life insurance

The Birth of Social Security in America

Posted on May 16, 2017 by fsykes - Social Security Benefits

We take Social Security for granted, but where did this important insurance program come from and when did it start? It hasn’t been around forever, has it? The answer is no. Social Security began after the Great Depression, when millions of Americans who had lost their savings were facing an old age defined by stark poverty. Few workers had pensions through their jobs, and President Franklin Roosevelt wanted to do something to alleviate the poverty that faced so many older workers in their retirement years.

Since its creation in 1935, millions of retirees have been able to live more comfortably because of this national insurance program, which they collectively funded through payroll taxes during their working years you will see this as FICA on your payroll statement. Though Social Security wasn’t meant to be the only source of income for beneficiaries, it was in its early years and, unfortunately, it still is today for many. As per Social Security fact sheet in 2017 21% of married couples and 43% of unmarried persons rely on Social Security for 90% or more of their income. Many people do not realize that this is a program that has a life insurance, disability and retirement income benefits that you and your family can benefit from.

With changing demographics that include more retirees and fewer workers, Social Security has had to evolve over the years. President Reagan signed into law several revisions to Social Security after Congress passed suggestions made by the Greenspan Commission, which had reviewed the program’s financial picture. These changes included an increase in the payroll tax that pays for benefits as well as a gradual increase in the retirement age, from 65 to 67.

In the future, it’s likely that more changes will have to be made to keep the program financially sound. The prospect can sound alarming, but making necessary tweaks to keep a valuable program that provides millions of Americans with the basic income they need is well worth the effort. Long live Social Security!

For a full customized projection of your Social Security income please sign up for a plan option or learn more at www.socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Benefits for Children

Posted on April 18, 2017 by fsykes - Children's Benefits, Social Security Benefits

You would be surprised to know that according to the Social Security Administration, there are approximately 4.4 million children who receive $2.5 billion in aid each month.

Children of disabled, retired or deceased parents may receive Social Security benefits, which are intended to help families provide for their children through high school. When a parent dies or becomes disabled, Social Security is given to help the family meet the financial needs of the family. The law also protects unmarried and dependent grandchildren who were being cared for by the deceased, disabled, or elderly.

What children qualify for Social Security? It makes no difference whether your child is adopted, biological, or dependent step children, they maybe eligible if they meet certain requirements.

Has a parent(s) who is disabled or retired and eligible for Social Security benefits.
Is unmarried.
Is younger than 18 years old or up to age 19 if he or she is a full time high school student.
Is 18 years or older and disabled (as long as the disability began before the individual turned age 22).

How to Receive Benefits

First, the family must present the child’s birth certificate, the parents’ Social Security number and the child’s Social Security number. There may be additional documents required as well. Depending upon the circumstances, the applicant must provide a parent’s death certificate and/or evidence of disability from a doctor.

If your child is disabled, the Social Security Administration has a fact sheet and starter packet to help you navigate the process of receiving benefits. This information will guide you along the path to sign up for and obtain benefits and includes a frequently asked questions section as well.

If you are taking care of a child and are receiving benefits, then his or her benefits may stop at a different time than your own. For example, if the child is not disabled, then the caretaker’s benefits will terminate when the child turns 16 years old. If the child is disabled and you have responsibility and control of the child, then your benefits may continue. For these types of specific circumstances, it’s best to contact the Social Security Administration.

The Social Security benefit for children is an important government tool to help keep families — especially the youngest of the bunch — solvent during times of death and disability. Be sure to check in with the Social Security Benefit Planners in evaluating your own case.

Social Security Myth #7: Is Retirement Income Taxable?

Posted on March 27, 2017 by fsykes - Retirement Benefits, Social Security Myths

MYTH: Your benefits are not taxable in retirement.

Surprise! If you continue to have earned income in retirement while receiving Social Security, then part of your Social Security income can be included in your taxable income. That’s not to say that everyone pays taxes on Social Security
benefits or that the full amount is taxable, but it’s important to know that some of your benefits may be taxed. About half of all beneficiaries paid federal tax on Social Security in 2015.

To figure out whether your benefits are taxable or not, you’ll need to understand the IRS’ definition of “combined income.” This means your adjusted gross income plus any nontaxable income you receive, added to one half of your Social Security benefits. The total of these three numbers will determine whether your benefits are taxed, and how much.

If you are single and have a combined income of $25k to $34k you’ll owe taxes on up to 50% of your Social Security benefit. Couples that earn between $32K and $44K a year and file jointly will owe the same rate if their combined income is between $32k and $44k.

For single filers with combined incomes over $34k and married filers whose combined income exceeds $44k, the portion of benefits that may be taxable is 85%. That’s assuming the married couple files taxes jointly. Filing a separate return makes it far more likely that your benefits will be taxable.

You may also pay state taxes on part of your benefits if you live in Minnesota, North Dakota, Vermont and West Virginia; these states mirror the federal tax schedule. The following nine states may also tax a portion of Social Security but provide exemptions based on income and age: Montana, Colorado, New Mexico, Utah, Nebraska, Kansas, Missouri, Connecticut and Rhode Island. The remaining 37 states not listed above do not tax Social Security.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #4: Only Minor Children Get Benefits When You Die.

Posted on March 7, 2017 by fsykes - Children's Benefits, Family Benefits, Social Security Myths, Widow Benefits

MYTH: Social Security only helps minor children at your death.

You probably know that Social Security can provide benefits to children, but if you’re like most people, you believe that this can only happen if you die. That’s not the way it works, though.

Social Security was set up in 1935 to protect Americans, including their
children, through a paid insurance program known as FICA. That’s what the FICA taxes that come out of your paycheck each month are paying for. This program provides financial assistance in cases of disability, at retirement and at death.

If a parent – or in some cases, a guardian grandparent – is caring for a minor child or children and is receiving retirement or disability benefits through Social Security, the children may be eligible to also receive benefits. They may qualify for benefits if their parent or guardian dies as well.

In all three situations, the biological, adopted or dependent step-children may be able to receive benefits until they turn 18 – or longer, if they haven’t finished high school. Children with disabilities can continue receiving benefits for even longer.

The amount of benefits a child can receive varies but can be up to 75% the amount the deceased parent would collect from Social Security. A family limit applies when there are multiple children surviving the parent. This “family cap” is usually between 150% and 180% of the parent’s full benefit. No matter how many children are eligible to receive benefits, the total amount cannot exceed the family limit.

In cases where one parent passes away, a non-working parent or one who earns less that $16,920 per year may also receive additional Social Security family benefits until the child reaches age 16. Again, if the child is disabled, these benefits can continue beyond that age for the adult who exercises parental control and responsibility for the disabled child.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #1: You Can’t Change Your Mind

Posted on February 14, 2017 by fsykes - Social Security Benefits, Social Security Myths, Spousal Benefits, Widow Benefits

MYTH: Once you start receiving Social Security income you cannot change your mind.

Many people believe this to be true but the reality is quite different. There is a 12-month window, once you start collecting Social Security benefits, in which you can indeed change your mind.

During this grace period, you can decide to delay benefits in order to increase the amount you will eventually receive each month. You’ll have to pay back the full amount that you received in Social Security income before you can start the clock again, but in most cases it’s worth it.

Almost 50% of Americans choose to start collecting retirement benefits from Social Security at the age of 62. That locks in a permanent reduction of 25-30% over the amount they could receive if they delayed benefits until their full retirement age.

Your full retirement age varies based on the year you were born. Each year you delay benefits past retirement age will yield 8% in annual increases – up to age 70, that is. At 70 everyone has to start collecting benefits, with no increase for continued waiting.

Since the annual Social Security cost of living increase is a percentage of your previous benefit amount, delaying the time you start benefits will mean even more in retirement income once you decide to claim Social Security.

If you thought you needed to take your Social Security benefits early but things change, or you realize that you can afford to wait after all, it’s a good idea to stop the clock, repay what you’ve received and wait until your full retirement age – or age 70, if possible. After all, you’ve paid into Social Security to earn these benefits. You might as well collect as much as possible from the program.

Not associated with or endorsed by the Social Security Administration or any other government agency.

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