Myths and Facts about Social Security

 

Myth: Social Security will provide most of the income you need in retirement.

Fact: It’s likely that Social Security will provide a smaller portion of retirement income than you expect.

There’s no doubt about it–Social Security is an important source of retirement income for most Americans. According to the Social Security Administration, more than nine out of ten individuals age 65 and older receive Social Security benefits.

But it may be unwise to rely too heavily on Social Security, because to keep the system solvent, some changes will have to be made to it. The younger and wealthier you are, the more likely these changes will affect you. But whether retirement is years away or just around the corner, keep in mind that Social Security was never meant to be the sole source of income for retirees. As President Dwight D. Eisenhower said, “The system is not intended as a substitute for private savings, pension plans, and insurance protection. It is, rather, intended as the foundation upon which these other forms of protection can be soundly built.”

No matter what the future holds for Social Security, focus on saving as much for retirement as possible. You can do so by contributing to tax-deferred vehicles such as IRAs, 401(k)s, and other employer-sponsored plans, and by investing in stocks, bonds, and mutual funds. When combined with your future Social Security benefits, your retirement savings and pension benefits can help ensure that you’ll have enough income to see you through retirement.

Myth: Social Security is only a retirement program.

Fact: Social Security also offers disability and survivor’s benefits.

With all the focus on retirement benefits, it’s easy to overlook the fact that Social Security also offers protection against long-term disability. And when you receive retirement or disability benefits, your family members may be eligible to receive benefits, too.

Another valuable source of support for your family is Social Security survivor’s insurance. If you were to die, certain members of your family, including your spouse, children, and dependent parents, may be eligible for monthly survivor’s benefits that can help replace lost income.

For specific information about the benefits you and your family members may receive, visit the SSA’s website at www.socialsecurity.gov, or call 800-772-1213 if you have questions.

Major Sources of Retirement Income

 

Source: Fast Facts & Figures About Social Security, 2016, Social Security Administration

Myth: If you earn money after you retire, you’ll lose your Social Security benefit.

Fact: Money you earn after you retire will only affect your Social Security benefit if you’re under full retirement age.

Once you reach full retirement age, you can earn as much as you want without affecting your Social Security retirement benefit. But if you’re under full retirement age, any income that you earn may affect the amount of benefit you receive:

• If you’re under full retirement age, $1 in benefits will be withheld for every $2 you earn above a certain annual limit. For 2017, that limit is $16,920.
• In the year you reach full retirement age, $1 in benefits will be withheld for every $3 you earn above a certain annual limit until the month you reach full retirement age. If you reach full retirement age in 2017, that limit is $44,880.

Even if your monthly benefit is reduced in the short term due to your earnings, you’ll receive a higher monthly benefit later. That’s because the SSA recalculates your benefit when you reach full retirement age, and omits the months in which your benefit was reduced.

Myth: Social Security benefits are not taxable.

Fact: You may have to pay taxes on your Social Security benefits if you have other income.

If the only income you had during the year was Social Security income, then your benefit generally isn’t taxable. But if you earned income during the year (either from a job or from self-employment) or had substantial investment income, then you might have to pay federal income tax on a portion of your benefit. Up to 85% of your benefit may be taxable, depending on your tax filing status (e.g., single, married filing jointly) and the total amount of income you have.

For more information on this subject, see IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

What Is Your Full Retirement Age?

If you were born in Your full retirement age is:
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67

Note: If you were born on January 1 of any year, refer to the previous year to determine your full retirement age.

 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017

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* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. NASA Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

CUSO Financial Services, L.P. and its representatives do not provide tax advice. For such advice, please contact a tax professional.

How To Freeze And Unfreeze Your Credit

After a major data breach, many people consider freezing their credit reports. It’s not a bad idea, if you don’t need access to it right away. It can give you peace of mind if someone does get ahold of your social security number or other information that can lead to identity theft. Social Security numbers cannot be replaced like a credit card number. Credit cards can be replaced and in your hands in a few days, but your SSN is with you for life. It can take years and cost untold thousands to clean up the mess. Tragically, this can happen over and over in your life.

Freezing your credit is the best way to prevent new accounts from being opened with your SSN but it does not protect existing bank accounts or credit cards. This is where credit monitoring services step in. They watch over your SSN and current accounts and notify you about new activity.

What is a Credit Freeze? A credit freeze will prevent anyone from viewing your credit file and reports or opening credit in your name. When you apply for a credit card, a loan, or even living quarters, you are evaluated based on your credit file. The freeze prevents it from being released from the major credit bureaus.

Activating a Freeze: You must contact each of the bureaus independently to add a freeze. Visit their websites to do this or contact them by telephone at the numbers they list on their websites. Some states allow them to charge a fee to do this, but it is usually worth it.

Information You Will Need: To place a freeze, the bureaus will ask for some information:

Your name
Your Social Security number
Your birthdate
Your current address
Your former address
A payment card (in some cases)
A PIN that you choose to lift or reapply a freeze

Freezing and Unfreezing Your Credit File: You can still get access to your file after a freeze is put on it. You just have to contact the bureaus to do so. Check with them as to lead-time for temporarily unfreezing and refreezing and if there are any fees associated with doing so. Just be aware that this process may delay any approvals for credit. Each company has three days to lift your freeze once they receive your request.

How Long Does a Credit Freeze Last? A freeze will stay on your reports until you lift them.

Can an Attacker Unfreeze My File If He or She Has My Information? No one can freeze or unfreeze your file unless he or she also has your PIN associated with the freeze.

Remember that credit monitoring and identity theft recovery services do not prevent fraud. They will alert you if someone tries to access your credit or if something looks amiss, or assist you to repair your identity in the case of identity theft. These services will not monitor your payment card purchases either. You will need to monitor your charges separately.

Also, within days after the Equifax breach, all three bureaus were reporting such high demand for credit freezes that it was rumored they were asking for people to send their requests via U.S. Mail.

Contact Information for Major Credit Bureaus to place a freeze or to unfreeze:

Equifax:

https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp
800-685-1111

Experian:

https://www.experian.com/freeze/center.html
888-397-3742

TransUnion:

https://freeze.transunion.com/sf/securityFreeze/landingPage.jsp
888-909-8872

© Copyright 2017 Stickley on Security
September 19, 2017

Misspell A URL And Give Up Your Sensitive Information

It’s not important to know what GitHub is or even what cryptocurrency is. However, there is a new phishing scheme that uses malware residing on the former to steal the latter, as well as lift your sensitive information. In this case, it uses fake phishing sites that look so similar to the real one for GitHub, that it’s incredibly difficult to tell the difference. It employs a method called typosquatting to take advantage of users who are trying to download the source code for the cryptocurrency platform EtherDelta and who have “fat fingers.”

First, “fat fingers,” is a reference to clumsy typing or making typos. Typosquatting (also referred to as domain jacking) is the term used to describe someone who takes advantage of a brand by buying a domain that looks like or is a typo away from one that is well-known and in this case, using it to deliver malware or something else that isn’t desired by the user. Cybercriminals used small misspellings, or typos, of the development platform GitHub, to get malware onto the computers of unsuspecting victims that stole cryptocurrency and other valuable information.

The best way to avoid becoming a victim of typosquatting is to bookmark your frequently visited sites and uses those instead of manually typing in the address.

Alternatively, check the web addresses when you type them in manually very carefully before hitting the “enter” key on the keyboard. Make sure it reflects the site you really want to visit.

If you’re doing a web search for a site and using keywords, examine the result closely before clicking on the links that appear in the results list.

Doing this is very important particularly when going to websites that store your sensitive data, such as your financial institution or healthcare site.

© Copyright 2017 Stickley on Security
September 22, 2017

Less Obvious Fees That May Be Costing You Big Bucks

Phone company fees

Have you ever studied the list of fees on your phone or Internet bill and wondered, “What’s that?” While many telecommunication fees are advertised when you sign up for service, companies can later add fees without notifying you.

So-called “mobility administrative” charges may be added to your bill, raising your monthly costs incrementally. Make sure you review your bill periodically, and contact your provider if you see any questionable or new charges.

New-car fees

It’s not uncommon for car dealers to add a few fees at the last minute during a purchase. Reportedly, this can raise the cost of the car by several thousand dollars.

Remember, if you’re negotiating with the dealer, make sure to ask up front about fees that cover things like documentation and dealer-preparation services. It’s a little extra work for you, but avoiding expensive surprises at the end of a negotiation is worth it.

Resort fees

Many hotels sneak a resort fee into the final bill for your stay. The worst part? They’re not always advertised and are generally unavoidable.

The next time you book your vacation, contact the hotel before you finalize your purchase and ask for the total cost of the stay. You may even specify that you want to know if there’s a resort fee, just to be on the safe side.

BALANCE
September 2017

5 Steps to Financial Relief After a Natural Disaster

Hurricanes Harvey and Irma may be over, but the recovery is just beginning.

As any victim of a natural disaster knows, putting your life back together may take weeks, months or even years. Fortunately, when it comes to property and finances, you can take actionable steps to reclaim what you lost.

The following tips can’t undo the damage, but they can put you on the road to financial recovery.

1. File insurance claims ASAP

Getting assistance for the damage inflicted on your home may take a while. So as soon as it’s safe to enter, survey your house and photograph the aftermath. Save receipts for related expenses as well. Having detailed records will help bolster your insurance claims, and improve your chances of receiving coverage.

2. Beware of financial scams

Never missing an opportunity to swindle people, scammers often prey on victims of natural disasters. If someone contacts you about a “relief” loan with a too-good-to-be-true interest rate, avoid it.

3. Contact creditors if you’re unable to pay

If you exhaust your savings and max out your credit cards to cover disaster-related expenses, let your creditors know ASAP. Similarly, if you’re unable to pay your mortgage or other loans, don’t blow the monthly due date. Explain your situation and politely ask for an alternate plan (e.g., reduced or delayed payments). Failing to contact them may look like negligence on your part.

If you’re struggling to manage your finances or need help dealing with your creditors, you can always contact one of BALANCE’s Certified Financial Coaches for one-on-one assistance.

4. Prioritize your expenses

In a time when costs quickly pile up, you may have to make some tough decisions. Replacing essential damaged items might mean you don’t have enough money to pay a bill. Make a list of financial necessities in order of importance, and see what you can postpone for now.

5. Use caution with contractors

Like loan scammers, shady contractors may also try to take your money. If you need help rebuilding your home, get estimates from three different professionals. Pro tip: avoid the cheapest bid. Typically, the medium-price estimate will deliver quality work at a reasonable price.

Resources

Individuals and business owners who sustained losses from Hurricane Harvey can apply for assistance by registering online at www.DisasterAssistance.gov or by calling 1-800-621-FEMA (3362).

BALANCE
September 2017

Equifax Victim Protection Options Everyone Should Know

By now, most of us have heard of the recent data breach at the credit bureau, Equifax. If not, there is a good chance you will be receiving a letter from them letting you know that your social security number and other information was accessed by an unauthorized party. That’s because this event affected 44% of the U.S. population. There are a few items to consider as a follow up to the initial stories on this topic and that is what the following information covers.

There was some controversy about signing up for the offered free credit monitoring and other identity protection services from Equifax. So you might be a bit skeptical of taking them up on it after this, but it’s certainly worth consideration. However, be sure to read the fine print for any service you sign up for, no matter what the service is doing. In this case, there was initially some detail that required those who chose to use the service, called TrustedID Premier to pay for the service automatically once the free term expired. However, that clause has since been removed from Equifax’s terms of service with respect to this breach. So, you can sign up and take advantage for free; but still read the terms of service thoroughly and don’t expect this to completely protect you from identity theft.

If you are still hearing that signing up for the credit monitoring service will exempt you from any class action lawsuit that may arise, that has changed. Equifax has removed that language from its Terms and Conditions, so you can now take advantage of the service without worry.

Consider the options if your social security number was accessed by unauthorized parties for any event; not just this one. Credit monitoring services do not prevent your identity from being stolen. They will alert you if someone tries to obtain credit with your information. Essentially, it gives you a heads up right away so you can take action to remedy before it gets worse. Identity theft protection services, which were also offered, will help you through the process of correcting any fraud, but again won’t prevent it from happening.

On the other hand, consider a credit freeze, which will prevent credit from being taken out in your name. It blocks any attempt to access credit and the credit bureaus will alert you if someone tries. A credit freeze is recommended to those who have had their social security numbers stolen and who are not applying for credit in the near term. That is because a freeze will do just that; freeze access to your credit so no one can access your report.

That said, if a time occurs where you will need to provide access to your credit for some reason, a credit freeze can be lifted and re-implemented if needed. Just make sure to check the fine print to find out how much lead time is needed to do this and if additional costs are involved. In some states, there is a cost associated with freezing credit.

An important detail about taking advantage of any credit monitoring service is that if there already is a freeze on your credit, the credit monitoring services will not work. This is because they need to access your credit reports in order to monitor activity. However, don’t unfreeze it just to sign up for a service. If the third party cannot access your file because it’s frozen, then the credit freeze is doing what it is intended to do.

Something that often gets overlooked is monitoring the credit of children. In theory, children under 18 should not have a credit report, because they are not consumers. Per a 2012 study by the Identity Theft Assistance Center and the Javelin Strategy & Research group, one in 40 families with children under 18 had at least one child whose information was accessed in an unauthorized manner. If you find a report for your child on file with Equifax, Experian, or TransUnion, investigate it and the possibility of fraud using the child’s information.

Also remember that this applies to anyone who has used a social security number to get credit of any type or even to turn on utilities. This breach or any breach that includes stolen social security numbers is not limited to U.S. citizens. Anyone with a social security number can be a victim of identity theft.

© Copyright 2017 Stickley on Security
September 13, 2017