2017 Active Living by Skagit Publishing

Fall 2017

Active Living: The Retirement Years

A Supplement to the Skagit Valley Herald And the Anacortes American

Active Living | SOCIAL SECURITY

What is the future of Social Security Board of Trustees Annual Report

Inside This Issue: SOCIAL SECURITY: What is the future of Social Security?............2 Listen and Learn: Free Audio Publications......3 Ask Rusty.....................................................4 Q & A: When to start your benefits.................5 Survivor Benefits...........................................7

By Kirk Larson Social Security Washington Public Affairs Specialist

ecently, the Social Security Board of Trustees released its annual report to Congress presenting the financial status of the Social Security trust funds for the short term and over the next 75 years. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034 with 77 percent of benefits payable at that time. In the 2017 Annual Report to Congress, the Trustees announced: The asset reserves of the combined OASDI Trust Funds increased by $35 billion in 2016 to a total of $2.85 trillion. The combined trust fund reserves are still growing. Beginning in 2022, the total annual cost of the program is projected to exceed income. • Total income, including interest, to the combined OASDI Trust Funds amounted to $957 billion 2

finances:

in 2016. • The projected actuarial deficit over the 75-year long-range period is 2.83 percent of taxable payroll. • The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034 – the same as projected last year. At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits. “It is time for the public to engage in the important national conversation about how to keep Social Security strong,” said Nancy A. Berryhill, Acting Commissioner of Social Security. “People understand the value of their earned Social Security benefits and the importance of keeping the program secure for the future.”

Hidden obstacles that keep people from retirement....................................................6 HEALTH: Pets Can Improve Your Health........................8 Disclaimer: Social Security Administration does not endorse any products or services advertised in this supplement

To learn more about the 2017 Trustees Report go to www. socialsecurity.gov/OACT/TR/2017/. Active Living: The Retirement Years

Active Living | SOCIAL SECURITY

Now you can. Social Security offers more than a hundred publications in audio format, in both English and Spanish. You can find them at https://www.ssa.gov/pubs/ or you can call (800) 772-1213 for assistance. At Social Security, we want to make sure you can get the information you need. That is why we offer our publications in print, online in both Internet and PDF versions, and some in audio format. You also can get publications in Braille, in enlarged print and even cassette or CD. If you are blind or visually impaired and

Listen And Learn About Social Security.

Free Audio Publications For Your Convenience.

erhaps youâ&#x20AC;&#x2122;ve been planning to read that booklet on Social Security benefits for some time now,

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By Kirk Larson Social Security Washington Public Affairs Specialist

You can even learn about Social Security in 15 different languages at our Language Gateway. There are many publications you can read and down load in Arabic, Chinese, Korean, Spanish, or Vietnamese. If you want to learn about Social Security in Greek, well now you can. Just go to https://www.ssa.gov/site/languages/ en/ Social Security is committed to using technology to improve the

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are having trouble reading a notice we sent you in the mail, you can ask a Social Security representative to read it and explain it to you. You can contact us as many times as you want to get an explanation.

Active Living: The Retirement Years

Listen cont. on page 6

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but you never seem to find the time to sit down with it. If only you could listen to an audio version, just as you might listen to the latest novel by your favorite author on audio book.

Active Living | SOCIAL SECURITY Social Security Matters by AMAC Certified Social Security Advisor Russell Gloor Association of Mature American Citizens

Ask Rusty - DRC’s, Working and Waiting; Restricted Application

ear Rusty: My wife is 66 and not collecting S.S. She wants to wait until age 70 to collect the larger benefit, but I know she could collect now and her payments will grow if she continues to work until age 70 because there were at least 4 years that she had no income and several years where her income was only $2k - $3k. In the next 5 years she will earn around $25K per year. My question is, what will be the difference in benefits at age 70 if she just waits to collect versus if she collects now and continues to contribute to S.S? Our birth dates are 12/1950 (wife) and 05/1953. I am not yet collecting benefits. Signed: Trying to Maximize our Benefits

ear Trying: The first thing to keep in mind is that for each year of your wife’s working career her earnings are adjusted for inflation before her benefit calculation is done. So, for example, $3,000 earned in 1971 would, for purposes of computing her benefit, be adjusted to about $21,450 in today’s dollars. The same is true for earnings in each of the years up to when your wife turned 60 years old, but only to the maximum taxable earnings for each year. So your wife’s benefit would only increase as a result of her working now if she earned more than any of the inflation-adjusted earnings for one or more of the years in the 35 years used to calculate her benefit. However, replacing any years in which she had zero earnings would improve her benefit a small amount. Since your wife has reached her Social Security “full retirement age” of 66, she’s entitled to 100% of what’s called her “primary insurance amount”, or PIA. For each year she waits beyond age 66 she’ll earn delayed retirement credits (DRCs) to the tune of 8%per year, up to age 70. So if her PIA is $1,000 at age 66, she would instead receive $1,320 if she retires at age 70. Considering that any adjustment to her PIA from working would actually be very small due to the 35 year averaging and earnings indexing, the guaranteed 8% per year benefit increase would appear to be a prudent path. However, there’s another strategy you may want to consider.

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Since both of you were 62 years of age prior to January 1, 2016, you have available to you a strategy known as the “Restricted Application”. This “loophole” was closed by the Bipartisan Budget Act of 2015 for all except those born prior to 1954. Using this strategy, one spouse can begin receiving benefits and the other spouse can, once they reach their full retirement age, file a “Restricted Application for Spousal Benefits Only” and allow their own personal benefit to earn Delayed Retirement Credits up to age 70. This would typically be used to enable a lower-earning spouse to begin benefits while the higher-earning spouse’s benefit grew to its maximum of 132% of PIA. Using this strategy, your wife could start her benefits now, and you could file the restricted application and collect spousal benefits from her work record while letting your own grow at 8% per year until you are 70. You would then switch to your own larger retirement benefits. At that point your wife could switch to spousal benefits from your record if higher than her own, and both of you will have collected benefits on her record during the years in between. A final note: An important consideration is the potential increased survivor’s benefit your wife would be entitled to as your widow, since she would get 100% of your benefit rather than the lower amount she would otherwise receive on her own work record (or as your spouse). Note too that all of this is predicated upon you maintaining good health and adequate financial resources to be able to delay applying for Social Security benefits until age 70. The information presented in this article is intended for general information purposes only. The opinions and interpretations expressed are the viewpoints of the AMAC Foundation’s Social Security Advisory staff, trained and accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). NSSA, the AMAC Foundation, and the Foundation’s Social Security Advisors are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government. Furthermore, the AMAC Foundation and its staff do not provide legal or accounting services. The Foundation welcomes questions from readers regarding Social Security issues. To submit a request, contact the Foundation atinfo@ amacfoundation.org.

Active Living: The Retirement Years

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Active Living | SOCIAL SECURITY benefits at age 62, we’ll reduce your monthly benefit 25.8 percent to $964 to account for the longer time you receive benefits. This decrease is usually permanent.

Q & A - When should you start your Social Security Retirement Benefits?

Question: When Can I start my benefits? Answer: You can start your Social Security retirement benefits as early as age 62, but the benefit amount you receive will be less than your full retirement benefit amount. Your monthly retirement benefit will be higher if you delay starting it. You can visit www.socialsecurity.gov/planners/retire/ageincrease. html to find your full retirement age. We calculate your basic Social Security benefit—the amount you would receive at your full goskagit.com

retirement age—based on your lifetime earnings. However, the actual amount you receive each month depends on when you start receiving benefits. You can start your retirement benefit at any point from age 62 up until age 70, and your benefit will be higher the longer you delay starting it. Question: If I start my benefits early, how much of a reduction will I take? Answer: If you start your benefits early, they will be reduced based on the number of months (a little more than one-half of one percent per month) you receive benefits before you reach your full retirement age. You could take a 25 to 30 percent reduction if you start early. The following chart shows an example of how your monthly benefit increases if you delay when you start receiving benefits. Monthly Beneﬁt Amounts Differ Based on the Age You Decide to Start Receiving Beneﬁts This example assumes a benefit of $1,300 at a full retirement age of 66 and 2 months 1700

Monthly Beneﬁt Amount

By Kirk Larson Social Security Washington Public Affairs Specialist earn about your retirement benefits as we answer some basic questions that are commonly asked during our educational presentations. Social Security is part of the retirement plan of almost every American worker. If you’re among the 96 percent of workers covered under Social Security, you should know how the system works. At Social Security, we’re often asked, “What’s the best age to start receiving retirement benefits?” The answer is, there’s no one “best age” for everyone and, ultimately, it’s your choice. The most important thing is to make an informed decision. Your decision is a personal one. Would it be better for you to start getting benefits early with a smaller monthly amount for more years, or wait for a larger monthly payment over a shorter timeframe? The answer is personal and depends on several factors, such as your current cash needs, your current health, and family longevity. Also, consider if you plan to work in retirement and if you have other sources of retirement income. You must also study your future financial needs and obligations. This decision affects the monthly benefit you will receive for the rest of your life, and may affect benefit protection for your survivors.

1400 1100

$964

$1,029

$1,112

$1,198

$1,300

$1,386

$1,490

$1,594

$1,698

800 500

66 and 67 2 months

Age You Choose to Start Receiving Beneﬁts

Let’s say you turn 62 in 2017, your full retirement age is 66 and 2 months, and your monthly benefit starting at that age is $1,300. If you start getting Active Living: The Retirement Years

Question: What if I wait to take my benefits after my full retirement age, will they be larger? Answer: Yes, your benefits keep growing until age 70. If you choose to delay getting benefits after your full retirement age, you would increase your monthly benefit at the rate of two-thirds of one percent per month or eight percent per year. In our example case, your benefits would grow to $1,698. This increase is the result of delayed retirement credits you earn for your decision to postpone receiving benefits past your full retirement age. The benefit at age 70 in this example is 76 percent more than the benefit you would receive each month if you start getting benefits at age 62 — a difference of $734 each month. Question: Can I work after I start my Social Security retirement payments? Answer: You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn. We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit. For 2017 that limit is $16,920. In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age. If you will reach full retirement age in 2017, the limit on your earnings for the months before full retirement age is $44,880. Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.

Active Living | FINANCES

Hidden obstacles that keep people from retirement By Sabah Karimi, GOBankingRates.com (TNS)

by retirement. If you’re investing in your 20s, learn what strategies you should be following.

ore than 50 percent of Americans will retire broke, according to a 2017 GOBankingRates study. And another 19 percent have less than $100,000 in the bank, which might not be enough to see them through their golden years.

Claiming Social Security Too Early You can start collecting Social Security benefits when you turn 62, but you won’t get the full benefit until you reach your full retirement age.

If you’re not setting aside enough — or any — of your paycheck each month, your retirement dream could become a nightmare. Even if you plan on working during retirement, you might need more money to cover medical care, travel costs and living expenses. Check out these hidden obstacles that could be impeding your retirement goals, and get tips for growing your nest egg.

Tom Foster, national spokesperson at MassMutual Financial Group, shared the results of a MassMutual Retirement Services study that showed “those who took concrete steps, such as calculating the best time to collect Social Security, targeting how much money they would need to afford retirement and increasing savings, report feeling more financially secure in retirement.”

Overspending During Your Working Years No matter how much you make during your working years, keep an eye on your spending — especially those big-purchase decisions, such as a new car or home, said Robert Steen, a certified financial planner and retirement advice director at USAA. You might be able to afford an added car payment or a larger house, but if you consider that extra money could be going into a retirement plan that’s earning interest, you’ll find you’re missing out on opportunities to save more.

Miscalculating Retirement Savings Goals Do you really know how much you need to save for retirement? “A general rule of thumb is to have about 12 times your final salary saved by the time you retire,” said Steen. This amount assumes you will retire at 65. But considering you could be saddled with additional medical expenses in retirement — and that you’ll need to accommodate for any financial shortfalls — you might want to save more. There are strategies to follow to hit your savings goals.

Counting On Your Employer Company pensions are no longer the norm. Mark Thomas, senior vice president of Aon Affinity Insurance Services, said, “Employers are switching employee benefits from so-called ‘defined benefit plans’ (a pension) to ‘defined contribution plans’ (401k).” Sadly, this means you can’t rely on your 6

workplace or the government to support you with the income you need for retirement.

Neglecting The Employer Match If your company offers retirement matching, make sure to take full advantage of it as soon as you are eligible to receive the benefit. The Vanguard Group recommends contributing 12 percent to 15 percent of your pay, including any employer match, to reach your retirement goals.

Leaving Retirement Contributions Out Of The Budget When you’re putting together your monthly budget, make space for your retirement contributions so you can stay on track with your goals. “Build a budget and stick to it,” said Thomas. “Most people are spending more time planning their vacations than their retirement.”

Starting To Save Too Late Make compound interest work in your favor by contributing to your retirement fund as early as possible. Each dollar you contribute at the age of 20 is the equivalent of earning $5.84 by retirement at age 65, according to Vanguard. Each dollar you stow away at age 45, however, will only be worth $2.19 Active Living: The Retirement Years

GOBankingRates.com () is a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt. © 2017 GOBankingRates.com, a ConsumerTrack web property. Distributed by Tribune Content Agency, LLC.

Listen cont. from page 3 customer service experience. Learning about any aspect of Social Security’s programs is easier than ever, in the format that works best for you. These days, you can even get a personalized estimate of your future benefits and apply for those benefits online. From the comfort of your home, you can access information about Social Security. Take it a step further and use the audio publications in combination with the Frequently Asked Questions (FAQs) section to get answers to over 700 questions. If you were planning to plug in the ear buds and listen to a little music tonight, why not play the Social Security publication you’ve been putting off? It’s never been easier to learn about Social Security. Visit our webpage and you can learn about Social Security programs at www.ssa.gov. Welcome to our online library. Whatever your preferred format, we’re here for you. goskagit.com

Count on Social Security Survivor Benefits To Protect Your Family By Kirk Larson Social Security Washington Public Affairs Specialist

ragedy strikes without warning. According to the U.S. Centers for Disease Control and Prevention, over 2.7 million people will die in the U.S. this year. For families who lose a wage earner, it can have a devastating financial impact in addition to the emotional one. If you work, some of the Social Security taxes you pay now go toward survivors benefits for workers and their families. In the event of your death, certain family members — widows, widowers (including your divorced spouse), children and dependent parents — may be eligible for survivors benefits. Today, in Washington State, there are over 110,000 widows/widowers and surviving children receiving monthly

Active Living | SOCIAL SECURITY

benefits. The average payment is just about $1,225 per month. Social Security’s survivors benefits may be more valuable than your individual life insurance. The benefit amount your family is eligible for depends on your average lifetime earnings. The more you earned, the more their benefits will be. Check your Social Security Statement to see an estimate of survivors benefits we could pay. You can create a secure my Social Security account to access your Statement anytime and see an estimate of these benefits. In certain circumstances, we also make a one-time payment of $255 to your spouse or child if you’ve worked long enough. Survivors must apply for this payment within two years of the date of death.

our website at www.SSA.GOV. No one likes to think about death, but, unfortunately, it’s inevitable. When it

happens, know that you can count on Social Security to be there for your loved ones.

For more information about how Social Security’s survivor benefits visit

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Active Living | HEALTH

3 Ways Pups Can Improve Seniors’ Health

(Family Features) Furry friends can play a significant role in pet owners’ lives. The old saying goes, “dogs are man’s best friend,” and research shows they may be more than that. In fact, they just might be the key to keeping seniors active.

beyond physical activity. It’s no secret that pets provide companionship. From reducing rates of stress, depression and feelings of social isolation, pets can play a significant role in improving people’s lives, which ultimately can make pet owners happier and healthier.

According to a study conducted by the University of Lincoln and Glasgow Caledonian University in collaboration with Mars Petcare Waltham Centre for Pet Nutrition, dog owners 65 and older were found to walk over 20 minutes more a day than seniors who did not have canine companions at home.

Not only do pets serve as companions in their own right, studies have shown that dog owners can get to know their neighbors through their pets. Pets can even help facilitate the initial meeting and conversation, which may come as no surprise for many dog owners who have chatted with others while walking their dogs. For older adults who live alone or in a group facility, having a pet is also a great way to build relationships with others.

The study documented three key conclusions: 1. Dog owners walked further and for longer than non-dog owners.

As senior citizens are celebrated on upcoming days that acknowledge older adults, it turns out living with a pet can be a healthy choice for seniors in more ways than one.

2. Dog owners were more likely to reach recommended activity levels. 3. Dog owners had fewer periods of sitting down. “Older adult dog owners are more active than those without dogs and are also more likely to meet government recommendations for daily physical activity,” said Nancy Gee, human animal interaction researcher at Waltham. “We are learning more every day about the important roles pets play in our lives, so it’s no surprise that pets are now in more than 84 million households. It’s great to recognize how pets can help improve seniors’ lives.”

For more information on the benefits of pet ownership, visit bettercitiesforpets.com.

Walking with your pup can help both the pet and owner get in shape. Pets can keep older adults active and even help them meet the recommended public health guidelines for weekly physical activity. According to the study, on average, dog owners more often participated in 30 minutes a day of moderate physical activity and achieved 2,760 additional steps. However, the benefits of pet ownership go 8

Active Living: The Retirement Years

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