Retirement Planning Retirement PlanningRetirement Planning
Advice on how to prepare for life after government.

Getting Social

Social Security is insurance against loss of income due to death, disability or retirement. Not everyone will collect Social Security benefits equally, but unlike most forms of insurance, most of us actually want to collect them at some point. I don't know about you, but I really don't want to get my money's worth out of my homeowners insurance if that means that my house has to burn down, or my auto insurance if that involves enduring a car accident.

Some Scenarios

How do people benefit from Social Security? Here are a few examples:

  • A young widowed mother with three young children can receive benefits for them until they are 18 (or 19 if still in high school) and for herself while caring for the children -- unless she remarries or earns more than the annual earnings limit.
  • Suppose a worker waiting to retire at 66 is diagnosed with terminal cancer and dies before receiving his first check. The taxes that he paid for the past 40 years will be used to pay benefits to his family or to other workers and their families.
  • A federal worker who retires under the Civil Service Retirement System and hasn't paid Social Security taxes during her government career still will receive a benefit from Social Security if she paid into the system at jobs before or after her federal service. Suppose she had 12 years of Social Security-covered wages. Her benefit might be enough to pay for Medicare Part B insurance with a little left over.

Fast Facts

According to the Social Security Administration:

  • SSA paid benefits to about 54 million people in 2006.
  • About 16 percent of the total U.S. population and 90 percent of the population 65 or older received Social Security benefits in 2005.
  • For 65 percent of the aged in 2005, Social Security provided at least half of their income.
  • Women accounted for 56 percent of adult Social Security beneficiaries in 2006.

Paying for It

Workers who are covered by Social Security in 2008 will pay a 6.2 percent Federal Insurance Contribution Act tax on their wages up to $102,000. Workers fortunate to earn more than $102,000 will not have FICA withheld for the remainder of the year after they've hit the limit.

Why isn't the tax withheld from all wages? Because the limit on withholding also limits the wages that are used to compute the highest 35 years of earnings that are the basis of the Social Security benefit. The higher the taxable wage, the higher the future potential benefit that will be paid.

Average Benefits

The maximum Social Security benefit for a worker retiring at full retirement age (65 years and 10 months) in 2007 was $2,116 per month. That would apply to someone who earned the maximum taxable wage for at least 35 years. The average benefit awarded to a retired worker in 2006 was $1,054 per month. It's a good thing that those in the Federal Employees Retirement System also have a basic benefit and, presumably, money in a Thrift Savings Plan account, because they provide a supplement to Social Security.

Women and Men

According to SSA, 28 percent of all adult women who receive Social Security benefits, are widows, mothers or recipients of spousal benefits from retired, deceased or disabled workers. But less than 1 percent of adult men who receive Social Security benefits get widower, father or spousal benefits from retired, deceased or disabled workers.

Apply Yourself

It's best to apply for Social Security retirement benefits about three months before you want to receive the first payment. You can do most of the application online. (Click here for instructions.) If you choose to apply in person, be sure to schedule your appointment at an SSA office before you go. You will receive an appointment time and will be told what documents you should bring with you.

And, yes, you actually have to apply for benefits. Unless you wait until you turn 70, the checks -- I mean the direct deposits -- won't show up until you let SSA know you're ready to receive them.

Medicare First

You can apply for Medicare at 65 even if you are not ready to begin receiving (or aren't eligible for) Social Security benefits. Contact Social Security three months on either side of your 65th birthday to apply for Medicare Part A. You also can enroll in Medicare Part B at the same time, but if you are still working and covered by the health plan of your own or your spouse's current employer, you can postpone enrolling in Part B until you or your spouse retire. Here's some basic information about Medicare.

Reduced Benefits

Many young workers are not even counting on Social Security for their retirement. Unless changes are made, by 2040 benefits for all retirees could be cut by 26 percent and could continue to be reduced every year thereafter. If you lived to be 100 years old in 2080 (which will be more common by then), your scheduled benefits could be reduced by 30 percent from today's scheduled levels. Many reform plans, including those put forth by the President's Commission to Strengthen Social Security in 2001, would preserve scheduled benefits, including cost- of-living increases, for "near-retirees" (those 55 and older). SSA has answers to frequently asked questions about the system's future.

CSRS and Social Security It's commonly assumed that federal employees in the Civil Service Retirement System are not covered by Social Security. But CSRS retirees who have earned 40 credits of Social Security coverage through work outside government will be eligible to receive benefits from the system starting at 62. CSRS employees should know:

  • Receiving a Social Security retirement benefit will not have any impact on your CSRS retirement (unless you didn't pay your post-'56 military service deposit or you're covered under the CSRS Offset system).
  • Receiving a CSRS retirement benefit may have an impact on your Social Security benefit due to the Windfall Elimination Provision and the Government Pension Offset.
  • If a CSRS retiree leaves a survivor benefit for their spouse (or former spouse), this will not reduce that spouse's own earned Social Security benefit.
  • A CSRS employee who works past his or her full Social Security retirement age will be able to receive Social Security benefits and continue working.

Topical Information

Social Security provides fact sheets on many topics of interest to workers and their families. Here are a few you might want to check out:

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.


Tammy Flanagan has spent 30 years helping federal employees take charge of their retirement by understanding their benefits. She runs her own consulting business at and provides individual counseling as well as online training for the National Active and Retired Federal Employees Association, Plan Your Federal Retirement as well as the Federal Long Term Care insurance Program. She also serves as the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars.

For more retirement planning help, tune in to "For Your Benefit," presented by the National Institute of Transition Planning Inc. live on Federal News Radio on Mondays at 10 a.m. ET on WFED AM 1500 in the Washington-metro area. Archived shows are available on

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