This year is the 83rd anniversary of the Social Security Act. What are some commonly asked questions regarding Social Security, and their answers?
Q: Suppose someone turned 70 this year, but still works. They have two different 403(b) accounts with their employer and still contribute to one of them. Are they still required to take Required Minimum Distributions?
A: They would have to start taking RMDs by April 1 of the year following the year in which they turn 70 1/2, whether or not they are working. If they are age 70 1/2 or older, and still working, they may be able to delay taking RMDs from the 401(k) or 403(b) sponsored by the company for which they are still working. This is called the “still working” exception. For this to apply, they must:
- Be considered employed throughout the entire year
- Own no more than 5 percent of the company
- Participate in a plan that allows them to delay RMDs
Q: If someone takes an early retirement offer from their employer, and claims Social Security benefits at the age of 62, would they be able to take up part time work if they wanted without the government reducing their monthly benefit?
A: Because they are under their full retirement age for that entire year, the SSA would deduct $1 from every $2 you earn above the annual limit. This year, the limit is $17,040. In the year they reach full retirement age, the SSA will deduct $1 from every $3 you earn above a different limit ($45,360, this year). Starting the month they hit their full retirement age, benefits will no longer take a hit.
Q: What is someone supposed to do if they call Social Security multiple times, and get varying responses to the same question? Is there somewhere they can get more information in writing?
A: ssa.gov is the official Social Security website. It is searchable, and has many answers that may be helpful. AARP has a SS Benefits Calculator in addition to SS Questions and Answers tool. The Consumer Financial Protection Bureau also helps pre-retirees plan with an easy-to-use tool.
Q: Will Social Security be there for children or grandchildren when it’s their time to retire?
A: In the 18th annual Transamerica Retirement Survey, 76% of American workers said they feared that Social Security will not be there for them when they are ready to retire. The 2018 Annual Report of the Board of the Social Security Trustees said that the program’s trust fund would be exhausted by 2034, but it doesn’t mean benefits will go to zero. So long as workers are still paying taxes into the system, current retirees will receive at least about 75% of their expected benefits. Supposedly, that reduction in benefits would only happen if Congress did not act to tamper with the system. Ultimately, who knows what the future may hold, but there is still great wisdom in saving for retirement.
This article has been edited from its original
Original Article published by The Union Tribune
Written By Jill Schlesinger
August 26, 2018