Victor Malca Law A Trusted Name In Florida
Victor Malca P.A. has over 25 years of litigation experience in Workers Compensation and Social Security Disability lawsuits. His experience and continued success in fighting for his clients puts among the most trusted workers compensation lawyers in Florida. Our area of expertise is in representing injured workers on compensation benefit cases and disabled individuals claim social security disability benefits.
Our unwavering advocacy for employee rights and privileges are recognized by our past clients across South Florida. Book a free consultation today.
ABOUT THE AUTHOR
Judy Ponio is a writer for Victor Malca Law P.A. and enjoys helping people with questions about social security, workers compensation, and other serious matters involving peoples livelihood. She is not an attorney and her writing should not be considered legal advice.
How Does Work Affect Your Social Security Payments
Many people continue to work beyond retirement age, either by choice or out of necessity. But if you are receiving Social Security benefits, you need to be aware of how working can affect your benefit payments. Earning income above Social Security thresholds can cause a reduction in benefits and mean your benefits will be taxed.
Whether it makes sense to work and collect Social Security at the same time is a complicated assessment that depends on how much you earn and when you begin taking Social Security benefits.
Local Elder Law Attorneys in Your City
If you work and are full retirement age or older, you can earn as much as you want and your benefits will not be reduced. However, individuals may begin taking Social Security retirement benefits early beginning at age 62. If you are younger than full retirement age, there is a limit to how much you can earn and still receive full benefits. If you earn more than $18,960 , Social Security will deduct $1 from your benefits for each $2 you earn over the threshold. In the year you reach full retirement age, you can earn up to $50,520 without having a reduction in benefits. However, if you exceed $50.520 in earnings, Social Security will deduct $1 from your benefits for each $3 you earn until the month you reach full retirement age. Once you reach full retirement age, your benefits will no longer be reduced.
For more information on Social Security, .
Taking Social Security At 62
Unless you meet a few clear-cut criteria, you’ll want to give the idea of taking Social Security at age 62 quite a bit of thought before you apply for benefits. Unless you have a critical illness, you’ll likely receive more income over your lifetime by starting your benefits later.
For example, let’s say that you live to age 84. You can get varying amounts, depending on whether you start Social Security at age 62, 66, or 70. To do the math, multiply your monthly benefit amount times 12 months, then multiply that by the number of years you expect to receive benefits.
- Age 62: $835 × 12 × 22 = $220,440
- Age 66: $1,114 × 12 × 18 = $240,624
- Age 70: $1,470 × 12 × 14 = $246,960
You get more total income by waiting until age 70 to begin benefits. If you live longer, the age 70 plan works even better for you than the examples above.
For instance, if you start your benefits at 70 and live to age 94, you’ll receive $423,360 from Social Security. If you’d started at 62, you’d only get $320,640.
In general, the longer your life expectancy, the longer you should wait to start drawing Social Security.
Below are a few general guidelines you can use to determine whether it makes sense to take Social Security retirement benefits at age 62.
Don’t Miss: What Age Does Social Security Stop
Documents You May Need To Provide
We may ask you to provide documents to show that you are eligible, such as:
- Birth certificate or other proof of birth
- Proof of U.S. citizenship or lawful alien status if you were not born in the United States
- U.S. military discharge paper if you had military service before 1968
- W-2 forms and/or self-employment tax returns for last year.
- Final divorce decree, if applying as a divorced spouse and
We accept photocopies of W-2 forms, self-employment tax returns or medical documents, but we must see the original of most other documents, such as your birth certificate.
Do not delay applying for benefits because you do not have all the documents. We will help you get them.
Social Security: What Should You Do At Age 62
Is 62 your lucky number? If you’re eligible, that’s the earliest age you can start receiving Social Security retirement benefits. If you decide to start collecting benefits before your full retirement age, you’ll have company. According to the Social Security Administration , approximately 69% of Americans elect to receive their Social Security benefits early. . Although collecting early retirement benefits makes sense for some people, there’s a major drawback to consider: if you start collecting benefits early, your monthly retirement benefit will be permanently reduced. So before you put down the tools of your trade and pick up your first Social Security check, there are some factors you’ll need to weigh before deciding whether to start collecting benefits early.
You May Like: Receiving Social Security
How Early Should You File Before The First Check
When planning your retirement income, the first thing to know about Social Security benefits is that they are paid one month in arrears.
This means if youre eligible for benefits beginning in June, you wont receive your first check until July. The day of the month is dependent on your date of birth:
- If you were born between the first and the 10th, youll receive your check on the second Wednesday of the month.
- If you were born between the 11th and 20th, youll receive your check on the third Wednesday of the month.
- If you were born after the 21st of the month youll receive your check on the fourth Wednesday of the month.
Because you receive your payments one month in arrears and to avoid other snags that could come up file at least 90 days before you want your Social Security checks to start.
Now that you have this information, I hope you wont be surprised like Cheryl. The day before rule on birthdays is strange, but its a rule you need to know to effectively plan your retirement income.
Questions or Comments? If you still have questions, or would like to leave a comment, you could use the comments section below, but what may be a better option is to join my . Its very active and has some really smart people who love to answer any questions you may have about Social Security. From time to time Ill even drop in to add my thoughts, too. Alsoif you havent already, you should join the 100,000+ subscribers on my YouTube channel!
Youre Concerned About The Future Of Social Security
Theres an elephant in the room no one wants to talk about but must be considered. For years now the Trustees who oversee the Social Security program have been warning it will become insolvent sometime in the early 2030s. This will have a necessary impact on the governments ability to make good on its promise.
What that means is pure speculation at this point, but there are those who foresee a reduction in benefits. If this happens, future payouts will be less than currently expected. This scenario, in effect, devalues deferring Social Security.
Older people, particularly those nearing retirement age, are concerned about the future of Social Security yet, they are unlikely to be affected much, says Solomon. Still, if the prospect of losing Social Security payments keeps you awake at night, it may be preferable to file early or at full retirement age rather than wait for a higher sum.
The Social Security claiming decision is not one to be taken lightly. Even if you are certain of what you want to do, its best to review all the alternatives with your advisors because its nearly impossible to reverse the decision you ultimately make.
Read Also: At What Age Can I File For Social Security
Theres A Social Security Spousal Benefit
Marriage brings couples an advantage when it comes to Social Security. One spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s Social Security benefit. For example, if your monthly Social Security benefit is worth $2,000 but your spouse’s own benefit is only worth $500, your spouse can collect a spousal benefit worth $1,000 — bringing in $500 more in income per month.
Just as the benefit based on your own work history is reduced if you claim it early, the same is true for a spousal benefit. That 50% figure is the maximum amount that only a spouse who is at least full retirement age is eligible for. Taking the spousal benefit early at, say, age 62, reduces the amount to as little as 32.5% of the higher earners benefit. If you take your own benefit early and then later switch to a spousal benefit, your spousal benefit will still be reduced.
Youre Single And Have Health Issues
If youre single and have health issues, you may just want to use a simple break-even analysis. This calculation compares what youll receive in cumulative lifetime benefits for filing at various ages.
For example, if youre trying to compare filing at 62 versus what youd receive if you filed at 67, a break-even analysis would tell you that you need to live longer than age 78 for filing at 67 to make more sense over filing at age 62.
You can run all sorts of age combinations in these calculations, but if youre single and have health issues, this is probably where filing early makes the most sense because youre not worried about increasing survivor benefits or the host of other factors that married individuals have to worry about.
For more information on this specific topic, check out this great article on the break even analysis at dummies.com.
Spouses And Social Security
You can claim Social Security benefits based on your spouse’s work record. If claiming spousal benefits provides more, claiming before your FRA on a spouse’s record means you’ll lose even more than claiming on your own recordthe benefit reduction for a spouse is up to 35% while the reduction for claiming your own benefit is up to 30%. For instance, if you’re the spouse of Colleen in the above example and you are the same age, you’d be eligible for only $650 a month at age 6235% less than the $1000 a month you would get at your FRA of 67.
Not married? Read Viewpoints on Fidelity.com: Social Security tips for singles
Your decision to take benefits early could outlive you. If you were to die before your spouse, they would be eligible to receive your monthly amount as a survivor benefitif it’s higher than their own amount. But if you take your benefits early, say at age 62 versus waiting until age 70, your spouse’s survivor Social Security benefit could be up to 30% less for the remainder of their lifetime.
Timing And Your Health Coverage
Your health insurance coverage can also play a role in deciding when to claim Social Security benefits. Do you have a health savings account to which you would like to keep contributing? If so, note that if youre age 65 or older, then receiving Social Security benefits requires you to sign up for Medicare Part A, and once you sign up for Medicare Part A, youll no longer be allowed to add funds to your HSA.
The SSA also cautions that even if you delay receiving Social Security benefits until after age 65, you might still need to apply for Medicare benefits within three months of turning 65 to avoid paying higher premiums for life for Medicare Part B and Part D.
In 2022, the average monthly premium for Part D will be $33 per month versus $31.47 in 2021. If you enroll in a Medicare Advantage plan, the average monthly premium will be $19 per month in 2022 versus $21.22 in 2021. However, if you are still receiving health insurance from your or your spouses employer, you might not yet have to enroll in Medicare.
As of Oct. 16, 2021, Social Security offices are only open by appointment, and to get an appointment you need to be in a limited, critical situation. Most people will have to transact their business online, by phone, or through the mail.
Don’t Miss: How Much Will My Social Security Be At Age 65
Reasons Why It Makes Sense To Claim Social Security As Early As Possible
Social Security has always been a uniquely American Rorschach Test. Should you take whats offered to you right now or wait a few years for whats behind the curtain?
Fortunately, you dont have to have visions of Monty Hall haunting your Social Security claiming decision. Theres actually a fairly reliable checklist you can go through to determine if it makes sense for you to start collecting your government pension as early as possible .
Here are five reasons why it makes sense to do so:
You May Not Get A Choice
Some people have every intention of working well into their late 60s or beyond. But life doesn’t always work out that way.
You could end up losing your job in your early 60s, at which point you might struggle to find a new one due to circumstances outside your control . Or, your health could start to decline in your early 60s, forcing you to scale back your hours at work or even leave the labor force altogether.
That’s why, in the course of your retirement planning, it’s actually a good idea to assume you’ll have to sign up for Social Security at age 62 and lock in a lower monthly benefit for life. If you go with that assumption and ramp up your savings efforts in light of it, you’ll be in a better position to cope with unwanted surprises that come your way, like having to abandon your career at an earlier age than anticipated.
Of course, this isn’t to say that you should actually claim Social Security at 62. If, by the time you get to that age, your job is stable and your health allows you to keep at it, then working longer and holding off on filing for benefits could be a very smart financial move.
The point, rather, is that you shouldn’t assume you’ll end up with as generous a Social Security benefit as you’re eligible for. Rather, to play it safe, assume you’ll be locked into a lower benefit so you can plan around that accordingly.
You May Like: How Much Money Do I Get From Social Security
Reasons To Take Social Security At Age 62
For most people, the reasons to take Social Security at a later age far outweigh the reasons to take it at 62. There are exceptions, though:
- Your earned income will be below the annual earnings limit, so your benefits won’t be withheld.
- You have health issues and/or a shorter-than-average life expectancy, and, if married, your spouse has a larger benefit than your own.
- You have no other accounts to withdraw from and no way to earn income, so you must take Social Security at 62.
Many people underestimate the true value of their Social Security benefits. By looking at how much you receive over your life expectancy, you’ll be able to make an informed decision about whether to take your benefits at age 62.
You Can Undo A Social Security Benefits Claiming Decision
There aren’t many times in life you can take a mulligan. But Social Security offers you the chance for a do-over. Let’s say you claimed your benefit, but regretted the decision and wished you had waited. Within the first 12 months of claiming Social Security benefits, you can withdraw the application. You will need to pay back all the benefits you received, including any spousal benefits based on your record. But you can later restart your Social Security benefits at the higher amount youll earn by waiting.
Early claimers have another opportunity for a do-over: They can choose to suspend their Social Security benefit at full retirement age. Say you took your benefit at age 62. Once you turn full retirement age, you can suspend your benefit. You don’t have to pay back what you have received, and your benefit will earn delayed retirement credits of 8% a year. Wait to restart your benefit at age 70, and your monthly payment will get up to a 32% boost — which could erase much of the reduction from claiming early.
Don’t Miss: Ssa Benifits
No : If You’re Still Working You’ll Be Penalized
At 62, you’re younger than what Social Security considers your full retirement age. As a result, you’ll be penalized for collecting your benefits if you’re still drawing a paycheck. That penalty is steep — in 2021, it’s $1 for every $2 you earn above $18,960 in the year.
As a result, it generally doesn’t make sense to collect your Social Security benefits while you’re still working if you’re below full retirement age. If you’re making a decent salary, you could even lose your entire benefit while you’re still working, which makes it a complete waste.
How Much Will I Get From Social Security
Your retirement benefit is based on your lifetime earnings in work in which you paid Social Security taxes. Higher income translates to a bigger benefit . The amount you are entitled to is modified by other factors, most crucially the age at which you claim benefits.
For reference, the estimated average Social Security retirement benefit in 2022 is $1,657 a month. The maximum benefit the most an individual retiree can get is $3,345 a month for someone who files for Social Security in 2022 at full retirement age , the age at which you qualify for 100 percent of the benefit calculated from your earnings history. FRA is 66 and 2 months for people born in 1955, 66 and 4 months for people born in 1956, and is gradually rising to 67 for those born in 1960 or later.
Youll only know your own amount for sure when you apply, but there are ways to get a sense of it in advance. The quickest and easiest is to use AARPs Social Security Benefits Calculator or check your online My Social Security account. The latter draws on your earnings record on file with the Social Security Administration for the AARP calculator, youll need to provide your average annual income.
Keep in mind
Social Security sets a cap on how much of your income it takes into account in figuring your benefit. In 2022 the cap is $147,000 . Any income above that is not counted in your benefit calculation .