Social Security & You

Social Security is part of almost everyone's life - more so than most of us realize.  It is one of the best benefits offered by the Commonwealth to public employees.

Social Security protects more than 1,825,000 workers across the state and pays benefits to more than 700,000 Kentuckians through its retirement, disability and survivors programs.  Social Security is also the base upon which most Kentucky public employee retirement systems is built.

The importance of Social Security survivors' benefits is often underestimated.  Younger Kentuckians face a 1 in 5 chance of succumbing before reaching age 65.  Survivors' benefits are paid on a monthly basis to the deceased worker's family to help ease the loss of a wage earner.

The value of Social Security survivors' benefits for an average wage earner who leaves a spouse and two children is equivalent to a $295,000 life insurance policy.  The average payment for the spouse and two children is about $1,350 per month, which may be increased based on the annual cost of living index--something few private insurance plans offer.

Social Security also protects workers who suffer the tragedy of disability.  Few workers have purchased private, long-term disability insurance.  Studies show, however, that a 20-year-old worker has a 1 in 3 chance of being severely disabled before the age of 65.  More than 144,200 disabled Kentuckians under 65 and 55,000 dependents receive assistance under the disability provisions.

Social security disability protection is equivalent to a $350,000 disability policy for an average wage earner with a spouse and two children.  The average monthly payment of a disabled worker in Kentucky is about $805 and about $1,200 for a disabled worker with a spouse and two or more children.

Almost every public employee who has retired receives Social Security benefits.  Social Security pays monthly retirement benefits to a half-million retirees and their families across Kentucky. Benefits can equal as much as $1,200 a month for workers earning the maximum under Social Security.

The usual retirement age for people retiring now is age 65.  Social Security calls this "full retirement age," and the benefit amount that is payable is considered the full retirement benefit.  Because of longer life expectancies, the full retirement age will be increased in gradual steps until it reaches age 67.  This change starts in the year 2003 and it effects people born in 1938 and later.

You can start your Social Security benefits as early as age 62, but the benefit amount you receive will be less than your full retirement benefit.

If you take early retirement, your benefits will be permanently reduced based on the number of months you will receive checks before you reach full retirement age.  If your full retirement age is 65, the reduction for starting your Social Security at age 62 is about 20 percent; at age 63, it is about 13.3 percent and at age 64, it is about 6.6 percent.

Medicare is our nation's basic health insurance program for those 65 or older and many disabled individuals.  There are two parts to Medicare:  1) Hospital Insurance--sometimes referred to as Part A -- and 2) Medical Insurance--Part B.

Most get hospital insurance when they turn 65 - you qualify for it automatically if you are eligible for Social Security.  If you have been getting Social Security disability benefits for 24 months, you will qualify for hospital insurance under the Medicare program.

Almost anyone eligible for the Medicare hospital insurance can sign up for its medical insurance Medical insurance is an optional program, unlike the hospital portion of Medicare that is free.

The question most often asked about Social Security is "Will it be there for me?"  Consider that Social Security has been in existence for more than 60 years.  It is a flexible program that has been able to change with the needs of the beneficiaries it serves and the workers who provide the financing.  Social Security is currently financed well enough to pay all estimated benefits for the next 40 years without any changes - at all!  You can count on Social Security being there when you need it.

Your personal wage history and an estimate of your future Social Security benefits may be obtained by filing a Form 7004 with the Social Security Administration.  The Form 7004 is available from your local Social Security office, the state Division of Social Security (1-502/564-3952) or by calling the Social Security Administration toll-free at 1-800/772-1213.