Social Security. n Retirement benefit n Spouse's benefit n Your pension and Social Security n Work in retirement n Cost-of-living adjustments n Taxation.

Social Security

Social Security Retirement benefit Spouse's benefit Your pension and Social Security Work in retirement Cost-of-living adjustments Taxation of benefits Disability benefit Survivor benefit Medicare Applying for benefits

Social Security tax (FICA)

2006 employee contributions if in “Covered Employment”

OASD1 rate: 6.20% on maximum of $94,200

Medicare rate: 1.45% on all wages

Retirement benefit Eligibility based on number of credits

(quarters of coverage)

Benefit based on primary insurance amount (PIA)

When benefits can start

Early benefits at age 62 with permanent reduction

Full benefits at normal retirement age (age 65 if born before 1938)

Benefits increased if delayed beyond normal retirement age

Spouse's benefit At spouse’s normal

retirement age, spouse's benefit is 50% of worker’s PIA

If spouse is age 62, spouse's benefit is reduced

Your pension and Social Security If you qualify for your own Social Security benefit,

its amount will be reduced because of your Fire and Police Pension

Your Social Security benefit as a spouse will also be reduced because of your Fire and Police Pension

Work in retirement Annual earnings limit if you work and receive

Social Security benefits $1 reduction for every $2 earned over $12,480 if

under SSNRA in 2006 $1 reduction for every $2 earned over $33,240 if

attain SSNRA in 2006

Social Security benefits Inflation

Indexed to CPI

Income taxes Up to 85% of benefits may be subject to federal income

taxes

Social Security disability benefit

You must be fully insured and currently insured

You must be unable to perform any gainful work Your disability must be expected to last at least

twelve months

The benefit is payable at any age without

reduction

Social Security survivor benefit

Surviving spouse can receive benefit if:

Age 60, or

Disabled and over 50, or

Any age if caring for eligible dependent child

Social Security survivor benefit

Amount of surviving spouse benefit: 100% of PIA if surviving spouse is at normal

retirement age

Reduced at earlier ages

75% if caring for eligible dependent child

Medicare Coverage begins at age 65 Part A – hospital insurance Part B – medical insurance, including doctor's

services Part C – Medicare Advantage Part D – prescription drugs Long-term care insurance

Applying for benefits

Three months before you want checks to begin

Three months before age 65 for Medicare

Social Security number

Proof of age

Last two to three years' w-2 Your personal earnings and benefit estimate

statement

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LAFP3 TAXES2006 2006 0818.ppt