How Did Cbo Analyze Income
CBO used data from the Census Bureaus 2018 American Community Survey to estimate income from different sources for Vietnam veterans and nonveterans ages 63 to 78. The ACS is one of the biggest surveys that the Census Bureau administers, reaching roughly 1 in 40 U.S. households each year. CBO relied on the ACS because it samples a large number of veterans, and its data on income information are about as accurate as data from other national surveys that also report veteran status.
CBO examined the selected group of veterans and nonveterans at two points in time: 2008 and 2018. In 2008, most were still working but near the end of their careers. CBO calculated earnings in that year because earnings are closely linked to retirement income. At the second point, 2018, most of the group were no longer working. CBO did not quantify the potential effects of different factors such as education and work experience that strongly influence the amount and sources of income.
At the second point in time, 2018, CBO focused on four sources of income common to veterans and nonveteransearnings, Social Security, investments, and retirement plans. For veterans, the agency also calculated income with and without disability compensation paid by VA. In 2018, about 1.3 million Vietnam veterans ages 63 to 78 received that compensation because of medical conditions or injuries incurred during their military service. CBOs estimates of VAs disability payments relied on data from both the ACS and VA.
Early Withdrawals From Your Tsp And Ira After The Military
About Ryan Guina
Ryan Guina is The Military Wallet’s founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.
Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.
Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.
Featured In: Ryan’s writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine , Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.
Trends In Growth Of The Veteran And Social Security Beneficiary Populations
The overall Social Security beneficiary population more than doubled from 1968 through 2004, whereas the number of veterans receiving Social Security more than quadrupled .7 Consequently, the percentage of Social Security beneficiaries who have served in the military has approximately doubled since the late 1960s.
The percentage of Social Security beneficiaries who are military veterans has remained fairly steady over the past decade, after increasing drastically since 1968. In 2002, an estimated 9,457,000 veterans received Social Security. The estimated number decreased slightly to 9,420,000 in 2004, but this small difference may not be statistically significant. The estimated percentage of Social Security beneficiaries who are veterans has declined slightly from its all-time high of 25.0 percent in 1996.
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A Benefits Boost: $200 Plus Cola Changes
Anyone who is a current Social Security recipient or who will turn 62 in 2023 the earliest age at which an individual can claim Social Security would receive an extra $200 per monthly check.
There are some additional tweaks that would boost benefits over the long-term. One of the primary changes would be to base the annual COLA on the Consumer Price Index for the Elderly , rather than the current index that the Social Security Administration uses for its calculation the Consumer Price Index for Urban Wage Earners and Clerical Workers .
The CPI-E more accurately reflects seniors’ spending patterns, according to experts on Social Security. For instance, it puts more weight on health care expenses, which can be considerable for senior citizens.
If the CPI-E had been used to index the annual COLA for Social Security, a senior who filed for Social Security benefits over 30 years ago would have received about $14,000 more in retirement than compared with the CPI-W, according to the Senior Citizens League.
The bill would also boost benefits for the lowest income earners in the U.S., who receive benefits under a program called the Special Minimum Benefit. Under the legislation, it would be indexed so that it is equal to about 125% of the federal poverty line, or about $1,400 a month. In 2020, the Special Minimum Benefit paid about $900 per month, according to the Social Security Administration.
Cbos Approach To Analyzing Veterans Income
To quantify the income of Vietnam veterans and nonveterans, CBO analyzed ACS data from 2008 and 2018.20 The ACS is among the largest of the Census Bureaus surveys, reaching about 2 million households each year, and is designed to represent the entire U.S. population. Households in the ACS survey provide information on demographics, employment status, education, disabilities, and military service, among other topics. More than 75,000 male veterans who said they served during the Vietnam War were interviewed for the 2018 ACS.21
CBO chose the ACS after examining the Current Population Survey and the Survey of Income and Program Participation. The ACS covers more veterans than those surveys and is about as accurate, CBO concluded.
To determine VAs disability payments, CBO analyzed administrative data from VA, partly because VAs disability compensation is mingled with several other types of income in a residual category on the ACS.
CBO examined five sources of regular income: earnings, Social Security, retirement plans, investment income, and disability payments from VA. Onetime payments such as inheritances or home sales were excluded.22 The first four income sources CBO studied were common to all men the fifth, disability compensation, could only be received by veterans.
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Would Those Changes Fix The Program’s Funding Shortfall
Expanding the payroll tax would boost the Social Security Administration’s trust fund, ensuring its solvency through 2096, according to DeFazio.
Whether this bill moves forward or not, boosting payroll taxes in some fashion is viewed as a way to guarantee that current and future retirees don’t lose benefits after 2035.
For instance, the Congressional Research Service said in a 2021 report that “raising or eliminating the cap on wages that are subject to taxes could reduce the long-range deficit in the Social Security trust funds.”
Imputing Amounts Of Income
CBO assigned income values to respondents using PMM.7 Under that method, respondents who had been designated to receive retirement income were matched with observationally similar cases , and the amount of income the respondents was assigned was determined by the amount the matching donors reported. PMM has a number of desirable properties. In contrast to standard regression imputation, which is deterministic, PMM includes a random component to introduce heterogeneity into the imputed values. Further, PMMs semi-parametric imputation process is less vulnerable to model misspecification than a fully parametric imputation model. Relative to hot-deck imputation within adjustment cells, PMM allows for more predictors and for the use of continuous variables as predictors.8
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Do I Get Extra Money From Social Security For Being A Veteran
As a veteran, you may receive several different benefits from the Social Security Administration . The exact interplay between VA and SSA benefits depends on the circumstances that are specific to your case, but it is very common for veterans to receive VA disability compensation in addition to Social Security Disability Insurance. Also, veterans who served prior to 2001 get additional social security credit for their military service that is counted towards their SSA retirement benefits.
Ensuring that you are receiving all of the VAand SSA benefits that you might be entitled to can help you and your familyenjoy financial stability for years to come. You gave years of your life toyour country, and you deserve compensation for your service. But sometimes theVA may be reluctant to grant you the benefits you deserve. If you have beendenied your VA benefits, call Jackson and MacNichol today at 800-524-3339 for afree consultation with a veterans disability compensation lawyer.
Extra Social SecurityCredits For Veterans Were Discontinued in 2002
The amount and type of credits you receivedepends on the period in which you served in the military:
Although the SSA automatically takes thesecredits into account when calculating your lifetime earnings, it doesnt hurtto ask for a copy of your work record from SSA to make sure all of your military service has beentaken into account.
What to Do IfYour Benefits Are Denied
Military Veterans May Be Entitled To Extra Earnings
As mentioned above, servicemembers who have served on active duty between 1940 and 2001 are entitled to extra earnings that will boost their Social Security benefits. It is important that men and women who have served during these periods check to make sure credits have been added to their record. This happened automatically for military members who served between 1968 and 2001, but it is still a good idea to confirm you are receiving the full benefits for which you are entitled.
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Vietnam Veterans Income In 2018
The disability compensation VA provides is unlike other sources of income because it is only available to veterans, who may have faced special risks in the course of their military service. That compensation can be viewed as a work-related benefit, a lifetime indemnification that the federal government owes to veterans with a medical condition that was incurred or worsened while they were in the military. If those disabled veterans are out of the workforce for a long time, their Social Security benefits will be less than they otherwise would be, and they might not accumulate much personal savings. VAs compensation mitigates such effects. The amount of that compensation can be sizable: CBO calculated that for Vietnam veterans who received it, average annual disability compensation was nearly as much as they received in Social Security benefits.
Are There Different Levels Of Disability
Yes for Disability Compensation. For Disability Compensation, the range is from 0% to 100%. A veteran with a 0% rating may have a service connected condition, but it doesnt interfere with normal life functions. A veteran with a 100% rating will have one or more disabilities that significantly interfere with normal life functions. There is a full range between the two, with the majority of Vermonts disabled veterans rated at 10%, 20%, or 30%.
No for Non-Service Connected Pension. Pension is provided only to veterans who the VA determines to be 100% disabled.
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Ethnicity And Geographic Distribution
Vietnam veterans were more likely than nonveterans to be White and less likely to be Hispanic. Roughly equal percentages of veterans and nonveterans were Black. However, a slightly larger share of Black men than White men joined the enlisted ranks in the early 1970s.14 Like veterans of other eras, Vietnam veterans have tended to live and retire in the South, where large active-duty populations are located. Only a small share of all men, both Vietnam veterans and nonveterans, lived in rural communities.
How To Receive Federal Benefits
To begin receiving your federal benefits, like Social Security or veterans benefits, you must sign up for electronic payments with direct deposit.
If You Have a Bank or Credit Union Account:
- Call the Go Direct Helpline at .
If You Don’t have a Bank or Credit Union Account:
- Direct Express debit card – a pre-paid debit card. Get help by calling the Go Direct Helpline at .
Make Changes to an Existing Direct Deposit Account:
On Go Direct’s FAQ page, learn how to make changes to an existing direct deposit account. You also may contact the federal agency that pays your benefit for help with your enrollment.
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Getting A Social Security Number For A New Baby
The easiest way to get a Social Security number for your child is at the hospital after they are born when you apply for your childs birth certificate. If you wait to apply for a number at a Social Security office, there may be delays while SSA verifies your childs birth certificate.
Your child will need their own Social Security number so you can:
- Claim your child as a dependent on your income tax return
- Open a bank account in their name
- Get medical coverage for them
- Apply for government services for them
Increase In Social Security Benefits In 202: How Much Will Recipients Get
There has not been a double-digit COLA increase since 1982 when there was an 11.2% increase. AP
STATEN ISLAND, N.Y. A cost-of-living adjustment could put more money in the pockets of retirees and other Americans who receive monthly Social Security checks.
The specific amount of the cost-of-living adjustment, or COLA, for 2024 wont be released until Fall 2022, however, the nonpartisan Senior Citizens League said it could be as much as a 10.5% increase.
Currently, Social Security recipients receive an average of $1,542.22 per month if the COLA increase is 10.5%, recipients would get approximately $175.10 extra monthly.
The last two years the COLA increase was 5.9%. There has not been a double-digit COLA increase since 1982 when there was an 11.2% increase.
The potentially significant increase comes at a time when inflation rates in all consumer markets are soaring, but also at a time when the future of Social Security benefits are in jeopardy.
Its projected that Americans will stop receiving their full Social Security benefits in 2035, if lawmakers dont act, according to a report released by the Social Security and Medicare trustees.
BILL INTRODUCED THAT WOULD RAISE MONTHLY PAYMENTS BY $200
FOLLOW KRISTIN F. DALTON ON
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Cbos Adjusted Sample Compared With Data Linked To Administrative Records 2013
Source: Congressional Budget Office, using data from the ACS and from C. Adam Bee and Joshua W. Mitchell, Do Older Americans Have More Income Than We Think? Working Paper SEHSD-WP2017-39 , Appendix Table 7, .
To create its sample, CBO imputed retirement-plan income to some ACS respondents. The ACS asks respondents to report income from defined benefit and defined contribution plans from companies, unions, federal, state, and local governments individual retirement accounts Keogh plans and any other type of pension, retirement account, or annuity.
For the Census sample, Bee and Mitchell linked ACS data with IRS Form 1099-Rs, which record gross distributions that were made from employer-sponsored plans and individual retirement accounts and that were permanently withdrawn from tax-preferred retirement plans. Bee and Mitchell excluded certain kinds of distributions that the authors did not consider income, primarily direct rollovers and conversions, which move money from one tax-preferred retirement plan to another.
ACS = American Community Survey IRS = Internal Revenue Service.
Pose Your Questions To Larry Here
However, I do not see any extra added income to those years to apply any extra credit. The SSA webpage indicates that for every $300 of military pay earned, you will be credited with an additional $100 in earnings up to $1,200 a year. What I dont know is how to tell if I have been given these extra credits in my current benefit. The SSA website states that From 1968 through 2001, you dont need to do anything to receive these extra credits. The credits were automatically added to your record. Id like to be sure of this as I dont see evidence in my SSA earnings record that shows me how this has been added to my benefit.
Another thing that makes me think that I have not been given this credit is that when I applied for Social Security online, I was never given the opportunity to insert any of my military service info. I called the SSA and spoke to someone about this. Unfortunately, it was after I started receiving my Social Security benefit, which was also after my retired military friend told me about the extra credits. The SSA representative told me the reason I didnt get prompted by the online application for military service is because it is invoked based on the persons age. He said I am too young to have served in Korea or WWII. This, to me, appears to be a flaw in the application process because that doesnt account then for armed forces reserves for the period from 1968 through 2001 talked about on their website.
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Military Veterans And Social Security
General Information: Wounded Warriors
Anya Olsen is with the Office of Retirement Policy, Office of Policy, Social Security Administration.
The findings and conclusions presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration.
Cbos Adjusted Sample Compared With Data From The Acs And The Irs 2018
Source: Congressional Budget Office, using data from the ACS and the IRSs Statistics of Income2017 Individual Income Tax Return.
The ACS data understates retirement-plan income because many people fail to report it. CBOs sample includes retirement-plan income both for those who reported such income and those to whom CBO imputed income. The IRSs taxable and aggregate income figures do not include distributions to people who did not file returns. The IRSs aggregate income figure includes distributions such as direct rollovers and conversions, which move money from one tax-preferred retirement plan to another.
ACS = American Community Survey IRS = Internal Revenue Service.
a. The IRS publishes taxable income and aggregate income from retirement plans annually in its Statistics of Income2017 Individual Income Tax Return. Because the IRS data for 2018 had not been published when CBO began its analysis, the agency projected taxable and aggregate income from retirement plans for that year by using IRS data from 2007 to 2017. To make the IRS data more comparable to data reported in the ACS, CBO averaged its projection with IRS data from 2017.
2.See C. Adam Bee and Joshua W. Mitchell, Do Older Americans Have More Income Than We Think? Working Paper SEHSD-WP2017-39 , .
10.CBO referred to the SOI taxable amount as the sum of the taxable SOI components, and the SOI total amount as the sum of all the taxable and non-taxable components.