Results & Possibilities For A Typical Retiring Couple
Both Matt and Sylvia are 67 years old, which is the typical retirement age in their fields. While Sylvia, who works for a local charity, is entitled to $1,500 per month, former executive Matt is entitled to $2,300. The two of you are both healthy and will likely outlive your respective life expectancies.
The options they have for dispersal are as follows:
How Social Security Retirement Benefits Are Calculated
Social Security benefits are based on how much you earned during the years you worked. You must have worked enough years to earn 40 work credits . Your monthly retirement benefit is based on the 35 years in which you earned the most income.
The Social Security Administration applies a formula to calculate your primary insurance amount. The primary insurance amount is the monthly benefit you are entitled to receive when you reach full retirement age.
Factors that can impact or change the amount a retiree receives in retirement benefits include:
- Applying for Social Security benefits before reaching full retirement age, which reduces the amount you receive each month.
- You delay retirement past your full retirement age, which increases the amount you receive each month.
- You may receive cost of living benefit increases the year you become 62 years of age. Retirement benefits are adjusted each year to reflect increases, if any, in the cost of living as measured by the Consumer Price Index.
- You worked for the government and you are entitled to receive a government pension benefit under a pension plan.
Planning for a normal retirement is important. Knowing how much you can expect to receive in Social Security income can be a significant factor used to develop a retirement plan.
How Do I Apply For Survivors Benefits
To apply for survivors benefits, please visit . A family member or other person responsible for the beneficiarys affairs should do the following:
- Promptly notify Social Security of the beneficiarys death by calling 1-800-772-1213
- If monthly benefits were being paid via direct deposit, notify the bank or other financial institution of the beneficiarys death. Request that any funds received after the death of the beneficiary be returned to Social Security as soon as possible.
- If benefits were being paid by check, DO NOT CASH any checks received for the month in which the beneficiary died or thereafter. Return the checks to Social Security as soon as possible.
A one-time payment of $255 is payable to the surviving spouse if he was living with the beneficiary at the time of death, OR if living apart, was eligible for Social Security benefits on the beneficiarys earnings record for the month of death. If there is no surviving spouse, the payment is made to a child who was eligible for benefits on the beneficiarys earnings record in the month of death. Monthly survivors benefits can be paid to certain family members, including the beneficiarys widow or widower, dependent children and dependent parents.
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How To Decide When To Retire
Choosing when to retire can be challenging. There are several factors that you must consider, such as your health, potential retirement income, cost of living, and life expectancy.
Developing a comprehensive retirement plan while you are young is one of the best ways to ensure that you have the retirement income you need when you reach your desired retirement age. As you begin planning for retirement, a smart step is to review your Employee Benefits Package. It is important to understand how long you must work for the employer to become an eligible employee for qualified plans and any pension or optional retirement plan that your employer might offer.
Your employer may have several programs available that you can utilize to plan for retirement, such as employer-sponsored retirement plans, profit-sharing plans, employer contributions, employee contribution programs, and stock options. Ask your employer whether it offers a matching contribution and if the plan is a defined benefit plan in the form of a pension or a defined contribution plan, such as a 401. The differences could make a difference in the monthly retirement benefit you receive once you retire.
After reviewing the retirement benefits offered by your employer, you may want to explore individual retirement accounts and options for saving for retirement. As you explore various accounts, consider your Social Security benefit options and discuss the beneficiary designation for the retirement account.
A Guide On Taking Social Security
Deciding when to take Social Security depends heavily on your circumstances. You can start taking it as early as age 62 , or you can wait until you’ve reached full retirement age or age 70 based on your work history. While there’s no “correct” claiming age for everybody, the rule of thumb is that if you can afford to wait, delaying Social Security can pay off over a long retirement. Here are some guidelines to consider.
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Social Security Disability Insurance
For SSDI, the document requirements are considerably broader and the application is lengthier. Along with the usual personal data , youll need to provide extensive documentation of your medical history and treatment and file an Adult Disability Report.
The SSDI process also includes an interview, in person or by phone. Youll find detailed information in Social Securitys Adult Disability Starter Kit.
When you can file: There is no minimum age for SSDI but you must have done at least some work in which you acquired Social Security credits.
Where to file:Online, by phone or in person.
What Happens If I Work And Get Social Security Retirement Benefits
You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit. Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
- We use the following earnings limits to reduce your benefits: If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2022 that limit is $19,560.
- In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2022, the limit on your earnings for the months before full retirement age is $51,960.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Use our Retirement Age Calculator to find your full retirement age based on your date of birth.
Use our Retirement Earnings Test Calculator to find out how much your benefits will be reduced.
What counts as earnings:
Your benefits may increase when you work:
When youre ready to apply for retirement benefits, use our online retirement application, the quickest, easiest, and most convenient way to apply.
If you need to report a change in your earnings after you begin receiving benefits:
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When Can You File For Social Security
The earliest when you can apply for Social Security benefits is at age 61 and nine months, and you can expect to receive your first payment four months laterthe month after your birthday. Typically, Social Security benefits are paid the month after they are due or must be specified. For example, the Social Security website states that an individual who wants their benefits to start in May will receive their first benefit check in June.
For example, if you turn 62 on Dec. 15, then your first full month of eligibility is January, and your payment for that month will arrive in February. If you have already reached age 62 and met all other eligibility criteria, then you may begin collecting benefits in the same month when you apply if you specify, although your first payment still would not arrive until the following month.
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Option To File And Suspend
People can apply for and then suspend their own Social Security payments if they desire to provide for their spouse while deferring their own benefits. If Tom were to file for his benefit at age 66, for instance, Mary would become eligible for a spousal benefit.
If Tom delays receiving his benefit until he turns 70, he will receive the larger deferred amount. Mary might start getting her spousal benefit right away while postponing her own retirement payment.
To maximize the amount received, it is essential to have the option to flip from spouse benefits to ones own.
How Do I Apply For Medicare Benefits
If you are already receiving Social Security retirement or disability benefits or railroad retirement checks, Social Security will contact you a few months before you become eligible for Medicare and give you the information you need to register. You should sign up for Medicare even if you dont plan to retire at age 65, or you may be penalized a 10% premium surcharge for each year past age 65 that you do not have Medicare. However, if you are age 65 or older and are covered under a group health plan either from your own employment or you are covered from your spouses employment, you may delay enrolling in Medicare medical insurance without having to wait for a general enrollment period or pay the 10% premium surcharge for late employment. The rules allow you to:
- Enroll in Part B any time you are covered under the group health plan, or
- Enroll in Part B during an eight-month special enrollment period that begins with the month your group health coverage ends or the month your employment ends, whichever comes first
I disagree with the SSAs decision on my claim. How can I appeal? Please visit www.ssa.gov/pubs/10041.html or call 1-800-772-1213 to file an appeal. All appeals should be sent to your local office to find your local office, please visit www.ssa.gov/locator.
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Applying For Social Security Benefits Online
The first thing you will need to do to apply for benefits online is creating a Social Security account on the SSA website. This account has a lot of great features and can be used to track your earnings over your lifetime based on reports made to the SSA. When you have an account, you can check in and see if all the information is correct. If not, you can notify the SAA of the mistake and show past tax returns or pay stubs to correct the error.
Once you have an online account and your documents are ready, you can start your retirement benefits application online. The process is simple and most people will have no issue getting through the application alone. However, your local Social Security office can provide help if its needed. You can also reach out by telephone to the SSA for help if you have issues completing your application.
Tips For A Successful Retirement
- Saving for retirement requires a strong financial plan and smart investing. A financial advisor help you on both fronts. Finding a qualified financial advisor doesnt have to be hard. SmartAssets free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If youre ready to find an advisor who can help you achieve your financial goals, get started now.
- Dont forget to include Social Security payments in your retirement plans. They may not have a titanic impact on your finances in retirement, but they can line your pockets with some extra cash when you might need it. SmartAssets Social Security calculator can help you get an idea of your future benefits.
- If you are thinking about where to retire, SmartAssets retirement tax-friendliness tool can help you figure out how your Social Security benefits, property taxes, and retirement account and pension withdrawals will be taxed in each state.
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What Is A Social Security Card
Your Social Security card is an important piece of identification. You’ll need one to get a job, collect Social Security, or receive other government benefits.
When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.
Working While Receiving Benefits
You can continue to work after you begin receiving Social Security retirement income. If you do, you can increase the monthly benefits you receive. The US Social Security Administration reviews your earnings records each year. If you earned more during that year than in previous years, the SSA recalculates the amount of your benefit.
However, you must keep in mind that working while receiving benefits could result in a reduction of your monthly benefits. For individuals who have not reached full retirement age, their benefits are reduced by $1 for each $2 earned above the yearly earnings limit. During the year in which you reach full retirement age, your benefits are reduced $1 for each $3 earned above the yearly earnings limit. Only the money you earn before the month you reach full retirement age is counted.
There is a different limit used for individuals during the year in which they reach full retirement age. The yearly earnings limits are adjusted each year. Earned income and income from self-employment are the only sources of income used to determine a reduction in benefits. Income from an annuity, pension plan, interest, investments, veterans benefits, and other government benefits are not included when calculating how much to reduce retirement benefits.
After you reach full retirement age, you can earn any amount and your benefits will not be reduced.
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Where Can I Find More Information
To find more information about Maryland programs for seniors, visit www.aging.maryland.gov. You can also call 410-767-1100, 800-243-3425 , or 410-767-1083 . The Centers for Medicare and Medicaid Services offer consumer resources at www.medicare.gov and 1-800-MEDICARE. The Social Security Administration has several helpful publications on its website, visit .
How To Stop Social Security Check Payments
The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.
If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.
Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.
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Get Ssa Benefits While Living Abroad
U.S. citizens can travel to or live in most, but not all, foreign countries and still receive their Social Security benefits. You can find out if you can receive benefits overseas by using the Social Security Administrations payment verification tool. Once you access the tool, pick the country you’re visiting or living in from the drop-down menu options.
How Do Benefits Work And How Can I Qualify
While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to:
- Those who are currently retired
- To people with disabilities
- To the surviving spouses and children of workers who have died
Each year you work, youll get credits to help you become eligible for benefits when its time for you to retire. Find all the benefits Social Security Administration offers.
There are four main types of benefits that the SSA offers:
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Learn about earning limits if you plan to work while receiving Social Security benefits
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The Benefit For Widow Or Widower
If the deceased spouse was nearing retirement age, the surviving spouse may get up to 100% of the deceased spouses pension.
Here are some real-world applications of benefit calculation:
- If Tom receives $2,000 per month and Mary has chosen to receive half of Toms Social Security payment, she will receive $1,000 per month. Mary would be entitled to a $2,000 survivor benefit but would lose her $1,000 spousal benefit upon Toms passing.
- John and Betty receive $2,000 and $2,000, respectively, per month from their respective sources of income, for a total of $4,000. Considering that her Social Security wages are equivalent to Johns, Betty will not be eligible for a widows benefit upon his passing. That $2,000 a month would keep coming to her.
- Their total income is $3,200, with Carol bringing home $2,000 and Joe $1,200. In the event of Carols passing, Joe would get $2,000 in the form of a spousal death benefit.
In the event that the deceased spouse received a lower benefit amount due to an early election, the surviving spouses benefit amount will also be lowered. Similarly, the widow or widower benefit would increase if the departed spouse had chosen to delay receiving payments until after the typical retirement age.