Wednesday, August 10, 2022

How Much Money Do I Get For Social Security

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For Those Who Get Caught By The Earnings Limit

How Much Money Will You Get From Social Security?

If you find yourself in a situation where the earnings limit applies, dont panic. The amount of benefits withheld is eventually paid back to you. There is a recalculation that happens. The result of this recalculation is that once you reach FRA, any withheld amounts are put back in the mix and slowly paid back out to you with each monthly check.

If you find yourself facing an unplanned early retirement, it may be to your benefit to use savings to supplement your income and delay the start of Social Security so that if you find another job, the earnings reduction will not apply.

This introduction to how some of the rules of Social Security work is a lot to take in. If you want to learn more, check out the Control Your Retirement Destiny podcast on either iTunes or Podbean.

The Control Your Retirement Destiny podcastis available on iTunes or Podbean

How Are My Benefits Calculated

The SSA uses your Average Indexed Monthly Earnings and Primary Insurance Amount to calculate your benefits. The formula Social Security uses is quite complicated, and most people won’t be interested in trying to calculate their benefits on their own, especially because Social Security can give you an estimate.

To give you an idea of what you might receive, for 2021, the average SSDI benefit amount is $1,277 per month, but those whose income was fairly high in recent years can receive up to $3,148.

If you’re interested in how Social Security calculates your AIME and PIA, here’s how.

Average SSDI Benefit in 2021 Monthly Social Security disability benefits range from $100 to $3,148.

Working Could Sometimes Raise Your Benefit

There’s one other caveat to consider. Remember, your Social Security benefit is based on your highest 35 years of earnings. If you work after you start getting Social Security benefits and the salary you earn is higher than your income in some earlier years, you could replace a year of low earnings with a year of high earnings. This could raise the benefit you’re entitled to.

Likewise, if you worked less than 35 years before claiming Social Security benefits, you could also increase your primary insurance amount by working longer. When you don’t work a full 35 years, the SSA factors in years of $0s when determining your monthly benefits. You could eliminate some of these $0 wage years by working even after you begin receiving Social Security retirement checks.

This guide to;how your work history affects Social Security benefits;provides more insight into how working could increase your monthly income so you’ll know if this applies to you.

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Reductions Based On Workers’ Comp Benefits

If you’re collecting workers compensation benefits, your disability benefits will be reduced.


Workers’ compensation benefits are counted as unearned income toward the SSI income limit and will reduce your SSI check.


If you receive both workers compensation and SSD, your monthly benefits from SSD will be reduced. This is because the Social Security Administration limits the total amount of combined monthly benefits you can receive. However, veterans disability compensation will not lower your SSD check.

The basic rule is that your workers compensation and SSD benefits combined cannot exceed 80% of the “average current earnings” you made before you became disabled, or the total amount your family receives monthly from SSD at the time you get your first workers compensation check, whichever is higher.

If your workers compensation payment and SSD check combined take your monthly payment above 80% of your pre-injury salary, the Social Security Administration will reduce your SSDI check so that you receive only 80% of your prior monthly earnings. The specific rules about how workers’ compensation reductions are made vary by state.

Here’s How To Estimate Your Social Security Benefit From Your Salary

What Is the Best Age to Start Claiming Social Security ...

Fortune tellers use crystal balls, tea leaves, and tarot cards to see the future. Thankfully, you don’t have to resort to psychic tools and mystical arts to predict your Social Security benefit. The Social Security Administration opts for a more concrete approach, in the form of online calculators and other estimators.

In 2020, the average Social Security benefit is $1,503 monthly and the maximum benefit is $3,790. A six-figure salary translates into a benefit that’s between those two numbers — but where the benefit lands, exactly, is influenced by other factors beyond your current income. Your income in prior years, your age today, and the timing of your benefits claim are also important. If you’re willing to make some assumptions, it is possible to estimate your future monthly Social Security benefit.

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Want $3895 Per Month In Social Security Benefits Here’s The Salary You Need

    Social Security benefits are a substantial source of income for many retirees. However, the average benefit amount is just over $1,500 per month, or around $18,000 per year, according to the Social Security Administration.

    Considering $18,000 per year is barely above the federal poverty line, the average retiree won’t be able to survive on Social Security benefits alone.

    One solution is to boost your retirement savings to supplement your income during your senior years. Another option, though, is to increase your Social Security benefits.

    The maximum amount you can collect in benefits in 2021 is $3,895 per month. But to receive that amount, you’ll need to be earning a certain salary. Here’s what it takes to max out your Social Security benefits.

    Adjust All Of Your Annual Earnings For Inflation

    Unless youre retiring this year, your future payouts will need to factor in inflation in the years between now and retirement age. The Social Security Administration uses the national average wage indexing series to calculate benefits for retirees, adjusting earnings to account for inflation in the years prior to retirement.

    Your Social Security retirement earnings will be adjusted to the average wage two years prior to retirement, attached to taxes taken out with your SSN throughout your lifetime. In 2019, that average wage was $54,099.99, so someone retiring in 2021 will be indexed on that. The IRS will take $54,099.99 and multiply it by the wage ratio for each year prior to that to come up with a wage for every year worked. The Social Security Administration maintains this wage ratio, which is based on the National Average Wage Indexing Series, available here. You can perform this calculation yourself or go to the Social Security website and input the year you plan to retire at the bottom. That will give you the estimated indexing factors for each year going back to your year of birth.

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    Spouses And Social Security

    You can claim Social Security benefits based on your spouses work record. If claiming spousal benefits provides more, claiming before your FRA on a spouses record means youll 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 youre the spouse of Colleen in the above example and you are the same age, youd 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 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 its higher than their own amount. But if you take your benefits early, say at age 62 versus waiting until age 70, your spouses survivor Social Security benefit could be up to 30% less for the remainder of their lifetime.

    What If Your Income Falls Short

    How much money will I receive from Social Security Disability Benefits?

    Many workers won’t be able to achieve the maximum Social Security benefit amount, and that’s OK. There are still ways you can boost your monthly payments.

    One option is to work a little longer. To calculate your benefit amount, the Social Security Administration uses an average of your earnings over the highest-earning years of your career. Chances are you’re earning more toward the end of your career than you were when you first started working.

    Even if you’ve already worked 35 full years, by continuing to work a little longer, you can have more higher-earning years included in your average income. That, in turn, will result in a larger benefit amount.

    Another way to boost your benefits is to wait to claim them. You can claim benefits at age 62 or anytime after that, but the longer you wait , the more you’ll receive every month. In fact, by waiting until age 70 to claim, you can receive your full benefit amount plus up to 32% extra each month.

    Keep in mind, too, that these benefit adjustments are permanent. No matter how long you live, you’ll continue earning larger checks each month if you delay claiming benefits.

    Many older adults rely on Social Security to make ends meet in retirement, so it’s important to make sure you’re making the most of your benefits. Even if you can’t quite reach the maximum benefit amount, you may be able to collect more than you think.

    The $16,728 Social Security bonus most retirees completely overlook

    The Motley Fool has a disclosure policy.

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    Can Children Qualify For Social Security

    Biological or adopted children or stepchildren can be eligible for Social Security benefits if they meet the following criteria:

    • Have a parent who is disabled or retired and eligible for Social Security benefits.
    • Are unmarried.
    • Are younger than 18 years old or up to age 19 if they are full-time high school students.
    • Are 18 years or older and disabled .

    The requirements for Social Security survivors benefits are similar, except that the parent must be deceased for the child to qualify.

    Supplemental Security Income is a separate program for Americans with limited incomes and other resources. Recipients must generally be;65 or older, blind, or disabled. But SSI is also available to children under age 18 in certain cases. To qualify:

    • The child must have a physical or mental impairment that results in marked and severefunctional limitations.
    • The impairment or impairments must have lasted or be expected to last for a continuous period of at least 12 months or be expected to result in death.

    In the case of blindness, that duration requirement doesn’t apply.

    Social Security rules limit how much money a family may receive in total benefits.

    Get The Maximum Benefits You Deserve

    Until you win your disability claim, its impossible to say exactly how much money youll get, but we can show you how to get a pretty close estimate.

    Getting benefits is not easy, which is why most people hire an attorney to help them. Most people get denied on their first attempt and give up.

    If that happens to you, you should appeal because thats when many people do finally get their benefits. Work with an attorney who knows Social Securitys complicated process and take some of the burden off yourself as you apply or appeal.

    Makris Law Firm has over 40 years of experience helping Texans when they need it the most. We fight to get the maximum possible benefits for you.

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    Determine Your Primary Insurance Amount

    To calculate your actual Social Security retirement amount, youll need to factor in something called bend points. These points are based on three separate percentages of your average indexed monthly earnings, set by law. For 2021, your PIA will be the total of:

    • 90 percent of the first $996 of your earnings plus
    • 32 percent of your average earnings between $996 and $6,002 plus
    • 15 percent of your average earnings over $6,002

    If the total above is not a multiplier of $.10, the SSA will round down the amount to the next-lowest multiplier of $.10. The SSA sets a maximum amount available to recipients each month, and this amount can vary from one year to the next. For 2021, someone filing at age 70 can receive up to $3,895 a month, while someone filing at full retirement age caps out at $3,148. If you begin filing at age 62 in 2021, your benefit may be reduced to as low as $2,203 per month.

    Social Security Quick Calculator

    8 Things Everyone Wants to Know About Social Security

    You can get a more accurate prediction if you’re willing to input a few pieces of information to the Social Security Quick Calculator. All you need is your birthdate, current salary, and future retirement date. You can view your benefits estimate in today’s dollars or future dollars, adjusted for inflation. There is a place to add your projected retirement date, but you can leave that field blank to see benefits estimates for claiming at age 62, at Full Retirement Age , or at age 70.

    The table below shows some results from the Quick Calculator, assuming a $100,000 salary.

    Current Age


    Table data source:

    As you can see, a younger person today making $100,000 earns the highest benefit. The calculator assumes your earnings gradually rise 2% annually to reach $100,000 in the current year, and then remain at $100,000 until you retire. In that model, someone who is 35 and earning $100,000 today will make that six-figure salary for 29 years. But the person who is 60 and just reached the $100,000 salary mark only has four more years to earn that amount. Even the inflation indexing that Social Security does with past-year wages isn’t enough to overcome the assumptions that the calculator makes. The 60-year-old has a lower income average over time and, therefore, earns a lower Social Security benefit.

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    Claim That Politicians Exempted Themselves From The Tax

    Critics of Social Security have said that the politicians who created Social Security exempted themselves from having to pay the Social Security tax. When the federal government created Social Security, all federal employees, including the president and members of Congress, were exempt from having to pay the Social Security tax, and they received no Social Security benefits. This law was changed by the Social Security Amendments of 1983, which brought within the Social Security system all members of Congress, the president and the vice president, federal judges, and certain executive-level political appointees, as well as all federal employees hired in any capacity on or after January 1, 1984. Many state and local government workers, however, are exempt from Social Security taxes because they contribute instead to alternative retirement systems set up by their employers.

    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.

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    Now You Know How Earnings Affect Social Security Benefits

    Earning money will affect your Social security benefits in different ways depending on whether you are receiving Social Security retirement benefits, disability insurance benefits, or Supplemental Security income. Knowing the rules for your particular program will help you determine if it’s a good idea to get a job and will help you plan for how any money you earn could affect the benefits you receive.

    Theres A Social Security Spousal Benefit

    How much money will I get in SSI benefits

    Marriage brings couples an advantage when it comes to Social Security. Namely, one spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s Social Security benefit. Put simply, 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.

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