Q&A: This nurse needs a Social Security checkup. Here’s how to check yours

Dear Liz: I’m a certified nurse midwife who is salaried. When we are fully staffed, I work 55 hours a week on average. If we cover extra shifts, we are paid a lump sum rather than hourly. (If we were paid hourly, it would work out to far less than minimum wage.) We are paid twice a month, but my pay stub shows that I only work 70 hours per pay period. I work almost that many hours in a single week! When I work extra shifts, it is reported on my check under “miscellaneous” with the lump sum listed. I asked our administrators about this and they just told me it wasn’t a big deal, but I’m not convinced that’s true. Do the hours reported on my paycheck affect my Social Security income later? I just don’t want to lose out on Social Security benefits when I work my butt off!

Answer: The hours you work don’t affect your future Social Security benefit, but your earnings do. At least they should. Your employer is supposed to report your full salary to Social Security, and to deduct the appropriate amount of Social Security tax from your paychecks. If your pay is underreported, your future benefits could be shortchanged.

Here’s a quick way to check if your earnings are being reported properly. On your paycheck, there should be a line that says either “Social Security,” “OASDI” or “FICA.” If the line says Social Security or FICA, the amount listed should be 6.2% of the money you earned for the pay period, up to a maximum annual amount of $8,239.80 for 2019. (There’s a ceiling on the amount of wages subject to Social Security taxes, which this year is $132,900.)

Some employers don’t break out Social Security taxes from Medicare taxes, and include them both in a line for FICA, which stands for Federal Insurance Contributions Act. The FICA amount should be your Social Security tax (6.2% of your earnings up to $132,900) plus 1.45% for Medicare. (There’s no cap, so all earnings are subject to the Medicare tax.)

If the tax amounts shown don’t include that “miscellaneous” lump sum, please call the IRS at 1-800-829-1040 to report the situation.

Friday’s need-to-know money news

Today’s top story: You owe interest on a 0% APR credit card. How did that happen? Also in the news: How to choose the right health plan, how to win big on Black Friday, and how your travel plans affect which Medicare coverage you should choose.

You Owe Interest on a 0% APR Credit Card. How Did That Happen?
Could be several reasons.

How to Choose the Right Health Plan
Happy Open Enrollment season!

Win Big on Black Friday by Buying This — and Not That
Creating a Black Friday strategy.

How your travel plans affect which Medicare coverage you should choose
Yes, you read that correctly.

Thursday’s need-to-know money news

Today’s top story: How to choose the right health plan. Also in the news: Your data is out there: how to take action, 7 retirement savings mistakes financial advisors see too often, and what to do if you haven’t filed your taxes in years.

How to Choose the Right Health Plan
Open enrollment season is here.

Your Data Is Out There: Don’t Freak Out, Do Take Action
Taking preventative measures.

7 Retirement Savings Mistakes Financial Advisors See Too Often
How they help their clients recover.

What to Do If You Haven’t Filed Your Taxes in Years
Time to come clean.

Wednesday’s need-to-know money news

Today’s top story: Your student debt doesn’t always die with you. Also in the news: 10 ways to meet a credit card’s minimum spend requirement, how today’s Fed rate cut affects you, and how to churn credit cards without getting penalized.

Your Student Debt Doesn’t Always Die With You
It all depends on the type of loan.

10 Ways to Meet a Credit Card’s Minimum Spend Requirement
Don’t let your rewards slip away.

Here’s how the Fed rate cut affects you
Cheaper loans, lower interest on savings.

How to Churn Credit Cards Without Getting Penalized
Targeting those sign-up bonuses.

Tuesday’s need-to-know money news

Today’s top story: Ditch the turkey – six ideas for a Thanksgiving getaway. Also in the news: How to get the most out of the Walmart Rewards Mastercard, the potential pros and cons of buying a post-scandal Volkswagen Diesel, and how to get a retention bonus by threatening to cancel your credit card.

Ditch the Turkey: 6 Ideas for a Thanksgiving Getaway
The turkey can wait.

How to Get the Most Out of the Walmart Rewards Mastercard
Maximizing your rewards this holiday season.

Should You Snap Up a Post-Scandal Volkswagen Diesel?
The pros and cons.

Threaten to Cancel Your Credit Card to Get a Retention Bonus
The bank wants to keep you as a customer.

How to choose the right health plan

When we’re given a choice about our health care plans, we often choose badly.

In one study, more than 80% of the employees at a Fortune 100 company picked the wrong plans, often choosing low-deductible options that ultimately cost them more. Another study found that inertia — sticking with the same plan, rather than evaluating the options each year and choosing a better one — cost workers an average $2,032 annually.

In my latest for the Associated Press, steps to help you pick a better plan.

Monday’s need-to-know money news

Today’s top story: How to vanquish 5 common financial fears. Also in the news: Will you get what Social Security promises, how to save money online with these sneaky tricks, and 10 better money habits to start now.

Vanquish 5 Common Financial Fears
Time to put these fears to rest.

Will You Get What Social Security Promises?
Making smarter decisions about claiming your benefit.

Save Money Online Shopping With These Sneaky Tricks
Thinking beyond coupons.

10 Better Money Habits to Start Now
The right habits can boost your savings.

Q&A: Triggering the windfall elimination provision

Dear Liz: After working and paying into Social Security for more than 40 years, I took a city job at age 60. This job does not pay into Social Security and will afford me a small pension upon retirement in a few years (I’m now 64). Will this pension amount be deducted from my Social Security payments?

Answer: Normally, people who get pensions from jobs that didn’t pay into Social Security face the “windfall elimination provision,” which can reduce any Social Security benefits they may have earned. If, however, you have 30 or more years of “substantial earnings” from a job that paid into Social Security, then this provision does not apply. The amount that counts as “substantial earnings” varies by year; in 2019, it’s $24,675.

Q&A: Medicare vs. spouse’s health plan

Dear Liz: I am planning to retire in a few months at 65. My husband, who is five years younger, works for a corporation that provides excellent health insurance. When I sign up for Medicare, will I still be able to stay on my husband’s health insurance? Which insurance will be listed first for coverage?

Answer: The rules are different depending on whether your husband’s insurance is considered a large employer plan or a small employer plan.

If the plan covers 20 or fewer employees, his employer can boot you off the plan or make it secondary to Medicare. If the plan covers more than 20 employees, though, the employer typically can’t treat you differently from younger employees and spouses and must allow you to stay on the plan, which would remain your primary insurance with Medicare as the secondary insurer.

Medicare penalties are another issue to consider. Medicare Part A, which covers hospital visits, is usually premium-free, but people generally pay premiums for Medicare Part B, which covers doctor’s visits, and Medicare Part D, which covers prescription drugs. If you don’t sign up for Medicare Part B and Part D when you’re first eligible, you could face permanent penalties that would raise your monthly premiums for life.

These penalties don’t apply if you put off signing up for Part B and Part D because you’re covered by a large employer health insurance plan from current employment, either yours or your spouse’s. Once that employment or coverage ends, though, you’ll need to sign up for Part B and Part D promptly or the penalties kick in.

Notice the use of the words “typically,” “normally” and “generally” in the paragraphs above. Medicare’s rules and exceptions can be tricky to navigate. Talk to the benefits manager at your husband’s company so you know where you stand, and what parts of Medicare to sign up for as you turn 65.

Friday’s need-to-know money news

Today’s top story: AmEx makes it easier for immigrants to access credit. Also in the news: Retirement savings mistakes financial advisors see too often, big changes could be in store for student loan borrowers, and why you shouldn’t tell the person you just started dating about how much money you have.

AmEx Makes It Easier for Immigrants to Access Credit
How the new feature works.

7 Retirement Savings Mistakes Financial Advisors See Too Often
How to avoid them.

Big changes could be in store for student loan borrowers
Rewriting the rules.

Don’t Tell the Person You Just Started Dating How Much Money You Have
Keep it to yourself for now.