The Senior Scene

Baby boomers turning full retirement age in 2019 are the last class that can take advantage of a valuable Social Security strategy. The strategy lets a beneficiary restrict an application to spousal benefits only, giving the beneficiary some Social Security income now while allowing his or her own retirement benefit to grow 8 percent a year until age 70.

If you are a boomer who qualifies, it behooves you to take a good look at when you and your spouse will claim benefits. “It is a way to get a little extra income for four years,” says Judith Ward, senior financial planner for T. Rowe Price.

To restrict an application to spousal benefits only, you must have been born before Jan. 2, 1954. Anyone born on or after that date is out of luck when it comes to this particular strategy.

To use the claiming strategy, you must be at least full retirement age for Social Security. Those born in 1953 have a chance to use the strategy this year as they hit their full retirement age of 66. Say a 66-year-old qualifies for a $2,200 monthly benefit, while the spouse qualifies for a $1,400 benefit. The higher earner can file a restricted application to claim a $700 monthly spousal benefit. The couple will bring in $2,100 a month from Social Security, but when the higher earner hits age 70, he or she can switch to a benefit worth $2,904. The couple will then bring in a total of $4,304 a month for the rest of their lives, plus annual cost-of-living adjustments.

Claiming the lower earner’s benefit and the spousal benefit can make it easier for the higher earner to delay and thus boost that more lucrative benefit. And that boosted benefit is the one that the surviving spouse will keep after the first spouse dies. “There’s not a lot of downside,” says Ward, to using the strategy.

For a beneficiary to use the restricted application strategy, the spouse must have already claimed his or her benefit. If you are age 66 but your spouse is 60, you’ll need to wait at least two years to use this maneuver. But if your spouse is, say, 68 and claiming a benefit, you can file a restricted application for a spousal benefit off his record and let your own grow to age 70.

Ex-spouses catch a break. If a couple has been divorced two or more years, the ex-spouses are considered to be independently entitled to Social Security benefits. As long as the couple was married at least ten years, an ex-spouse who is still single can file a restricted application for spousal benefits only regardless of whether his or her ex has claimed a benefit.

If you try to take advantage of this strategy before it disappears, be prepared if you run into confusion when claiming benefits. Some Social Security representatives may be unaware of the strategy or think it no longer applies to anyone. In most cases, asking for a supervisor resolves the issue.

If you can’t take advantage of this restricted application strategy, that doesn’t mean it’s every man or woman for themselves. A couple can still maximize Social Security benefits by coordinating their claims.

“Understand how you taking Social Security affects your partner,” says Sean Scaturro, a certified financial planner for USAA. If the high earner claims Social Security early, for instance, that could consign a spouse to a lifetime of reduced survivor benefits.

When strategizing, consider who has the highest benefit. Ideally, the higher earner will allow that benefit to grow until turning age 70. The lower earner could take his benefit earlier, filling an income gap while the higher benefit grows.

While dual-income couples may find it easier to delay at least one benefit to age 70, single-income couples may face a harder choice. A non-earner can’t claim a spousal benefit until the earner claims his benefit. If the couple can afford to go without Social Security income until 70, they may want to wait. If not, they should aim to delay claiming at least until full retirement age. No matter what the situation, carefully run the numbers before taking benefits.

Source: Kiplinger’s Retirement Report.

Kaiser Permanente Washington is among the nation’s best healthcare providers for Medicare patients, according to the Centers for Medicare and Medicaid Services’ annual ratings of care and service in the Medicare system.

Kaiser was the only health plan in Washington to receive a five-star rating, the highest possible. Nationally, seven of Kaiser’s eight Medicare Advantage health plans received the the top ranking.

The overall scores for the Medicare star quality ratings are based on care and service quality measures in nine categories, including staying healthy, member satisfaction, managing chronic conditions, customer service, and pharmacy services.

Kaiser’s Medicare Advantage plan includes primary care, specialty, lab, radiology, and pharmacy providers. 

Social Security is an earned benefit. Your earnings history is a record of your progress toward your benefits. Social Security keeps track of your earnings so we can pay you the benefits you’ve earned over your lifetime. This is why reviewing your Social Security earnings record is so important.

If an employer didn’t properly report just one year of your work earnings to us, your future benefit payments from Social Security could be less than they should be. Over the course of a lifetime, that could cost you tens of thousands of dollars in retirement or other benefits to which you are entitled. Sooner is definitely better when it comes to identifying and reporting problems with your earnings record. As time passes, you may no longer have easy access to past tax documents, and some employers may no longer exist or be able to provide past payroll information.

While it’s the responsibility of your employers, both past and present, to provide accurate earnings information to Social Security so you get credit for the contributions you’ve made through payroll taxes, you should still inform us of any errors or omissions you find. You’re the only person who can look at your lifetime earnings record and verify that it’s complete and correct.

The easiest and most efficient way to validate your earnings record is to visit www.socialsecurity.gov/myaccount to set up or sign in to your own my Social Security account. You should carefully review each year of listed earnings and use your own records, such as W-2s and tax returns, to confirm them. Keep in mind that earnings from this year and last year may not be listed yet. Notify us right away if you spot errors by calling 1-800-772-1213.

You can find more detailed instructions on how to correct your Social Security earnings record at www.socialsecurity.gov/pubs/EN-05-10081.pdf.

Remember, you can access important information like this any time at www.socialsecurity.gov and do much of your business with us online.

Source: Social Security Administration

Large numbers of Americans 60 and older are concerned that healthcare costs prescription drug costs are outpacing retirement savings—something women worry about more than men, according to a new survey by the National Council on Aging  (NCOA) on financial-related issues.

“All too often, older women are feeling the very real consequences of the income gap during retirement. After careers of earning less than their male counterparts, women are more likely to face financial insecurity, and this survey shows widespread concern among women, far more than men,” said Anna Maria Chávez, NCOA’s executive vice president.

The survey of 1,227 60-plus adults last spring found the rising cost of healthcare and prescription drugs and losing their independence are the top concerns of older adults and a direct threat to a secure retirement. Specifically:

• 60 percent of women are worried healthcare costs will exceed retirement income. That concern is shared by 56 percent regardless of gender, and the majority of them have household incomes under $50,000.
• 46 percent of women are worried that prescription medicine costs will exceed retirement income.
• About half of the survey participants are worried about outliving their savings.

“Every day, 10,000 people in America turn 65, and nearly half of our population is already over the age of 60,” said Chávez, adding that NCOA is working with government policymakers “to help address these concerns head-on for a growing population of older adults across the country.”

“Our recent NCOA/Ipsos survey of older Americans finds that most people 60 and older report being pretty happy with their current lives,” reports Annie Weber, senior vice president of Ipsos, a market research firm. “That is despite majorities of this group reporting worry about their physical health and their healthcare costs exceeding their savings.”

The survey, conducted for NCOA by Ipsos, also found that most older adults are happy with their lives despite concerns about healthcare costs and their physical health.