THIS WILL HELP SO MUCH WHEN CALLING YOUR INSURER (belive me...)

Infographic: Three Tips for Communicating With Insurers

Jay JohnsonMay 17, 2016Infographics0 Comments

https://blog.medicarerights.org/three-tips-communicating-insurers/?utm_source=middle-of-month-registered&utm_medium=email&utm_campaign=mi-outreach

If you are like most people, you have called your insurance provider with a question, been put on hold, and finally reached a representative only to discover you did not have all the necessary documents in front of you.

It can be easier. Below is a handy infographic with some tips to help you get the best results when communicating with insurers. Remember: If you have questions about your insurance coverage, whether you have Original Medicare or get your benefits through a Medicare Advantage Plan (such as an HMO or PPO), you have the right to get answers.

Visit Medicare Interactive for more great articles!

https://www.medicareinteractive.org/get-answers/planning-for-medicare-and-securing-quality-care/getting-quality-care/tips-for-communicating-with-insurance-companies?

Calculate When to Take Social Security

An online tool can help you make the right decision

by Allan Roth, AARP, September 21, 2018 | Comments: 12

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I’m often asked by clients when they should take Social Security. That question will soon be personally relevant, as my wife and I become Social Security-eligible next year. It’s a significant decision we all have to make at some point, so let’s discuss ways to calculate the best choice for you.

You are probably aware that every year you wait between ages 62 and 70, your payment from Social Security increases. First, I want to dispel a myth I’ve heard countless times: “Every year you wait is like earning a guaranteed 8 percent.” That’s just wrong, because it’s typically less than 8 percent.

More importantly, you get the higher payment for one year less for every year you defer. This doesn’t mean that waiting is bad, but you don’t want to compare that 8 percent to a CD paying 3 percent, and probably don’t want to wait if you are single and have a shorter-than-average life expectancy.

My advice to clients is that they don’t have to choose between spending money now by taking Social Security early, on the one hand, and cutting expenses in order to wait, on the other — as long as they have some savings they can live on. What I tell them is that delaying Social Security is like buying a government-backed, inflation-adjusted deferred annuity. Waiting is actually buying a higher cash stream that will increase with inflation.

The last calculation I did on delaying Social Security indicated it was like buying that annuity at a 34 percent discount. Today, to my knowledge, no insurance company is even offering an inflation-adjusted annuity, as they don’t want to take on inflation risk. Fortunately, the U.S. government will.  

Choosing what’s best for you

I’ve kicked the tires on many Social Security calculators and now recommend OpenSocialSecurity.com. It’s free and written by Mike Piper, the author of Social Security Made Simple. It’s relatively simple and uses a methodology superior to that of other calculators. 

Other calculators assume a particular year you or you and your spouse will die. Your actual life span is likely to be different than a precise year estimated by life-expectancy tables, so Open Social Security instead uses probabilities. That is the same methodology actuaries use for insurance companies in pricing their policies. Though it can run as many as 9,216 possible options, the answer is displayed in a way that is very simple to understand.

As Piper told me: “Rather than assuming that you will die at a specific age in the future, this calculator accounts for uncertainty in life spans. It accounts for the possibility that you'll still be alive at age 101. But it also accounts for the possibility that you'll die at age 69. Accounting for such uncertainty is particularly important in the case of a married couple, in which the effectiveness of each person's claiming decision is affected by how long both people ultimately live.”

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For ways to save and more, get AARP’s monthly Money newsletter.

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I had an aha moment when I ran the calculator with data from my wife and me. I have been the higher income earner so wasn’t surprised it told me to wait until age 70. What surprised me was the recommendation that my wife take her benefit at age 62, which was different than any calculator I had ever used.

I spoke to Piper, who explained, “When the spouse with the lower earnings record delays benefits, it only increases the amount the couple receives as long as both spouses are still alive.” Under Social Security rules, as soon as one spouse passes, the surviving spouse will get the higher benefit amount.

He continued, “Many calculators overestimate this length of time during which both spouses are alive, because they ignore the possibility that even the spouse with the longer life expectancy could die early. As a result, those calculators overestimate the value of the lower-earning spouse waiting to claim benefits." I concur with his logic.

My advice

If you are single and in good health, chances are waiting until age 70 is the optimum solution. In fact, if you have saved, research from the Brookings Institution indicates you probably have a longer-than-average life expectancy. That reinforces the decision to wait, since you will collect a higher amount during a longer life. And waiting is easy, since you don’t have to do anything.  

If you are married, however, the choice is more complex. Odds are that the higher-earning spouse should wait until age 70, but the waiting may not be optimal for the lower-earning spouse. Of course, you won’t know what’s best for you until you run the numbers.

Editor's note: AARP also has a Social Security benefits calculator, which can be found here.

Also of Interest

• Are you really ready to retire? 

Why you Should Consider Working Longer and Delaying Social Security Benefits

Each additional year of work can make a big difference in your benefits

by Jane Bryant Quinn, AARP, July 11, 2019 | Comments: 5

HERO IMAGES

The single most effective way to maintain your standard of living in retirement is — ta-da! — not to retire. Or at least, not to retire as soon as you planned. A 2018 study called “The Power of Working Longer,” for instance, found that hanging on just two months longer improves your standard of living more than saving an extra 1 percent of your wages for the last 10 years of your career.

There are several reasons this might be so. If you’re still working, you don’t have to draw on your savings to cover expenses. You can use part of your earnings to add to your savings. And between the ages of 62 and 70, the longer you delay taking Social Security, the greater your monthly benefit. From full retirement age until 70, for example, your benefit grows 8 percentage points for each year you put off claiming.

But few people understand another factor that can improve their finances: how an additional year of work can raise a key number that Social Security uses to set their benefits.

To see how those additional wages help, you need to know how Social Security calculates your benefit. It uses an average of your highest 35 years of earnings covered by Social Security (they need not be consecutive years), starting from age 16. An inflation adjustment is applied to the wages you earned up to age 60 to bring them in line with your current purchasing power. If you put in more than 35 years, your lowest-earning years are dropped, pulling your average earnings up. If you put in fewer than 35 years, you get a zero for each missing year, which pulls your average down. Your 35-year average is then run through a complicated formula to produce your “primary insurance amount.” That number is the starting point for all your benefits, plus spousal and survivors benefits, based on your record. It’s also the number from which your benefits are reduced, if you have a government pension and are subject to the Windfall Elimination Provision or Government Pension Offset.

When you’re working, each year of higher earnings replaces one of your lower-earning years, so your average earnings rise. People who aren’t working can eliminate zeros on their record by getting a job. (To see your year-by-year earnings record, register for a “my Social Security” account at ssa.gov.)

Social Security reviews workers’ records every year. If last year’s earnings knocked out a lower earnings year, your benefit will be recalculated. If you’re currently receiving benefits, the higher payment will show up in next year’s checks.

Adding to a work record can be especially valuable for people who spent part of their lives out of the workforce — for example, women caring for children, laid-off workers who couldn’t find new jobs right away and people who got a late start. This strategy also works wonders for those who held low-wage jobs when they were younger but are making much more money now.

What if your current wage is less than you used to get? No matter. Social Security will still compute your benefit based on your highest 35 years. You may not love working longer, but financially it’s all balloons.

More on Planning for Retirement:

• Many boomers want to transition into retirement
• Try AARP's Social Security Q&A tool

https://www.aarp.org/retirement/social-security/info-2019/delay-claiming-social-security-benefits.html

Don't Rush Social Security by Jane Bryant Quinn

Don't Rush Social Security

If you can afford to wait until 70, you'll be better off

by Jane Bryant Quinn, AARP Bulletin, August 30, 2017 | Comments: 36

JOHN VOGL

Nurture your Social Security nest egg longer for more financial security later in life.

I usually encourage people to wait until age 70 before taking Social Security retirement benefits. By waiting, you get the maximum payout. Your monthly check will be at least 76 percent higher than if you started as soon as you qualified, at age 62. If you’re married and die first, waiting will also provide your spouse with a larger survivor’s benefit.

Many people need the money, so they start their benefits at 62. But what about those with substantial investment portfolios? Even if they can afford to wait, would they come out ahead if they claimed at 62 and invested those benefits for growth? 

I put this question to Bill Reich­enstein, a professor of finance at Baylor University in Waco, Texas, and cocreator of one of the most powerful Social Security calculators. He adjusted for various taxes (for example, the probable tax on a higher-income investor’s Social Security income) and assumed a 2 percent annual cost-of-living increase in benefits. After running several cases at the national average life expectancy for people who are 62, he found that they all produced the same answer: Financially, it’s better to wait. 

For example, say that you claim at 62 (accepting a much smaller check for starting early) and put the money into a nest egg invested half in stocks and half in bonds. You decide not to tap your savings to replace that Social Security income. You’d rather hold your income down so you can build your investments up. At 70, you start drawing on that nest egg, taking the monthly benefit you would have gotten if you had waited until 70 to collect. How long will your invested Social Security money last, after tax? 

Oops, only until age 81. That just about matches national life expectancy. But on average, people in the top two-fifths of the income range live longer than that. For a 50-year-old, that’s nearly 89 for men and 92 for women. Roughly half of the well-to-do will probably exceed even that extended age. Your invested nest egg will run out, leaving you only the discounted Social Security benefit that you took at 62.

Here’s another example. Say that, at 62, you decide to start your benefits and invest them but hold your income level by drawing an equal amount out of your IRA to help pay your bills. The result is about the same — your nest egg will run out before you reach your average extended life expectancy. What’s more, claiming at 62 could raise the percentage of your Social Security benefits subject to tax, Reichenstein says.

You might think you can beat the system by investing more of your Social Security benefit in stocks and less in bonds. Maybe stocks will soar, creating a nest egg that lasts until you’re 88 or older. But there’s also a greater risk of earning even less than Social Security would pay. 

You might consider starting at 62 and investing the benefits if you and your spouse are sure you’ll never need the money. That way, your heirs will inherit the account if you die early. If your health is poor, you might also start at 62, assuming your spouse will never need a larger survivor’s benefit. 

But if you think that investing your benefits will beat the lifetime returns that Social Security pays, well, you can always dream.

https://www.aarp.org/money/credit-loans-debt/info-2017/when-to-take-social-security-jbq.html