Current law reduces Social Security benefits by $1 for every $3 earned over $17,000. You had to reach age 70 before you could collect full benefits no matter how much you made.
Who the bill applies to: anybody age 65-69, even if you have not yet signed up for Social Security or any part of Medicare. Social Security will start sending you checks - retroactive to Jan. 1 or whenever you turned 65.
How many people are affected? Social Security estimates about 950,000 - including 100,000 who have never signed up for anything.
What action do you have to take? Probably none. If you registered with Social Security when you turned 65 to be eligible for Medicare Part A, even if you elected not to receive benefits at that age, you don't have to do anything. Social Security already knows you exist, and will act accordingly. If you are 65 and have never contacted SS for any reason, you will receive a letter suggesting you do so. But you don't have to wait for the letter.
Will this bankrupt Social Security? No. There will be a big outlay at first - maybe $22 billion through 2007 - but eventually, it will be a wash. That is because if you continue to work, you continue to pay Social Security taxes, thus, if more people work longer hours, Social Security will get more SS taxes.
Does this change the law that increases the "normal retirement age?" No. Congress had already decided to increase the normal retirement age from 65 to 67 by the year 2027, increasing it a little bit every year. If you are now 62, the age at which you qualify for full retirement benefits no matter how much you earn will be 65 plus two months. If you are age 38 or younger, it will be on your 67th birthday.
Does it change the provision that increases the monthly benefit for those who postpone applying for Social Security? No, that's still in effect. But it's believed most people will take the money and run.
Who loves this besides the seniors? The restaurant and retail industries who anticipate that many workers who now accept only part-time employment in order to protect their Social Security checks will be happy to work more hours.
Does anybody dislike it? Sen. Bob Kerrey, D-Neb., who is not seeking re-election, supports the general principle but argued that a more fundamental reform of Social Security is needed. And some young people may not like it if those working seniors means employers no longer bid up their wages to attract them.
How long until that retroactive check arrives? Not figured out yet. But you can be sure the money will arrive before the fall elections.
