50+ Lifestyles

Social Security – Overhauled Again

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

A recent article by Jill Schlesinger (CBS News Business Analyst) highlights a change to the way you sign in to all Social Security’s online services – including your my Social Security account. This article was published in the Quad-City Times on August 31 and is reproduced here. This SSA.GOV change will impact millions who are receiving or intend to receive Social Security retirement benefits and also younger workers who are interested in using helpful tools to calculate future Social Security benefits. We have requested permission from Jill Schlesinger to reprint her article here.

Jill states that if you created an online my Social Security account before Sept 18, 2021, or maybe never opened one up, you will no longer be able to sign in to your personal my Social Security account using your username and password. Instead you will need to use one of Social Security’s credential service providers, Login.gov or ID.me. If you already have a Login.gov or ID.me account, and you can use that to sign in to our online services, please continue using that account. If you only have a Social Security username, online screens will guide you through the process to transition your account to Login.gov.

To transition your account, please go to www.ssa.gov/myaccount and select ‘Sign In’. On the next page, select ‘Sign in with Social Security Username’. After you successfully sign in with your Social Security username and password you will receive a prompt to create an account with Login.gov, which is a government account that gives you access to all government agencies, including the IRS and the Department of Veterans Affairs. You will then be taken to the Login.gov website.

Once you successfully link your Social Security username with your new Login.gov account, you will see a confirmation screen. You can then start using your new Login.gov account to access our online services immediately. Login.gov has 24/7 customer support through phone and chat at www.login.gov/help to help you set up an account, if needed.

Once you have established the account, there are a lot of useful resources. The most obvious one is that you can use the portal to claim benefits. The age at which you can draw benefits varies based on when you were born. Full retirement age rises incrementally if you were born from 1938 to 1960 – after that, the full retirement age is 67. While you can claim at age 62, doing so will permanently reduce your benefit by as much as 25%, which also could affect a non-working spouse who is claiming on the same record.

Additionally, if you claim early there could be a negative impact on most income (including wages, bonuses, commissions and vacation pay – and net earnings if you’re self-employed – but not pensions, annuities, investment income or interest, or veterans or other government of military retirement benefits. The government deducts $l from Social Security benefits earned over $22,320 in 2024.

Conversely, if you can afford to wait beyond your full retirement age, there is a benefit – you are entitled to “delayed retirement benefits,’ which amounts to up to 8% a year more for each full year that you delay, until age 70. Because Social Security benefits are adjusted for inflation every year, claiming later can be even more valuable over time.

Although most people wait until they are a few months away from claiming to even think about Social Security, using the new portal at any age is helpful. If you are close to retirement, working with the “Plan for Retirement” tool can demonstrate the power of waiting, and if there are spouses who have worked, there could be a strategy when one claims at full retirement age and the other waits.

If you are younger, the portal can help you understand the long-term Social Security impact of choosing a different career path, one where you earn much more or less than what you are currently earning.

Finally, I am often asked if younger workers should count on Social Security, because if is “broke.” The answer is yes, you should count on it. While the surpluses to the system are shrinking, the 2024 Trustees Report said that the government will be able to pay scheduled benefits until 2033. At that time, the funds reserves will become depleted and the money coming into the system (through taxes) will be sufficient to pay 79% of scheduled benefits. As I have noted several times in this column, I believe that Congress will eventually (kicking and screaming) address the problem of through some combination of: raising the level on which taxes are levied (the social security wage base: which is currently $168,600); increasing the current FICA tax rate, which is set by statute at 6.2% each for employees or 12.4% for self employed Americans; or raising the retirement age at which you can claim Social Security retirement benefits. In other words, a little tinkering here and there should help solve the problem.

During the month of October, we continue offering our virtual Community Meetings on Medicare. Oct 15 Craig reviews the basics of Medicare then focuses on the Medicare Supplements. Two days later Oct 17 Craig again reviews the basics of Medicare and then focuses on the Advantage Plans and in particular what we believe is the more competitive plans for these Medicare Regions, and that plan is the AARP United Healthcare Advantage Plan. If you would like to participate in these virtual meetings call us at 563.332.2200 OR email me at www.dickschillig.com. Scroll over to the “contact” icon to drop down for our email address. AND become one of those that can say “now I understand the choices I have for Medicare.”

Richard J. Schillig, CLU, ChFC, LUTCF is an Independent Insurance and Financial Advisor with RJS and Associates, Inc. He can be reached at (563) 332-2200.