Monday, May 16, 2022

How Much Am I Getting For Social Security

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Using Your Benefit Estimates

How Much Money Will You Get From Social Security?

As your statement will show, your Social Security retirement benefits will vary depending on when you claim them before or after your full retirement age . The longer you wait to start receiving payments, the higher your benefit amount will be.

However, it’s not always better to wait until your full retirement age to claim your Social Security benefits. If you need your Social Security benefits for living expenses, or you have a health condition that makes it unlikely that you will live past age 75 or so, you may be better off collecting your benefits sooner rather than later. You can use a calculator at the Social Security website to see which retirement age makes the most financial sense for you .

For comprehensive practical information about how and when to claim Social Security benefits, see Social Security, Medicare & Government Pensions, by Joseph Matthews with Dorothy Matthews Berman .

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  • Maximum Social Security Benefits You Can Get

    The maximum monthly Social Security benefit available to someone retiring in 2021 is $3,895, which assumes that:

    • They worked 35 years or more
    • In their 35 top-earning years, their income met or exceeded the SSA’s maximum taxable amount, so that they paid the largest Social Security tax amount possible for each of those years
    • They are retiring at age 70, which entitles them to the maximum delayed retirement credit

    For comparison, the table below lists the monthly benefits for workers who plan to retire in 2021 whose earnings met or exceeded the SSA maximum-taxable limit every year of their working lives, from age 22. This situation is far from typical, but it shows the impact of retirement age on Social Security benefits, isolated from other factors.

    Maximum Social Security Benefit for Workers Retiring in 2021
    Age

    How The Earnings Limit Is Applied

    The most confusing part of the benefit reduction due to income is how its reflected in your monthly benefits deposits. Instead of taking out a little bit every month, the SSA will withhold several months of benefits at a time.

    If you predict in advance that you will have excess earnings and report this to the Social Security Administration, they may take a few months of benefits before you actually earn the anticipated excess earnings.

    For example, if your Social Security payment is $1,667 per month, and you expect to receive $28,960 in wages from your job, the Administration would calculate that youll be over your earnings limit by $10,000 and thus $5,000 in benefits should be withheld. So, they would withhold your benefit payment from January to March. In April, your checks would resume.

    If you dont report excess income before you earn it, then you have to report this information after the fact. You can do this when you file your income tax return, but the preferred method is to be proactive and call your local Social Security Administration office.

    If you wait for the Social Security Administration to learn of your excess earnings via your tax return, there could be a significant gap between the time you earn the excess income and the time that they withhold your benefits. In most cases, its better to report the excess earnings quickly so the benefits reduction occurs closer to the time you actually earn that extra income.

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    How Much You Could Receive

    Old Age Security pension amounts January to March 2022

    Maximum monthly payment amountTo receive the OAS your annual income must be
    $642.25

    Find out more about Old Age Security payment amounts.

    The Old Age Security pension is reviewed in January, April, July and October to reflect increases in the cost of living as measured by the Consumer Price Index. Your monthly payment amount will not decrease if the cost of living goes down.

    Check The Social Security Administration’s Math

    I make $100,000. How much will I get from Social Security ...

    Your statement includes a record of the earnings on which you’ve paid taxes and an estimate of the benefits you will receive at various retirement ages: 62, 67, and 70. It is always wise for you to check the SSA’s numbers. Don’t be surprised if you uncover an error. Some government-watchers estimate that the SSA makes mistakes on at least 3% of the total official earnings records it keeps.

    When you check your record, make sure that the Social Security number noted on your earnings statement is your own, and make sure the earned income amounts listed on the agency’s records mesh with your own records of earnings as listed on your income tax forms or pay stubs.

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    Know Your Social Security Full Retirement Age

    First things first:Determine your Social Security full retirement age. For people born between 1943 and 1954, full retirement age is 66. If your birthday falls between 1955 and 1959, it gradually climbs to 67. If you are born in 1960 or later, your full retirement age is 67.

    You can claim your Social Security benefits a few years before or after your full retirement age, and your monthly benefit amount will vary as a result. More on that in a moment.

    Are Social Security Benefits Taxable

    If you have a lot of income from other sources, up to 85% of your Social Security benefits will be considered taxable income. If the combination of your Social Security benefits and other income is below $25,000, your benefits wonât be taxed at all. The amount of your benefits that is subject to taxes is calculated on a sliding scale based on your income. Money that Social Security recipients pay in income taxes on their benefits goes back into funding Social Security and Medicare.

    If your retirement income is high enough that your benefits are taxable, how do you pay those benefits? You can ask Social Security for an IRS Voluntary Withholding Request Form if youâd like the government to withhold taxes from your Social Security benefits. Otherwise, youâre expected to file quarterly tax returns to pay these taxes over the course of the year.

    That covers federal income taxes. What about state income taxes? That depends. In 13 states, your Social Security benefits will be taxed as income, either in whole or in part the remaining states do not tax Social Security income.

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    Can You Collect Social Security At 62 And Still Work

    Yes, you can begin collecting Social Security as early as age 62, and you can still work while you collect these benefits. However, there is a limit to the amount that you can make while receiving benefits. Most people working full time will earn more than the limit of $18,960, and their benefits will be reduced by $1 for every $2 that they earn over the limit. If working part-time or full-time and earning less than this limit, then there will be no reduction in benefits.

    Fact #: Social Security Lifts Millions Of Elderly Americans Out Of Poverty

    Social Security COLA in 2022: How much more money you will see in your benefits every month

    Without Social Security benefits, about 4 in 10 Americans aged 65 and older would have incomes below the poverty line, all else being equal, according to official estimates based on the 2019 Current Population Survey. Social Security benefits lift more than 15 million elderly Americans out of poverty, these estimates show.

    An important study that matches Census estimates to administrative data suggests that the official estimates overstate elderly reliance on Social Security. That study finds that in 2012, 3 in 10 elderly Americans would be poor without Social Security, and that the program lifted more than 10 million elderly Americans out of poverty.

    No matter how it is measured, however, its clear that Social Security brings millions of elderly Americans out of poverty and dramatically reduces the elderly poverty rate.

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    Who Qualifies For Ssi

    SSI, which is run by the Social Security Administration , aims to help those over 65, as well as blind and disabled people, who have little or no income.

    Along with having a disability, whether you qualify or not depends on your assets.

    To meet the requirements, individuals can’t have more than $2,000 in assets, while couples can have up to $3,000.

    But the SSA exempts some things you own, which include the following:

    • Life insurance policies with a face value of $1,500 or less
    • Your car
    • Burial plots for you and members of your immediate family
    • Up to $1,500 in burial funds for you and up to $1,500 in burial funds for your spouse
    • The home and land where you live

    For more on Social Security, we explain five things to know that can save you hundreds of dollars.

    Calculate How Much Social Security You Will Receive

    How much you will receive when it comes to social security is not definite, much less guaranteed. Remember that other people benefit from the social security tax that you pay to the government. The government uses the social security payments you made for people who have already reached the age of 65 and above. By the time you reach that age, how much social security will you receive?

    Below are the steps that can help you calculate how much social security you will receive.

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    Your Most Burning Questions On Social Security

    Readers asked. Here are our replies.

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    People have lots of questions about Social Security: Will it still be around when I retire? How much will I get? How does the spousal benefit work?

    Thats not surprising.

    No government program is more important to so many Americans. This year, Social Security is expected to pay $1.1 trillion to 69 million recipients of retirement and disability benefits and Supplemental Security Income. Nearly all Americans pay into the program and can expect to receive a benefit at some point in their lives. And it is the largest retirement income source for a majority of older households.

    The New York Times recently invited readers to submit their questions about Social Security. Today, were responding to some of the most frequent ones.

    Is Social Security financially secure? Should people in their 60s who can afford to wait to claim benefits wait until they can get the highest monthly benefit, or should they consider signing up now because the program may not be there in 20 years?

    That would mean immediate, across-the-board benefit cuts, but the pain would be felt most acutely by todays younger workers and low-income retirees.

    Could you provide a full explanation of spousal benefits for living spouses, and for widows, widowers and divorced people?

    Do Social Security benefits last your lifetime?

    There Are Social Security Survivor Benefits For Spouses And Children

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    If your spouse dies before you, you can take a Social Security survivor benefit. However, that won’t be in addition to your own benefit. You must choose one or the other. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death .

    A widow or widower can start taking a survivor benefit at age 60. However, the payment will be reduced because it’s taken before full retirement age. If you remarry before age 60, you are not eligible for a survivor benefit. If you remarry after age 60, you may be eligible for a survivor benefit based on your former spouse’s earnings.

    Eligible children who are under age 18 or were disabled before age 22 can also receive a Social Security survivor benefit. It would be worth up to 75% of the deceased’s benefit.

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    Four Ways Benefits Can Be Increased Or Decreased

    There are four ways the starting benefit can be permanently increased or reduced from the PIA calculated at age 62:

    • Starting benefits earlyBenefits may begin as soon as age 62, but they are permanently reduced for every month between the onset of benefits and FRA.
    • Delaying benefits beyond full retirement ageDelayed retirement credits can permanently increase benefits, and they are awarded for every month between FRA and a later onset of benefits.
    • Starting early and continuing to workIf you start benefits before your FRA and keep working, the SSA may deduct the part of your benefits that exceeds a threshold. However, any such deductions are not permanent. When you reach your FRA, the SSA recalculates your benefits and credits back any deductions.
    • Continuing to work, periodEven if you dont start benefits early, you can increase your benefits by continuing to work up to any age. Any year in which your indexed earnings are higher than one of your 35 previous highest years will boost your benefits. However, after age 60, you will not receive wage indexing, and after age 62, you will not receive bend point inflation indexing.

    All four points are related to your starting Social Security benefits. Keep in mind that when your benefits start, the COLA will increase them annually. If you start benefits at age 66, your PIA automatically increases with the applicable COLAs from the years in which you turn 63 through 66.

    How Will Working Affect Social Security Benefits

    In a recent survey, 68% of current workers stated they plan to work for pay after retiring.1

    And that possibility raises an interesting question: how will working affect Social Security benefits?

    The answer to that question requires an understanding of three key concepts: full retirement age, the earnings test, and taxable benefits.

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    How Much Earned Income Can You Have Without Losing Ssi

    When you have earned income, you lose a portion of the monthly benefits you receive from SSI. Eventually, your earned income can grow so high that you lose your entire benefit. But not all earned income counts.

    The SSA excludes certain income from counting when determining your earned income level. It excludes:

    • The first $20 of all income earned
    • The first $65 of monthly earned income
    • Income that is being used to pursue a plan of self-support by someone who is disabled or blind or income that is set aside for such a plan
    • The first $30 of infrequent income per quarter

    You are also able to deduct any work expenses related to impairment. And only one-half of your earned income counts in determining how much your benefits are reduced.

    So, for example, say it’s 2019 and you earn $1,627 per month in earned income with no other income sources.

    • You’ll subtract $85 from the $1,627 , which will leave you with $1,542.
    • Only half of this income counts, so you’d have $771 in earned income.
    • For 2019, $771 happens to be the monthly maximum federal benefit — called the federal benefit limit — for an individual receiving SSI.
    • In this example, your benefit is reduced to $0.

    So, for 2019, you can earn up to $1,627 in earned income and get at least some SSI benefits. Once you hit the federal benefit limit, however, your SSI benefit ends.

    How To Determine Your Social Security Benefits

    You should regularly check the estimated Social Security benefit youll eventually get

    While Social Security benefits are not guaranteed, the quality of your retirement is down to the way in which you have planned ahead.

    It is worth figuring out the amount in financial sum of your retirement benefits in order to determine what your years of Social Security contributions entitle you to.

    You can do this in a variety of ways, but some of the most common methods is to:

    • Visit a local Social Security office to obtain a record of your taxed Social Security earnings and an estimate of retirement benefits
    • Visit the Social Security website and use one of their online benefit calculators to work out your retirement estimate based on your earnings record
    • Wait until you decide to start receiving benefits and allow the SSA to calculate the amount for you

    Many people, rather than visit a Social Security office, now try to transact their business either online, over the phone or via mail, as many offices have been affected by the ongoing COVID-19 pandemic.

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    How To Calculate Social Security Benefits In Excel

    If you are in your late 50s and approaching retirement, you can create a useful model of your future benefits. It works best to do this in a Microsoft Excel spreadsheet, as follows:

    • Using a recent Social Security statement, list in spreadsheet column A your taxable Social Security earnings year by year.
    • List in column B the most recently published NAWI adjustment factors as published by the SSA.
    • Multiply columns A and B and output the result to column C.
    • Identify in column D the 35 highest values in column C. Add these together and divide the sum by 420 . This will approximate your AIME.
    • Use the most recently published bend points to convert your AIME into a PIA.

    You also can fill in hypothetical values for estimated taxable Social Security earnings in future years until you plan to stop working. To be conservative, use a NAWI adjustment factor of 1.0000 in column B for all future years.

    A financial advisor who fully understands this process can help verify your calculations, advise you on when to start Social Security benefits, and estimate the future benefits you can expect to receive.

    How To Maintain Your Ssdi Benefits

    Being approved for SSDI benefits avoids financial hardship and most applicants have had to endure a difficult process to get these entitlements so in order to hold onto them you need to be aware of what you need to do. Two things you should do to keep your SSDI benefits active are as follows:

    • Keep seeing your doctor as this confirms you still have a disability
    • Maintain contact with the SSA on a regular basis
    • Notify the SSA if there are any changes to your circumstances such as: changing address, charged with an offense, altering your name, losing custody of a child who is in receipt of SSI benefits and taking up employment.

    In the majority of cases when your situation is reviewed by the SSA, it is typically confirming your ongoing need for disability benefits. If you can provide medical evidence that your health has not improved and if you have maintained contact with the SSA your SSDI benefits will probably remain the same. If the SSA decides to review your case and you lose your SSDI as a result you may appeal the decision within ten days of the SSA notification.

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