Continuing Benefits & Deductions
If youâre currently a member of the CalPERS Health Program, you must meet specific requirements to continue your health insurance coverage into retirement, or maintain the right to re-enroll in the future after retirement.
To continue your CalPERS health benefit coverage after retirement, you must meet both of the criteria below:
- Be enrolled in a CalPERS health plan upon separation from employment, either in your own name or as a dependent
- Retire within 120 days of your separation from employment
If you donât meet both requirements before you retire, youâll lose all future rights to be in the CalPERS Health Program. If your family members are included in your CalPERS health plan at the time of your death, their enrollment will continue automatically if theyâre eligible for and receive a monthly allowance.
Public Agency or School Members
If your employer doesnât contract with CalPERS for health benefits, contact your employer to determine if your benefits will continue.
To continue dental coverage into retirement, you must:
- Be enrolled in a state-sponsored dental plan on the date of your separation from employment
- Retire within 120 days of your separation
If youâre enrolled in CalPERS Long-Term Care and have premiums deducted from your paycheck, youâll need to call 982-1775 before you retire to find out how to continue your premium deductions.
Other Deduction Payments
Estimating The Lump Sum Value Of Social Security
Social Security is a guaranteed income stream available at retirement for those who qualify. Of course, any stream of income has an economic value to it however, because Social Security is available only as a guaranteed income stream, with specified payments based on wages earned and a fixed starting date that can only be adjusted forwards or back by a couple of years, most people think of Social Security separately from the rest of their assets. A portfolio is a portfolio, and guaranteed income is guaranteed income, and never the twain shall meet.
Nonetheless, the availability of Social Security is of material value to most retirees, and decisions about the timing of when and how to use Social Security can impact the needs for drawing on other assets for retirement income. And in point of fact, its actually relatively straightforward to estimate what the approximate value of Social Security would be as an asset on the balance sheet.
After all, Social Securitys expected payments have an anticipated time horizon the retirees life expectancy and as a payment backed by the Federal government, has approximately comparable risk to any other government bond. And once youve determined the payment stream, a time horizon, and a growth/discount rate, you can calculate a present value of the series of cash flows as though it were a lump sum asset.
When To Apply For Benefits How Much Youll Get
AARP, Updated April 19, 2021
All the information presented is for educational and resource purposes only. It is not intended to provide specific or investment advice. We don’t guarantee the accuracy of the tool and suggest that you consult with your advisor regarding your individual situation.
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How Is Social Security Calculated
To determine your monthly benefits, the Social Security Administration uses a series of somewhat complicated calculations. At their heart is an inflation-adjusted average of your monthly income from your highest earning years.
This monthly average is run through an income replacement formula that determines your base monthly Social Security payment rate in retirement. This base rate will then be adjusted upward or downward depending on a few factors, like your age when you start claiming Social Security benefits, your employment status in retirement, your tax bracket and your Medicare premiums.
If that sounds overly complex, dont fret. Heres how each part of the Social Security calculation breaks down.
Check The Social Security Administration’s Math
Your statement includes a record of the earnings on which you’ve paid taxes and an estimate of the benefits you will receive at various retirement ages: 62, 67, and 70. It is always wise for you to check the SSA’s numbers. Don’t be surprised if you uncover an error. Some government-watchers estimate that the SSA makes mistakes on at least 3% of the total official earnings records it keeps.
When you check your record, make sure that the Social Security number noted on your earnings statement is your own, and make sure the earned income amounts listed on the agency’s records mesh with your own records of earnings as listed on your income tax forms or pay stubs.
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The Permanent Disability Retired List
Those who are determined to have a medical disability rated at 30% or greater or who have served more than 20 years are placed on the Permanent Disability Retired List. Like those on the Temporary list, these retirees are given the same retirement benefits their non-medically retired colleagues enjoy. For those on the Permanent list, retirement pay is calculated in one of two ways:
- The disability rating percentage, or Method A
- Your years of active service, or Method B
- Those who were transferred from the Temporary list to the Permanent list have their pay recalculated using the most current disability percentage rating
Is There A Maximum Benefit
Yes, there is a limit to how much you can receive in Social Security benefits. The maximum Social Security benefit changes each year. For 2021, itâs $3,895/month for those who retire at age 70 . Multiply that by 12 to get $46,740 in maximum annual benefits. If that’s less than your anticipated annual expenses, youâll need to have additional income from your own savings to supplement it.
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Find Your Primary Insurance Amount
For you to get maximum amounts of earnings on your PIA, you have to attain the age of 65 years. When you start getting the PIA before you reach the eligible age, you will receive fewer amounts. The primary insurance amounts solely depend on the bend points. These points are what determine your monthly benefits. They are based on your work history and the contributions you have made over the years. The social security calculator derives your bend points from the percentages of your AIME .
Social Security Statement Information
SSA must provide you with your Social Security Statement if you request it as long as youre at least 25 years old, have a Social Security number, and earn wages/net self-employment income. The statement must provide a record of your earnings an estimate of your current/to-date contributions to the Social Security program and an estimate of your current disability insurance/survivor benefits and future retirement benefits .
Important information, such as the number of work credits youve accumulated to date , is used by both SSA and the Centers for Medicare & Medicaid to calculate your future or current benefits. Both programs are based on your earnings and the taxes you pay into these programs.
Many people enjoy the ability to check their Social Security Statement online. Its more convenient and secure because, after establishing your Social Security My Account, you can check the information for accuracy any time. Its a wise idea to check your SSA earnings record at least once a year or more.
Your Social Security Statement also estimates the amount of dependents/survivors/ benefits that are potentially claimable on your work record:
In addition to important information about how to estimate your future Social Security benefits, the Social Security Statement includes a reminder to check and request a correction of your earnings record if its not correctly reported.
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If You’re Not Sure Why You Received A Payment
Contact the authorizing agency directly to find out why they sent the payment. You may be able to find the authorizing agency in the memo line of the check. View this diagram of a sample Treasury check to help you locate the authorizing agency contact information on your own check. Scroll about half way down the page to see the diagram.
If you’re unable to find which agency authorized the payment, . They can help you determine which government agency you need to contact. To find which RFC you need to call, look for its city and state at the top center of the check.
Use the Treasury Check Verification System to verify that the check is legitmate and issued by the government.
Determine Payments After Age 62
Figure out your disability payments starting at age 62. Increase your years of actual service by the time between your disability retirement and the age of 62. Add cost-of-living adjustments provided over that same time period to your high-three salary. The federal government provides this adjustment as the cost of living increases.
Multiply that high-three salary by 1 percent for each year of service if you have less than 20 years. Multiply by 1.1 percent if you have at least 20 years.
Who Is Eligible For Social Security Benefits
Anyone who pays into Social Security for at least 40 calendar quarters is eligible for retirement benefits based on their earnings record. You are eligible for your full benefits once you reach full retirement age, which is either 66 and 67, depending on when you were born. But if you claim later than that – you can put it off as late as age 70 – youâll get a credit for doing so, with larger monthly benefits. Conversely, you can claim as early as age 62, but taking benefits before your full retirement age will result in the Social Security Administration docking your monthly benefits.
The bottom line: Youâre eligible for Social Security Benefits if youâve paid into the system for at least a decade, but your actual benefits will depend on what age â between 62 and 70 â you begin to claim them.
How Do I Calculate Fers Retirement
A FERS disability retirement pay calculator works just as any other calculator does. You give the calculator a set of inputs and parameters, and the calculator gives you an answer.
The output could be your annual payment .
Or it could be your monthly or weekly payment. On the other hand, your output could be the total amount of money you will receive over X amount of time .
It all depends on what you ask the calculator to give as its output. It is up to you.
Many of the calculations depend on your high-3 salary. OPM defines your high-3 as the highest average basic pay you earned during any 3 consecutive years of service. Your basic pay is your basic salary paid for your position.
This includes salary increases for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. Further, if ones total service was less than 3 years, the average salary is figured by averaging basic pay during all periods of creditable Federal service.
The best way to find your high-3 average salary is to get a FERS benefit to estimate from your Agency. This report will show the official figures that will be sent to OPM.
While the OPM website does not have a specific calculator webtool, they publish information on how they make the calculations .
Here, we summarize those guidelines.
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Retirement Pay Calculations Under The Temporary Disability Retirement List
One of two options are used to calculate the benefitwhich one is used? According to the Department of Veterans Affairs, the pay is calculated at whichever method provides the greater advantage for the veteran:
- Pay calculated on your disability percentage. This calculation uses a minimum of 50 percent while on the temporary list. This is known as Method A.
- Pay calculated on the years of active service. This is known as Method B.
Your pay will be computed based on whichever is more beneficial for you.
While on the Temporary list, federal guidelines state you must have a physical no later than every 18 months. Those who fail to do so will have their payments suspended until the examination has been performed.
The date you were signed on to the temporary list is very important. According to the DoD, those on the temporary list prior to January 1, 2017 are allowed to remain on that list for a maximum of five years assuming there is no change in the condition.
Those who were placed on the Temporary list on or after January 1, 2017 are allowed three years maximum, providing you condition does not change during that time. According to the DoD, those who are found fit for active duty during this time may be removed from the list and returned to active duty.
What Is A Social Security Card
Your Social Security card is an important piece of identification. You’ll need one to get a job, collect Social Security, or receive other government benefits.
When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.
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Concurrent Retirement And Disability Pay
If you have served more than twenty years at the time you are medically retired, if you are eligible, you can have minimize the loss of retirement pay through Concurrent Retirement and Disability Pay . In addition to twenty years of service, eligibility for CRDP also requires that you have a service-connected medical condition rated at least 50%.
CRDP is calculated based on the percentage rating of your service-connected disability. Like military retired pay, CRDP benefits are taxable. Your CRDP benefits canât exceed the amount your retirement pay would have been if your retirement pay was based only on your years of service. For more information about the amount you can receive, call the Defense Finance and Accounting Service at 800-321-1080 or visit the DFAS website.
See Noloâs article on Concurrent Retirement and Disability Pay to learn more.
How To Easily Calculate Your Monthly Social Security Benefits Based On Your Earnings
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Social Security Calculation Step : Adjust All Earnings For Inflation
So lets jump in with calculating your AIME. To do this, youll need to get use a notepad or a tool like Excel/Google Sheets.
Youre going to need six individual columns with plenty of room underneath for your information. Set up your columns with the following headings: Year, Age, Actual Earnings, Indexing Factor, Indexed Earnings, Highest 35 Years.
The first two headings are the year and your age. Go all the way back to the first year you had earnings that were taxed for Social Security. You can find a complete record of this by going to your online SSA account and click the link that says view earnings record. If you dont have an online account, its very easy to set one up.
This may seem a little redundant to put the year and your age, but itll make another step a little easier.
Now you just need to copy down the information from the SS earnings history. Youll want to use the part that says your taxed Social Security earnings. Dont skip a year, even if there were no earnings. Just put a zero in.
Once you have all of your historical earnings recorded, its time to adjust them for inflation. The SSA uses an indexing factor to make sure your future benefit has kept up with inflation, but still based on your earnings.
Important note hereonly your earnings through age 59 are indexed. All earnings at age 60 and beyond are used in the calculation at face value with no inflation adjustment applied.
What A Social Security Break
In a nutshell, a Social Security break-even calculator can tell you when the best age is to start taking Social security benefits, in terms of how much money you could expect to receive over time. Going back to the previous example, lets assume that you track your benefit amounts over a 10-year, 20-year and 30-year period. Heres how your total benefits received would look over each of those periods, for all three starting points.
Your cumulative benefits after 10 years:
- $144,000, starting at age 62
- $122,400, starting at age 66
- $52,800, starting at age 70
Your cumulative benefits after 20 years:
- $288,000, starting at age 62
- $326,400, starting at age 66
- $316,800, starting at age 70
Your cumulative benefits after 30 years:
- $432,000, starting at age 62
- $530,400, starting at age 66
- $580,800, starting at age 70
You can see that youd draw the most Social Security benefits in total if you wait until age 70 to start taking them, assuming you live to age 100. But that could be a big if when youre not in the best health.
What you have to keep in mind when using a Social Security break-even calculator is that the numbers are hypothetical. They dont take into things that could affect your ability to draw benefits or how far those benefits might go, such as:
How Long Can You Stay On Each Page
For security reasons, there are time limits for viewing each page. You will receive a warning if you dont do anything for 25 minutes, but you will be able to extend your time on the page.
After the third warning on a page, you must move to another page. If you do not, your time will run out and your work on that page will be lost.