Here is a great article from Bill Bischoff of Smart- Money writing about the horror stories that can happen when we fail to take even the most simple steps on our old 401(k)’s, life insurance policies, etc.

Enjoy!

http://www.shpnews.com/download/Smart%20Money%20Estate%20Planning.pdf

Here is a recent post from the Wall Street Journal on yahoo.finance.  It is written by Kelly Greene and it gives very specific steps to how to manage the initial stages of retirement.

I like it because there are a few steps, such as controlling our budget and lowering our costs that we can actually control.  I always find it frustrating when there seems to be so much out of our control while at the same time these are the most important things in our lives.  The list goes on and on in this way, but I hope you get my drift.

Sincerely,

MP

 
http://finance.yahoo.com/focus-retirement/article/113329/which-way-retirement-wsj?mod=fidelity-readytoretire&cat=fidelity_2010_getting_ready_to_retire

The Financial Pope has spoken about interest rates and where he believes the economy is headed.

Check out this article from yahoo finance.

MP

http://finance.yahoo.com/blogs/daniel-gross/fed-disappointing-no-exit-announcement-190023663.html?sec=topStories&pos=main&asset=&ccode=

I vividly remember when I began this career in 2001 all of the vitriol targeted against annuities.  Now ten years later and a much different country, the last hold outs are giving up their ground that should’ve been retreated from a long time ago.

Check out the article from MarketWatch about Putnam Investments and see what I mean.
http://www.marketwatch.com/story/retirees-need-less-stocks-more-annuities-2011-07-11?link=MW_story_popular

Sincerely,

The Editor

During my pessimistic moments, I find it hard to disagree.

http://www.telegraph.co.uk/finance/financialcrisis/8648310/Risk-of-stock-market-crash-is-building-warns-Centre-for-Economics-and-Business-Research.html

MP

The previous about the GOA study required you to cut and paste.

I have figured it out to make it easier on all of us.

http://www.gao.gov/highlights/d11400high.pdf

Thanks,

MP

It is not often that bi-partisanship or nonpartisan activity emerges from Washington, but when it does it’s powerful.

This article directly asked the questions that are on the minds of many soon-to-be retirees, such as when to take social security, how to properly plan retirement, etc.

Highly recommend it!

http://www.gao.gov/highlights/d11400high.pdf

MP

Social Security Administration

1250 Hancock Street Room 2N

Quincy, MA 02169

Contents

George Takei And Patty Duke Boldly Go To Social Security’s Website      2

You Can Rely On Electronic Payments     3

Make Sure You Get The Right Amount      3

The Handsome Gift For Dad       4

Important Information For Public Employees      5

Social Security Online Services 6

NEW!  Frequently Asked Questions and Answers    7

Are you ready to set course for retirement? Then follow the advice of entertainment icons George Takei and Patty Duke and Boldly Go to www.socialsecurity.gov.  The two celebrities have teamed up in a new campaign to help Social Security promote its online services as an easy and secure way for people to apply for retirement, disability, Medicare, and so much more.

Those ready to retire, apply for disability benefits, or delay retirement and apply only for Medicare, can do so from the comfort of their home or from any computer.  And don’t forget to sign up for direct deposit so you’ll get your benefits at warp speed.

Already receiving Social Security benefits? Go online to let Social Security know about a change of address or phone number, start or change direct deposit, get a proof of income letter, or replace a lost Medicare card.

As Patty tells George, Social Security’s website “is for everyone.” Workers can get an online estimate of their future retirement benefits and use Social Security’s planners to plan for a secure retirement and “Young people can help their grandparents with retiring online or getting extra help with their Medicare prescription drug costs.” To which George concludes, “Everyone, of all ages, should go to www.socialsecurity.gov.”

So Boldly Go to www.socialsecurity.gov. Like George, you may find yourself saying, “Oh my!”  Then, in retirement, live long and prosper.

You Can Rely On Electronic Payments

You probably don’t need a reminder that natural disasters lurk around the corner when we least expect it.

Many natural disasters force people to leave their homes.  The last thing a person who falls victim to this kind of devastation needs to worry about is how they’re going to get their next Social Security or Supplemental Security Income (SSI) payment.

Here’s a solution. Make sure that you’re receiving your benefit payments electronically.  Electronic payments are the best way to receive your benefit payments. Here’s why.

Electronic payments are safe. Your money is deposited directly into your account each month. Because it’s transferred electronically, there’s never a risk of your check being lost or stolen.

Electronic payments are quick. You’ll get your payment faster when it’s made electronically. Your money is immediately available to you once it’s deposited; no waiting by the mailbox for the check to arrive.

Electronic payments are convenient. No more need to stand in line at the bank to cash your check or to leave your house when the weather is bad. It’s also nice to know your payment is in your account instead of your mailbox when you’re on vacation or away from home.

Perhaps we also should mention that electronic payments are now mandatory. People who apply for Social Security benefits on or after May 1, 2011, must receive payments electronically. Nearly everyone currently receiving benefits who has not signed up for electronic payments must switch to electronic payments by March 1, 2013. Electronic payments may be made by direct deposit, the Direct Express card program, or an Electronic Transfer Account. You can learn more about all three at www.godirect.org.

If you’re ever faced with a devastating event, there will be no question about where you’ll find your money when you receive electronic payments. The same cannot be said for paper checks being sent to mailboxes that may no longer exist.

Learn more by reading our online fact sheet, Get Your Payments Electronically at www.socialsecurity.gov/pubs/10073.html. Or go directly to the source, where you can learn more and sign up for electronic payments: www.godirect.org.

Make Sure You Get The Right Amount

At Social Security, our goal is to make sure you are paid the correct amount, on time, every month.

Some things have made that job easier over our more than 70 years of paying benefits, such as direct deposit and electronic application systems. But some of the factors that determine your payment amount still depend on good old fashioned human intervention. And in some cases, getting the correct payment amount depends on you.

You certainly don’t want to be paid less than you’re entitled to receive. But what can be even more difficult, in the long run, is to be overpaid — in which case you’ll probably have to pay us back, cutting your payment down each month until the debt is repaid.

What can cause an overpayment? Sometimes an overpayment (or even an underpayment) occurs because the person receiving benefits did not report a change to us.

For example, if you receive Social Security retirement or survivors benefits and are under your full retirement age and working, we usually ask you to estimate your earnings for the year. If you realize your earnings will be higher or lower than you estimated, let us know as soon as possible so we can adjust your benefits.

If you receive Social Security disability benefits, you should tell us if you take a job or become self-employed, no matter how little you earn. You also need to report if you begin receiving or have a change in any worker’s compensation or other public disability benefits — or if your disabling condition improves.

If you receive SSI, you need to report any changes that can increase or reduce the amount of your benefit, such as changes in address (even if you get electronic payments), changes in living arrangements, income, or increased savings that inch over the resource limit ($2,000 for an individual, $3,000 for a couple). Any changes in your living arrangements, income, or resources could change your SSI payment amount.

Learn more about the kinds of things you need to report when you receive Social Security retirement and survivors benefits by reading our online publication: www.socialsecurity.gov/pubs/10077.html

Read about reporting responsibilities for people receiving Social Security disability benefits here: www.socialsecurity.gov/pubs/10153.html

Learn all about the sorts of things to report when you receive SSI by reading over this online publication: www.socialsecurity.gov/pubs/11011.html

If you’re underpaid in any given month, once we verify the information that caused you to be underpaid, we will send you any money you are due. If you’re overpaid, read our online fact sheet to learn what happens next: www.socialsecurity.gov/pubs/10098.html

With your help and by diligently reporting any applicable changes, we’ll achieve a goal we can all agree on: paying you the right amount, on time, every month.

The Handsome Gift For Dad

Father’s Day is right around the corner. Perhaps you’ll give Dad the usual gift: a necktie, shaving set, leather wallet, or new fishing lure. But there’s something he may appreciate even more. People all over the country are helping their dads save nearly $4,000 a year on the cost of prescription drugs. You can help your dad too — and it won’t cost you a dime.

The high cost of prescription medication can be a burden on fathers (or anyone) who have limited income and resources. But there is Extra Help — available through Social Security — that could pay part of his monthly premiums, annual deductibles, and prescription co-payments. That Extra Help is worth an average of almost $4,000 a year.

To figure out whether your father is eligible, Social Security needs to know his income and the value of his savings, investments, and real estate (other than the home he lives in). To qualify for the Extra Help, he must be enrolled in Medicare and have:

• Annual income limited to $16,335 for an individual or $22,065 for a married couple living together. Even if his income is higher, he still may be able to get some help with monthly premiums, annual deductibles, and prescription co-payments. Some examples where income may be higher include if he or his spouse:
  • —Support other family members who live with them;
  • —Have earnings from work; or
  • —Live in Alaska or Hawaii; and
• Resources limited to $12,640 for an individual or $25,260 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. We do not count his house and car as resources.

Social Security has an easy-to-use online application that you can help complete for your dad. You can find it at www.socialsecurity.gov. Just select the link on the left of the page that says, “Get extra help with Medicare prescription drug costs.” To apply by phone or have an application mailed to you, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and ask for the Application for Help with Medicare Prescription Drug Plan Costs (SSA-1020). Or go to the nearest Social Security office.

To learn more about the Medicare prescription drug plans and special enrollment periods, visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227; TTY 1-877-486-2048).

Of course, the Extra Help is not just for fathers. Anyone who is entitled to Medicare and has limited income and resources may be eligible.

Important Information For Public Employees

We have important information that should be of interest to public employees.

If you work for an employer who does not withhold Social Security taxes from your salary, such as a government agency, the pension you get based on that work may reduce your Social Security benefits under the “Windfall Elimination Provision.”

This provision affects how the amount of your retirement or disability benefit is calculated if you receive a pension from work where Social Security taxes were not taken out of your pay. We use a modified formula to calculate your benefit amount, resulting in a lower Social Security benefit than you otherwise would receive.

Why a modified formula?  The law requires we determine Social Security benefit amounts with a formula that gives proportionately higher benefits to workers with low lifetime earnings. Before 1983, people who worked mainly in a job not covered by Social Security had their Social Security benefits calculated as if they were long-term, low-wage workers. They had the advantage of receiving a Social Security benefit representing a higher percentage of their earnings, plus a pension from a job where they did not pay Social Security taxes. Congress passed the Windfall Elimination Provision to remove that advantage.

In addition to the Windfall Elimination Provision, there is another reduction that could make a difference in benefits a spouse, widow, or widower can receive.

If you pay into another pension plan and do not pay into Social Security, any spouse, widow, or widower benefits available through Social Security may be subject to a Government Pension Offset. Generally, if government employment was not covered by Social Security, any Social Security benefits must be reduced by two-thirds of the government pension amount.

Why? Benefits we pay to wives, husbands, widows and widowers are “dependent’s” benefits. These benefits were established in the 1930s to compensate spouses who stayed home to raise a family and who were financially dependent on the working spouse. Now it’s more common for both spouses in a married couple to work, each earning his or her own Social Security retirement benefit. The law has always required that a person’s benefit as a spouse, widow, or widower be offset dollar for dollar by the amount of his or her own retirement benefit.

Similarly, if this government employee’s work had instead been subject to Social Security taxes, any Social Security benefit payable as a spouse, widow, or widower would have been reduced by the person’s own Social Security retirement benefit.

Even if you do not receive monthly benefits based on your spouse’s work, you still can get Medicare at age 65 on your spouse’s record if you are not eligible for it on your own record.

To learn more about the Windfall Elimination Provision, please read this fact sheet: www.socialsecurity.gov/pubs/10045.html

To learn more about the Government Pension Offset, please read this one: www.socialsecurity.gov/pubs/10007.html.

Social Security Online Services

Social Security Online

www.SocialSecurity.gov

Already receiving benefits?

See Our Online Services

Apply for Benefits Online

Online Retirement Application

File online in as little as 30 minutes!  Get an estimate of your retirement first by using the Retirement Estimator.

Online Disability Application

There is no need for an appointment, or to even leave your home!

Get a Publication

Available in English and Spanish.  Visit the “Multilanguage Gateway” to browse other languages.

NEW!  Frequently Asked Questions and Answers

Question:

Is it true I must now receive my benefits through direct deposit?

Answer:

Anyone applying for benefits on or after May 1, 2011, will be required to receive their payments electronically, while those already receiving paper checks will need to switch by March 1, 2013. Paper checks will no longer be an option for most people. If you don’t have a bank account, you can get your benefits through the Direct Express debit Master Card. Switching from checks to electronic payments is fast, easy, and free at www.godirect.org. You also can call the U.S. Treasury Processing Center’s toll-free helpline at 1-800-333-1795 or speak with a bank or credit union representative or contact Social Security for help.

Question:

I’m getting a summer job and I can’t find my Social Security card. Do I need to get a new one?

Answer:

Ask your potential employer if he or she needs to see the card or if just the number is required. Knowing your number is usually what is important. If you do need to get a replacement card, come to your local Social Security office or Social Security Card Center and show us documents proving your identity and, possibly, citizenship. You can go to www.socialsecurity.gov/ssnumber for more specific information about the process of getting a new card and where to take your information. At that website, you can also download a copy of the simple application to have pre-filled when you visit.

RETIREMENT

Question:

How do I know when it’s the right time for me to begin getting retirement benefits?

Answer:

If you use our online Retirement Estimator, you can get estimates of your benefit at various ages from age 62, the earliest eligibility age, to age 70, the age when you can take full advantage of delayed retirement credits. It allows you to key in a multiple scenarios so you can get an instant, personalized estimate of your future retirement benefits. It’s the best way to begin planning for your retirement. You can find the online Retirement Estimator at www.socialsecurity.gov/estimator.

Question:

What is the benefit amount a spouse may be entitled to receive?

Answer:

If you are eligible for both your own retirement benefit and for benefits as a spouse, we will always pay you benefits based on your record first.  If your benefit as a spouse is higher than your retirement benefit, you will receive a combination of benefits equaling the higher spouse’s benefits.  A spouse generally receives one-half of the retired worker’s full benefit unless the spouse begins collecting benefits before full retirement age. If the spouse begins collecting benefits before full retirement age, the amount of the spouse’s benefit is reduced by a percentage based on the number of months before he or she reaches full retirement age.  For example, based on the full retirement age of 66, if a spouse begins collecting benefits:

• At age 65, the benefit amount would be about 46 percent of the retired worker’s full benefit;
• At age 64, it would be about 42 percent;
• At age 63, 37.5 percent; and
• At age 62, 35 percent.

However, if a spouse is taking care of a child who is either under age 16 or disabled and receives Social Security benefits on the same record, a spouse will get full benefits, regardless of age.  Learn more by reading our Retirement publication at www.socialsecurity.gov/pubs/10035.html.

DISABILITY

Question:

I’m applying for disability benefits. Do I automatically receive Medicare benefits if I’m approved for disability benefits?

Answer:

You will receive Medicare after you receive disability benefits for 24 months. When you become eligible for disability benefits, we will automatically enroll you in Medicare. We start counting the 24 months from the month you were entitled to receive disability, not the month when you received your first payment. Special rules apply to people with permanent kidney failure and those with “Lou Gehrig’s Disease” (amyotrophic lateral sclerosis). Learn more about Social Security disability benefits by reading our publication at www.socialsecurity.gov/pubs/10029.html.

Question:

I’m thinking about getting disability insurance from a private company. If I become disabled and have a private policy, would it reduce my Social Security disability benefit?

Answer:

No. Your eligibility for Social Security disability benefits is not affected by any private insurance you may have. But workers’ compensation and certain other public disability payments may affect your Social Security benefit. You also should ask the company providing your disability protection what effect Social Security will have on the benefits they provide.

For more information about Social Security disability benefits, read our publication at www.socialsecurity.gov/pubs/10029.html.

SUPPLEMENTAL SECURITY INCOME

Question:

Can my children receive dependent’s benefits because I am on Supplemental Security Income (SSI)?

Answer:

No. SSI benefits are based on the needs of the individual and are paid only to the qualifying person. There are no spouse’s, children’s or survivors benefits. However, if your children are disabled themselves, they might be eligible to receive SSI benefits. To learn more about SSI benefits, read our publication on the subject at www.socialsecurity.gov/pubs/11000.html.

Question:

What is Supplemental Security Income (SSI)?

Answer:

SSI is a needs-based program administered by Social Security that provides monthly income to people who are 65 or older, blind, or disabled and who have limited income and financial resources. You can be eligible even if you have never worked in a job covered under Social Security. SSI is paid through general revenue taxes, not Social Security payroll taxes. To receive SSI, your financial resources (savings and assets you own) cannot be more than $2,000 ($3,000 if you are married). If you are married, a portion of your spouse’s income may be counted when deciding whether you are eligible. Generally, to be eligible for SSI, an individual also must be a resident of the United States and must be a either citizen or a noncitizen lawfully admitted for permanent residence. Learn more about SSI benefits at www.socialsecurity.gov/pubs/11000.html.

MEDICARE

Question:

If I have a question about my Medicare bill, who should I contact first?

Answer:

First, contact your provider. If you are unable to get your question answered or problem resolved, then contact 1-800 MEDICARE. For more information about Medicare benefits, visit www.Medicare.gov.

Contents

Social Security and Public Service      2

One More Homework Assignment    3

A Valuable Gift For Mom 4

Connecting To Older Americans   5

Social Security Information For Those Who Serve In The Military 5

Online Services 6

Social Security and Public Service

Public Service Recognition Week takes place from May 1 to May 7, 2011. We at Social Security appreciate the hard work and dedication of not only our own employees but all people who serve the American public.

Celebrated the first week of May since 1985, Public Service Recognition Week is a nationwide public education campaign honoring the men and women who serve our nation as Federal, State, county and local government employees — such as school teachers, police officers, and fire fighters — and who ensure that our government is the best in the world.

Recognition of public service goes back further than 1985. In 1961, President John F. Kennedy said, “Let the public service be a proud and lively career. And let every man and woman who works in any area of our national government, in any branch, at any level, be able to say with pride and with honor in future years: ‘I served the United States Government in that hour of our nation’s need.’”

Social Security employees consider it a privilege to serve the American public. You only need to visit an office, call our toll-free number, or visit www.socialsecurity.gov to see that when it comes to serving the public, we want to be the best.

A convenient service option for many Americans is our web site.  For example, if you need to obtain general information about Social Security, apply for benefits, or get an estimate of your future benefits, visit us online at www.socialsecurity.gov or go directly to our online services page at www.socialsecurity.gov/onlineservices.

You also can call Social Security toll-free at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. If you’re not sure where the nearest office is located, just visit www.socialsecurity.gov/onlineservices and select the “Social Security Office Locator” at the left side of the page.

Learn more about Social Security at www.socialsecurity.gov.

One More Homework Assignment

If you’re one of the many teenagers or young adults planning to get a summer job or start a career this summer, you may be surprised to see what’s deducted from your paystub.  If you don’t know already, it’s time to learn what your Social Security taxes are all about.

By law, employers must withhold from a worker’s paycheck Social Security taxes.  While usually referred to on an employee’s pay statement as “Social Security taxes,” sometimes the deduction is labeled as “FICA taxes” which stands for Federal Insurance Contributions Act, a reference to the original Social Security Act.

The taxes you pay now translate to a lifetime of protection, for retirement in old age or in the event of disability. And when you die, your family (or future family) may be able to receive survivors benefits based on your work as well.

Right now you probably have family members — grandparents, for example — who already are enjoying Social Security benefits which your Social Security taxes help provide.

Because you’re a long way from retirement, you may have a tough time seeing the value of benefit payments that could be many decades in the future.  But keep in mind that the Social Security taxes you’re paying can provide valuable disability or survivors benefits in the event the unexpected happens. Studies do show that of today’s 20-year-olds, about one in four will become disabled and about one in eight will die before reaching retirement.

Warning: if an employer offers to bend the rules and pay you “under the table,” you should refuse. They may try to sell it as a benefit to you since you get a few extra dollars in your pay. But you’re really only allowing the employer to cheat you out of your Social Security credits.  It’s also illegal.

Another tip: don’t carry your Social Security card around with you. It’s an important document that should be safeguarded and protected. And it can be a valuable tool for an identity thief, if it’s lost or stolen.

If you’d like to learn a little more about Social Security and exactly what you’re building up for yourself by paying Social Security taxes, take a look at our online booklet, How You Earn Credits, at www.socialsecurity.gov/pubs/10072.html.

Do you prefer videos to reading? Check out our webinar, “Social Security 101: What’s in it for me?” The webinar explains what you need to know about Social Security. You can find it, along with other informative webinars, at www.socialsecurity.gov/webinars.

You can also learn more by surfing the web at www.socialsecurity.gov.

A Valuable Gift For Mom

Mother’s Day is right around the corner. It’s always nice to give Mom a card, flowers, and candy. But this year people all over the country are helping their moms save nearly $4,000 a year on the cost of prescription drugs. You can help your mom too — and it won’t cost you a dime.

The high cost of prescription medication can be a burden on mothers (or anyone) who have limited income and resources. But there is Extra Help — available through Social Security —that could pay part of her monthly premiums, annual deductibles, and prescription co-payments. That Extra Help is worth an average of almost $4,000 a year.

To figure out whether your mother is eligible, Social Security needs to know her income and the value of her savings, investments, and real estate (other than the home she lives in). To qualify for the Extra Help, she must be enrolled in Medicare and have:

• Income limited to $16,335 for an individual or $22,065 for a married couple living together. Even if her annual income is higher, she still may be able to get some help with monthly premiums, annual deductibles, and prescription co-payments. Some examples where income may be higher include if she or her spouse:

—Support other family members who live with them;

—Have earnings from work; or

—Live in Alaska or Hawaii; and

• Resources limited to $12,640 for an individual or $25,260 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. We do not count her house and car as resources.

Social Security has an easy-to-use online application that you can help complete for your mom. You can find it at www.socialsecurity.gov. Just select the link on the left of the page that says, “Get extra help with Medicare prescription drug costs.” To apply by phone or have an application mailed to you, call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and ask for the Application for Help with Medicare Prescription Drug Plan Costs (SSA-1020). Or go to the nearest Social Security office.

To learn more about the Medicare prescription drug plans and special enrollment periods, visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227; TTY 1-877-486-2048).

So this Mother’s Day, give your mom a gift she can really use year-round — a savings of up to $4,000 a year on her prescription drugs. Flowers whither and candy is consumed, but the Extra Help through Social Security will keep on giving throughout the year.

Connecting To Older Americans

Older Americans Month is an occasion to show appreciation and support for our seniors as they continue to enrich and strengthen our communities. This May, the theme — Older Americans: Connecting the Community — pays homage to the many ways in which older adults bring inspiration and continuity to the fabric of our communities and highlights how technology is helping older Americans live longer, healthier, and more engaged lives.

Social Security uses technology to make dealing with Social Security easier for seniors. We offer a variety of services at www.socialsecurity.gov. Just look at the “top services” column to the left of the page to see the wide range of services that technology allows us to offer online.

Social Security has a special relationship with American seniors since we pay benefits, at one time or another, to just about every one of them. Nine out of ten Americans aged 65 or older receive Social Security benefits.

Here are some more statistics to consider. Among older Social Security beneficiaries, 52 percent of married couples and 72 percent of unmarried persons receive half or more of their income from Social Security.  Older Americans are a growing group, too. Life expectancy continues to rise, and by 2035, it’s estimated that there will be twice as many older Americans as there are today.

Older Americans, as well as people who don’t expect to retire anytime soon, who use Social Security’s website give it consistently high customer satisfaction ratings.  Right now you can get an estimate of your future retirement benefits, plan your retirement, even apply for retirement benefits right over our website. Visit us online at www.socialsecurity.gov.

Learn more about what you can do to celebrate Older Americans Month by visiting the organization’s website. www.olderamericansmonth.org

Social Security Information For Those Who Serve In The Military

On Memorial Day, it’s important to remember those who have made the ultimate sacrifice for our nation. We at Social Security honor the heroism and courage of our military service members and mourn for those who have given their lives in defense of freedom.

It’s also important to recognize those service members who are still with us, especially those who have recently been wounded. They’ve served us; likewise we serve them.

Earnings for active duty military service or active duty training have been covered under Social Security since 1957.  Social Security also has covered inactive duty service in the Armed Forces reserves (such as weekend drills) since 1988.

If you served in the military before 1957, you did not pay Social Security taxes, but we gave you special credit for some of your service.

You can get both Social Security benefits and military retirement. Generally, there is no reduction of Social Security benefits because of your military retirement benefits. You’ll get your full Social Security benefit based on your earnings.

When you reach age 65, you’ll also be eligible for Medicare. If you have health care insurance from the Department of Veterans Affairs (VA) or under the TRICARE or CHAMPVA program, your health benefits may change or end when you become eligible for Medicare. You should contact the VA, the Department of Defense, or a military health benefits advisor for more information.

If you’ve served in the Armed Forces and you’re planning your retirement, you’ll want to read our publication, Military Service and Social Security at www.socialsecurity.gov/pubs/10017.html.

You also may want to visit the Military Service page of our Retirement Planner, available at www.socialsecurity.gov/retire2/veterans.htm.

Finally, find out about expedited benefits for wounded warriors at www.socialsecurity.gov/pubs/10131.html

Online Services

Social Security Online

www.SocialSecurity.gov

In an environment in which CD rates are struggling to get north of 1 percent and money market accounts offering nothing more than a shiny new toaster, Pre-Owned Annuities have provided a viable alternative, topping those accounts with rates around 6 to 8 percent. Their popularity has taken off among savvy investors because of their high rate of return, consistent payout options and the variety of choices.

Don’t be confused by the word “annuity” in the name. Although the media and some agenda-driven financial professionals make a good living scaring people away from annuities at all cost, despite their value to some, Pre-Owned Annuities offer something different from the traditional annuity.

To understand what a POA (Pre-Owned Annuity) is you should know who owned it initially. Let’s assume that someone won the lottery or some type of structured settlement payout due to a judgment in a court of law. To further the example, let’s assume they were awarded $5,000 per month for the duration of their life, stemming from an accident or injury. That same person may be totally comfortable with that payment coming in on a consistent basis, but somewhere along the line might find it financially beneficial to seek out a lump sum of cash now to help with some immediate money issues. Maybe they want $100,000 to build their dream house or need to pay off taxes or bills. Whatever the reason, this person is willing to give up some future gain for a lump sum of cash now. Essentially, offering up their current income at a huge discount.

Here is where there is opportunity. For my client, this secondary market opportunity means a safe place to put funds, similar to a CD, Money Market or Treasury and get returns north of 5 percent. Once my client agrees to step in, the case will go before a judge and title will transfer from the original owner of the payments to my client. Then an acknowledgment letter from the funding source (typically an A-rated insurance company or, if the case originates from lottery winnings then the participating state) will reflect the new owner of those payments.

Here is an actual case. My clients invest $41,753.52. In return they, by court order, will receive one lump sum payment of $10,000 on Feb. 8, 2012 and then 180 monthly payments of $300 from April 8, 2012 until March 8, 2027. The payments will come from MetLife Insurance Company (A+ rating) and will give them a factored rate of return of 6.75 percent.

The variety of cases available makes these even more appealing. You can invest as little as $10,000 to over $1 million. The term can be as short as 12 months or as long as 40 years. As a financial professional, I am constantly working to make sure each investment fits into the bigger picture of the client’s overall plan. Whether it is creating a pension, wealth transfer or college planning, a Pre-Owned Annuity may be something your advisor will bring up now that “out of the box” ideas are becoming more popular.

So, what are the downsides? The rate seems too good to be true, so it must be. Like any financial instrument, there are some pros as well as cons. First, just as the terms of the above case might be the perfect fit for you, for others it might be totally wrong. The cases are ridged, and once you agree to enter the deal you are in – no switching terms around. Second is the limited supply of cases available in the first place. You are entering into a deal with another individual. Therefore, as a case becomes available it might be off the market within minutes of it going public. With rates as high as 8 percent in some situations, you can only imagine that these cases will fly off the shelves. To better serve our clients, we try and position ourselves to be ready with what they want at a moment’s notice, so when something pops up we can lock it in. It needs to be made clear that we are competing to get the deal with investors and advisors all over the United States. Imagine a 50-inch 3D TV being sold on Craigslist for $500 because the owner is moving out of the country and can’t take it with him. The TV is still worth $3,500, but someone is getting a great deal because they were the first to bite. The seller is happy because he got the quick cash and can move on without worry.

It also helps to have a relationship with a firm that can put you at the top of the list once you know what you are looking for. The final issue is the involvement of the courts. Although the court is there to protect all parties and ensure that everyone is getting treated properly, the process can be long and uncertain. Some cases close and are wrapped up in days. Others might go as long as 90 days before a judge even hears the case. Then, after all of that, the court might toss the case out, and the deal becomes dead. Most of the cases proceed with little issue, but  the investor should be prepared for anything. This might be a slight downside to ultimately getting safe returns as high as advertised. At the end of the day, no one loses any money. Safe, safe and more safe.

With investors starving for an alternative to CD’s and Money Market accounts, it is wise to be open minded and adventurous regarding new ideas that could be beneficial to your overall goals. All industries adapt to changing times. The financial world isn’t any different. There are opportunities around every corner and you might just need a helpful hint on where to look.

Chuck Nilosek is the host of Money Matters Radio on 96.9 Boston Talks, which airs Sundays at noon, and the owner of SHP Financial of Plymouth. Questions and comments can be directed to www.shpfinancial.com, 508-746-2400 or chuckn@shpne.com.

Read more: MONEY MATTERS: Pre-owned annuities offer viable option for investors – Rochester, MA – Wicked Local Rochesterhttp://www.wickedlocal.com/rochester/archive/x868518400/MONEY-MATTERS-Pre-owned-annuities-offer-viable-option-for-investors#ixzz1GDHNapdu