Retiring with Social Security and Medicare
Social Security and Medicare are Part of a Government-Sponsored Retirement Plan
Social Security and Medicare are part of a government-sponsored retirement plan for qualified working Americans. If you held a job that earned over a set amount each year (amount changed over time) throughout your working lifetime, you paid social security taxes. Congress determined the percent of your earnings withheld from your paycheck each pay period to support the funding of Social Security. In addition, some states also withheld a welfare tax to fund unemployment and other services for their citizens.
The tax money withheld became part of a federal treasury funding group benefits for social security. All Americans who work enough hours to contribute sufficient funding to the Social Security funding are eligible to receive benefits from this account once they meet eligibility requirements. Eligibility primarily applies to individuals of a certain age eligible for retirement or those with significant disabilities who cannot work.
The Common Retirement Ages
You may choose to delay collecting your retirement benefits until age 70. Benefits continue to increase until that time. If you delay retiring beyond age 70, your benefits do not continue to grow but remain at the same level you would have received at age 70.
My Social Security
Social Security’s website, “my Social Security,” allows you to keep track of your retirement benefits. You can establish an account and determine when you become eligible for benefits, your benefit amount, your Medicare eligibility, availability of other benefits, and other information about your status. In addition, you can go to “Get Your Social Security Statement” to get details of your earnings or visit the “Social Security Calculators page” to determine how much your benefit amount might be each month.
Earning Credit Toward Social Security and Medicare Benefits
Social Security 40% of Pre-Retirement Income
When you reach retirement age, you complete the retirement application and start the approval process. If you are approved, most people receive approximately 40% of their pre-retirement income from Social Security and Medicare benefits (provided they are 65 years old or disabled). Social Security replaces a percentage of your pre-retirement income based on your lifetime earnings. The portion of your income replaced is based on your highest 35 years of earnings and varies depending on how much you earn and when you choose to start benefits.
Individuals earn “credits” toward Social Security and Medicare benefits while working and paying into Social Security. Your birth year determines the number of credits you need before you are eligible to retire and receive benefits. If you were born in 1929 or later, you need 40 credits (approximately ten years of work). If you stop work before you reach the required number of credits, the credits remain intact until you return to the workforce later to add more. Once retirement credits reach 40, benefits activate.
Social Security Facts
Who Qualifies for Social Security Benefits?
To qualify, you must meet the earnings test based on your age and how many months you contributed earnings to social security over the years. Go to the Social Security website https://www.ssa.gov/planners/disability/qualify.html to find out when you can apply. It will be somewhere between two years and ten.
If you qualify under earning, apply online with social security: www.socialsecurity.gov. It takes three-five months for them to process the application. Warning! Your application won’t get processed unless you send them EVERYTHING requested on the form. https://www.ssa.gov/pubs/EN-05-10029.pdf Get a copy of this form and complete everything it tells you that you need to do. Otherwise, you get an automatic denial letter.
Are You Disabled “Enough” to Qualify?
You hear a lot of comments about how easy it is to get on disability, but I didn’t find that to be the case. You must answer the following questions to their satisfaction, or they will deny your request for approval.
- Are you working? Expect a denial of the request if your earnings equal a certain threshold; even if you do not work, you have income from another source that meets that threshold.
- Is your medical condition “severe”? Severe means that it significantly limits your ability to do necessary work activities such as lifting, standing, walking, sitting, and remembering for at least 12 months. Expect a denial of the request if your disability is less than 12 months or you can perform your job with accommodation. Therefore, if you are still working in any capacity, you will not be eligible for Social Security Disability.
- Does your medical condition meet or medically equal a listing? They have a listing of impairments they consider severe enough to warrant disability. If your condition does not appear on the list, you do not qualify. Here’s the list. https://www.ssa.gov/disability/professionals/bluebook/AdultListings.htm
- Can you do the work you did before? If you can still do the same job, with accommodation at a different location or the same location, but at reduced hours, you don’t have a qualifying disability.
- Can you do any work? They look at what jobs might be like what you do now and consider whether you could do them with your limitations. If they think you can, then you are disqualified from receiving disability.
You’re Approved for Social Security Plus Medicare, Too!
Social Security notifies you of the good news that they approved you for benefits. The letter explains you are to receive a monthly benefit based on lifetime average earnings of (amount) effective (date). You read further and discover your first check should arrive six months from the effective date of Social Security Approval. That’s right; it takes six full months to cut that first check. So, for example, if your approval occurred on June 15, begin counting six months on July 1, not June 15. Your first check, therefore, comes on January 1.
Medicare Approval is Automatic with Social Security Benefits
If you receive Social Security Disability and are under the age of 65, you receive automatic approval for Medicare. However, you must wait two years before coverage begins. You do not need to enroll at the end of the two-year waiting period. Social Security automatically sends you the card; however, you have the option to opt-out of Part B or D to avoid paying premiums for duplicate coverage. Caution: If you do not have other coverage and fail to enroll in Medicare ad required but later decide to do so, a penalty fee applies for late enrollment.
To determine if your earnings are eligible for Social Security Disability Benefits https://www.ssa.gov/planners/disability/qualify.html
To apply for Social Security Disability online: www.socialsecurity.gov
The list of impairments that qualify as disabilities
Applying for Lynn’s Social Security Disability
I submitted my husband’s application for disability once he could no longer use his hands. His previous job was as a supervisor of a fabrication shop and carpenter. He could not walk, lift, use his arms or hands for intricate work, tolerate extremes in temperature, drive a car, or work a full day due to primary progressive multiple sclerosis.
After losing his job through a layoff, he started his own drafting company. However, as his condition progressed, it became difficult to control the mouse or hit the correct keys. At that point, it was my opinion that he was unable to perform his job or any similar job for which his training and experience might qualify him. Therefore, as I understood the definition of disabled under Medicare regulations, he qualified.
However, Medicare did not agree. On his first application submission, Medicare denied his application because he could perform other similar work.
The Challenge Begins
I set out to prove them wrong. After looking up the job group associated with Lynn’s job title, I wrote down the job duties listed for that work category. Then, I addressed all the “similar functions concerning his limitations by looking at the work duties. Finally, I planned to use that information with his appeal.
Drafted Sample Letter for Doctor
To help his doctor know specifically what information Medicare needed for the appeal, I drafted a sample letter for him to use as a guide as needed. The letter addressed Lynn’s limitation as related to the job performance requirements. His doctor appreciated my efforts to make his work easier and used most of what I provided. He mailed in the document with all the appeal data complied.
To our dismay, once again, Medicare denied the appeal. With only a few days to appeal the denial, I promptly set about looking up the denial codes and assembling the evidence necessary to show their assumptions were incorrect. My efforts paid off with a notice that we had a hearing scheduled before a judge to hear our appeal. Finally, we would see a real person!
On the day of the hearing, I knew from the expression on the judge’s face that he would rule in our favor. As the judge watched me settle Lynn in his wheelchair at our table, he started to write. Before I sat down, the judge began asking questions about how long Lynn had needed a wheelchair and when he stopped driving a car. It became quickly apparent that the only question left needing an answer was what date to record as his effective date of the disability. He made the date retroactive eighteen months to the date he stopped driving.
Though I was pleased with the outcome, I was also frustrated. The information needed for the decision was present from the beginning. Therefore, it was unnecessary to go through two appeals. However, it took someone seeing Lynn in a wheelchair before someone believed what we sent was true.