When I Retire Can I Collect My Pension And Social Security
These tips will help you calculate your retirement income.
Retirement from teaching brings with it many complex financial questions. One of the most common is Am I entitled to collect my pension and Social Security? Two scenarios could allow you to receive both.
However, even if you fall into one of these categories, there are some provisions that make sure you dont double-dip into both a government pension and the Social Security system. Lets take a closer look at each scenario.
Can A Divorced Woman Who Was Married For More Than 10 Years Claim A Spousal Benefit On Her Ex
Not any longer. The government eliminated a strategy that allowed a spouse or a divorced spouse to use a restricted application to file for a spousal benefit while letting her own retirement benefit grow. Now only people born before 1954 can do this.
Instead, when a spouse or divorced spouse files for benefits, the government will give her all the benefits she is eligible for whether it is her retirement benefit or a spousal benefit, said William Reichenstein, a principal of Social Security Solutions, a company that helps individuals maximize their lifetime income.
A divorced spouse can file for a spousal benefit even if the ex-spouse has not yet claimed a benefit as long as both are at least 62 and are divorced for more than two years. A married spouse must wait until her spouse has filed.
But if the ex-spouse dies, the picture changes. The surviving ex-spouse can claim a survivor benefit as early as 60 and allow her retirement benefit to grow until as late as 70. Or she can claim her reduced retirement benefit early and then switch to a higher survivor benefit at full retirement age.
If you were married for 10 years, keep tabs on the ex, Ms. Floyd said. Once he dies, that survivor benefit could be higher than your own.
No : Delay Starting To Collect Your Benefits
Another way to increase your Social Security benefits is to delay starting to collect them. You can start as early as age 62 and delay up to age 70. Each of us has a “full” retirement age , and for every year beyond that that you delay, your benefits will grow by about 8%. Delay from age 67 to 70 and you’ll get benefits 24% bigger. The table below shows the effect of starting to collect early or late. For example, if your full retirement age is 67 and you start collecting benefits at 64, your checks will be 80% of what they would have been had you started collecting at 67.
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Survivors Benefits If You Are Divorced
An ex-spouse is eligible to receive the same benefits as a current spouse if they were married to the deceased worker for at least 10 years and are not currently married. However, if the living ex-spouse remarries before age 60, they forfeit their right to their deceased former spouses Social Securityunless that subsequent marriage ended in death, divorce, or annulment. If the living ex-spouse remarries after age 60, this rule doesnt apply.
How much a spouse or former spouse receives depends on several factors including when they file for benefits and whether they are still working and earning money.
Tips For Getting Retirement Ready
- Relying on Social Security alone may not be the best option when it comes to saving for retirement. As you approach early retirement age, its best to save as much as you can along the way. Our retirement calculator can help you determine how much money you need to retire comfortably.
- Financial advisors can help you manage Social Security benefits, taxes and much more. If youre having trouble finding the right fit, SmartAssets free financial advisor matching calculator pairs you with up to three advisors in your area.
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You’re Concerned Social Security Will Disappear
Some people are concerned about potential Social Security changes in the future, such as higher retirement ages, lower benefits or higher taxes on benefits. As a result, they want to take the sure thing as soon as possible. In a 2017 Social Security summary, the government said Social Security trust funds will be depleted in 2034. Even then, however, annual Social Security taxes are projected to keep benefits at almost three-fourths of current levels.
You Can Claim Social Security Benefits Earned By Your Ex
Just because you’re divorced doesn’t mean you’ve lost the ability to get a Social Security benefit based on your former spouse’s earnings. You can receive a benefit based on his or her record instead of a benefit based on your own work record if you were married at least 10 years, you are 62 or older, and you are single.
Like a regular spousal benefit, you can get up to 50% of an ex-spouse’s benefit — less if you claim before full retirement age. And the beauty of it is that your ex never needs to know because you apply for the benefit directly through the Social Security Administration. Taking a benefit on your ex-spouse’s record has no effect on his or her benefit or the benefit of your ex’s new spouse. And unlike a regular spousal benefit, if your ex qualifies for benefits but has yet to apply, you can still start collecting Social Security based on the ex’s record, though you must have been divorced for at least two years.
Note: Ex-spouses can also take a survivor benefit if their ex died after the divorce, and, like any survivor benefit, it will be worth up to 100% of what the ex-spouse received. If you remarry after age 60, you are still eligible for the survivor benefit.
A claiming strategy if youre divorced: Exes at full retirement age who were born on January 1, 1954, or earlier can apply to restrict their application to a spousal benefit while letting their own benefit grow.
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Who Can Get Social Security Survivors Benefits
Spouses and families of Social Security claimants may be eligible for two different kinds of benefits after a worker passes away. A one-time lump sum death payment of $255 is availableto spouses or children who apply for payment within two yearsof the family members death.
In addition, family members can collect survivors benefits, or a portion of the amount the deceased worker would have gotten at his or her full retirement age.
Family members who qualify for survivors benefits include:
You should be aware that if your spouse works, gets remarried, or is eligible for his or her own retirement benefits, this can affect eligibility for your Social Security survivor benefits. If you have more questions about your Social Security insurance or want help with a claim, contact the lawyers of Johnson & Gilbert today.
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.
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The Source Ofand Solution Tothe Problem
When the current Social Security formula was put in place in 1977, no provision was made for the contingency that economic conditions would be so dire that average wages would fall in any given year. This problem first surfaced in 2009 during the Great Recession. The AWI, however, fell by a relatively small amount, and policymakers chose not to do anything about it. As a result of the COVID-19 pandemic, however, the decline in the AWI is likely to be about four times as big now as it was during the Great Recession.
There is ample precedent for fixing this problem. The first precedent concerns Social Security cost-of-living allowances . As mentioned above, payments in years after beneficiaries first year of retirement are indexed to inflation using a version of the consumer price index . However, under the law, if prices fall in any year, benefits are not adjusted downward rather, they remain the same. The second precedent concerns the Social Security contribution and benefit base, also known as the taxable maximum. The taxable maximum is the dollar amount of annual earnings above which the Social Security payroll tax does not apply. The taxable maximum is indexed to the AWIbut like COLAs, it is never adjusted downward.
How Do You Apply
You can apply online by using our Social Security Retirement/Medicare Benefit Application to apply for retirement, spouse’s, divorced spouse’s or Medicare benefits.
If you and your spouse apply online for retirement benefits at the same time, or if your spouse applies online after you start receiving benefits, we will check their eligibility for benefits as a spouse. If they are qualified, the online application will automatically include a request for spousal benefits on your record.
If your spouse applies for benefits, they need to be ready to supply the information we need to approve their application for these benefits:
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Disability And Survivor Benefits
In addition to retirement benefit eligibility, the statement also provides estimates as to what your monthly income would be if you claimed disability benefits.
There are also estimates for how much monthly income through survivor benefits your eligible spouse or minor children may receive if you pass away.
What Are The Spousal Rules For The Ssi Program
SSI, because it is need-based and has income limits, has different rules when it comes to two spouses who are both disabled. It is technically possible for both spouses to receive SSI. However, the income guidelines make it difficult for both to qualify.
Each applicant is subject to an income limit and part of the money their spouse earns counts toward that limit. This is true even if the spouses only source of income is SSI.
The math can be a little bit complex. Confounding the issue further is the fact that the program allows for certain income exclusions and expense deductions when calculating your total monthly income. Our lawyers can evaluate your household finances and advise you on how to maximize benefits between you and your spouse.
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Doing A Breakeven Analysis And Other Ways To Decide How Soon To Start
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A Tea Reader: Living Life One Cup at a Time
If youre about to retire, you may be wondering whether you should start claiming your hard-earned Social Security benefits now. Here are a few key factors to consider in making that decision.
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:
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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What Is Railroad Retirement
Railroad retirement is a retirement and disability plan for railroad workers who spent enough of their careers in the industry to qualify. Designed and administered by the Railroad Retirement Board since the 1930s, railroad retirement is the only private retirement system administered by the federal government.
Survivor Benefits For A Spouse
If your mother qualified for Social Security benefits and you are under age 16, the Social Security Administration will pay your father benefits from your mothers record if he provides for your care. If your father is full retirement age, he will generally receive 100 percent of your mothers benefit amount. If he qualifies for retirement benefits based on his own record, the agency will pay him the higher monthly benefit, combining benefit amounts if necessary.
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No : Start Collecting Early At 62
If you live an average lifespan, though, you won’t come out ahead much by delaying, because you’ll get fewer checks, in total, than those who started earlier with smaller checks. If you live much longer than average, though, waiting will have been worth it. But if you have reason to believe you will live a shorter-than-average life, or you simply need the money, go ahead and start collecting early. For most people, that’s a perfectly reasonable thing to do.
Workers Who Die Before Age 62
The minimum age to start claiming Social Security retirement benefits is 62. If someone dies prematurely, then dependent children and spouses may be entitled to survivor benefits. At age 60, for example, widows and widowers can begin receiving Social Security benefits based on their deceased spouses earnings record . Terminally ill patients can apply for Social Security Disability Insurance , which means they will still receive some benefit from their contributions to the system.
What if you are terminally ill and have reached the minimum retirement age? If you are single, claiming right away may be the most sensible strategy. However, if you have a spouse, postponing may provide your spouse with greater benefits. The spousal benefit can be as much as 50% of the worker’s benefit, depending on the spouse’s age at retirement and if the spouse is eligible for retirement benefits based on their own earnings record. The Social Security Administration has an online calculator that helps determine benefits for spouses.
If you do not qualify for Social Security payments, then you will need to ensure that you have sufficient income to support your lifestyle in retirement.
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Certain Immigrants Over Age 65
Retired people who immigrate to the United States will not have the 40 U.S. work credits that they need to qualify for Social Security benefits. One way to rectify this problem is to earn six work credits in the United States and receive prorated U.S. benefits combined with prorated benefits from their former country under a totalization agreement. This solution makes sense for workers who also do not have enough benefits in their home country to qualify for that countrys equivalent of Social Security payments.
Older immigrants who do not qualify for U.S. Social Security and whose countries laws allow them to receive benefit payments while residing abroad can claim their Social Security or pensioners benefits while living in the U.S.
When Can You Start Collecting Social Security
You can start collecting Social Security at age 62 unless you are a widow or widower, in which case, you can collect Social Security at age 60. However, collecting Social Security at 62 will reduce your benefits. To receive full benefits, you must wait until age 65. You can receive extra benefits if you wait even longer to start collecting Social Security.
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No : Check Your Record
You can get a good estimate of how much income you can expect to receive from Social Security by setting up a My Social Security* account with the Social Security Administration . Doing so will let you see the SSA’s record of your earnings, which you should revisit now and then, to make sure they’re correct. If they’re not, you might end up receiving smaller benefit checks than you’ve actually earned. Fixing errors in your record can be an effective way to increase your benefits.
Social Security Benefits For Workers Turning 60 In 2020 Will Very Likely Drop Due To The Coronavirus Pandemic
Congress could pass legislation that would prevent this outcome.
As a result of the COVID-19 pandemic, about 3 million retired workers who turn 60 years old in 2020 will very likely have much lower lifetime Social Security benefits than previously expected. Without legislative changes, the average earner stands to lose nearly $1,500 per year for the rest of their life. Fortunately, there is a simple legislative changeexplored in detail belowthat would fix these problems without lowering the benefits of any other cohort of retirees. Chairman of the U.S. House Ways and Means Social Security Subcommittee, Rep. John Larson , has introduced such legislation*and Congress should fix this situation as soon as possible.
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Theres An Annual Social Security Cost
One of the best features of Social Security benefits is that the government adjusts the benefits each year based on inflation. This is called a cost-of-living adjustment, or COLA, and helps your payments keep up with increasing living expenses. The Social Security COLA is quite valuable its the equivalent of buying inflation protection on a private annuity, which can get expensive.
Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. In 2021, Social Security beneficiaries saw a 1.3% COLA in their monthly Social Security benefits.
The Kiplinger Letter predicted in September that the COLA for 2022 could be 6%, which would be the largest adjustment since 1982. The final COLA for 2022 will be announced on Oct. 13.
Heres what COLAs have been in other recent years:
- 2009: 5.8%
- 2021: 1.3%