Q: Ms. S, of Chattanooga, writes: “A friend told me I could apply for the widow’s pension three months before my 60th birthday. I went to the Social Security office in July and was told to come back in October. My birth date is 10/16/47. So, in October, I went back and spoke with a very nice lady who told me I would be eligible for $1,399 for approximately six months based on my income of approximately $27,000 for 2006. She said if I waited until I was 65 I would be eligible for $1,899 (from my husband’s Social Security). I have worked a small part-time job for the past three years and made $2,000 to $2,500 extra year, however the business has closed and I won’t have that extra income now. My son-in-law thinks I should wait until I’m 65 to get the larger amount. The lady told me she thought I wouldn’t be losing that much. What do you think?”
A: Choosing when to retire is one of the most important decisions you will make in your lifetime. As a general rule, early or late retirement will give you about the same total Social Security benefits over your lifetime. However, if you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. There are advantages and disadvantages to taking your benefit before full retirement age. The advantage is that you collect benefits for a longer period of time and the disadvantage is your benefit is permanently reduced. Each person’s situation is different. Here are some things you may want to consider when you make that decision: (1) Are you still working? (2) Do you come from a long-lived family? (3) How is your health? (4) Are you eligible for benefits on someone else’s record? (5) Do you have other income to support you if you decide to delay taking your benefits? (6) Will other family members qualify for benefits with you on your record?
Q: Mr. S, of Chattanooga, writes: “My mother-in-law is 83. She has less than $10,000 in total assets. Her sole income is a monthly Social Security check of about $1,000. She is currently in a senior apartment complex that her children subsidize. They would like to allow her to continue to live there. My question is: Could she qualify for Medicaid and realize savings on her Medical costs?”
A: Medicaid is a medical assistance program that is partially funded by the federal government but run by each state. Medicaid pays for basic medical care for people and families with low incomes and resources. People who are blind or disabled, age 65 or older, children, or members of families with dependent children may be eligible. Using broad federal guidelines, each state runs its own Medicaid program. The state decides who is eligible and the amount of medical care and services it will cover. Representatives in your local public assistance office can tell you about eligibility for Medicaid and whether you qualify. You may also want to ask them about other assistance in your community for which your mother-in-law may be eligible. For more information on the Medicaid program, see http://www.cms.hhs.gov/medicaid/. Also check to see if your mother-in-law has enrolled in the Medicare Prescription Drug program which would assist with the purchase of her prescriptions. For assistance in selecting a plan and enrolling, go the Medicare Prescription Drug Plan Finder, a Web site of the Center for Medicare and Medicaid Services (CMS).
Q: If I work after I start receiving Social Security retirement benefits, will I still need to pay Social Security and Medicare taxes on my earnings?
A: Yes. Any time you work in a job that is covered by Social Security — even if you are already receiving Social Security benefits — you and your employer must pay the Social Security and Medicare taxes on your earnings. The same is true if you are self-employed. You are still subject to the Social Security and Medicare taxes on your net profit.
Get answers to your Social Security questions each Thursday from Social Security District Manager Eleanor Jones. Submit questions to her attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at jvass@timesfreepress.com.
