Five Important Things to Remember About Social Security

Social Security benefits are an essential part of a federal employee’s retirement. They’re one of the three legs of the Federal Employees Retirement System (FERS), together with the Thrift Savings Plan (TSP) and the FERS pension.

Here are five things you should know for your retirement income.

Factors Influencing Your Monthly Benefit Amount

As of June 2022, the average monthly Social Security Benefit (excluding survivor and disability) was $1,592 gross. It’s essential to remember that if your yearly income exceeds a particular threshold-$25,000 for an individual and $32,000 for a married couple-a portion of your Social Security will be taxed.

The following things influence your Social Security benefit:

Work history
Age
Start date of your benefit
Marital status

The IRS life expectancy factor is sometimes thought to alter one’s Social Security benefit; however, it’s not included in the calculation.

Full Retirement Age (FRA)

When to withdraw your benefits is a critical decision. You become eligible at 62 and one month, but if you continue to work, your benefit will be subject to the dreaded earnings test, which results in cutbacks if your earned income exceeds a specific level-$19,560 in 2022. The full retirement age (FRA) is the age at which you may receive your entire pension even if you’re still working; thus, it’s important to know yours. Depending on your birth year, you’ll be between the ages of 65 and 67. For instance, the FRA of those born in 1960 or after is 67.

Cost-of-Living Adjustments (COLAs) and Medicare

Premiums for Medicare B and Cost-of-Living Adjustments (COLAs) are withdrawn straight from your Social Security check. That’s critical to remember when hearing about impending COLAs, which are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Your monthly benefit remains the same if there’s no inflation (or even deflation). And it there is If so, your Social Security benefit will increase by the same percentage as the CPI-W. For instance, the 2022 COLA was 5.9%. The COLA for the following year is expected to be the largest in nearly four decades.

However, while COLAs boost Social Security income, healthcare costs-and hence Medicare premiums-tend to climb in lockstep with inflation, generally negating any COLA increase. The 2022 Medicare B premium rise was 14.5%, canceling the 5.9% adjustment, although a drop of 8.6% is still preferable to a decrease of more than 14%.

Survivor Benefits

If you pass away, your surviving children or spouse may be entitled to Social Security survivor benefits. Many federal employees might not be aware of this. Still, if they are, they may be unaware that these survivor benefits are less than the full benefit that the original recipient would have received.

Benefits for Ex-Spouses

An ex-spouse can claim a part of your Social Security benefits if all five of the following statements about that person are true:

They’re 62 or older.
They aren’t wed.
The marriage lasted at least ten years.
The benefit they’re entitled to be less than what they would receive if they were on your record as your ex.
Based on the previous statement, this may seem clear, but you must also qualify for Social Security benefits, either retirement or disability.

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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.

Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.

Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.

Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.

Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.

With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.

Aaron can help you and your family to create, preserve and protect your legacy.

That’s making a difference.

Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.