Will Social Security Affect My Retirement
The retirement benefit that you receive from PEBA is not affected by any benefits you may receive from the Social Security Administration or through a workers’ compensation program. If you are a disability retiree receiving Long Term Disability benefits from Standard Insurance Company, please contact them regarding the effect of Social Security on their payments.
Does Owning Property Affect Social Security Benefits
Asked by: Wyman Hand
No. Social Security only counts income from employment towards the retirement earnings test. Other kinds of income including income from rental properties, lawsuit payments, inheritances, pensions, investment dividends, IRA distributions and interest will not cause benefits to be reduced.
What Age Does Social Security Kick In
One of the important questions that retirees have about Social Security is the ideal age to collect the monthly checks. Find out the best age for Social Security.
After paying into Social Security all your working life, you may consider claiming Social Security benefits when you retire. However, while it can be tempting to start drawing money from Social Security as soon as you retire, you must wait until you reach the minimum age for Social Security.
You can start taking Social Security retirement benefits starting at age 62. However, you will receive reduced benefits if you start receiving retirement benefits before the full retirement age. The full retirement age for social security is 66 and 2 months for anyone born between 1955 to 1959, and it increases to 67 for people born in 1960 or later.
Also Check: Tax Benefits Of Incorporating In Delaware
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.
Children Receiving Ssdi Benefits Through Their Parents
In some cases, a child is eligible to receive SSDI benefits through a qualified parent, adoptive parent, or step-parent. Under certain circumstances, a child could obtain these benefits through a grandparent. If the adult qualifies for and is receiving SSDI benefits or was entitled to benefits before their death, their child could receive benefits based on the Social Security record of their parent. These types of SSDI benefits are known as dependent or auxiliary benefits. Typically, these benefits terminate when your child turns 18.
If your child is under the age of 18, they are entitled to up to 50% of your monthly benefits, subject to a maximum per family. However, these benefits are only available until your child is 18 or in high school. If they are in high school when they turn 18, the benefits will continue until their 19th birthday. Additionally, if your child marries, their benefits will stop.
Recommended Reading: What Are The 3 Main Types Of Social Security Benefits
Will Social Security Alone Take Care Of Me In Retirement
Short answer on whether Social Security will take care of you in retirement is NO!
For one thing, it was never intended to.
FICA was designed to cover 40% of a workers previous income. The worker was supposed to come up with the other 60% themselves through savings and investments.
The problem is that not enough people understood how little of their retirement Social Security actually covers. Some 70% of unmarried elderly people count on Social Security for half or more of their monthly income. Approximately 21% of married couples and about 45% of unmarried elderly person rely on social Security for at least 90% of their monthly income.
That shows how important it is to have a retirement fund outside of Social Security.
How Unused Social Security Benefits Are Handled
Unused Social Security benefits remain in the Social Security trust funds to be used as payments to other Social Security benefit recipients. This rule applies to all types of Social Security benefits, including Social Security retirement benefits and Social Security disability benefits. Remember that the Social Security Administration does not hold your Social Security benefits in a private account. Instead, all Social Security taxes from current workers go into the trust funds to be used as payments to current benefit recipients. We will discuss more in the next section about how Social Security works.
In some cases, your family members might be entitled to survivor benefits based on your work record. While this is not technically a refund of unused benefits, it does provide a spouse, child, or even parents some level of benefits after the death of a Social Security recipient. We will also discuss the survivor benefit rules later in this article, where we will detail who can qualify for these benefits and how much they can get.
Read Also: Spousal Benefits Social Security Disability
What Happens If I Retire At 65 Instead Of 67
Asked by: Bill Haag Jr.
But if you do so, rather than waiting until your full retirement age of 67, your monthly benefit will be reduced by 30 percent permanently. File at 65 and you lose 13.33 percent. If your full retirement benefit is $1,500 a month, over 20 years that 13.33 percent penalty adds up to nearly $48,000.
Apply For Survivors Benefits
You should notify us immediately when a person dies. However, you cannot report a death or apply for survivors benefits online.
In most cases, the funeral home will report the persons death to us. You should give the funeral home the deceased persons Social Security number if you want them to make the report.
If you need to report a death or apply for benefits, call 1-800-772-1213 . You can speak to a Social Security representative between 8:00 a.m. 7:00 p.m. Monday through Friday. You can find the phone number for your local office by using our Social Security Office Locator and looking under Social Security Office Information. The toll-free Office number is your local office.
If you are not getting benefits
If you are not getting benefits, you should apply for survivors benefits promptly because, in some cases, benefits may not be retroactive.
If you are getting benefits
If you are getting benefits on your spouse’s or parent’s record:
- You generally will not need to file an application for survivors benefits.
- We’ll automatically change any monthly benefits you receive to survivors benefits after we receive the report of death.
- We may be able to pay the automatically.
If you are getting retirement or disability benefits on your own record:
- You will need to apply for the survivors benefits.
- We will check to see whether you can get a higher benefit as a widow or widower.
Don’t Miss: Bill To Increase Social Security Benefits
How Do I Set Up Direct Deposit Or Make A Change To My Current Direct Deposit Bank Account
Having your benefit directly deposited into your bank account is the most efficient and secure method for you to receive benefits. To set up direct deposit or change an existing direct deposit, log into Member Access and select Payment. Next choose Set Up Direct Deposit to set up a new direct deposit or choose the View/Change Direct Deposit option to modify an existing direct deposit. You may also complete a Direct Deposit Authorization and send it to:
S.C. Public Employee Benefit AuthorityAttention: Benefit Payments Department202 Arbor Lake DriveColumbia, South Carolina 29223
You may designate up to two bank accounts for direct deposit of your monthly retirement benefit. However, our automated systems do not currently allow the flexibility to designate a portion of your benefit to be deposited into a bank account and the remainder of your benefit to be issued on a prepaid debit card.
Lost Or Stolen Federal Payments
Report your lost, missing, or stolen federal check to the agency that issued the payment. It’s usually one of these paying agencies. If your documentation indicates it’s a different agency, and you need its contact information, look in the A-Z Index of U.S. Government Departments and Agencies.
To get an update on your claim, contact the Treasury Department Philadelphia Financial Center at 1-855-868-0151, option 1.
Read Also: Tax Benefit For 529 Plan
History Of Social Security
Right in the middle of the Great Depression with millions out of work and living in abject poverty something needed to be done to help American citizens in their time of need. It was between 1933 and 1939 that Franklin D. Roosevelt developed his New Deal, a collection of programs designed to get Americans back to work and prosperity.
A part of this New Deal was the Social Security Act which was signed into law by Roosevelt on August 14th 1935. As mentioned, the basic idea was a tax on income taxes that would go to a mutual fund to supply retirement and disability payments for those no longer able to work.
The first payroll Social Security deductions were collected in January 1937 with the first Social Security check going out in January of 1940. This check dated January 31st 1940 was for $22.54 and was issued to Ida May Fuller of Brattleboro, Vermont.
How Do I Change The Income Tax Withholding On My Monthly Retirement Benefit
As a benefit recipient, changes to both your federal and South Carolina state income tax withholding designations can be made through Member Access. Once you have logged in, select Payment, then choose the View/Change Tax Withholdings option. If you make no withholding election, federal regulations require PEBA to withhold federal income tax based on a status of married with 3 exemptions. Your tax withholding designations will be updated immediately however, changes that are made after our monthly payroll has been processed will be reflected in the following months benefit payment. Although the dollar amounts may change annually as a result of changes to the required withholding tables, the changes you make for marital status and exemptions will remain in effect until you make further changes or revoke them. You may also complete a Withholding Certificate for Monthly Benefit Payments and send it to:
S.C. Public Employee Benefit AuthorityAttention: Benefit Payments Department
Read Also: Social Security Spousal Benefits After Death
How To Calculate Your Social Security Benefit
Calculating your estimated Social Security benefit is no easy task. Your best bet may be to request a Social Security benefits estimate from the SSA. This will contain an estimate of your benefit at age 62, at your FRA, and at age 70, based on your current work history.
In addition to these estimates, the SSA also has a series of Social Security benefits calculators that can help you plan for retirement. You can also use this calculator from AARP to estimate the best age to start claiming your benefits.
How Long Does It Take The Ssa To Process A Disability Claim
According to the agency it may take anywhere between three and five months for a decision from the SSA. The length of time depends on how long it takes to gather the necessary information to process your claim. Your application is given to the state agency whose medical and vocational experts make the disability decision.
You may be asked to complete further forms, or they may request that you have an examination or medical test which you will not have to pay for. The SSA advises not to miss any appointments for medical tests or examinations.
Once your SSDI application is approved you cannot begin collecting benefits until the sixth full month of your disability is determined to have begun due to a mandatory five-month waiting period.
Also Check: Aarp Medicare Supplement Plan K Benefits
Ssdi For Your Disabled Adult Child
If your child is disabled, they could qualify for a category of benefits known as adult child benefits. These benefits are an extension of the SSDI benefits mentioned above. However, the extension is only for disabled children.
If your child is disabled before turning 18 or becomes disabled before reaching the age of 22, the benefits they received through your SSDI could continue for as long as your child is disabled. This means that as long as the parent, step-parent, or adoptive parent is eligible for, and receiving, SSDI or Social Security retirement benefits, their disabled child is eligible for dependent benefits. If the parent should die, if they were eligible at the time of their death, their childs benefits continue. In some cases, if the parents are deceased, a disabled child could receive these benefits through their grandparents.
To qualify, your adult child must meet the SSAs definition of an adult disability. As stated above, SSA has a different definition of child and adult disability. To qualify for SSDI auxiliary benefits under their parents earning record, a young adult must experience a disability that completely impairs their ability to perform any substantial gainful activity. This impairment could be either physical or mental in nature. Additionally, the impairment must be expected to result in the death of the adult child or last for a period of at least 12 continuous months.
Other qualifications include the following.
Family Benefit Maximum Limits
Although each qualified child may receive a monthly benefit payment based on your full retirement benefit amount, there is a limit to the amount the Social Security Administration will pay. They refer to this limit as the Family Benefit Maximum. This maximum benefit is not a set number but is about 150 to 180 percent of your full retirement benefit. Where your percentage falls depends on your full retirement age benefit.
There is one notable exception to maximum calculation. If you have a divorced spouse who is receiving benefits from your work record, it will not count in the family benefit maximum and it will not affect the amount of benefits you or your family may receive.
How Can Uncle Sam Keep Our Unused Social Security Benefits
Social Security rules are complicated and change often. For the most recent Ask Larry columns, check out maximizemysocialsecurity.com/ask-larry.
Boston University economist Larry Kotlikoff has spent every week, for over two years, answering questions about what is likely your largest financial asset your Social Security benefits. His Social Security original 34 secrets, his additional secrets, his Social Security mistakes and his Social Security gotchas have prompted so many of you to write in that we feature Ask Larry every Monday. Find a complete list of his columns here. And keep sending us your Social Security questions.
Kotlikoffs state-of-the-art retirement software is available here, for free, in its basic version. His new book, Get Whats Yours: the Secrets to Maxing Out Your Social Security, will be published in February by Simon & Schuster.
Anonymous Gig Harbor, Wash.: Heres a question thats been eating at me. Why does our government KEEP our unused Social Security after someones death rather than paying the unused balance back to the spouse? The government didnt contribute to our Social Security insurance, so why should they have the right to keep it? I think of all the people who either never drew a dime of it or those who drew but still left an enormous amount.
How Do You Qualify For Social Security Benefits
You qualify for Social Security old age benefits by paying into the program during your working years. Full insurance is based on accumulating 40 quarters or “credits” from covered wages, and a worker can earn up to four credits a year. One credit is awarded for every $1,470 in earnings for 2021 , an amount that is adjusted annually to keep up with inflation.
A payroll tax cap sets the maximum amount of earned income that is subject to the Social Security payroll tax. The payroll tax cap in 2021 is $142,800 .
The SSA keeps track of your earnings throughout your career, indexes each year’s total earnings, and uses the 35 highest-earning years to determine your average indexed monthly earnings . Next, your AIME is used to arrive at your primary insurance amount , the monthly amount you can begin to collect when you reach full retirement age.
For individuals born in 1938 or later, the full retirement age gradually increases from 65 until it hits 67 for those born after 1959. You can collect Social Security retirement benefits at age 62, but the amount of the benefit will be reduced to compensate for receiving it earlier and, presumably, for a longer period of time.
If you wait until you’re 70 instead of 62 to collect benefits, you’ll get an extra 8% a year, which means you’ll collect 132% of your PIA for the rest of your life. Once you reach age 70 the increases stop.
Read Also: Extra Social Security Benefits For Vets
I Am A Disability Retiree Why Does The Form 1099
In accordance with guidelines set forth by the Internal Revenue Service, disability benefits paid by a PEBA-administered retirement plan are reported annually on Form 1099-R as normal distributions for income tax purposes. Code 7 in box 7 of your Form 1099-R means that you are not subject to the 10 percent tax penalty for early withdrawal because you receive your retirement benefits via a monthly benefit. Code 3 is not applicable to box 7 because the disability program administered by PEBA is an occupational or job-related disability program rather than a total and permanent disability program as described in section 72 of the Internal Revenue Code.
These benefits should be included as ordinary income for tax purposes. Although the Form 1099-R which you received from PEBA correctly contains a code 7 in box 7, if you also receive monthly benefits from the Social Security Administration and are considered totally and permanently disabled for Social Security purposes, you may qualify for the federal Credit for the Elderly or the Disabled. Please refer to IRS Schedule R when completing your tax return. You must keep for your records a copy of your physicians statement, which certifies that you were permanently and totally disabled on the date that you retired. Tax laws are complex and change frequently therefore, you should consult a tax advisor if you have questions regarding your individual federal or state tax return.