any auxiliaries. This includes an effect upon the maximum total benefits paid on the record as well. Since the WEP does not apply after the death of the primary beneficiary, it is never used for survivors.


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New Mexico Joins the Efforts to Provide Retirement Benefits to Private Sector Workers

The lawmakers of New Mexico have initiated the process of understanding how they can provide steady retirement benefits to the private sector workers. Experts believe that low-wage workers in the state have no access to a retirement plan.  When they have a plan they would have better savings.  Some experts also think that only private sector employees do not only need an income in retirement, the general public needs it too so it must be a focus area.

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The Brief Regarding Offering Retirement Benefits to Private Sector Workers

The members of the legislative committee of New Mexico were recently briefed on the efforts to boost automated access to retirement benefits plans by the national experts. The members of the committee are responsible for overseeing state investments and pension.

The Fact

A harsh fact revealed by The AARP Public Policy Institute is that about 64 percent of private sector workers present in New Mexico do not have access to any sort of employer-sponsored retirement plan. It is the highest rate in America. As seven other states are moving to increase access to retirement benefits, it’s high time for New Mexico to do the same.

The Worst Hit

The Director of Consumer Affairs and Financial Security at AARP, Gerri Madrid-Davis recently informed the New Mexico lawmakers that the lower wage workers in the state are least likely to get access to any employer-sponsored savings plan. They don’t even have an access to tools like automatic retirement withdrawals from paychecks which can play a key role in boosting the retirement savings. She also said that workers who have an employer-sponsored retirement plan are 15 times more likely to save for retirement as compared to those who don’t have access to such plans.

Needs of the General Public

George Munoz who serves as the Chairman of the Investments and Pensions Oversight Committee believes that the legislators must cater to the retirement needs of not only employed professionals but the general public as well. If the general public has no source of retirement income, the federal social security system feels immense pressure.

Efforts of Other States

It is pertinent to mention here that five states such as Maryland and Illinois have made it mandatory for numerous small businesses to provide retirement benefits plans that have features like automatic enrollment and allow a person to opt-out anytime.

Public Sector Employees are Confident about Retirement

Public sector employees are confident about retirement despite the fact that they don’t have any idea about how much money they would need in retirement and they have not saved much money for the medical expenses post retirement. Most of them are not making many changes to the benefits and most of them are also confident that they will receive money from the employers post-retirement. They lack confidence in medicare and social security.


Survey Says Public Sector Employees are Confident about Retirement

The fact that public sector employees are confident about retirement was revealed in a recent survey. The survey was conducted entitled TIAA’s 2016 Retirement Confidence Survey and it targeted the State and Local Government Workforce. The survey states that 20 percent of the respondents were very confident about the fact that they were saving and investing for retirement in an appropriate manner. About 55 percent of the respondents were somewhat confident about their saving and investment decisions for retirement.

Changing the Plans

The survey that reveals that public sector employees are confident about retirement also noted that most of the respondents are covered by a primary defined benefit pension plan and most of them don’t make changes to it. About 20 percent of the workers reported changes to the plan in the last two years. About two-thirds of them expected to receive retiree health care benefits from their employers after the retirement. Among the latter, about one-quarter of the employees reported changes to the benefits in the last two years.

The Age Factor

Almost every employee who was serving the state and local government wishes to retire at the age of 62 but they were forced to work until they reached the age of 65.

The Confidence

The survey says that the public sector employees are confident about retirement only after taking into account the views of the respondents. About 44 percent of the respondents mentioned that they are very confident about the fact that they will receive all the benefits of their retirement plans and the same percentage of the respondents is somewhat confident. The analogous figures pertaining to retiree health care benefits are 30 percent and 54 percent. The survey also found out that the confidence of the respondents in the medicare and social security is far lower than the confidence in receiving the benefits they think they deserve.

Retirement Woes of Black New Yorkers Escalating

A recent survey has highlighted that the retirement woes of black New Yorkers are on the rise. They have not saved enough for retirement and they are barely getting by. They don’t intend to retire in the New York City. Many of them haven’t looked up basics like social security and they haven’t even started saving up for retirement.

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The Survey on Retirement Woes of Black New Yorkers

The survey on retirement woes of black New Yorkers was conducted by Siena College in association with AARP New York recently. It stated that the African-Americans belonging to the Gen X and baby boomers generation who live in New York City are not prepared for retirement. The survey was conducted telephonically and more than 600 African-Americans participated in it.

Key Findings

The survey on retirement woes of black New Yorkers revealed that 63 percent of the African-Americans between the ages of 36 to 70 are worried about having enough money to retire. It includes 72 percent of middle-class Gen Xers who were earning $40,000 to $120, 000 on an annual basis. It also exposed that 6 out of 10 respondents thought that they were just getting by. The reason behind the same could be increased costs of necessities such as housing, food, and utilities.

In the survey, about 47 percent of middle-class Gen Xers also mentioned that they don’t plan to live in New York post retirement.

Being Unprepared

The survey on retirement woes of black New Yorkers also mentions that about 56 percent of the African-American Gen Xers haven’t researched the social security benefits. About 61 percent have not researched the Medicare benefits and 74 percent have not written a plan such as a budget for retirement. Around 62 percent even do not have a plan for care if they become disabled or sick. Almost half also stated that they have not discussed retirement concerns with their families or life partners.

No Basic Steps

Commenting on the results of the survey on retirement woes of black New Yorkers, Reggie Nance who is a member of AARP stated that most people want to retire at a certain age or when they become eligible. The survey found that majority of African-American Baby Boomers and Gen Xers are concerned about saving enough for retirement but still they are not taking all the necessary steps to retire such as sitting down to create a budget or holding meetings with a financial planner.

Traditional Retirement Benefits Savings Methods still Working for Retirees

Traditional retirement benefits savings methods are working for the retirees these days. This was revealed in a survey. Many retirees stick to social security to sustain in retirement. They also think that their financial condition is good and that they would not run out of money.

Retirement Benefits

Survey on Retirees Preferring Traditional Retirement Benefits Saving Methods

Most retirees who are enjoying a good standard of living these days have confessed that they have relied on traditional methods of retirement benefits savings. This was revealed in a study conducted by Insured Retirement Institute during last summer. About 40 percent of the respondents stated that they were dependent on pensions as the source of income in retirement. The total numbers of respondents were 800 Americans who were between the ages of 65 and 60.

A huge chunk of the respondents had an annual household income of more than $50,000 and all of the respondents had the investible assets of at least $50,000. About half of the participants have investible assets worth $100,000 and $500,000. The survey also revealed that only 24 percent of the workers in the private sector had a defined benefit plan.

Financial Condition

A huge variety of the respondents stated that their financial condition was good or better than they expected it to be in retirement. The title of the study that revealed the financial wellness was It’s All About Income. This study also highlighted that over 70% of respondents were not concerned that they would exhaust all their financial resources while living in retirement.

Social Security Dependence

The survey also made it clear that social security was a big factor for ensuring retirees’ financial wellness too. About half of the income enjoyed by 15 percent of the retirees was through social security. Other sources of income were employment or systematic withdrawals from the savings. They comprised of only a small part of the total income of retirees.

Minimum Distribution Rules

Over half of the respondents mentioned that they had withdrawn money from the retirement accounts only to satisfy the rules regarding minimum distribution and they didn’t want that money to take care of the immediate spending needs.

The report stated that the significance of pension as a retirement benefits savings option for retirees cannot be overstated as without it, the retirees would most likely have a lower standard of living and they would also be less confident regarding their ability to sustain savings in retirement.

Many Americans Fear that they will Outlive Their Retirement Benefits Savings

A new survey has highlighted some very terrifying facts about retirement. It says that many Americans fear that they will outlive their retirement benefits savings despite the fact that a majority of them plan to have multiple sources of income. Those earning less were more anxious about retirement than those earning more. The survey also highlighted that people were not giving up saving even when they were past the 50 year age mark. The dependence on social security is also clearly evident.

Retirement Benefits

Fear of Outliving retirement Benefits Savings

About one third of the respondents in the AP-NORC Center for Public Affairs Research survey admitted that they fear to outlive their retirement benefits savings. In contrast, 34 percent of respondents who were more than 50 years of age believe that they are financially prepared for retirement. All the others are not sure about their future.

Multiple Sources of Income

Despite the fact that many Americans fear that they will not have money to lives comfortably in retirement, about81 percent admitted that they have at least two sources of income while 60 percent have three or more source of income in retirement.

Low Income, More Worry

The fact that people with low income are more worried about retirement was proven once again. About 58 percent of respondents from households that have less than $50000 income were anxious about retirement while only 40 percent of the respondents belonging to households that have income more than $100,000 were anxious about the same.

Good Savings

The survey also dug up the fact that about 67 percent of the respondents who have to work are still setting aside some money towards the retirement savings. About 90 percent of respondents from households that earn over $100,000 income accepted that they were saving for retirement while only 47 percent of people with household income less than $50,000 are still saving.

Dependence on Social Security

Social security is still among the preferred income sources of the retirees. About 44 percent of the respondents admit that social security would be the highest component of income for them. Around 54 percent of the respondents that had a household income less than $50,000 also said that they were relying heavily on social security as the topmost among all the retirement benefits they will likely get in the future.

Americans Dependent on Social Security and Employer-Sponsored Plans for Retirement Benefits

A bit of new research has shown that many Americans are depending on social security and employer-sponsored plans for retirement benefits. The study also found that Americans are saving less towards retirement benefits because they wish to pay off the short-term debts first. The study also stresses on the fact that technology is not enough for making the most of the employer-sponsored plans, personalized services are also required.

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The Research on Retirement Benefits

The research that showed Americans are relying upon which sources on forming their retirement benefits was conducted by the Lincoln Financial Group. It revealed that the Americans are highly dependent on the social security and employer-sponsored plans.

A Video

After the study results were available, Lincoln’s Retirement Plan Services created a video starring a fictional character Bob to help people understand the value of saving early and often. This video is aimed at helping people take actions today that will help them to have more benefits after retirement.

Value of Technology

The results of the study also show that technology is not enough to encourage people to save more. A combination of technology and personalized services are what’s needed the most to drive positive results.

In the video, Bob makes good retirement benefits saving decisions and receives that full employer match. He increases the amount of money he contributes to his employer-sponsored plan. He also meets with a financial advisor and creates a strategy that translates the saved money into retirement income.

Helping People

The President of Retirement Plan Services, Lincoln Financial Group Jamie Ohl has stated that from the company’s perspective the ultimate goal of people in retirement should be their income. The data from the American Consumer Study carried out by the company shows that people truly believe that they will be responsible for their own retirement security. The company wants people to understand how to make the most of an employer-sponsored retirement plan so that they are able to achieve the retirement that they have envisioned.

Fewer Savings

The survey also showed that about 36 percent of respondents wished to put more money in the retirement benefits plans but more than half were giving priority to paying off the short-term debt over accumulating some solid savings for retirement. The study also highlighted that only 56 percent Millennials are contributing towards a retirement benefits plan.

Nearly Half of Young Americans have Zero Retirement Benefits Savings

The retirement savings of young Americans are not up to the mark. It has been proven again by a survey which found out that nearly half of young Americans have zero retirement benefits savings. Their chances of getting regular income post-retirement are also low and they also don’t trust the social security system. Still, the majority of young Americans believe that they will have ample amount of money in retirement.

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Survey Exposing Zero Retirement Benefits Savings

The survey that revealed the retirement savings problem was conducted by the Black Youth Project at the University of Chicago in association with Associated Press-NORC Center for Public Affairs Research. The survey was conducted via a GenForward poll. It stated that 48 percent of Americans who were between the ages of 18 to 30 have zero retirement benefits savings and they don’t have access to a traditional pension either. Over 4 in 10 respondents between the ages of 25 to 30 have admitted that they have saved nothing for retirement.

Fewer Traditional Pensions

In the survey, it was also revealed that younger Americans won’t be able to access the traditional pensions that were enjoyed by earlier generations. Only 7 percent of the respondents said that they would be getting the rare benefit so that they get a pre-defined monthly amount post retirement.

No Faith in Social Security

The age in which the Americans receive social security is climbing high too. It is up to 67 rather than 66 so young Americans would have to wait longer for it as compared to their parents and grandparents. Young Americans don’t have faith in the social security system. Only 5 percent have admitted to having full confidence in this benefit while 28 percent said that they are somewhat confident.

The Self Confidence

Despite the sad fact that many of the young Americans have zero retirement benefits savings, their confidence in their own abilities is not lacking. A majority of the respondents admitted that they would have enough money they need in retirement and they will not be dependent on others. About 53 to 56 percent of Asian Americans, African Americans, and white Americans are sure that they will have enough money post-retirement. Only the confidence level of the Latinos is not that high. Just 43 percent think that they are either very confident or somewhat confident that they would have enough money to live comfortably in retirement.

The Bad News Regarding Retirement Benefits of Baby Boomers

We recently reported how Baby Boomers are meeting the retirement challenges nicely. Unfortunately, all is not as good as it seems. There are some negative findings in the 17th Annual Transamerica Retirement Survey of Workers. These findings state that baby boomers might not be able to work for as long as they wish. It also highlights that baby boomers have low savings, menial backup plans and minimal knowledge of social security.

Retirement Benefits

Why Baby Boomers Won’t Increase their Retirement Benefits by Working Longer?

Many baby boomers expected to increase their retirement benefits savings by working for a few years after retirement but this may not be possible. The reasons may vary from declining health to lack of job opportunities, says the 2016 Retirement Confidence Survey.

Employers are not Aging Friendly

About 47 percent baby boomers accepted in the TCRS survey that their employers may allow them to work past retirement as they are aging-friendly. The rest of them think that they might not be able to keep the job post retirement. About 29 percent admitted that their employers have made flexible transition arrangements.

Savings Difficulty

About 42 percent baby boomers said that their retirement savings are not enough or too low. The median amount they think they need is about $500,000. But when the 4 percent rule is used as a reality check, the annual income would be just $20,000 per year which is not enough to cover the expenses even when the social security income is added to it.

Lack of Financial Counseling and SS Knowledge

It is believed that financial counseling might help in increasing the savings but only 12 percent baby boomers admit that their employers provide any finance related counseling. About 19 percent of baby boomers accepted that they know a great deal about social security and 34 percent expected social security to be the primary source of income post retirement.

Minimal Backup

Only 25 percent of baby boomers have a backup plan in place if they are unable to work until they plan. About 26 percent said that they have only less than $5,000 to take care of a financial setback such as a medical emergency, unemployment, etc. Lack of a backup plan means that more than 28 percent have taken a loan, opted for early distribution or made a hardship withdrawal from IRA or their retirement benefits savings.

OPM and SSA to Stop Paying Deceased Federal Employees

It has been highlighted that the Social Security Administration paid about 1.7 million dollars to the families of deceased federal employees because they had no idea that the employee was dead. A recent audit says that a major reason behind this mistake was that SSA received the data on the death of federal workers from various sources but not from OPM. It is being seen that SSA is asking OPM to come to a data agreement and provide data pertaining to the dead federal workers and retirees on a regular basis.

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The Money Paid to Deceased Federal Employees

In a period of 21 years, the SSA paid benefits to about 35 deceased federal retirees and federal employees. The average beneficiary received about $49,156 during a time span of 84 months and the total money paid this way was 1.7 million dollars.

The Audit

SSA Inspector General conducted an audit related to the matter to ensure that it does not keep paying the deceased feds anymore. The audit found out that SSA paid $932 billion as benefits payments to all the feds during 1991 to 2013. The amount of money paid to the relatives of deceased people was less than one-tenth of the total amount. The audit did not include the benefits paid post-2013.

The Report

In the report of the audit, it was mentioned that SSA gets a report on the death of a federal worker or retiree via many sources like close family, friends, funeral homes, etc. It also gets the reports from the state bureaus of vital statistics and other federal agencies except for OPM. OPM didn’t share the data because the two agencies have no formal data sharing agreement, according to SSA.

The Request

In July 2016, the SSA requested OPM formally for the monthly death reports and the agencies are currently negotiating for that. In essence, the OPM has agreed to supply the data requested by the SSA. It is also verifying data and researching the expected volume of new death records. When all the negotiations between the agencies are complete, SSA will begin the process of collaborating with OPM on drafting a fresh Information Exchange Agreement along with developing the project timeline for the data it has requested.

The Beneficiaries

Washington has reported that 7 deceased federal employees and retirees were paid by the SSA and Maryland claimed four. Florida and Ohio had three such cases each.

Research States Millennials Are Better at Retirement Benefits Savings

Recent research shows that millennials are better at managing retirement benefits savings as compared to the baby boomers. Researchers highlighted the challenges millennials must tackle to boost their savings and their retirement plans. The research goes on to show that  millennials are less dependent on social security as a main component of retirement income when compared to baby boomers.

retirement benefits savingsThe Numbers of Retirement Benefits Savings

A survey conducted by Ramsey Solutions revealed that about 58 percent of Millennials are saving for retirement. It also exposed the fact that about 38 percent Millennials know how much money they will need when they retire. Millennials who responded that they are saving for retirement have been doing so since they were just 23 years old.

Not Enough Savings

Though millennials are better at saving for retirement, about 60 percent have  less than $10,000 saved towards retirement. Interestingly the amount is about the same saved by the Baby Boomers. The reason behind it is that Millennials will have to live a balanced lifestyle and they have to manage debt.

As per the disclosed figures, about 50 percent of millennials save less because the cost of living is too high. About 27 percent think that taking care of their children hampers their savings while 23 percent admitted the student loans are the reason. About 22 percent accepted the reason to be credit card debt and 21 percent said that the mortgage is the reason behind fewer savings for retirement.

The Praise

Chris Hogan who was serving as a spokesperson for Ramsey stated that it was encouraging to see that the Millennials are setting themselves up so that they can have a positive retirement outlook.

The Challenges

Hogan also pointed out the challenges that are yet to be tackled by the Millennials. He says that they need to maintain a balanced lifestyle and eliminate debt as it will allow them to boost the amount of money they are saving for the retirement.

The Future Plans

The survey highlighted that about 80 percent of Millennials were planning to save more towards retirement benefits in the future while 70 percent of Millennials hoped that they should have saved earlier. Around 40 percent of Millennials have already set an age at which they plan to retire.

Less Dependence on Social Security

The survey also pinpointed the fact that Millennials are less dependent on social security as the main component of retirement benefits. Just 28 percent Millennials depend on it while over 50 percent of Baby Boomers expect the Social Security to be a major chunk of their retirement income.

SSA has the most satisfied IT Federal Employees

A report has revealed that the overall satisfaction rate of federal workers has improved a bit. It also revealed that keeping the IT professionals satisfied with their jobs is a challenging task and only a few organizations like the Social Security Administration are succeeding in that. The report also emphasized on the need to involve professionals in vital tasks, the need to train them and the need to onboard them right.

social securityData Reveals Organizations that have Satisfied IT Federal Employees

The data that reveals the organizations that keep the IT federal employees satisfied was 2015 federal job satisfaction data which was recently analyzed by The Partnership for Public Service. It exposed that the IT professionals working at the Social Security Administration are the most satisfied ones as the index is more than 71 out of 100. NASA stands at second position with 69.7 out of 100. The other agencies that succeed in keeping the IT professionals happy are Commerce, Justice, Treasury, Interior, State and Labor.

The Overall Satisfaction

The index score of all federal employees stands at 58.1 average. It has improved for the first time in last four years. The average score of IT professionals’ satisfaction was just 56.2.

The Survey

The findings are based on the data prepared by using the OPM’s Federal Employee Viewpoint survey. The survey included input from over 421,000 people who were surveyed during the period of April 2015 to June 2015. The Partnership also organized a workshop in May 2016 that involved IT, HR and contract specialists from all across the federal government.

The Key Factors

The report has highlighted three key factors that influence job satisfaction. They are serving as a team member, strategic partner and an advisor in the agency or having an innovative and creative culture or investing in employee training so that they can feel connected to the mission of the agency they are serving.

Several participants of the 2016 workshop stated that they feel disconnected from the big picture. In the OPM report, just 43.5 percent people showed satisfaction with on the job training while only just more than 47 percent accepted that their training needs are assessed.

Finally, many federal employees also accepted in the report that if they have had the opportunity to learn the organizational culture during the onboarding process, the process would have helped them to easily integrate into the job they are assigned.

Retirees Don’t Regret Claiming Social Security Early

A new survey has revealed that majority of retirees who just retired or are about to retire don’t regret the decision of taking their social security. The survey also pointed out that one of the most unforeseen expenses in retirement is health care. Experts believe that the need to optimize the social security is higher than ever in the current scenario.

social securityWhy Retirees Don’t Regret Claiming Social Security Early

The survey was done by Nationwide Retirement Institute. The subjects were Americans who are older than 50 years of age. The Survey results were shared on Thursday. The survey revealed that about 69 percent of retirees would not change the age in which they started taking social security. About 23 percent regretted the decision of claiming social security early while 2 percent expected to take it early. About 6 percent were not sure about this decision.

The reasons behind why retirees are not regretting taking social security early were highlighted in the third annual online survey of over 900 Americans in or nearing retirement. About 39 percent respondents admitted that they opted for taking retirement benefits early because the things were beyond their control such as job loss or poor health.

The Major Setback

The survey also highlighted the fact that one of the biggest shocks to current retirees is the costs associated with healthcare. One in four respondents of the survey accepted that they were not able to live the lifestyle they expected in retirement due to rising healthcare costs.

Another research done by Health View Financial Services last month attested to the statements made by retirees. It stated that if the general inflation and healthcare costs keep rising in the future, the medical costs of the retirees may outpace Social security benefits in the next 20 years.

Expert Speak

Dave Giertz who is currently serving as the President of Sales and Distribution for Nationwide opined that an average American who is claiming the social security at 62 years of age would very likely spend about 61% of the monthly social security benefits on health care related costs.

So, it is vital to optimize social security, adds Mr. Giertz. added. He also stressed on the fact that too many American workers need the money they deserve but they are missing out on hundreds of thousands of dollars in retirement income because they are unable to maximize their benefit.

Calculating the FERS Supplement by Paul Kalra

A Lesson on Calculating the FERS Supplement by Paul Kalra

FERS Paul Kalra

There are many FERS annuitants who are able to retire prior to the age of 62, and who are eligible for the SRS (Special Retirement Supplement). You can meet such requirements if you have retired:

  • Following the MRA (Minimum Retirement Age) after putting in at least 30 years of service;
  • At age 60 with at least 20 years of service; or
  • Upon either an early voluntary or an involuntary retirement at age 50 after having 20 or more years of service, or at any age after at least 25 years of service, when it has been determined that your agency is undergoing a major reorganization, a RIF (reduction in force) or a transfer of function. (In this situation, you will not receive the SRS until you have reached your Minimum Retirement Age).

As Social Security retirement benefits cannot be received until you reach at least the age of 62, the Special Retirement Supplement can help you with bridging your income until the time that these benefits are paid out.

In order to determine roughly how much you will receive from your SRS, you should first obtain an estimate of benefits from the Social Security Administration. Each year, Social Security provides a statement of estimated benefits, so you will be able to easily find the dollar amount of estimated benefits that you are likely to be receiving at age 62.

Next, take this dollar amount and multiply it by your years of FERS service (rounded off to the nearest whole number). Once you have done so, divide this figure by 40. This will provide you with the approximate amount of FERS supplement that you should receive.

As an example, if the amount of Social Security benefit that you are estimated to receive at age 62 is $5,000 and you have put in 30 years of FERS service, then the calculation will be as follows:

$5,000 X 30 / 40 = $4,500

In running this calculation, your estimated FERS Supplement benefit would be approximately $4,500 per month. It is important to note, however, that certain situations such as obtaining outside employment following retirement could have an impact on the amount of benefit that you ultimately receive.

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Americans Use Social Security as the Key Source of Retirement Benefits

A recent poll has found out that most Americans will be dipping into their social security benefits before the retirement age. Though experts recommend that people should wait for as long as possible to get a heftier sum, all retirees can’t afford to wait. Many Americans also admitted that they would have multiple income sources after retirement that will form the retirement benefits but still the poll found that social security funds were a common source of income.

Facts on Using Social Security as Retirement Benefitssocial security

The poll done by NORC Center for Public Affairs Research and the Associated Press was released on Thursday. It stated that about one in four Americans who have crossed 50 years of age admit that they would use the social security program before they reach the retirement age. About 44% of people admitted that they would depend on social security during the retirement years because it will be their biggest source of income.

Why Taking Social Security Benefits Must be Delayed?

Gary Koenig who serves as the Vice President of Financial Security at AARP Public Policy Institute says that people should delay the social security benefits as long as possible because claiming these benefits early might have long-term repercussions on the financial security as a person ages. If a person chooses to wait the benefits increase 8% more for every year from 66 to 70. At 70 years of age, these benefits are at the maximum.

The Sad Truth

The sad truth of the matter is that most Americans don’t have the luxury of waiting. Ken Chrzastek, a Chicago resident had to take these benefits at 62 because he lost his job and companies didn’t want to hire an old person. He hasn’t found even any part-time work and had to withdraw $50,000 out of an IRA too.

Multiple Income Sources

Many Americans also confessed that they have multiple sources of income for retirement. The Americans who confessed it were all over 50 years of age. The poll results show that social security was a common source of income for these Americans. About 80% Americans who were surveyed said that they have or expect to have access to the social security income.

Over half of the respondents also accepted that apart from social security, they have other retirement benefits accounts such as IRA, 401 (k) and 403(b). Some Americans also had other savings. About 43% Americans had a traditional pension.

Federal Employees May Get a Social Security Boost

A WEP provision of the old Civil Service Retirement System has been reducing the benefits of many federal employees. A new bill was introduced by Republican leader Kevin Brady to change the WEP provision. If the change is successful, it would benefit many federal workers. National Active and Retired Federal employees is playing a pivotal role in pushing for the change.

csrs civil service retirement system social security

Why Federal Employees get Fewer Benefits?

The WEP provision of the old Civil Service Retirement System or CSRS reduces the benefits of the federal employees, state employees, county employees and even municipal employees who have worked in the private sector. Whether the employees worked in the private sector before, during or after the federal service time does not matter. It also includes the employees who receive an annuity from government employment that is not covered by social security.

All the federal and postal employees have contributed to the civil service retirement fund and the Social Security since last 30 years when the Federal Employees Retirement System was introduced. The people who retired under the old CSRS plan get significantly reduced Social Security benefits because of the WEP provision.

The Hope

Though feds have hoped to get rid of WEP since the day it was created, they have been unsuccessful so far. They have now got a glimmer of hope as the Republican leader Kevin Brady has introduced a bill against WEP. It’s known as the ETPSA bill (H.R. 711).

Brady has got a better chance at getting the bill cleared because he is a republican who would have no problem in rounding up the supporters of GOP. He is also the Chairman of the influential House Ways and Means Committee. The committee has jurisdiction over Social Security.

Age Matters

If the efforts of Brady prove to be successful, the federal employees who are turning 62 this year would have the maximum benefit. Many of the people in this age group would be eligible to get a monthly benefit of $77. This bill may decrease the monthly benefit of about 17 percent feds by $13 per month.

The Fact Sheet

The National Active and Retired Federal Employees have played a key role in ensuring that all the current and retired federal workers get rid of the WEP provision. They are currently leading the charge to change the law. They even have a detailed fact sheet that explains how WEP works and what would be the impact of the changes.

Woman Pleads Guilty to Multiple Social Security Scams

A woman living in Allenstown has pleaded guilty to two Social Security Frauds along with two counts of Theft of Public Money. She received social security benefits for her child but did not disclose that her full time working husband was living with her. She also didn’t report the alimony she received from the husband when he moved out. Concealment of these facts made her eligible to receive assistance for her minor child. She would have been ineligible for the assistance if she had reported the facts.

The Beginning of the Major Social Security Scams

social security
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Kim Wheeler who lives in Allentown has pleaded guilty according to a press statement. She confessed in US District Court for the District of New Hampshire. She divulged that she had been doing the scam since February 2005 when she first began to get social security disability benefits for her minor child as a representative. Then since May 2010, she has been a recipient of Food Stamps and Qualified Medicare Beneficiary benefits.

The Scam

The scam was carried out by Wheeler because she failed to report that her husband, child’s father lived with them when she applied for social security disability benefits. This income would have made her application ineligible as he was in a full-time job and living in the same house, says Emily Gray Rice, who is a US Attorney.

In the second instance, Wheeler didn’t report his income when applying for Food Stamps and Qualified Medicare Beneficiary benefits. It is necessary to report the income of all the members of the household in the latter instance. Wheeler failed to do it because she knew that doing so would make her ineligible for these benefits also.

The Concealment

Wheeler also did not report that her husband lived with her to the New Hampshire Department of Health and Human Services and the Social Security Administration. When her husband moved out of the home and paid alimony as well as child support, Wheeler concealed these facts from the aforementioned agency and department, according to Rice.

The Punishment

Wheeler now faces a sentence of 10 years in prison and the judgment will come on August 1, 2016. She is currently released on several conditions and is now awaiting the trial. The case’ investigation was done by New Hampshire Department of Health and Human Services’ Special Investigations Unit and the Social Security Administration’s Office of the Inspector General. The prosecution was done by Special Assistant United States Attorney Karen Burzycki.