Mike and Jennifer walk you through how and why you should register on the SSA.gov website for your “My Social Security” profile. This is something you probably want to consider doing, even if you are not close to claiming Social Security.
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How and Why to Create Your SSA.gov Account – Transcript
JENNIFER
Welcome to our latest edition of Facebook Live. We thought we would talk today a little bit about Social Security. It’s a very basic part of Social Security. In that vein, we are going to host and put on a webinar on June 17th. It gets much more in depth. However, This is an important topic, what we’re going to talk about today. So, I don’t mean to minimize it at all, but that is why you should have online access to your Social Security account. So, they used to mail statements, every year pretty much, and they have slowly stopped doing that. Sometimes I will get a random statement in the mail, but not always. So really everyone, even if you’re not even anywhere close to filing for benefits, should set up your online access to Social Security. And we’ll kind of get into that a little bit, but we have seen some mistakes in people’s records where they’re missing years of earnings, and so it can be important to keep an eye on that as time goes by to make sure that your record is accurate. So, Mike has actually recorded a video that shows you how to do it and it’s not difficult, but it is worth the time.
MIKE
Yeah. It’s pretty simple. So, we’re going to go through that. I’m going to try to work technology here.
JENNIFER
Good thing it’s not me.
Setting Up Your SSA.gov Account
MIKE
Hopefully, we can watch this at the same time. All right. So, this is the process of me logging in, and I’m just going to kind of walk you through the steps as we go here. The first thing you want to do is just go to ssa.gov. That’s where you can find lots of information on Social Security, right from their website, and then in the top right-hand corner you’ll see the “Sign in/up” button and click on that. Then, what we’re signing up for today is My Social Security. That’s the online version of your Social Security, essentially replacing those statements that you’re getting in the mail. You can keep track of everything. So, click on that. It should be pretty self-explanatory. You’re going to the “create new account.” Obviously you’re signing in, if you haven’t done that previously, we’ll click on create new account, read through the terms of service. These are actually, believe it or not, even though this is government, it’s not that long. It’s just so many things that we click through that are pages and pages long but this one isn’t that long.
JENNIFER
And that you never actually read.
MIKE
Right, right. So, click on “I agree to the terms of service.” It’s probably worth noting, and kind of what Jennifer was saying there, that last paragraph that Social Security is going green. Right here, you can see you will no longer receive a paper statement for Social Security in the mail once you sign up for My Social Security, but it’s better to have that online access anyway because you can see a lot more than those statements are giving you. I’ll hit next and then right here is where you’re going to fill out this information. So, I’ll scroll down the page here just so you can see what they’re asking for. Pretty simple, pretty self-explanatory. You know, basic contact information, address. You see I’ve filled it in, and I’ve blurred out everything for the creation of the person we’re creating. We’ll hit next. And this is a real account, I will say that. We wanted to go through this legit the first time. So, right here the next thing is they want to see your driver’s license. You can either input the information directly as far as the driver’s license number and the state, or you can upload it with a smartphone. You can see that the two options there and you’re just clicking the option that you decide to go with and hit next. I’m going to use the input your id information since it’d be a little harder to record what I do with the smartphone there and to get that in the video. All right. Here’s where you would put in that driver’s license number. If you have another ID card or need to use something else you have those options as well. But again, we’ll walk through this. We are in Virginia. Then I will obviously blur out the driver’s license number because you don’t need to see that.
JENNIFER
This person was a good sport though that allowed you to do this. It’s interesting that I didn’t realize you can put a learner’s permit in there. That is considered an official ID. I would not have thought of that.
MIKE
That is interesting.
JENNIFER
My soon-to-be fifteen-year-old daughter would be all over that one.
MIKE
And then, next. The next piece is one more step of security. This one is not required. I did go through and do it with the credit card information just to add that extra security. Anytime I’m doing anything online, I like to have that extra level, you know, when you have that dual authentication, which can be annoying at times. Oh, yes. A pain to go through those. But it is worth, I think, the extra security to go through that. So, I did that with the credit card.
JENNIFER
Interesting.
MIKE
This is where, once again, more information that I’m not going to let you see.
JENNIFER
Secret squirrel stuff.
MIKE
Yep. And then moving on. So, this is the activation code that you can get via text message. They’ll send you a code, just like lots of those tools. Type in the activation code. And then finally, you’re creating your access here. So, this is where you set up a username you’ll set up a password. You’ll go through the different questions and set up security questions. And then from there, that’s it. You’re in.
JENNIFER
Yeah.
MIKE
Congratulations. It’s set up. One more list of terms of service, and this is the same as what we saw before.
JENNIFER
This is in case you didn’t get the first.
MIKE
Just in case you didn’t see the first time, yeah. And then we are in the online access here so you can see, you know really quick, some of the information that you see.
Social Security Earnings History
JENNIFER
Yeah. So, eligibility and earnings, that’s what we were alluding to earlier, is you need to work basically 10 years to be eligible. They look at it in quarters. So, it’s not 10 consecutive years, but you need to have worked 40 quarters or the equivalent of 10 years to be eligible to receive benefits. There are some nuances to that because they do define quarters not so much by time, but by amount of earnings, and it’s just under $6,000 a year for the 10 years. But it calculates your benefit based on your highest 35 years of earnings, so if you only work 10 years and they’re calculating your benefit based on 35 years, then you would have 25 zeros in your account benefit calculation. Because some people are like, “Can I maximize my benefits? How can I do that?” If you know this when you’re younger you know that your higher earning years really do matter and having enough earnings record really does matter.
MIKE
Yeah. And there’s a lot of corporate pensions that work very differently. It’s the last couple of years.
JENNIFER
Yeah. average three years.
MIKE
And you know, so many people are working overtime for just those last few years to really raise that pension. It’s a little harder to do that with Social Security because it is such a long history.
JENNIFER
Yep. And there’s a cap on how much of your earnings are taxed every year. So, this year it’s $142,800, I think. So, if you made $200,000 you’re only taxed on that 142, so that’s your maximum earnings. And that goes up over time. It wasn’t that long ago, it was only $80,000.
JENNIFER
Yeah. In the video here, that little link is what you can click to see your earnings history, and you can see the years listed for this individual as far as the earnings history, and that’s what you’re going through and just double checking that, based off of your W-2, and you know what you actually earned in those years. And doing that on a yearly or you know at least every few years basis is not a bad idea.
JENNIFER
We had a client who had several years of information that was missing and it’s much easier to deal with sooner rather than later, because then you don’t have time and there’s no panic to figuring that out. So, we encourage everyone who has any kind of earnings history to create an online account like that so you can keep track. It is a very important part of most people’s retirement, that benefit. A large portion of the population lives on that as their sole support in retirement, which is not great. You know, it’s much better to have more resources, but even for those with resources, it’s an important part of their retirement picture. The timing and the calculation of when to file is a whole other story which we will actually get into in that webinar. We will share the link on how to register for that webinar with this video.
MIKE
Yep.
“Should I continue to work once I filed for Social Security benefits?”
JENNIFER
But there are a couple other like decision points we’ll just touch on, and one is, should you continue to work once you’ve filed for benefits? And that’s and “it depends” answer, like so many things.
MIKE
Yeah. A lot of people don’t realize that depending on when you are looking at filing for Social Security, you could potentially be penalized or at least the pay being delayed there because of your earnings in, you know, whatever that part-time income or even full-time income, to take Social Security and those particular calculations are, so pre full retirement age — and we just found out that, actually it was the year 1960?
JENNIFER
MIKE
So, anybody today watching the video that was born in 1959, this is the first year that you’ve become eligible for Social Security and your eligibility is actually 66 and 10 months, and that Social Security’s what they call the PIA, which is primary – no, excuse me. That’s the FRA, which is the full retirement age.
JENNIFER
Lots of acronyms.
MIKE
So, 66 and 10 months, they’re saying this is your full retirement age. You’ve made it at that point. 66 and 10 months for anybody born in 1959, you’re not going to be penalized by taking Social Security. Starting next year, that number goes to 70. And that was kind of that phase out period where they slowly pushed that full retirement age back to 70. So, it’s not 65, it’s for anybody who’s aging in now, and a lot of people think that because they’re Medicare eligible, they should be filing for Social Security. Not necessarily true.
MIKE
You could, but not necessarily.
JENNIFER
Not necessarily true. Right.
MIKE
Yeah. So, back to the earnings.
JENNIFER
Yes. So, for every two dollars you earn above $18,960 (random number seems like) and you’re not your full retirement age, you get penalized. Your benefit gets reduced by a dollar. And then, the year you turn full retirement age, you get a little more leeway. They penalize you a dollar for every three dollars earned, but the threshold is 50,000 or higher. But once you reach full retirement age, you can work all you want, and it does not reduce your benefits. So, it’s something to keep in mind if you’re going to continue to work, that you will be penalized for that, which makes no sense really to penalize people for earning, but they do.
Social Security Benefits After Divorce
JENNIFER
So, we were going to talk about benefits if you’re divorced, and some people think if they’re divorced that they’ve got no right to their ex-spouse’s benefit, but that may not be true if you were married for at least 10 years. And there are rules around it. The ex-spouse has to be full retirement age. You have to not be remarried, unless you’re 60 or older. If you’re 60 or older, you still can.
MIKE
It’s very complicated, these things.
JENNIFER
Yeah. But it is something to explore as far as, especially if your former spouse was a much higher wage earner than you’ve been in your work history. It actually may end up with a higher benefit, having a spousal benefit on that person’s record. So, something to keep in mind. And then we have the whole widow survivor benefit issue as well, which has different rules.
Social Security Survivor Benefits
MIKE
Yeah. That’s a whole other element to think about as far as when a widow or widower can receive Social Security. And that’s both their own as the surviving spouse and any possible dependent Social Security benefits as well. That’s an element there.
JENNIFER
Definitely. So, for example my daughter is eligible for survivor benefits on her dad’s record because she’s under 18. I am not old enough. I am not old enough.
MIKE
But you are not.
JENNIFER
Yes, thankfully. But anyway, to file for that, but everybody’s situation is unique.
Making a Decision About Social Security
JENNIFER
Social Security is not a simple issue no matter what, even if you got married at 22 and have stayed married till you’re 70, it’s still not simple because it also depends on your work history. So, definitely approach it carefully, those decisions. We’ve heard a statistic that 4% of people make the decision of when to file and how to file, only 4% do it in the way that maximizes their own personal benefit. So, it is a big deal.
MIKE
Yeah. And I’ll say too, when you go to actually file, there are agents and people in place and even in that online My Social Security tool, there’s things in there where you can see estimates for, you know, what the benefit will be at certain ages. But something that they don’t tell you is those Social Security agents, they literally are not allowed to give you advice. They can estimate anything that you ask them, but things like that –
JENNIFER
Ex-spouse, especially because they might not be looking at that.
MIKE
Yeah. And there’s no reason, first of all, for them to even know. But even if they did, they’re not allowed to offer that advice. They’re going to answer the questions, and I hate to say, unfortunately, we’ve had many clients that will ask a question to an agent and get a different answer depending on who they’re talking to.
JENNIFER
You really do have to pursue it doggedly.
MIKE
Having somebody that can help you out with that. And again, just a plug for the webinar that we’ve got coming up, I pulled up the quick information. June 17th, we’ll have that, late morning I believe is the plan. But we’ll have a link to that registration. The title is “What Baby Boomers Need to Know About Their Retirement Income” and we’ll go into a lot more detail there. A couple bullet points. So, at this workshop or this this webinar some things that we plan to get across that will help you are five factors to consider when deciding when to apply for Social Security, when it makes sense to delay benefits and when it does not, because there are certain instances that’s not the case.
JENNIFER
Yeah.
MIKE
Why you should always check your earnings record for accuracy. That’s just three of a few of the bullets. So, rewind and go back to that video there and set up your My Social Security. Hopefully everybody will do that today.
JENNIFER
Yeah. Thanks for joining us and again we would love feedback or suggestions of things you would like to learn about. Please email us at info@summitrva.com and you can also visit our website, summitfinancialpartnersrva.com and there is a “Contact Us” button as well. So, thanks for joining us.
MIKE
Thank you.
