Who Knew?

From the Arizona Star:

Barring a change in the rules, my wife, Georgina, and I are set with our plan for when to claim — or wait on — Social Security benefits. Using a little-known "file and suspend" strategy, I expect us to receive higher combined benefits over the long run, while protecting Georgina if I die first. ...

Discussed in a working paper for the Pension Research Council at the University of Pennsylvania's Wharton School, this strategy calls for the lower-earner spouse — Georgina in our case — to file for benefits first under her work record.

Depending on their circumstances, some spouses may wish to do so as early as possible, which is age 62. Georgina will wait until her full retirement age of 66 in 2010 primarily because her earnings from freelance work would reduce her benefits until then.

As the higher-earner spouse, I will then "file and suspend" when I reach my full retirement age of 66 in 2011. ...

That means I will file for my full retirement benefits but immediately ask that they be voluntarily suspended (which can be done in the remarks section of the application, either on paper or online, said Dorothy Clark, a Social Security spokeswoman). I will then wait to collect until I am 70. If we need money before then, we can tap our IRAs and other retirement plans.

Why do this?

● Once I file for benefits, even if I immediately suspend them, Georgina will become eligible for the spousal benefit.

● This benefit — 50 percent of what I would have received at full retirement age — will be higher than the benefit under her work record. (Note: If the lower-earning spouse files for benefits before full retirement age, the spousal benefit is reduced.)

● My benefit at age 70 will be considerably higher than at 66. For every year I wait up to age 70, I get a credit of 8 percent a year on top of annual cost-of-living adjustments.

● If I die before Georgina, instead of the spousal benefit she would receive a survivor benefit equal to whatever I was getting (or, generally, was entitled to get if I die before age 70).

Waiting In Dunkirk

From The Post-Journal of Jamestown, NY:

DUNKIRK — Chances are you may have filed a social security disability claim and either healed from the injury, or worse, before you ever received a check. Congressman Brian Higgins, 27th Congressional District of New York, visited the City of Dunkirk Senior Citizen Center on Friday morning to announce his proposed bill which could help alleviate several problems at the social security administration level.

“There is just an unacceptable back-log in social security disability claims and other services that people depend on here in Chautauqua County. I have a bill that I’ve introduced — with a lot of co-sponsorship — that would exercise congressional oversight over the social security administration,” Higgins said. “They have cut staffing, they have cut hours and they’re essentially cutting services and it’s unacceptable at a time where the claims for benefits are actually increasing.” ...

“We have lost staff by more than 50 percent. However, the work that we do continues to increase,” added AFGE Local 3342 President Paul Demler. “The population is not going away. It’s growing and we’re expecting over the next few years the effect of the baby-boom generation is going to increase our services by approximately 30 to 40 percent.”

Downfalls for SSA were noted as offering unreliable office hours for local administration offices and, worst of all, untimely with the processing of claims. ...

Under the SSA’s current plan, Demler says the Dunkirk office would actually close before it hired one new employee.

“Currently, the agency only has a plan to replace employees who leave at a 1:8 ratio, meaning it would require eight employees to leave before another is hired,” he said. “If you think of Dunkirk, there’s only 6 employees, they would close before ever considering to hire another employee under the 1:8 ratio. Jamestown would be down to two or three employees.”

Law Offices Of James Sokolove

Allsup is not the only entity seeking to represent Social Security disability claimants on a national basis -- and issuing press releases in an effort to get free advertising. Here are some excerpts from a press release from the Law Offices of James Sokolove:

The LOJS, dedicated to providing equal access to the civil justice system, cites the importance of the startling results of a two-month investigation into Social Security Disability Insurance (SSDI) claims presented in a recent CBS News video report. ...

“We need to be aware now that an aging boomer population will present an increasing number of claims just as the judges who review denials at the Social Security Administration (SSA) likewise age and potentially shrink in numbers,” says Attorney Jim Sokolove, founder of The Law Offices of James Sokolove. “It’s the perfect storm. As to why new judges aren’t being appointed to handle the increase … that’s the million-dollar question.” ...

About The Law Offices of James Sokolove

For almost 30 years, The Law Offices of James Sokolove (jimsokolove.com) has focused on reinventing how people obtain legal services. Equality of access, irrespective of ethnicity or income, and superior quality of representation and service within our civil justice system is our mission. Within an ever-changing legal profession, the LOJS business model is a proven success strategically matching specific client needs with particular law firm expertise and service quality. LOJS is the nation’s largest and fastest growing marketer of legal services.

Waiting In Perryville

From the Southwest Missourian:

Tarring a roof or putting up walls never made Jeff Niccum bat an eye. Manual labor is all the work he has known.

But his life of construction, roofing and landscaping has resulted in degenerative joints and painful arthritis in his early 40s. Giving his son J.T., who turned 5 Wednesday, a bath hurts him. J.T. got a train for his birthday, but Niccum could only put the toy together from a recliner. Getting on the floor with the boy was out of the question.

Niccum, of Perryville, Mo., has been rejected four times for Social Security disability. His appeals have come back unfavorable since 2000. After the first time, he said he thought they might be right. So he landed a job driving a forklift at Gilster-Mary Lee. After just a week of work, he couldn't get out of bed.

Social Security Retirement Benefits Worth $225,000 And Disability Benefits Worth $414,000

From the National Academy of Social Insurance:

For most Americans, the value of their Social Security is the biggest accumulation of dollars they will take into retirement. In fact, for two-thirds of recipients over the age of 65, Social Security is more than half of their income during retirement, according to a new report released today by the non-partisan National Academy of Social Insurance (NASI).

The report, Social Security: An Essential Asset and Insurance Protection for All, details Social Security’s vital role in safeguarding Americans families and retirees, with a particular focus on groups at high risk of having inadequate incomes – older women, African American families, and the Latino community. The report synthesizes findings from research and outreach activities by twelve organizations funded by the Ford Foundation.

The average monthly benefit for retirees is $1,045 in 2007. A 65-year old who wanted to buy a guaranteed income of that size – with payments that go up with the cost of living and continue for a widowed spouse -- would need to pay an insurance company about $225,000. ...

The value of the disability benefits for disabled workers – those who cannot work at any job for at least a year because of physical or mental illness and impairments – was the equivalent of purchasing a $414,000 disability insurance policy in 2006. That represents the total benefits available to a 30-year old worker who becomes disabled after earning between $25,000 and $30,000 a year, has a 28 year-old spouse, a child age two and an infant under the age of one.

An Administrative Law Judge is supposed to decide upon something like 50 Social Security disability claims in a month. By my calculation, that is over $20 million in benefits -- per month -- and almost a quarter of a billion dollars per year! And that is not even considering the value of Medicare!

Field Offices With Fewer Than 15 Employees To Be Closed?

From the Storm Lake Iowa Pilot-Tribune (emphasis added):

Worries continue to circulate on the potential closing of the Storm Lake Social Security office and others like it around the state.

On Tuesday, officials of the union that represents many of the Social Security workers called on Iowans to protest to their members of Congress.

Officers of the American Federation of Government Employees (AFGE) Local 836 said that a Social Security Administration downsizing initiative and increased use of online services would be "a mistake that will compromise the quality and efficiency of service." ...

The SSA facility in Oskaloosa is slated to be closed on February 1, although Senator Tom Harkin has spoken to Commissioner Michael Astrue opposing any office closures in his state.

"The Commissioner has said that offices with 15 or fewer employees could be shutdown, and most of the offices in Iowa currently have fewer employees than that," said Cheryl Hainkel, the Kansas City Regional Vice President of Council 220.

If the agency approves additional shutdowns in Iowa, there could be just five remaining locations for the entire state, the union claims: Davenport, Des Moines, Waterloo, Cedar Rapids, and Council Bluffs.

"An individual would have to travel up to two-and-a half hours (153 miles) in order to reach their nearest Social Security office," Hainkel said. ...

The local manager of the Storm Lake office is also concerned about the future, feeling that not all senior citizens would be comfortable in using electronic communications or be able to drive long distances to meet with Social Security staff.

Budget Outlook For FY 2009

It may not make that much difference what President Bush wants in the budget for fiscal year (FY) 2009, which begins on October 1, 2008, since Democrats in Congress can just pass continuing funding resolutions until Bush leaves office and they can deal with a different president, perhaps of their party. However, Bush is not going to make it easy. From Reuters:

President George W. Bush will propose freezing most domestic spending in his upcoming 2009 budget and will seek big cost savings from government health care programs, a U.S. official said on Thursday.

Bush's final budget is due out next week.

Testimony On Overpayments

David Rust, Social Security's Acting Deputy Commissioner for Disability and Income Security Programs, testified today before the Subcommittee on Federal Financial Management, Government Information and International Security of the Senate Committee on Homeland Security and Governmental Affairs on the subject of "preventing, detecting, and collecting improper payments." Rust's written statement is available online.

Here is a little excerpt that gives a small preview of the President's fiscal year (FY) 2009 recommended budget for Social Security:

The President's Budget for FY 2009 includes a proposal to provide SSA with funding, outside the spending caps, for program integrity activities such as CDRs and SSI redeterminations. The Budget includes a special funding mechanism that will provide $240 million for SSA's program integrity efforts, in addition to the $264 million already included in the base request, for a total of $504 million. SSA plans to process 329,000 medical CDRs and nearly 1.5 million SSI redeterminations in FY 2009. If found to be as cost-effective as SSI redeterminations, up to $40 million may be used for initiatives to improve the disability process and up to $34 million may be used to expand the Access to Financial Information project, which automates verification of SSI recipients' assets held in banks. In total, SSA estimates this program integrity funding in FY 2009 will result in over $4 billion in savings over 10 years.