Social Security for Dummies

Get the benefits you’ve earned

Social Security For Dummies is the one guide you need to navigate the often-complex world of Social Security retirement benefits. This updated edition offers clear guidance on when to claim benefits, how much you can expect to receive, where to find Social Security calculators, and so much more.  

Since its inception in the 1930s, workers across the United States have set aside a portion of their wages to fund the Social Security Administration. For many, Social Security forms the foundation for their retirement funds. Social Security For Dummies provides you with all the information you need to take charge of your retirement, maximize your financial well-being, and successfully navigate the U.S. Social Security Administration. You’ll get up-to-date information to:

• Make your way around the Social Security website

• Know your Social Security options—including retirement, survivor, spousal, and disability benefits
• Find resources when you’re stumped
• Get answers to common questions

Retirement is meant to be enjoyed, and Social Security For Dummies makes it easier.

Jonathan Peterson, an award-winning journalist, is a former executive communications director at AARP. During his news career, he covered the White House, state and national political campaigns, and various facets of U.S. domestic and economic policy.

Introduction 1

About This Book 2

Foolish Assumptions 3

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Part 1: Getting Started with Social Security 5

Chapter 1: What Social Security Is and Why You Need It 7

Understanding What Social Security Means for You 8

Benefits for retirees 9

Benefits for children 9

Benefits for survivors 11

Benefits for the disabled and their dependents 11

Appraising the Value of Social Security 12

Understanding How You Pay for Social Security 14

How much you pay 14

Where your money goes 15

Getting the Most Out of Your Social Security Benefits 16

Getting in Touch with the Social Security Administration 17

Chapter 2: A Breakdown of Benefits 19

Bringing Security to Old Age: Retirement Benefits 20

Who qualifies and when 20

How you qualify 22

How much you get 23

Surviving the Loss of a Breadwinner 27

Who qualifies 30

How much you get 30

How benefits are earned 34

Paying Your Bills When You Can’t Work: Disability Benefits 35

Who qualifies 36

How you qualify 36

How much you get 37

When the Need Is Great: Supplemental Security Income 38

Chapter 3: Deciding When to Start Collecting Retirement Benefits 39

Paying Attention to Your Full Retirement Age 40

Determining your full retirement age 40

Estimating how much you’ll get each month based on when you retire 40

Looking at Life Expectancy When You Claim Benefits 45

Doing a break-even analysis: The payoff from different retirement dates 45

Considering what’ll happen if you live longer than you expect 47

Considering Your Spouse When You Claim Social Security 50

Recognizing the Potential Payoff of Working Later in Life 52

Putting It All Together: The Right Time to Begin Collecting Benefits 53

Chapter 4: Protecting Your Number and Securing Your Card 57

Getting a Social Security Number 57

For U S citizens 58

For noncitizens 59

Managing Your Social Security Card 62

If your card is lost or damaged 63

If your name changes 64

Protecting Yourself by Protecting Your Number 65

Protecting your identity 66

Knowing what to do if scammers get your number 67

Part 2: Taking the Plunge: Filing for Social Security 71

Chapter 5: Signing Up for Benefits 73

When to Apply for Social Security Benefits 73

Where to Apply for Social Security Benefits 74

In person 75

By phone 75

Online 75

How to Apply for Social Security Benefits 76

Retirement benefits 78

Survivor benefits 80

Disability benefits 82

Supplemental Security Income benefits 83

How You Get Your Money: The Check Is Not in the Mail 84

Chapter 6: Determining How Much You’ve Earned 87

Your Social Security Statement 88

How to access it 88

How to understand it 89

Social Security Calculators 90

Social Security’s own tools 91

AARP’s Social Security calculator 93

Other online calculators 95

Chapter 7: Navigating the System 97

Being a Smart Consumer of Social Security 98

Keeping good records 98

Making sense of the correspondence you get from Social Security 98

Making (and showing up for) appointments 99

Getting the Answers and Help You Need 99

Finding answers online 100

Having someone on your side when you deal with Social Security 103

Life Happens: Keeping the Social Security Administration in the Loop 105

Setting the (Earnings) Record Straight 108

Halting Your Retirement Benefits 109

Recovering a Lost or Stolen Social Security Check 111

Getting Dinged for an Overpayment 112

Getting Social Security in a Global Economy 113

U S citizens 113

Noncitizens 114

Registering a Complaint with the Social Security Administration 116

Chapter 8: When You and Social Security Disagree: The Appeals Process 121

Reconsideration: Taking Your First Step 122

Deciding whether to file a request for reconsideration 125

Taking the steps to file 126

Going to an Administrative Law Judge to Solve Your Problem 128

Requesting a hearing 128

Preparing for your hearing 130

Participating in your hearing 131

Knowing What to Expect from the Appeals Council 134

Taking Your Claim to Federal Court 136

Part 3: Who Benefits and When 139

Chapter 9: Spousal Benefits: Watching Out for Each Other 141

Who Qualifies and Who Doesn’t 142

Traditional spouses 143

Same-sex spouses 143

Common-law spouses 144

Divorced spouses 144

Widows and widowers 145

How Much You Can Expect to Get 147

How to Maximize Your Benefits 149

Maximizing your lifetime benefits as a married couple 150

Getting the biggest benefit possible for your surviving spouse 152

Chapter 10: Family Benefits: Who Gets What 155

Defining Who’s in the Family 156

Spouses 156

Parents or grandparents 157

Natural children 158

Adopted children 159

Stepchildren 159

Grandchildren 160

Parents of a worker 160

Identifying the Benefits Family Members Are Eligible For 160

Dependent children under 18 160

Dependent children 18 and over 161

Disabled adult children 161

Grandchildren 161

Parents of a worker 162

Looking at How Having a “Child in Care” May Affect Your Own Benefits 162

Understanding the Family Maximum 164

Counting on Kids’ Benefits When Parents Live Apart 167

Managing Benefits on Behalf of a Child 169

Chapter 11: When You Can’t Work: Social Security Disability Benefits 171

The Two Types of Disability Benefits 172

Social Security Disability Insurance 174

Supplemental Security Income 178

How Social Security Defines Disability 179

Are you working for money? 180

Do you have a severe medical problem? 181

Is your disability on “the list”? 181

Can you perform the tasks required by your former job or a similar job? 182

Can you do any other available work in the economy? 184

How to Make Your Case 185

Cutting through the red tape 186

Gathering the best medical evidence: The role of your doctor 188

Getting help 189

Showing that you’ve tried to solve your problem 190

Telling the truth 191

What to Do If You Get Turned Down 192

What Happens to Your Benefit If You Can Go Back to Work 192

Part 4: Social Security and Your Future 197

Chapter 12: Enrolling in Medicare 199

Understanding the ABCs (and D) of Medicare 200

Part A: Hospital insurance 200

Part B: Medical insurance 201

Part C: Medicare Advantage 202

Part D: Prescription-drug coverage 203

Qualifying for Medicare 204

Signing Up for Medicare 205

Deciding what parts to enroll in 206

Keeping track of the enrollment periods 209

Knowing your options for applying for Medicare 211

Paying Premiums 212

Getting Hit with Late Fees 213

Part A 213

Part B 213

Part C 214

Part D 214

Buying Extra Insurance: Medigap 215

Getting Financial Help If You Need It 216

Extra Help for Part D 216

Medicaid 217

Medicare savings programs 217

Pharmaceutical assistance programs 217

Programs of All-Inclusive Care for the Elderly 217

State pharmaceutical assistance programs 218

State health insurance assistance programs 218

Chapter 13: Working in “Retirement” 219

The Pros and Cons of Not Retiring at Retirement Age 220

Facing the challenges of working later in life 220

Reaping the benefits of working later in life 222

The Earnings Test: How Your Payments Are Calculated When You Work 223

How the earnings limit works 223

How exceeding the limit may cost your family 225

How the earnings test affects benefits 226

Getting a break for your first months of retirement 227

Reporting earnings to the Social Security Administration 229

When You Go Back to Work after Retirement 232

Special Considerations for the Self-Employed 233

Tax deductions 234

Work credits 234

Earnings limit 235

Reporting requirements 235

Uncle Sam Giveth and Taketh Away: How Benefits Are Taxed 236

Chapter 14: Shaping a Financial Future You Can Live With 239

Envisioning Your Life with Social Security 240

Figuring out how much money you need 241

Determining how much income you need 241

Narrowing the gap between too little income and too much spending 242

Working with a financial professional 244

Preparing for Life on Social Security 246

Purchasing an annuity 246

Signing up for Medicare 247

Handling home equity 248

Getting long-term-care insurance 249

Understanding how Social Security interacts with private pensions 249

Managing your investments 250

Part 5: The Part of Tens 253

Chapter 15: Ten Myths about Social Security 255

Myth: Social Security Is a Ponzi Scheme 256

Myth: Your Social Security Number Has a Racial Code in It 257

Myth: Members of Congress Don’t Pay into the System 257

Myth: Social Security Is Going Broke 258

Myth: The Social Security Trust Funds Are Worthless 259

Myth: You’d Be Better Off Investing in Stocks 260

Myth: Undocumented Immigrants Barrage Social Security with Illegal Claims 261

Myth: When Social Security Started, People Didn’t Even Live to 65 262

Myth: Congress Keeps Pushing Benefits Higher Than Intended 262

Myth: Older Americans Are Greedy Geezers Who Don’t Need All Their Social Security 263

Chapter 16: Ten Reasons Young People Should Care about Social Security 265

If You’re Lucky, You’ll Be Old Someday 266

Your Parents Will Be Old Even Sooner 266

You’re Paying into the System Now 267

You Benefit When Social Security Keeps People Out of Poverty 267

You May Need Benefits Sooner Than You Think 268

Social Security Ensures That Time Doesn’t Eat Away at Your Benefit 269

Social Security Benefits Are One Thing You Can Hang Your Hat On 270

The System Works 270

The Alternatives Are Worse 271

Life Is Risky 272

Chapter 17: Ten Choices Facing the Country about the Future of Social Security 273

Whether to Increase the Earnings Base 274

Whether to Cover More Workers 274

Whether to Raise Taxes 275

Whether to Cut Benefits 276

Whether to Modify the Inflation Formula 276

Whether to Raise the Full Retirement Age 277

How to Treat Women More Fairly 278

Whether to Divert People’s Taxes to Private Accounts 279

Whether to Create a Minimum Benefit 279

Whether to Give a Bonus for Longevity 280

Part 6: Appendixes 281

Appendix A: Glossary 283

Appendix B: Resources 291

Social Security 291

Medicare 292

AARP 293

Other Sources 294

Appendix C: Strengthening Social Security 297

Index 301

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