Tag Archives: social security benefits

Turning 65 this year? Don’t overlook these 3 steps

retirement_roadMy Comments: The transition from working FOR money to having money FOR YOU is full of tension and hard to answer questions. If you’re beyond this stage, then don’t bother with this. On the other hand, if it’s today or in your future, then this is good stuff.

Gail MarksJarvis / The Chicago Tribune / January 6, 2017

If you will be turning 65 this year and plan to keep working, you have essential money decisions to make that can’t be ignored.

The arrival of your 65th birthday requires that you take specific steps so you don’t get in trouble with the government on Medicare rules and face fines later. And the years around your birthday command attention to money details that could make the difference between having plenty of money for retirement and running out of funds early. So don’t drift by this major time in your life without attention to the three issues people at age 65, or near retirement, must address.

Sign up for Medicare. When you are 65, you will be eligible to start taking Medicare to cover some of your doctor, hospital and other medical costs. Full Medicare coverage is not free so you typically don’t want to start taking it if you are still working full time, aren’t on Social Security and will have solid, affordable medical coverage at work until you decide to retire. But you can sign up for Medicare at 65 and get a small part of Medicare — the free benefits that cover some hospital care — even if you don’t need the full Medicare package while working. (See http://www.ssa.gov/pubs/EN-05-10530.pdf.) Signing up doesn’t have to mean you give up your health insurance at work. And the hospital coverage you get free through Medicare Part A can supplement the health insurance you have through your workplace insurance, said Philip Moeller, who walks people through the confusing Medicare requirements in his book, “Get What’s Yours for Medicare.”

If you are going to keep working after 65, you simply say on the Medicare form you fill out that you won’t be claiming the form of insurance yet that covers doctors because you have solid coverage through work. (See faq.ssa.gov/link/portal/34011/34019/Article/3773/How-do-I-sign-up-for-Medicare.) In other words, you aren’t taking Medicare Part B at that time. Part B is the Medicare insurance that you will use later in retirement to pay for doctors, outpatient treatment and supplies like knee braces or walkers.

After doing the basic sign-up at age 65, you will get a Medicare card in the mail and you will start being eligible for one of the three parts of Medicare: Part A. Later, when you actually retire, or when you don’t have solid medical insurance through work, you will need to sign up for full Medicare coverage. Then, you will be able to rely on all three parts of Medicare — Part A for hospitals, Part B for doctors, equipment like leg braces and walkers and outpatient medical services, and Part D for some prescriptions. For Part B, you will pay premiums each month — typically $104.90, although what you pay depends on your income. Your drug Part D cost depends on the plan you choose from numerous insurance companies, and you need to scrutinize them carefully to make sure they cover your particular prescriptions. Monthly premiums for popular drug plans range from about $18 to more than $66 and swing dramatically depending on where you live, Moeller said.

If you plan to rely on your employer insurance while working, beware: Employers can’t kick you out of their health insurance at 65 or as you age, but that rule applies only to businesses with 20 or more employees, Moeller notes. So if you work for a small company with only a few employees, at age 65 you could end up needing to sign up for Medicare and also start using — and paying for — all three types of Medicare: Parts A, B and D. Your employer is supposed to tell you if your insurance through work is considered to be sufficient enough that you don’t have to apply for full Medicare. If not, you will have to apply for full Medicare including Parts A and B.

If you don’t have acceptable coverage at work, and fail to sign up for Medicare when 65, the government can penalize you throughout your retirement. When you start using Medicare Part B for doctors, the penalties could boost your monthly payments by 10 percent for each full 12-month period. (See http://www.medicare.gov/your-medicare-costs/part-b-costs/penalty/part-b-late-enrollment-penalty.html.) If you miss the deadline for signing up for drug coverage through Part D, another penalty on drug coverage can last through retirement. (See http://www.medicare.gov/part-d/costs/penalty/part-d-late-enrollment-penalty.html.) There are specific times during the year when you must enroll. Make sure you pay attention to enrollment periods because there is no leeway.

If possible, wait on Social Security. Although you can start getting Medicare at age 65, and must pay attention to paperwork then, Social Security is different.

You don’t have to apply for Social Security at a certain age, and the longer you wait, the better. Most people who are around 65 now won’t be able to retire and get full Social Security retirement benefits until they are at least 66. If they are healthy and can work until 70, they will boost their Social Security benefits significantly. For each year a person waits to retire after 66, the person can increase his or her Social Security payments 8 percent a year. And there are also cost-of-living increases in Social Security benefits annually. Those payments are guaranteed. You aren’t going to find a guarantee like that in any investment. That makes waiting to retire a smart move if possible.

Budgeting and investing. When you start depending on Medicare, you will not be able to count on it for all your medical needs. Full Medicare covers only about half of your medical expenses. So as you plan for retirement, you will need to shop for supplemental insurance that picks up where Medicare leaves off. There are two types: Medigap insurance and Medicare Advantage plans. They differ in what they charge, what they cover, and whether they apply to your community, or cover your medicines, your doctors and the places where you might travel. Costs vary broadly with some of the expensive Medigap plans costing well over $600 a month per person. (See Medicare’s PlanFinder http://www.medicare.gov/find-a-plan/questions/home.aspx.)

Also, realize that your income impacts what you will be charged for Medicare and the taxes you pay on Social Security. So financial planners suggest that people examine their savings a few years before retiring to ensure that during retirement they have a blend of IRA and Roth IRA plans. Roth IRAs don’t get taxed in retirement and IRAs are taxed. So by plucking a little money from each of the two plans for expenses each year, retirees can keep their taxes down and hold on to more of their Social Security and Medicare benefits than they would if they didn’t consider tax implications.

Republican Presidents and Recessions

changeaheadroadsignMy Comments: As an economist, I readily acknowledge that political parties and recessions have little to do with each other. There are too many other variables that result in economic downturns.

But the records suggests they are somehow correlated. We are due for one, and if history is any indication, Trump will have the pleasure of navigating one in the next four years.

by Rich Miller – December 21, 2016

Here’s a frightening factoid for Donald Trump as he prepares to take office next month: Every Republican president since World War II has been in power during at least one recession.

Of course, as the saying goes, past performance is not necessarily indicative of future results and the billionaire developer may well avoid a downturn on his watch.

But with the economic expansion soon to become the third-longest on record, the risk of a contraction occurring during his time in office can’t be cavalierly dismissed.

“Republican presidents seemingly can’t do without” recessions, Joachim Fels, global economic adviser for Pacific Investment Management Co., wrote in a blog post dated Dec. 12.

The same can’t be said of Democrats. Outgoing President Barack Obama did preside over an economic downturn in his first six months in office – one he inherited from his predecessor, Republican George W. Bush. John F. Kennedy took office just before a recession ended. And the U.S. entered and exited slumps when Jimmy Carter and Harry Truman were in charge.

But it was recession-free during the tenures of Democrats Lyndon Johnson in the 1960s and Bill Clinton in the 1990s.

“The U.S. economy has performed better when the president of the United States is a Democrat rather than a Republican,” Princeton University professors Alan Blinder and Mark Watson wrote in a paper published in the American Economic Review this year.

The difference isn’t due to more expansionary fiscal and monetary policies under Democrats, according to Blinder, who served in the Clinton White House, and Watson.

Instead it appears to stem from less costly oil shocks, a more favorable international environment, productivity-boosting technological advances and perhaps more optimistic consumers, they wrote. Some of those disparities may be down to better policies, but luck also played a role.

Fels cautioned against overestimating the ability of presidents to prevent recessions – or to create them for that matter. After all, it’s often the Federal Reserve which determines the ups and downs of the economy through changes in interest rates.

What’s more, some Republican presidents just caught a bad break, Fels said. Dwight Eisenhower, for instance, took office in 1953 when the U.S. was still enmeshed in the Korean War.

Others inherited recession-prone economies from their Democratic predecessors. Inflation was running above 10 percent when Ronald Reagan took over from Carter in January 1981, and then-Fed Chairman Paul Volcker was determined to squelch it.

Trump said during the campaign that his plans would result in 3.5 percent annual growth, well above the 2.1 percent pace of the current expansion. Still, there’s no denying the Republican record when it comes to recessions.

If Trump wants to ensure himself a successful presidency, that might be another party tradition the unconventional leader-in waiting may have to break.

The Risks That Threaten Global Growth

changeaheadroadsignMy Comments: Readers of this blog will recall my observations about risk in general and in particular, those that will influence our economic well being in years to come.

With the new administration seemingly in favor of conflicts over trade between nations, and of retreating from the forces that have fostered global economic growth for the past 7 decades, these comments by Martin Wolff seem prescient.

Just as I tend to agree with Trump’s call to ‘drain the swamp’, or in my words, re-assess the assumptions on all levels that led us to where we are now, there are major forces at work over which we have virtually no control that demand a reassessment of economic assumptions. The next few decades are going to be tough for a lot of us.

by Martin Wolff, January 3, 2017

What is going to happen to the world economy this year? Much the most plausible answer is that it is going to grow. As I argued in a column published at this time last year, the most astonishing fact about the world economy is that it has grown in every year since the early 1950s. In 2017 it is virtually certain to grow again, possibly faster than in 2016, as Gavyn Davies has argued persuasively. So what might go wrong?

The presumption of economic growth is arguably the most important feature of the modern world. But consistent growth is a relatively recent phenomenon. Global output shrank in a fifth of all years between 1900 and 1947. One of the policy achievements since the second world war has been to make growth more stable.

This is partly because the world has avoided blunders on the scale of the two world wars and the Great Depression. It is also, as the American economist Hyman Minsky argued, because of active management of the monetary system, greater willingness to run fiscal deficits during recessions and the increased size of government spending relative to economic output.

Behind the tendency towards economic growth lie two powerful forces: innovation at the frontier of the world economy, particularly in the US, and catch-up by laggard economies. The two are linked: the more the frontier economies innovate, the greater the room for catch-up. Take the most potent example of the past 40 years, China. On the (possibly exaggerated) official numbers, gross domestic product per head rose 23-fold between 1978 and 2015. Yet so poor had China been at the beginning of this colossal expansion that its average GDP per head was only a quarter of US levels in 2015. Indeed, it was only half that of Portugal. Catch-up growth remains possible for China. India has still greater room: its GDP per head was about a 10th of US levels in 2015.

The overwhelming probability is that the world economy will grow. Moreover, it is highly likely that it will grow by more than 3 per cent (measured at purchasing power parity). It has grown by less than that very rarely since the early 1950s. Indeed, it has grown by less than 2 per cent in only four years since then — 1975, 1981, 1982 and 2009. The first three were the result of oil price shocks, triggered by wars in the Middle East, and Federal Reserve disinflation. The last was the Great Recession after 2008’s financial crisis.

This is also consistent with the pattern since 1900. Three sorts of shocks seem to destabilise the world economy: significant wars; inflation shocks; and financial crises. When asking what might create large downside risks for global economic growth, one has to assess tail risks of this nature. Many fall into the category of known unknowns.

For some years, analysts have convinced themselves that quantitative easing is sure to end up in hyperinflation. They are wrong. But a huge fiscal boost in the US, combined with pressure on the Fed not to tighten monetary policy, might generate inflation in the medium term and a disinflationary shock later still. But such a result of Trumponomics will not occur in 2017.

If we consider the possibility of globally significant financial crises, two possibilities stand out: the break-up of the eurozone and a crisis in China. Neither is inconceivable. Yet neither seems likely. The will to sustain the eurozone remains substantial. The Chinese government possesses the levers it needs to prevent a true financial meltdown. The risks in the eurozone and China are unquestionably real, but also small.

A third set of risks is geopolitical. Last year I referred to the possibility of Brexit and “election of a bellicose ignoramus” to the US presidency. Both have come to pass. The implications of the latter remain unknown. It is all too easy to list further geopolitical risks: severe political stresses on the EU, perhaps including the election of Marine Le Pen to the French presidency and renewed inflows of refugees; Russian president Vladimir Putin’s revanchism; the coming friction between Mr Trump’s aggrieved US and Xi Jinping’s ascendant China; friction between Iran and Saudi Arabia; possible overthrow of the Saudi royal family; and the threat of jihadi warfare. Not to be forgotten is the risk of nuclear war: just look at North Korea’s sabre-rattling, the unresolved conflict between India and Pakistan and threats by Mr Putin.

In 2016, political risk did not have much effect on economic outcomes. This year, political actions might do so. An obvious danger is a trade war between the US and China, though the short-term economic effects may be smaller than many might suppose: the risk is longer term, instead. The implications of the fact that the most powerful political figure in the world will have little interest in whether what he says is true are unknowable. All we do know is that we will all be living dangerously.

An important longer-run possibility is that the underlying economic engine is running out of steam. Catch-up still has great potential. But economic dynamism has declined in the core. One indicator is falling productivity growth. Another is ultra-low real interest rates. Mr Trump promises a resurgence of US trend growth. This is unlikely, particularly if he follows a protectionist course. Nevertheless, the concern should be less over what happens this year and more over whether the advance of the frontier of innovation has durably slowed, as Robert Gordon argues.

A good guess then is that the world economy will grow at between 3 and 4 per cent this year (at PPP). It is an even better guess that emerging economies, led yet again by Asia, will continue to grow faster than the advanced economies. There are substantial tail risks to such outcomes. There is also a good chance that the rate of innovation in the most advanced economies has slowed durably. Happy New Year.

The Makings of a Caliphate

My Comments: As a lifelong Democrat, I’m very aware that if a million more people in this country had better jobs and were feeling good about their financial future, Hillary Clinton would probably be taking the oath of office later this month. Pieter-Bruegel-The-Younger-Flemish-ProverbsBut they didn’t so a different force will be running the asylum for the next few years.

It somehow has to work out, despite so many people with no clue at the helm. Our lives are at stake. As for the middle east, the following words are a useful perspective that puts those tensions in an understandable context. Whether we learn anything from this is another matter.

December 14, 2016 / By Anisa Mehdi

At this time of year, on the crowded roads of Amman that intersect at the Fifth Circle, men in red velvet suits with white pompoms on their hats hawk “Santa” paraphernalia to drivers stuck in the rush hour snarl. Christmas trees adorn major malls. Wrapped packages dress windows, enticing passers-by to come in and buy. Though Christians make up only about 6 percent of Jordan’s population, in this Muslim-majority country, signs of another religion’s holiday are accepted markers of winter.

Call it tolerance. Call it appreciation. Call it capitalism. There is no prohibition on fun, diversity or commercialism in Islam. As in Judaism, the great prohibition in Islam is polytheism.

Allowance for alternate forms of worship, lifestyle and religious legislation is woven into Islamic scripture and jurisprudence. Where, then, did the horrific massacres of Muslims and people of other faiths in the Islamic State’s so-called caliphate come from? The multiconfessional nature of Islamic civilization is something the Islamic State does not understand. Nor does it comprehend the broad range of social and cultural expressions that historically inhabit a caliphate. Therefore, it is important to distinguish between calling for the restoration of a caliphate and the goals of the Islamic State.

A History of Heterogeneity

Analysts searching for the meaning of the caliphate usually consider its political structure, economy, leadership and territorial conflict. Beyond its geopolitical identity, what are the historical pillars of Islamic empire? What has been the reality on the ground in terms of social structure, culture and daily life? If the Islamic State, the Taliban, al Qaeda, Boko Haram and other political perversions of Islam knew the rich cultural history of Muslim caliphates, they would run in the opposite direction.

A caliph is defined as a successor to the Prophet Mohammed, who died in 632, leaving the election of leadership in the hands of his close companions. The caliphate — a society ruled by the caliph — has been in flux ever since. Following the reign of the first four caliphs, dynasties emerged to rule an expanding empire. The Baghdad-based Abbasids took power from the Damascus-based Umayyad dynasty in 749. They ruled for over 500 years until Hulagu Khan and his Mongol armies destroyed the capital in 1258. During that time, emirates and sultanates — including surviving Umayyads who maintained a rival caliphate from Andalusia on the Iberian Peninsula from 929 to 1031 — threatened Abbasid leadership from time to time. From 909 to 1171, the Fatimid dynasty ruled from Cairo, taking on invading Crusaders from the north for nearly a century.

Shifting imperial boundaries in what we now call the Middle East are nothing new. Claims on this fertile and prosperous region that connects continents date back to Alexander the Great, 300 years B.C. As Peter Frankopan illuminates in The Silk Roads: A New History of the World, after Alexander’s campaigns,”The intellectual and theological spaces of the Silk Roads were crowded, as deities and cults, priests and local rulers jostled with each other. The stakes were high. This was a time when societies were highly receptive to explanations for everything from the mundane to the supernatural, and when faith offered solutions to a multitude of problems. The struggles between different faiths were highly political. In all these religions — whether they were Indic in origin like Hinduism, Jainism and Buddhism, or those with roots in Persia such as Zoroastrianism and Manichaeism, or those from further west such as Judaism and Christianity, and, in due course, Islam — triumph on the battlefield or at the negotiating table went hand in hand with demonstrating cultural supremacy and divine benediction. The equation was as simple as it was powerful: a society protected and favored by the right god, or gods, thrived; those promising false idols and empty promises suffered.

“There were strong incentives, therefore, for rulers to invest in the right spiritual infrastructure, such as the building of lavish places of worship. This offered a lever over internal control, allowing leaders to form a mutually strengthening relationship with the priesthood who, across all the principal religions, wielded substantial moral authority and political power. This did not mean that rulers were passive, responding to doctrines laid out by an independent class (or in some cases caste). On the contrary, determined rulers could reinforce their authority and dominance by introducing new religious practices.”

It’s all politics.

An Un-Islamic Caliphate

Although Mustafa Kemal Ataturk officially put the kibosh on the caliphate in 1924 with the fall of the Ottoman Empire, its restoration has been an ongoing conversation among Muslim peoples searching for identity, security and self-determination in the wake of post-Word War I colonialism.
Where did it start?

During the life of the prophet in Medina, Muslims lived in community with Jews and Christians. Although there were tensions among them, each religious group was governed by its own scriptural civil and penal codes: worship and marriage, birth and death, theft and murder. Intrareligious disputes were often brought to Mohammed for arbitration. Medina was an oasis, an agricultural economy, and men and women both farmed the fields. Its large markets were renowned for produce, leather, woven baskets and blankets made and sold by women. The superintendent of the market under the second caliph, Umar, was a woman. There were schools and courts. Women owned property and inherited from their parents and husbands.

There were battles, mostly with the powerful families of Mecca bent on persecuting the nascent Muslim community that posed a threat to their pre-eminence and the profitability of their markets. The battles of Badr and Uhud mark triumph and defeat, respectively, that live in legend and allegory today. Raids on passing caravans supplemented the economy with goods and earned a reputation for fierceness. Perhaps it was not a perfect governance structure, but by and large, peace reigned in Medina until the prophet’s death, at which time political rivalries began unraveling Muslim unity. Nevertheless, respect for people of other faiths, particularly within the Abrahamic tradition, remained.

Historically, the great Muslim-administered civilizations contained populations that varied linguistically, culturally and religiously. From the Iberian Peninsula to the Malay Peninsula, from the outskirts of Vienna to the outlying islands of Indonesia, heterogeneity prevailed even if equality did not. Taxes were higher on non-Muslims in some economic structures in which only Muslims were allowed to enter into military service. (The taxes were considered payment for security.) Churches and synagogues welcomed worshippers on their prescribed days. People were buried in cemeteries according to local religious tradition and culture. In the Jewish cemeteries of Toledo, Spain, headstones facing Jerusalem are inscribed in Hebrew and Arabic. The Metropolitan Museum of Art’s “Art of the Arab Lands, Turkey, Iran, Central Asia and Later South Asia” describes the multicultural nature of these societies: Artisans and craftspeople of different faiths made the windows, doors and sacred artifacts for great houses of worship, libraries and palaces across continents and centuries, as well as household objects and books, sacred and secular alike.

The art and architecture of the far-reaching empires that eventually became Muslim-majority nations were breathtaking. Think of 16th-century Ottoman and Persian miniatures and the competition among artists for excellence, described in Orhan Pamuk’s thriller, My Name is Red. Universities flourished, starting with the Al-Qarawiyyin mosque and religious school in Fez, followed by Baghdad’s “House of Wisdom.” Sciences ranked high in intellectual pursuit. Advancements in astronomy and navigation set the stage for the eventual exploration of the Americas — the success of which ironically triggered the economic decline of Silk Road societies. Demand for gold and chocolate outpaced desire for silks and spices, and trans-Atlantic traders outbid their trans-Asian competitors.

The caliphates and empires of Islam are rich with culture, gender equity (especially as compared with contemporaneous non-Muslim societies), literacy and the arts. They have also fought with one another as furiously as they fought the Crusaders. Safavids and Ottomans from the 16th to 19th centuries. Arabs and Turks during and after World War I. Syria’s rebels and government today, as well as Libya’s, along with the Islamic State and those it hopes to subjugate.

Muslims and non-Muslims, superpowers and small powers, powerbrokers and pawns alike must recognize that the extreme behaviors of politically motivated Muslims are not synonymous with Islamic values or the cultures of the caliphates.

What’s happening today is tribal and political. It’s about land, resources, trade routes and trading partners. It’s about power, control of women, managing neighboring states and creating a new status quo. The next time you read, “revive,” “restore,” “Islamic” and “caliphate,” remember: It’s not about religion.

It never is.

A Primer on Social Security Spousal Benefits

SSA-image-3My Comments: For many millions of us, the monthly Social Security check keeps us housed, fed, and clothed. This is something society has provided for it’s elder citizens since civilizations appeared on the planet. The way it’s accomplished has changed, but the basic premise has not.

Why is that some we have put in charge of rule making have concluded this is a waste of their money? Why did we put them in charge in the first place? How many of us have to starve or simply find a way to die quickly before common sense prevails?

The reality is a Republican has introduced legislation that could very easily put Social Security back on track to remain viable for another 50 years. Do you think it has a chance of passing? What follows is my weekly attempt to help anyone better understand the workings of our Social Security system. I’ll report on the proposed legislation as the next Tuesday’s roll around.

by Robert Powell | December 9, 2016

Q: I am 69, and I started drawing my Social Security benefits when I was 66. My husband, who is 62, is still working. My question: Can he draw on my Social Security benefits (receiving 50%) until he is 66? Can we get the forms on the Internet? He works the third shift and asked if I could help him since Social Security offices are not open at night. — Carolyn Farlow, Reno

A: Bad news times three.
First, if your husband takes spousal Social Security at 62, he doesn’t get 50% of your payment, he only gets 35%, because of early filing, says Andy Landis, author of Social Security: The Inside Story: An Expert Explains Your Rights and Benefits. “He would have to wait until 66 to start the Social Security to get the full 50% payment,” Landis says.

Second, Landis says if your husband files before 66 he has to file for both the spousal and his own Social Security. “That means there would be a permanent reduction in both kinds of payments,” he says.

And third, since your husband is under 66, his work can reduce his Social Security even further, says Landis.

After all those cautions, your husband might still choose to file for Social Security, says Landis. If so, you can get started at Apply for Benefits. Before you do, you might run your situation through a free adviser such as that found at the Financial Engines website.

Says Landis: “Congratulations for planning ahead.”

Getting 88% More from Social Security

SSA-image-3My Comments: 88% seems like an irrational number. Whether it is or not, and depending on how you want and expect your life to play out, the dollars you get from Social Security are likely to contribute greatly to your financial peace of mind and standard of living down the road. If you don’t make sure you understand how this works, you are likely to have regrets before it’s all over.

Jean Folger | December 7, 2016

If you could get 88% more from Social Security benefits, then you would, right? As the majority of Americans rely – at least to some degree – on Social Security benefits to fund their later years, it seems like a no-brainer. To do it, however, you need a basic understanding of how benefits work and the steps you can take to maximize them.

The biggest danger – and opportunity – comes if you’ve had a gap in your life that means you don’t have 35 years of earnings on your record when you’re planning to start your benefits. That’s the important finding of a new working paper from the Center for Retirement Research at Boston College.

According to the paper, 46% of women and 15% of men could replace a zero-income year by working until age 63 instead of 62, if they’d been planning to retire early. And if late-career income can replace a zero in your benefits calculation, you could lock in a higher benefit. The benefit becomes staggering if you also work – and wait to collect – until you are 70.

Women vs. Men
Spending an extra year at work to ensure that you have a full 35 years of earnings on your record can boost your benefits in two ways: You’ll have more earnings factored into the Social Security calculation, plus you’ll delay receiving benefits for one more year. If you start receiving payments before your normal retirement age (which falls between age 65 and 67, depending on the year you were born), your benefits will be permanently reduced. What’s more, every year you wait beyond normal retirement age until you turn 70 increases your benefit by 8%.

According to the Center for Retirement Research paper, a woman could boost her benefit by as much as 88% by replacing a zero-income year (by working an additional year) and by waiting until age 70 to collect. For men, a similar scenario would result in an 82% bump.

“Women stand to benefit most from working longer because they tend to have more zeroes in their earnings records,” Matthew Rutledge, a research economist and author of the paper, told CNBC. On average women spend 29 years in the workforce, compared with 38 years for men. The difference? Women take an average of five-and-a-half years away from work to care for children and another 1.2 years to care for an older adult.

As the paper explains, if late-career earnings increase your average indexed monthly earnings (AIME) by $1 (AIME is the average of the highest 35 years of wage-inflation-indexed earnings, divided by 12), your benefit will increase by 90 cents if you have very low career earnings, by 32 cents if you’re like most workers, and by 15 cents if you’re a higher earner.

Particularly likely to benefit are stay-at-home parents, those who have suffered a long-term illness or injury, and those who otherwise have gaps in their careers. “We were really surprised at how many people have zeroes in that top 35, especially women,” said Rutledge to CNBC.

Women vs. Men
Spending an extra year at work to ensure that you have a full 35 years of earnings on your record can boost your benefits in two ways: You’ll have more earnings factored into the Social Security calculation, plus you’ll delay receiving benefits for one more year (remember, your benefit goes up 8% each year that you wait past normal retirement age).

According to the Center for Retirement Research paper, a woman could boost her benefit by as much as 88% by replacing a zero-income year (by working an additional year) – and by waiting until age 70 to collect. For men, a similar scenario would result in an 82% bump.

“Women stand to benefit most from working longer, because they tend to have more zeroes in their earnings records,” said Rutledge to CNBC. On average women spend 29 years in the workforce, compared with 38 years for men. The difference? Women take an average of five-and-a-half years away from work to care for children and another 1.2 years to care for an older adult.

Should You Wait to Collect?
Even if you don’t have a zero-income year, waiting to collect can pay off. Of course, delaying won’t be the right choice for everyone, and a number of factors must be considered before making any decisions, including:
• Current cash needs
• Health and family longevity (how long you expect to live)
• Other sources of retirement income
• Work plans during retirement
• Future financial obligations
• Potential Social Security benefit amounts

The Bottom Line
To know where you stand, get a copy of your Social Security statement to review estimates of your future retirement benefits, your earnings to verify the amounts on record and an estimate of the Social Security and Medicare taxes you’ve paid. The statement lists your earnings by year, so you’ll be able to count the number of years you have on record to help you determine if spending an extra year or two in the workforce would boost your Social Security benefits during retirement. Pay particular attention to how many zero-income years you have, if any.

Keep in mind, though, that you may have access to benefits based on your spouse’s (or ex-spouse’s) earnings record – which could be larger than you would be entitled to even if you worked those couple of extra years.

A Better Economy Under Trump Seems Unlikely

080519_USEconomy1My Comments: I want our economy to improve. It needs to improve. There are problems that are an existential threat to the continued welfare and wellbeing of my children and grandchildren.

Some of these threats result from the natural evolution of societies across the planet, things like demographics, the improving longevity of our species, and global warming. Others will result from decisions made by our elected leaders that regardless of party, will have an inevitable bias that limits a favorable outcome.

The next four years will reveal a very different bias than what we’ve experienced so far this century. It happens. Those of us who care have to work to make sure that the pendulum does not go too far so it can again swing back the other way, to the benefit of ALL OF US.

Updated: November 27, 2016 | Mark Zandi

Americans voted for change when they made Donald Trump president, and they are going to get it. What this means for the economy is uncertain, but under most scenarios, it ultimately will be diminished.

Financial markets have adjusted surprisingly well to the prospect of a President Trump, at least so far. Stock prices have rallied, the value of the U.S. dollar has strengthened, and interest rates have jumped.

Investors expect the Trump administration to adopt an expansionary fiscal policy. That means deficit-financed tax cuts and increased government spending.

With the economy near full employment, investors anticipate inflation to pick up and the Federal Reserve to increase interest rates more quickly. Outsize gains in financial and health-care stocks imply that investors also believe Trump will scale back Dodd-Frank regulatory reform and Obamacare.

If financial conditions hold firm, the election should have little immediate economic fallout. It also helps that Mr. Trump is inheriting a fundamentally strong economy. Job creation remains robust, and with near-record open job positions and few layoffs, it would take a severe shock to derail things.
But how well financial markets and the economy hold up in the coming year will depend on how quickly the new administration articulates and implements its economic policies. The Trump campaign wasn’t very forthcoming about those policies, likely in part because they weren’t well-developed. The campaign’s economic-policy team was thin, as nearly all establishment Republican economists decided not to participate.

And it remains unclear who will take the key policy positions in the administration, let alone where the teams of economists, financial analysts, and lawyers needed to formulate legislation will come from. They will come, but it could take an uncomfortably long time, particularly for impatient financial markets.

Still, a Republican-controlled House and Senate will smooth the way for more policy to become law, particularly since the Senate filibuster is no longer the legislative fetter it used to be. The president also has significant authority over trade and immigration policy.

So what will economic policy be under President Trump? It is highly likely that two pending trade deals, the TTP with the Pacific Rim and the TTIP with Europe, will be shelved. Labeling some countries, such as China, currency manipulators can’t be ruled out. Presumably this would result in some form of action, such as higher tariffs.

It is a good bet that fewer immigrants will be allowed to come and stay. To satisfy his campaign pledge to require the undocumented to leave the country, President Trump will increase enforcement and may more aggressively implement the e-verify program used by employers to determine whether potential employees have appropriate work visas.

Tax cuts seem likely, albeit with a much smaller price tag than he proposed during the campaign. The corporate tax code will probably also be brought more in line with those of other countries, and there will be a one-time lower tax rate for repatriation of foreign profits now held overseas. More government spending on veteran benefits and the military seem likely, and while more infrastructure spending isn’t as sure, given skepticism among some congressional Republicans, President-elect Trump is openly supportive of it.

It is difficult to see how President Trump will pay for his tax and spending policies. They will likely add significantly to the government’s already uncomfortably large deficits and debt load.

If all this is approximately right, then the economy over Trump’s four-year term will fall meaningfully short of what it would have if there had been no changes in policy. Eventually, it will suffer weaker GDP and job growth, higher inflation and interest rates, and a heavier government debt load.

Behind this poorer performance is a smaller workforce, as some undocumented workers leave and fewer legal immigrants come. Global trade also suffers, given the greater skepticism around our relationships and what is likely to be a somewhat stronger U.S. dollar, particularly against the Chinese yuan and other emerging currencies, like the Mexican peso.

There are important long-term economic benefits from lower marginal tax rates and a reformed corporate tax system, but these changes are too small to have a significant impact on growth, at least not quickly. And then there are the tax and spending policies that result in larger budget deficits. Expansionary fiscal policy makes sense when the economy is in a recession, but it makes little sense when the economy is operating near full employment, as it is today. It only fuels inflation, and higher interest rates.

Mr. Trump’s election also arguably has a deeper, potentially more ominous meaning for the global economy. On the heels of the Brexit vote in the United Kingdom, it indicates that antiglobalization populist political sentiments are more widely held across the globe. Populism’s next victim may be the eurozone. And if it fractures, so too will the global economic expansion.

Economic policy under President Trump can go in many different directions. But to believe that his anti- globalization, deficit-adding policies will result in a better economy is misguided.

Mark Zandi is chief economist at Moody’s Analytics.