Entitled to Know

When should I retire?

Sounds like such a simple question...one asked by millions of seniors each year. Yet the answers are as unique as the individual asking them. To help future retirees sort through it all, the Social Security Administration has unveiled a new benefits calculator.

This isn’t a first for SSA but this latest version goes further than earlier models. The Baltimore Sun’s Eileen Ambrose provides a nice breakdown of how it works:

You won't be able to use it if you don't have enough credits to qualify for benefits - 10 years of earnings - or you are already receiving benefits.

You will need to plug in your Social Security number and mother's maiden name. The agency says the site is secure. And when you print out your information, it won't include these identifying details.

The calculator will ask when you plan to stop working and your average future earnings. It combines these with your earnings history so far.

With the click of the mouse, you can see what your monthly benefit will likely be at 62 - the earliest year to receive benefits - and at other ages. You can,for instance, calculate the difference in benefits by working one more year,something the annual paper estimates don't tell you. In my case, retiring at 63 instead of 62 would mean an extra $100 a month.

Our own senior policy analyst, Mary Jane Yarrington, says the more tools available to workers the better. She answers hundreds of questions from seniors and future retirees each year. Do you have a Social Security question? You can reach her at: “Ask Mary Jane”.

by Maria Freese, NCPSSM Government Relations
& Policy Director

Senator Tom Harkin has introduced Pension legislation, the Restoring Pension Promises to All Workers Act, which we hope will ultimately become law.

Social Security was never designed to be the only source of a person’s income in retirement – it was always intended to be one income stream out of 3 in retirement – the other two being income from traditional pensions and income from individual savings. This so-called 3-legged retirement stool is coming under increasing pressure.

Unfortunately, we all know that coverage in traditional pension plans is dropping as only about 20% of today’s workers in the private sector are covered by defined benefit plans. And although coverage in 401k plans is growing, the average balance in the 401k plans of workers in the last decade prior to retirement is only about $60,000. If it weren’t for the run-up in housing values – many workers would be facing retirement with few assets available to finance it.

Senator Harkin’s legislation addresses a number of inequities in our pension system. The provisions he includes won’t help everyone but for the people they do affect, his bill could represent the only thing standing between them and living a life of poverty in retirement.

For workers caught in the globalization wars who are pawns in the game of mergers and acquisitions, the Harkin bill could keep them from losing half their pensions as workers caught up in a recent Halliburton re-shuffling did. For widows and divorced spouses of federal workers, the Harkin bill would help take the gamble out of survivor and retirement annuities, closing several longstanding loopholes that wipe out the pension benefits of some spouses of federal employees.

While it seems as though these glitches in the pension system should be easy to fix because they are so egregious, in fact they are not. Getting them passed will take the commitment of someone like Senator Harkin who believes now is the time to finally right these wrongs.

The National Committee commends Senator Harkin for taking on this challenge. And we look forward to working with him to get the Restoring Pension Promises to All Workers Act signed into law.

Ask Mary Jane. NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

This is my first foray into the blogging world but what a perfect vehicle to continue doing what I've been doing for years...answering questions about the Social Security and Medicare programs. Over the past forty years, one question comes up over and over.

A retired husband asks: “What happens when I die? What does my widow get?” If both are retirement age or more, the easy answer is that the survivor receives whichever benefit amount is the greater. Usually the wife has the smaller benefit.

That means her monthly benefit will jump up to the amount the husband had been receiving. On the other hand, if she dies first, his benefit does not change.

Do you have other questions about Social Security or Medicare? Please take a moment and drop me a line. You can post your question here in the comments section or we've provided an easy to use form which will email your question directly to me.