Monday, May 16, 2022

How Do I Get My Social Security Benefits

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What Income Reduces Social Security Benefits

How Do I Get the Most from My Social Security Benefits?

If you plan to work in retirement and also collect Social Security benefits, then some of your benefits may be temporarily withheld based on your income. Until you reach your FRA, your benefits will be reduced by $1 for every $2 you earn in excess of $18,960 for 2021. In the year you reach your FRA, your benefits will be reduced by $1 for every $3 that you earn above $50,520 for 2021.

Starting with the month when you attain FRA, your benefits will no longer be reduced. Note that these dollars are not lost forever instead, your Social Security benefit will be increased to account for them after you reach your FRA.

The Impact Of Roth Iras

If youre concerned about your income tax burden in retirement, consider saving in a Roth IRA. With a Roth IRA, you save after-tax dollars. Because you pay taxes on the money before contributing it to your Roth IRA, you will not pay any taxes when you withdraw your contributions. You also do not have to withdraw the funds on any specific schedule after you retire. This differs from traditional IRAs and 401 plans, which require you to begin withdrawing money once you reach 72 years old, or 70.5 if you were born before July 1, 1949.

So, when you calculate your combined income for Social Security tax purposes, your withdrawals from a Roth IRA wont count as part of that income. That could make a Roth IRA a great way to increase your retirement income without increasing your taxes in retirement.

Another thing to note is that many retirement plans allow individuals, aged 50 years or older, to make annual catch-up contributions. For 2021, you can make catch-up contributions up to $1,000. These must be made by the due date of your tax return. You have until April 15, 2022 to make the $1,000 catch-up contribution apply to your 2021 Roth IRA contribution total.

Who Can Use The Retirement Estimator

You can use the Retirement Estimator if you have enough Social Security credits to qualify for benefits and you are not:

  • Currently receiving benefits on your own Social Security record.
  • Waiting for a decision about your application for benefits or Medicare.
  • Age 62 or older and receiving benefits on another Social Security record.
  • Eligible for a Pension Based on Work Not Covered By Social Security.

If you are currently receiving only Medicare benefits, you can still get an estimate. For more information, read our publication Retirement Information for Medicare Beneficiaries.

If you cannot use the Retirement Estimator or you want a survivors or disability benefit estimate, please use one of our other benefit calculators.

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Is Social Security Taxable

Your income from Social Security can be partially taxable if your combined income exceeds a certain amount. Combined income is defined as your gross income plus any nontaxable interest that you earned during the year, plus half of your Social Security benefits. For example, if youre married, file a joint tax return with your spouse, and your combined income ranges from $32,000 to $44,000, then you may have to pay tax on up to 50% of your Social Security benefits. If your combined income is greater than $44,000, then up to 85% of your benefits may be taxable. For single filers, those income numbers are $25,000 to $34,000 and greater than $34,000.

Keep Your Information Secure

my Social Security  Sign In Or Create an Account

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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Do You Have A Security Freeze Or Fraud Alert On Your Credit Report

If you have a security freeze, fraud alert, or both on your credit report, you can still open a mySocial Security account by temporarily lifting it.

  • Contact our Identity Services Provider and request that they temporarily lift your security freeze or fraud alert.
  • Create a mySocial Security account online after lifting the security freeze or fraud alert.
  • Reinstate the security freeze or fraud alert with the Identity Services Provider if needed. When you request a temporary lift of your credit freeze or fraud alert, the Identity Services Provider may automatically reinstate it after your temporary lift expires.
  • If you dont want to temporarily lift your security freeze or fraud alert, you can visit your local Social Security office to open an account in person. For more information on security freezes and fraud alerts, read the Federal Trade Commissions .

    The Basics About Disability Benefits

    The SSDI program pays benefits to you and certain if you are insured. This means that you worked long enough and recently enough – and paid Social Security taxes on your earnings. The program pays benefits to adults and children with disabilities who have limited income and resources.

    While these two programs are different, the medical requirements are the same. If you meet the non-medical requirements, monthly benefits are paid if you have a medical condition expected to last at least one year or result in death.

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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.

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    What Is Full Retirement Age

    How Do I Apply For My Social Security Retirement Benefits Online – Documents Needed To Apply For SSI

    In addition to how much youve earned over the years, the size of your monthly Social Security benefit depends on when you were born and the age when you start claimingdown to the month.

    Youll receive your full monthly benefit if you start claiming when you reach what Social Security considers your full retirement age , sometimes also referred to as normal retirement age. FRA was 65 when Social Security began, but it has been raised to 67 for anyone born in 1960 or later. To find your FRA, see the chart below.

    Finding Your Full Retirement Age

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    How Much Is The Social Security Spousal Benefit

    If youre eligible and can qualify, the spousal benefit can be as much as 50% of the higher-earning spouses full retirement age benefit.

    If your spouses full retirement age benefit amounts to $2,000 per month, your spousal benefit at your full retirement age could amount to $1,000 per month.

    Its important to note that this benefit cannot be more than 50% of the higher-earning spouses full retirement benefitbut it can be less!

    Thats because the benefit is also based on your filing age. Depending on how old you are when you file, the spousal benefit amount will range between 32.5% and 50% of the higher-earning spouses full retirement benefit.

    Check out the chart below to get an idea of how the benefit works and what your payment might be if you can take advantage of spousal benefits. The chart assumes that your full retirement age is 67 and your spouses full retirement age benefit is $2,000 per month.

    Did you notice the steep penalty for filing early? You receive significantly less in payments if you choose to file sooner rather than wait until full retirement age.

    You may have also noticed that the spousal benefit does not increase beyond your full retirement age. When considering your own Social Security benefit, there can be a lot of advantages to waiting to file and delaying when you start receiving payments well past your retirement age, but thats not the case here.

    Lump Sum Death Benefit

    First, lets deal with the one-time payment formerly called a funeral benefit. Upon the death of a Social Security beneficiary, the Social Security Administration pays a lump-sum death payment of $255. Needless to say, the $255 one time payment doesnt quite cover the cost of a funeral. Its been stuck at that level for several years and inflation has significantly eroded its useful value.

    There are three categories of people who may receive the death payment:

  • A surviving spouse, who was residing with the deceased spouse, or
  • A surviving spouse, who was not residing with the deceased, but was receiving benefits based upon the work record of the deceased spouse, or who becomes eligible for benefits after the death of the spouse, or
  • A surviving child, who was receiving benefits based upon the work records of the deceased parent, or who becomes eligible for benefit after the death of the parent. The payment is divided evenly among all eligible children.
  • If there are no eligible survivors in either of these three categories, then no death benefit is paid.

    Even though $255 isnt a lot, who wants to pass on money thats rightfully theirs? If the eligible spouse or child is not receiving benefits at the time of death, they must apply for benefits within two years in order to receive the death payment.

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    Calculating The Benefit Amount

    Figuring out how much youll receive in Social Security survivor benefits requires a little math. The simple explanation is that at the death of the first spouse, surviving spouses receives the higher of their own benefit, or the benefit of the deceased. But this simple explanation doesnt consider what age the deceased filed for benefits, if they did at all, and when the surviving spouse decides to file.

    If the Deceased DID NOT File for Benefits

    If the deceased spouse never filed for benefits, but died on or before their full retirement age, the calculation is relatively easy. The survivor receives the deceaseds full retirement age benefit, adjusted for the survivors filing age .

    If the deceased spouse never filed for benefits, and died after their full retirement age, the survivor receives the deceaseds benefit in the same amount it would have been on the date of the deceaseds death reduced for the filing age of the survivor. You can see the next chart for more information on age-based reductions that come into play in both cases.

    But what if the deceased spouse filed for benefits before he passed away? If this is the case, it could get a little more confusing.

    If the Deceased DID File for Benefits

    When it doesnt pay to delay

    To Find Out If Their Benefits Are Taxable Taxpayers Should:

    How Divorce Can Affect Your Social Security
    • Take one half of the Social Security money they collected during the year and add it to their other income.

    Other income includes pensions, wages, interest, dividends and capital gains.

    • If they are single and that total comes to more than $25,000, then part of their Social Security benefits may be taxable.
    • If they are married filing jointly, they should take half of their Social Security, plus half of their spouse’s Social Security, and add that to all their combined income. If that total is more than $32,000, then part of their Social Security may be taxable.

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    Information You Need To Apply

    Before applying, be ready to provide information about yourself, your medical condition, and your work. We recommend you print and review the . It will help you gather the information you need to complete the application.

    Information About You

    • Your date and place of birth and Social Security number.
    • The name, Social Security number, and date of birth or age of your current spouse and any former spouse. You should also know the dates and places of marriage and dates of divorce or death .
    • Names and dates of birth of children not yet 18 years of age.
    • Your bank or other and the account number.

    Information About Your Medical Condition

    • Name, address, and phone number of someone we can contact who knows about your medical conditions and can help with your application.
    • Detailed information about your medical illnesses, injuries, or conditions:
    • Names, addresses, phone numbers, patient ID numbers, and dates of treatment for all doctors, hospitals, and clinics.
    • Names of medicines you are taking and who prescribed them.
    • Names and dates of medical tests you have had and who ordered them.

    Information About Your Work:

    • Award letters, pay stubs, settlement agreements, or other .

    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.

    How Does The Social Security Administration Calculate Benefits

    Benefits also depend on how much money youâve earned in life. The Social Security Administration takes your highest-earning 35 years of covered wages and averages them, indexing for inflation. They give you a big fat âzeroâ for each year you donât have earnings, so people who worked for fewer than 35 years may see lower benefits.

    The Social Security Administration also makes annual Cost of Living Adjustments, even as you collect benefits. That means the retirement income you collect from Social Security has built-in protection against inflation. For many people, Social Security is the only form of retirement income they have that is directly linked to inflation. Itâs a big perk that doesnât get a lot of attention.

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    What Is A Social Security Benefit Verification Letter

    The Benefit Verification letter, sometimes called a “budget letter,” a “benefits letter,” a “proof of income letter,” or a “proof of award letter,” serves as proof of your retirement, disability, Supplemental Security Income , or Medicare benefits. You may use your letter for loans, housing assistance, mortgage, and for other income verification purposes. You can also use it to prove that you don’t receive benefits, have applied for benefits, or that you have never received Social Security benefits or SSI.

    In addition to name, date of birth, and the benefits received, the Benefit Verification letter includes other identifiers to prevent misuse and fraud.

    Taxes On Benefits Could Go Up

    Do I have to quit my job in order to get Social Security Disability Benefits?

    Currently, Social Security benefits are subject to federal income taxes if your combined income exceeds certain thresholds. This includes other income reported on tax returns, such as wages, self-employment, interest and dividends.

    Up to 50% of a beneficiary’s check may be taxable if their income is between $25,000 and $34,000 and they file their taxes individually, or between $32,000 and $44,000 and they file jointly with their spouse.

    Up to 85% of benefits are subject to taxes if an individual has more than $34,000 in combined income, or more than $44,000 for a married couple.

    Lawmakers could change those terms in order to bring more money into the system, said Larry Kotlikoff, a professor of economics at Boston University and president of Economic Security Planning, a provider of financial planning tools.

    Those taxes could be accelerated by raising the 50% threshold to 85% and the 85% threshold to 100%, Kotlikoff said.

    Alternatively, those income thresholds could be lowered, he said.

    Higher taxation on benefit income could be “politically easier for Congress to do,” Kotlikoff said.

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    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:

    • Learn about earning limits if you plan to work while receiving Social Security benefits

    Ask Larry: Will I Be Able To Get A Social Security Spousal Benefit In My Case

    Ask Larry

    Economic Security Planning, Inc.

    Today’s column addresses questions about the potential effects of pensions on the availability of spousal benefits, statistics about what benefit amounts different people receive and potential effects of filing for survivor’s benefits early and while working. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc.

    Have Social Security questions of your own youd like answered? Ask Larry about Social Security here.

    Will I Be Able To Get A Social Security Spousal Benefit In My Case?

    Hi Larry, My wife and I both turn 62 next year. I retired from public service at 57 and she also stopped working. I receive a pension from my job. I am currently short of my 40 quarters as I have 38 since I did not pay into Social Security during my public service.

    Will I be able to get any Social Security as a spouse since my wife will get her Social Security retirement benefit? If yes, will it be reduced because of the pension? Should I work to get 40 quarters and then take my retirement benefit reduced by my pension? Thanks, Steve

    In other words, unless your spousal benefit rate is more than 2/3rds of the amount of your pension from your public service work, you probably couldn’t be paid any spousal benefits.

    Can You Give Us A Breakdown By Percentages Of What Dollar Amount Social Security Recipients Are Getting?

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