Disabled Beneficiaries Can Earn More Income And Still Receive Benefits
In 2021, non-blind disabled workers could only earn up to $1,310 each month before becoming ineligible to receive benefits.
However, in 2022, non-blind disabled workers will be able to earn up to $1,350 each month.
Also, blind disabled workers will be able to earn up to $2,260 each month in 2022 compared to the $2,190 limit in 2021.
Inflation means COLA Increase in October 2022 will be Double Digits
Tricks To Maximize Your Social Security Benefits
One tip: Your benefit rises each month you delay collecting Social Security after age 62.
How Social Security calculates payouts can be complex and arcane. But there are a few basic principles that can substantially boost lifetime benefits for the millions of Americans whose most dependable stream of income comes from the public pension program.
For starters, the primary earner in a family, in most cases, should delay collecting as long as possibleoptimally, to 70 years old. Then, if youre among the large group of people who have worked fewer than 35 yearsthe number used by Social Security to calculate your benefitor have had some particularly low-earning years, you could get a big boost for each additional year you work. Thats particularly true after age 60 because of a quirk in how Social Security treats salary increases.
Even for higher-income families, Social Security can be key in retirement finances. A family with two high-earners can receive benefits totaling as much as $100,000 a year combined if both defer collecting until age 70. And that payout will rise annually with inflation, much as it did this past year with a 5.9% annual cost-of-living adjustment to account for surging consumer prices.
You have to be way up there in income before you consider a six-figure, inflation-adjusted annuity not a big deal. says Mike Piper, a St. Louis certified public accountant who operates a free calculator for Social Security claiming strategies.
Have At Least 35 Years Of Earnings
Social Security bases your benefit on the 35 highest-salary years. Even if youve worked fewer years, it still takes your earnings, adjusts them for wage inflation, and spreads them over 420 months to determine your average monthly wage. It then uses a formula that tilts toward low earners to determine how much of this wage will be replaced by your monthly benefit at full retirement age.
The process is anything but simple, but the bottom line is that people who worked fewer years or had long periods where they earned little get sharply reduced benefits. Some of the most extreme cases are parents who took years off from work to raise children.
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Consider a parent born in 1960 who earned an average salary of $84,000 a year, but stepped away from work for 20 years after her children were born, says William Reichenstein, head of research for Social Security Solutions, which sells Social Security optimization software.
As a result, she has only 20 years of earnings history if she begins collecting Social Security benefits. She would get $1,874 a month at full retirement age, Reichenstein calculates.
If you have 20 years of earnings because you raised some kids, the other 15 years are zeros, he says.
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How Social Security Payment Schedule Works
If you are receiving Social Security Retirement or Social Security Disability Insurance benefits , your payment date depends on your birth date.
In addition, If you are receiving payments on the record of a retired, disabled, or deceased worker , that persons birthday sets the schedule.
Heres how the Social Security Payment schedule works for those who receive Social Security retirement benefits or SSDI:
- If your birthday is in the first 10 days of the month, then youll receive your benefits payments on the second Wednesday of each month.
- For those with birthdays between the 11th and the 20th, benefit payments are deposited on the third Wednesday of the month.
- Payments are made on the fourth Wednesday of the month for those with birthdays on the 21st or later.
Here is a table that better displays how the payment schedule works:
| BIRTHDAY | |
|---|---|
| 21st 31st | Fourth Wednesday |
Now that you understand how the payment schedule works, its time to review the 2022 payment calendar as released by the SSA.
You Can Receive Benefits Before Your Full Retirement Age
You can start receiving your Social Security retirement benefits as early as age 62, but the benefit amount will be lower than your full retirement benefit amount.
If you start receiving your benefits before your full retirement age, we will reduce your benefits based on the number of months you receive benefits before you reach your full retirement age.
If you wait until age 70 to start your benefits, your benefit amount will be higher because you will receive delayed retirement credits for each month you delay filing for benefits. There is no additional benefit increase after you reach age 70, even if you continue to delay starting benefits.
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What You Need To Know About Stopping Your Benefits
If you’d like to withdraw your Social Security application, there are a few things you need to know first.
- You only have 12 months from when you became entitled to Social Security benefits to make the decision. So if you’ve been receiving benefits for several years, you won’t be eligible to pause your payments.
- You can only withdraw once in your lifetime.
- You’ll have to pay back all the money you and your family received from Social Security .
- If others receive benefits based on your application, they must consent to withdrawing your application.
Keep Your Information Secure
Identity theft affects millions of people each year and can cause serious financial and identity-related problems. Protect yourself by securing your personal information, taking the time to understand the threat of identity theft, and exercising caution.
Protect Yourself From Fraud
Social Security is diligently working at national, regional, and local levels to combat the fraud that undermines our mission to serve the American public.
There are steps you can take to help protect your personal information:
- Do not routinely carry your Social Security card.
- Never say your Social Security number aloud in public.
- Beware of phishing scams to trick you into revealing personal information.
- Create a mySocial Security account to help you keep track of your records.
- Visit If You Want Extra Security to learn about extra verification steps we can add to your account.
Report Suspicious Activity
If you receive a suspicious call from someone claiming to be from Social Security, hang up and then report details of the call to the Office of the Inspector General. You can do this by submitting a report online.
Additional Information
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You Or Your Family Members May Be Eligible For Increased Benefits
Our mission is to deliver Social Security services that meet the changing needs of the public.
It’s not unusual for a benefit recipient’s circumstances to change after they apply or became eligible for benefits. If you, or a family member, receive Social Security or Supplemental Security Income , certain life changes may affect eligibility for an increase in your federal benefits. For example, if your spouse or ex-spouse dies, you may become eligible for a higher Social Security benefit.
To find out if you, or a family member, might be eligible for a benefit based on another persons work, or a higher benefit based on your own work, see the information about benefits on the Social Security website. You can also use the Benefit Eligibility Screening Tool to find out if you could get benefits that Social Security administers. Based on your answers to questions, this tool will list benefits for which you might be eligible and tell you more information about how to qualify and apply.
The questions and answers below are about a few of the life changes that could possibly increase your benefits.
If You Or Your Clients Fall Victim To A Scam
If your client is a victim of a scam, they should never feel embarrassed. Anyone can become a victim of fraud. The important thing is to report the scam immediately. Advise your clients to:
- Stop communications with the scammer.
- Notify financial institutions and protect their accounts.
- Contact local law enforcement and file a police report.
- File a complaint with the FBI Internet Crime Complaint Center at www.ic3.gov and on the FTC website at ReportFraud.ftc.gov.
- Report Social Security-related scams to our Office of the Inspector General at oig.ssa.gov.
- Retain financial transaction information and records of all communications with the scammer.
Please share this information with your clients so they can help their friends, family, and community.
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Prioritize Your Basic Needs
Next, it’s time to allocate your Social Security benefits. Leonard Hayduchok, CEO and president of Dedicated Financial Services, suggests treating your Social Security check as you would a paycheck. Use the benefits to pay for regularly occurring expenses such as housing costs and groceries. According to the BLS survey, people 65 and older spend an average of the following amounts on food and related housing expenses a year:
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Housing: $17,472
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Utilities: $3,810
You should try to allocate about 60% to 70% of your annual Social Security benefits to pay for these expenses, though that won’t be possible for many retirees. If your annual benefits equal the national average of $1,619.67 a month or $19,436.04 a year, that means 60% of your Social Security check — which comes out to $11,633.83 annually — won’t be enough to cover the expenses above.
Still, it’s a good idea to dedicate as much as you can to food and housing. After all, these are your basic needs — without them, you won’t live well. Just keep in mind that once you’ve used your check to cover these basic expenses, you’ll likely need to dip into your additional income sources to cover other costs.
Retirees whose food and housing costs are greater than their Social Security checks should look for ways to cut back on these expenses. For example, one option might be to move to a city where you can live comfortably off Social Security.
Average Social Security Payment By Age
The average Social Security retirement benefit is significantly lower than the maximum. It was $1,544.70 per month in July 2022, according to the most recent data available from the SSA. Heres what the average benefit looks like at different ages for those who started collecting at FRA, according to an annual report published by the SSA in 2021.
| Average Social Security Benefit by Age |
|---|
| Age |
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Before You Make Your Decision
There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:
- If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
- That there are other things to consider when making the decision about when to begin receiving your retirement benefits.
When To Start Checking Your Social Security Benefits
While you can start receiving social security benefits as early as age 62, you may not want to start collecting them then. It all depends on your individual circumstances and retirement goals.
There are a few things to consider when deciding when to start checking your social security benefits, including:
-Your life expectancy: If you think you may not live to a ripe old age, it may make sense to start collecting benefits earlier.-Your financial situation: If youre struggling to make ends meet, starting to collect social security benefits sooner may be a good idea. However, if youre doing well financially, you may want to wait until later so you can receive higher benefits.-Your retirement goals: If you want to enjoy a comfortable retirement, you may need to wait until your full retirement age or even later to start collecting social security benefits.
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Don’t Forget To Claim For Your Children
If you claim retirement, disability or survivors benefits and have dependent children, you can file a claim for them as well. A qualifying child can receive up to 50% of a parent’s full retirement or disability benefit, and up to 75% of a deceased parent’s benefit. However, there’s a limit to the amount of money that can be paid to a family, with the maximum amount determined as part of every Social Security benefit computation.
To qualify, a child must be either younger than age 18, age 18-19 and a full-time student in grade 12 or lower, or 18 or older with a disability that began before age 18. Although this is not technically your Social Security benefit, it’s still an SSA payment that can help your family make ends meet.
Notify Social Security About Your Return To Work
If you plan to return to work, you should notify the Social Security Administration right away, Elsasser advised. That way, the agency can start to reduce your checks now.
If you don’t, you could be in for an unwelcome surprise early the next year when the IRS reports your earnings to the Social Security Administration.
If that happens, you may get an unexpected letter from the Social Security Administration notifying you that they are stopping your benefit right away until any earnings penalty from the prior year is made up.
That may disrupt your cash flow if you’re not expecting it.
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Verify Your Income Record
Your Social Security payout is based on your highest 35 years of earnings, as recorded by the Social Security Administration. Because any record can have errors or gaps, you should verify your Social Security income record before you file for benefits. If the Social Security Administration is missing one or two of your highest-earning years, for example, your benefit could be permanently reduced by a significant amount.
To verify your Social Security record, create an account. This is where you can see your earnings record and other important information, such as your estimated future retirement, disability and survivors benefits. If you find any mistakes, you can contact the SSA at 1-800-772-1213.
How Can I Get A Social Security Statement
You can get your Social Security Statement online by using your personal mySocial Security account. If you dont yet have an account, you can easily create one. Your online Statement gives you secure and convenient access to estimates for retirement, disability, and survivors benefits you and your family may be eligible for.It also shows your earnings history.To set up or use your account to get your Statement, go to . We also mail paper Statements to workers age 60 and older 3 months before their birthday. This is if they dont receive Social Security benefits and dont yet have a personal mySocial Security account. Workers who dont want to wait for their scheduled mailing can request their Statementby following these instructions.The Statement will arrive by mail in four to six weeks.
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What To Do If You Think Your Social Security Benefits Are Incorrect
If you think your social security benefits are incorrect, you can contact the Social Security Administration to fix the problem. The SSA is a government agency that provides financial assistance to people who are retired or disabled.
There are a few different ways to contact the SSA. You can call them at 1-800-772-1213, or you can visit their website at www.ssa.gov. You can also visit your local SSA office.
When you contact the SSA, you will need to provide them with some information about yourself, such as your social security number, date of birth, and address. You will also need to provide them with information about the error, such as what type of error it is and how much money is involved.
The SSA will then investigate the problem and correct any errors that they find. If you have any questions about the process, you can contact the SSA for help.
Keep Your Income In Check
If you want to maximize your Social Security benefits, you’ll have to keep an eye on your outside earnings. For 2022, if you’re younger than full retirement age, your Social Security benefit will be reduced by $1 for every $2 you earn above $19,560. If you reached full retirement age in 2021, your benefit will be reduced by $1 for every $3 you earn above $50,520 until you hit the month of full retirement age. After you hit full retirement age, there are no Social Security benefit reductions.
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How Inflation Affects Cola
Inflation continues to rise over the last year, hitting a record in June 2022 of 9.1%.
Heres how a few things that cost a lot more in June 2022 than they did in June 2021:
Gasoline up 59.9%
Shelter costs up 5.6%.
Health Insurance up 17.3%
As Inflation hits a record in June 2022, it is projected that the Social Security COLA for 2023 will hit double digits .
According to The Senior Citizens League, the COLA for next year could reach 10.5% or more.