I attended some interesting education sessions and this week, and I thought I might recap some of the more interesting factoids regarding Social Security planning and pass on a personal story as well as a disturbing trend of which I was made aware.
Did you know the amount of your Social Security benefit is based on the 35 years you earned the most employment or self-employment income? If you don’t have 35 years of earnings, each year under 35 years you did not earn money will be recorded as zero and will bring your overall eligible benefit down. Even working part time to replace those years will increase your benefit, so pre-retirees with less than 35 years of earnings may want to consider working a little to fill in these gaps.
To be eligible for a Social Security benefit, a worker must earn at least 10 work credits under the system. To earn a credit you must earn $1,130 in 2012, and up to four credits can be earned each year. In order to earn four full credits in 2012 you must earn at least $4,520.
Social Security offers some attractive benefits for being married and all spouses are eligible for a spousal benefit equal to 50 percent of his or her spouse’s payment. In some cases a spousal benefit may exceed the benefit earned as a worker, especially those spouses who spend considerable time as a homemaker.
Divorced individuals may be eligible for a spousal benefit due to the previous marriage, assuming you were married to your previous spouse for at least 10 years, and non-remarried widows or widowers are eligible to receive reduced Social Security benefits at age 60.
Now the disturbing stuff: Last week one of my personal email accounts was hacked. This has happened before but previous hacks simply resulted in crooks using my email address to send out some pretty obvious spam (usually Viagra direct ads). This time, however, the hackers had definitely read through my emails and the resulting fraudulent emails sent from my account were clearly customized for my locale and interests – pretty scary.
Coincidentally, one of the educational sessions I attended addressed email security in the financial services industry. A growing fraud trend involves crooks hacking into emails, looking through the emails in the mailbox to ascertain the email owner’s financial relationships, and then using the hacked email account to compose and send compelling emails requesting emergency wire transfers from banks and brokerage firms.
Banks and brokerage firms typically require a signed wire request form before completing a wire transfer, but the crooks were requesting the form by email and then using other signed documents in the email account to paste original signatures from the other documents onto the form.
This is sophisticated stuff, so be aware, change your email password more often and commit to your financial adviser or bank manager that you will only request account withdrawals by phone and never by email.