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By Harikrishna Majmundar
FREQUENTLY ASKED QUESTIONS
Q. I have invested all my savings to buy a triplex in an expensive area hoping to earn good rental income. As there are liquor and convenience shops all around, I do not get adequate rent. My son pays mortgage. I practically do not get any income as the taxes are high. When my wife and I became eligible for Supplemental Security Income (SSI), the Social Security officer pressurized me to sell the triplex. He feels that with so many resources I am not eligible for welfare. I have retained the triplex to get advantage of inflation in real property. Is it necessary for me to sell the triplex? If my wife and I do not get SSI, we shall be compelled to sell our beloved property. Is there any way to resolve this problem?
A: You need not sell the property. It is exempted for the purpose of computing your resources. From the gross income you get, you can create a fund for taxes so that the months in which you do not pay tax, your gross income would be above the prescribed limit. As the mortgage is being paid by your son, you would get SSI at the reduced rates.
Q: Before applying for SSI, I bought an expensive car though I do not drive. My grandchildren would escort me to my friends, library, hospital and my friends. My SSI officer says that the value of the car is more than $4,500. He says the additional amount -- the difference between the price of the car and $4,500 -- is my resource and as it is over the prescribed limit, I am not eligible to get SSI. Please state the correct position.
A: The re-sale value of the car is not a resource because one car is exempted in computing the resources. Please ask for review/appeal to get the SSI.
Q: I am on green card. I have more than 40 credits but my pay was not enough to get me a sizeable amount of Social Security. If I go to India and stay there, shall I have to come back every six months to continue my eligibility for getting SSI?
A: Not necessarily. Please obtain a pamphlet issued by Social Security administration. The title of the pamphlet is �your payments while you are outside the United States.�
Q: I am getting disability SSI/Medicaid. The amount is not enough and I feel short of about $300 per month. Though I am disabled, I can do some work of and on and get some $600 per month on an average. I was told my SSI/Medicaid would be discontinued because I am not yet 65 and I am able to work. What should I do as $4,600 wouldn�t be sufficient to cover Medicaid expenditure?
A: As the state encourages disabled people to work, your SSI/medical will not be discontinued. In addition to whatever you get as your pay, they would give you the present SSI and continue the Medicaid. As you get income by earning, the first $85 is free and $208 per month would be deducted from your SSI. Do note that the administration is sympathetic toward those who work.
Q: After six months, I shall be completing 65 years and become eligible by virtue of age and citizenship for SSI. As I am widowed and staying with my son, I may have to pay him a small amount for my expenditure � food, shelter, clothing, etc. I have $3,000 here in USA and some Rs. 30,000 (about $700) in India. As it is more than the prescribed limit, I shall not get SSI and Medicaid. I am getting nervous and wonder if I will have to run away to India. Please advise.
A: Though you have a little more than the prescribed limit, you can spend the amount before you apply for SSI. Please try to bring funds from India. The total resources are about $3,750. You make monthly payments to your son, you may buy computer or clothings or a second-hand car. As you are paying monthly say at $1,000 to your son, you would get full SSI. If you are able to spend down your resources, you are allowed to repay your debt to bring down your resources.
These questions and answers are courtesy of Harikrishna Majmundar of California, author of �Mapping the Maze: A Guide to Welfare for Elderly Immigrants.� He has advised several hundred welfare applicants. A copy of this 2003 published book is available for $10 from H.J. Majmundar, 450 Melville Ave., Palo Alto, Calif. 94301 or send an e-mail to [email protected] if you have a question.
By BIJAN MOHSENI
Part 1
Americans are living longer. Life expectancy for Baby Boomers (born
between 1946 and
1965) is greater than for any previous generation. National Center for
Health Statistics tables show that life expectancy increased by 30
years during the 20th century -- from 47 in 1900 to 77 at the
millennium. And, figures compiled in the Society of Actuaries' 2000
Annuity Table estimate the life expectancy of men 65 years old to be
another 15.9 years. At the same age, women can expect to live an
additional 19.2 years.
What do these numbers mean to you? The good news is that your
retirement may be years longer than you thought it would be. That also
could be the bad news. It all depends on how well you have planned and
saved for your retirement. Longevity is, increasingly, becoming a major
factor in retirement planning.
Recent surveys have sought to determine whether Americans are aware of
the implications of longer lives in relation to future sources of
income. Questions concerning Social Security, pensions and individual
savings -- referred to as a "three-legged stool" in the traditional
paradigm of retirement income -- were included in the surveys.
These surveys have found major misperceptions regarding these three
important retirement issues. Let's look at a few of these
misperceptions and their potential impact over longer lifespan.
Social Security
The Employment Benefit Research Institute (EBRI) 2003 Retirement
Confidence Survey found that the average retirement age is 62. When
EBRI asked respondents when they thought they could receive full Social
Security Benefits, 51 percent believed that they could claim full
benefits at a younger age than is actually the case.
Most people working today won't be eligible for full benefits until age
67. Since Social Security accounts for close to 40 percent of the
average retiree's income, this lack of awareness can adversely impact
plans about when to retire, how much Social Security income to expect
and how much more money will be needed in retirement income.
Pensions
Defined benefit plans are traditional employer-funded retirement plans
that provide income for life. These plans are guaranteed (up to certain
limits) by a federal agency. According to the
Department of Labor, the number of these plans has dropped from 139,000
in 1979 to 56,000 in 1998. The number of plans and workers covered
continues to decline.
Defined contribution plans (401(k) s), on the other hand, are mainly
employee-funded. Between
1979 and 1998, the number of these plans increased from 331,000 to
674,000, according to the Department of Labor. Here, the individual
employees are totally responsible for deciding how much to contribute,
where to invest, and how the money will be distributed at and through
retirement. They assume all the risks and bear all losses.
According to Merrill Lunch�s 2003 Retirement Survey, 50 percent of
Americans believe that these plans are guaranteed by law up to certain
limits. They are not. And as we saw a few years ago, losses close to,
or during, retirement can prove devastating.
Savings
In the National Retirement Planning Coalition's (NRPC) 2002 Survey of
Prospective Retirees, 31 percent of the respondents reported less than
$50,000 saved in defined contribution plans, with another 40 percent
having between $50,000 and $199,999 in such plans. Personal savings
excluding defined contribution plans and home equity is likewise
modest, with 38 percent of the survey's respondents having less than
$50,000 and another 36 percent reporting $50,000 to $199,999. Other
recent surveys report similar figures.
How long would these nest eggs last? People often use 85 as an assumed
life expectancy when calculating retirement needs. Remember the life
expectancies mentioned earlier? Those actuarial figures are averages.
So, half of those 65-year-old males will live past 80, while half of
the 65-yearold females can expect to live past 85.
According to the Census Bureau, there are presently more than 60,000
Americans over 100 years old. What if you are one of the estimated
600,000 centenarians in 2040 and you had used age 85 in planning? For
15 or more years, you might find yourself totally dependent solely on
Social Security and perhaps a small pension income.
This is what's known as longevity risk -- the real possibility that you
might very well outlive your money.
Bijan Mohseni of the Business Planning Group of Tampa offers securities
through AXA Advisors, LLC (member NASD, SIPC) and annuity and insurance
products through an insurance brokerage affiliate, AXA Network, LLC and
its subsidiaries. He can be reached at 4890 W. Kennedy Blvd., Suite
800, Tampa, FL 33609 or call (813) 282-9088.
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