Some Oldsters Still Need Social Security Credits There are more than a few people pushing retirement age who still do not have enough Social Security credits to qualify for retirement benefits. They almost always fall into one of two categories. They are either people who spent their career in one …Read more. People Who Feel Cheated by Social Security There are two kinds of people in the world: those who jump out of bed each morning all bright-eyed and bushy-tailed ready to take on the world, and those who get up all sullen and despondent waiting for the world to take them on. And with respect to …Read more. But Wait, There's More! Have you ever seen those infomercials (usually run on obscure cable channels and usually in the middle of the night) in which the pitchman is trying to sell you a product? And after he gives you the price, he says, "But wait, there's more!" Then …Read more. Clearing Up Misunderstandings About Disability Benefits Q: I have been getting disability since I was 56 years old. I am now 61. I'd like to switch over to real Social Security when I turn 62 so that I can start working. How do I do that? A: Your question reveals several misunderstandings about the …Read more.more articles
Agency Checkup Nothing To Fear
Q: I am a certified public accountant. One of my clients, who signed up for his Social Security about a year ago, just got a letter from Social Security's "Office of Quality Assurance." The people there want to redo his claim for benefits. And they are asking him to bring in his military discharge papers (he was in the Army 40 years ago), his W-2 records for the past 10 years and other documents. What's going on? He's very worried about this.
A: Tell your client to relax. This really is a "no big deal" kind of thing — from his perspective, anyway. But it is a big deal to the Social Security Administration.
The SSA's Office of Quality Assurance takes a small sampling of Social Security cases and redevelops them. It's not really to see whether he's being paid correctly, although they will check into that. But your client shouldn't worry about this, because historically, Social Security benefit calculations have a very high degree of accuracy. Statistics show that people, in part because of these kinds of reviews, are getting the correct benefit amount about 99 percent of the time.
Instead, this quality review is more of a checkup on Social Security's internal claims processing procedures. For example, as part of a normal application, the SSA almost never asks for military records, because one's military service (and any possible Social Security credit one might be due because of that service) already is recorded in Social Security files. But as part of this review, the SSA asks to see your client's military papers to help verify that its records of military service are accurate. And by the way, if he can't easily put his hands on his military records, the SSA will help him obtain them.
The same is true for his W-2 forms. The administration just wants to help document that its earnings records are accurate, which, again, they are almost all the time.
Although I'm not totally sure of this, I think these reviews are voluntary. So if this is really bothering your client, ask him to check with the SSA about opting out of the review.
Q: My husband died at age 52 about 12 years ago. I am now 62 and thinking of retiring. Someone told me I should consider filing for widow's benefits. But because my husband died so many years ago — when wages were less than they are today — I'm sure I will get much more on my own record, even though I made less than he did when he was alive. Do you think I should file for widow's benefits?
A: I think you will be surprised at the amount of your potential widow's benefits.
But that doesn't automatically mean you should file for widow's benefits. As I've explained many times in this column, widows have options when it comes to Social Security. For example, it might be financially advantageous for you to take reduced retirement benefits on your record now and switch to full widow's benefits at 66.
Another option would be to take reduced widow's benefits now and switch to your own Social Security at age 70, when you would get your full benefits plus a 32 percent delayed retirement bonus.
The folks at your Social Security office can go over the numbers and your options with you at the time you retire.
Q: My husband and I are self-employed. Quite a few years ago, we incorporated our business. We did this on the advice of our accountant, who said we would pay less in taxes this way. In fact, for many years, we paid no taxes at all. Recently, I hurt my neck and back in a car accident. I filed for Social Security disability benefits, but my claim was denied. They said I'm not "insured." What does that mean? I have my 40 quarters from work I did before we started this business.
A: It means there are consequences to not paying taxes. There are two "insured status" requirements you must meet to qualify for Social Security disability benefits. The first is that you must have at least 40 Social Security credits, often called "quarters." You said you have that.
But the second half of the insured status rule says you must have been working and paying Social Security taxes in recent years. Specifically, the law says you need to have paid Social Security taxes in five of the past 10 years.
I have seen situations similar to yours hundreds of times during my career with the Social Security Administration. Self-employed people are able to "cook the books" in order to lessen or even eliminate their tax burden. It always sounds like a great idea because, generally, no one likes paying taxes. But that smaller tax burden always results in smaller Social Security payments.
And sometimes, as in your case, it results in the loss of Social Security benefits. I just hope that you took some of that money you saved by not paying Social Security taxes and bought yourself a good disability insurance policy.
If you have a Social Security question, Tom Margenau has the answer. Contact him at firstname.lastname@example.org. To find out more about Tom Margenau and to read past columns and see features from other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
COPYRIGHT 2012 CREATORS.COM