BENEFIT ESTIMATE

There is a special form you can use to get a “Personal Earnings and Benefit Estimate Statement.” Contact the Social Security Administration Toll free at 800 772-1213, in person at the local branch office, or visit their web site at http://www.ssa.gov for the form that will enable you to receive a free, detailed, personal estimate of Social Security benefits. The estimate is automatically mailed each year to those not receiving benefits.

DIRECT DEPOSIT

Direct deposit of Social Security checks is the fastest and most secure method of payment delivery. Checks sent through the mail are 10 times more likely to be reported lost or stolen. Direct deposit will be suggested at the time of your initial claims application, but can be elected at any time after payments begin. You must supply your bank account information, including financial institution routing number, to elect direct deposit.

FULL RETIREMENT AGE INCREASES

The traditional full retirement age of 65 is changing. For people born in 1938 and later (age 62 in the year 2000 and after), the age at which full, unreduced retirement benefits begin will gradually increase until it reaches the new “full” retirement age of 67. Review this chart to determine how the change affects you.

EARLY BENEFIT OPTION REMAINS

“Early” reduced benefits continue to be available for workers and spouses at age 62, or as early as 60 for survivors. However, the “early” benefit reduction will be greater in the future. “Early” benefits are permanently reduced based on the number of months benefit checks are received prior to the “full” unreduced retirement age. The scheduled increases in the full retirement age described above will automatically result in additional months between “full” and “early” retirement and therefore, an increased reduction in early retirement benefits.

DELAYED RETIREMENT

If you decide to continue working beyond your Full Retirement Age, your benefit amount on your own work record will increase in two ways. Additional years of work may increase your average lifetime earnings -- the basis for benefit computations. Also, delayed retirement credits added to your record for such work can increase your benefit anywhere from three to eight percent (depending on your year of birth) annually, up to age 70. Work after age 70 will not increase your benefit.

AUTOMATIC COST OF LIVING ADJUSTMENT ( "COLA" )

Social Security benefits are adjusted annually to help keep pace with inflation. The cost of living increase is based on the Consumer Price Index from the third quarter of the previous year through the third quarter of the current year. The percentage of the COLA increase is announced each fall and benefits are increased the following January. During the last decade (from 1990 through 2000) Social Security benefits increased from a high of 5.4 percent in 1991, to a low of 1.3 percent in 1999 for an average COLA increase of 2.8 percent.

ANNUAL EARNINGS TEST

Work and earnings after entitlement may reduce your monthly Social Security benefits if you are younger than your Full Retirement Age. If you have earnings as a survivor, only your benefit is reduced, not the benefits of other family members. Work and earnings of disabled individuals and those receiving SSI payments are handled differently. If you are receiving one of these categories of payment and are working, you must report your earnings to the SSA.

Until January 2000, the Social Security retirement benefits of working recipients under the age of 70 were reduced to the extent they had earnings over the allowable limit. Now, only work and earnings before your Full Retirement Age are considered. The amount of “allowable” earnings changes annually. In 2001, the allowable earnings limit for anyone younger than “full” retirement age is $10,680. For every $2 earned over this limit, $1 is withheld from your Social Security benefit.

Special rules prorate earnings for the year a worker attains full retirement age, with only those months prior to the worker’s birth month being counted against benefits.

DIVORCED SPOUSE

If a marriage lasted at least 10 years, a former spouse may be eligible for benefits on a worker’s Social Security record. The amount of the benefit paid to the ex-spouse does not reduce the benefit paid to the worker or current spouse. This is true of both “life” cases (retirement or disability) as well as “death” cases (i.e. survivor benefits).

TAXES

Social Security benefits are taxable to the extent that one-half of your benefits when added to your other income (including investment income, dividends, and even tax-exempt interest) exceeds the Internal Revenue Service (IRS) “base amount” of $25,000 ($32,000 if married). If you have substantial income, as much as 85% percent of your benefits could be subject to income tax at your marginal rate. For additional information about taxes, contact the Internal Revenue Service at 1 800 829-3676, or visit the IRS website http://www.irs.gov

GOVERNMENT PENSION OFFSET

Receipt of a government pension based on work not covered by Social Security (federal civil service for example) may reduce or offset your Social Security survivor benefit. Additional information is available directly from the SSA. Call and ask for their special fact sheet, “Government Pension Offset.” A separate fact sheet, “A Pension from Work Not Covered by Social Security” explains the effect when a government worker is also eligible for his or her own Social Security benefit.

LEAVING THE UNITED STATES

If you are a U.S. citizen, extended travel or residency in most foreign countries does not affect your eligibility for Social Security benefits. However, Social Security benefits may not be sent to Cambodia, Cuba, North Korea, Vietnam and some of the former republics of the Soviet Union. The list may change based on world events. You should obtain current country status from Social Security prior to finalizing your plans to move abroad. Generally, Medicare does not cover health care outside of the United States.

SOCIAL SECURITY SERVICES ARE FREE

Beware of anyone charging a fee for Social Security services. There is no charge to obtain a Social Security card, change a name on a card, replace a lost card, apply for benefits, change an address, report a death, request publications or otherwise obtain information or any other Social Security transactions.