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How Old Do You Have To Be Collect Social Security

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How Much Can I Earn If I Work After My Full Retirement Age

Collecting Social Security after 67 How They Feel About It Now

If you continue to work after reaching full retirement age, you may work and earn as much as you’d like. You will not be subject to the retirement earnings test, and your Social Security benefits will not be affected.

If you work prior to FRA, you may forfeit part of your benefits if you earn above annual thresholds. However, your benefit amount will be recalculated at full retirement age to account for most of those forfeited funds.

Can A Person Who Is Due A Public Pension Also Collect Social Security Benefits

Two rules could reduce benefits for people who are also entitled to a public pension on earnings not covered by Social Security.

One rule is the windfall elimination provision , which applies to people who worked at jobs covered by Social Security but also worked as noncovered government employees and are due a pension.

When it is time to claim benefits, many people are unprepared for these cuts, Mr. Blair said. Possible W.E.P.-related reductions are not reflected in the workers Social Security statement, which shows the history of annual earnings and estimates of future benefits only for jobs covered by Social Security.

You can have someone who looks at the Social Security statement and it shows a benefit of $1,000 at full retirement age, Mr. Blair said. But the individual a teacher who is due a public pension, for example may be surprised later if the benefit is much lower, he said.

In addition to W.E.P. reductions, a government pensioner who applies for a Social Security spousal or survivor benefit can face reductions. The government pension offset reduces those benefits by two-thirds of the government pension.

Mr. Blair said individuals who are eligible for a public pension and Social Security can estimate their future benefits by running the numbers on the W.E.P. and G.P.O. calculators.

Pensioners are exempt from the W.E.P. offset if they paid into Social Security for 30 years or more in jobs with substantial earnings .

Earn Ssa Work Credits In Some Countries

You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.S. benefits.

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What Is The Average Person Social Security Benefit Per Month

California. In Americas most populous state, an estimated 4.3 million retirees who collect Social Security can expect to receive an average of $ 1,496.13 per month from the program in 2020, or $ 17,953.56 over the course of the year. California is another state where the benefits are below average for the United States.

How much does the average person collect on Social Security?

The average social security allowance was $ 1,543 per month in January 2021. The maximum possible social security allowance for those who retire at full retirement age is $ 3,148 in 2021.

What If I Take Benefits Early

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If you choose to receive your Social Security check up to 36 months before your full retirement age, be aware that your benefit is permanently reduced by five-ninths of 1% for each month.

If you start more than 36 months before your full retirement age, the benefit is further reduced by five-twelfths of 1% per month, for the rest of retirement.

For example, let’s assume that you stop working at age 62. If your full retirement age is 66 and 2 months you elect to start benefits at age 62, the reduced benefit calculation is based on 50 months. This means that the reduction for the first 36 months is 20% and 5.83% for the remaining 14 months. Overall, your benefits would be permanently reduced by 25.83%.

Effect of early retirement on benefits

1.Represents Full Retirement Age based on DOB Jan. 2, 1955

2.PIA = The primary insurance amount is the basis for benefits that are paid to an individual

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What’s Full Retirement Age

Full retirement age is when you’re eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1955 or later, your full retirement age can be anywhere between age 66 and 2 monthsall the way up to age 67 for those born after 1959. If you were born before 1955, you’ve already reached age 66 and full retirement age.

Retirement ages for full Social Security benefits

If you were born in

Your full retirement age is

1954 or earlier

How To Stop Social Security Check Payments

The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.

If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.

Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.

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What To Consider Before Filing For Social Security

A larger benefit check sounds great, but there are tradeoffs, and soon-to-retire folks should consider multiple issues before they decide one way or the other on when to file. If you really want to consider all the avenues, then youll have to think about your finances and longevity two issues that people have a hard time grappling with.

But heres the key trade-off: you can file early and take a reduced benefit, expecting that a shorter life span will mean you receive more now, or you could file at full retirement age or later and claim a bigger check, and eventually live long enough to claim more than the first approach.

Social Security is like longevity insurance, says Brent Neiser, a Certified Financial Planner and former chair of the Consumer Advisory Board at the Consumer Financial Protection Bureau. Its a stream of payments that will not stop throughout your life, so delaying your benefits to keep those payments as large as possible forms a helpful base to your retirement plan.

Neiser urges those who have not saved enough for retirement to use whatever means possible to postpone their Social Security benefits until after their full retirement age to help boost their future income.

You can use personal savings to help bridge the gap, but ideally you should plan to work a little longer , Neiser says.

Pros And Cons Of Collecting Social Security While Working

When Can I Retire and Collect Social Security? What’s The Best Age?

If you’re eligible for Social Security, you can start collecting your benefits as early as age 62. You can also continue to work. But unless you’ve reached your full or “normal” retirement age , you’ll be doubly penalized:

  • If you earn over a certain amount, your benefits will be temporarily reduced.

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Social Security Disability Programs

In addition to retirement benefits, the Social Security Administration manages two programs that provide benefits to people who are disabled or blind.

Social Security Disability Insurance Program
SSDI supports disabled or blind individuals by providing benefits based on their workers contributions to the Social Security trust fund. Your contributions are based on your earnings or your spouses or parents earnings while in the workforce. Your dependents may also be eligible for SSDI benefits based on your earnings.
Supplemental Security Income Program
SSI benefits are paid out as cash assistance to people with limited incomes and resources who are elderly, blind or disabled. These benefits may also include blind or disabled children. SSI payments are a federal benefit funded by the general fund of the United States not the Social Security trust fund. Some states provide additional state supplemental benefits in addition to the federal SSI payments.

In some cases, people may be eligible for both SSI and SSDI at the same time. The Social Security Administration calls these concurrent benefits. This can happen when a disability qualifies you for Social Security Disability Benefits, but you only get a small amount of monthly SSDI benefits. This may qualify you to receive SSI benefits as well.

Comparing SSDI and SSI Programs

FEATURE
Up to 85%

Income Taxes for Other Benefit Programs

No More File And Suspend

Note that the claiming strategy called file and suspend, which allowed married couples who have reached their FRA to receive spousal benefits and delayed retirement credits at the same time, ended as of May 1, 2016. However, spouses born before Jan. 2, 1954, who have attained their FRA may still be able to file a restricted application. It allows them to claim spousal benefits while delaying their own benefits up to age 70.

Social Security benefits can be taxable if your combined income is high enough.

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Whats Your Social Security Break

If youre looking to maximize your total lifetime Social Security payout, youll want to conduct a break-even analysis to determine when you should start drawing your benefits.

Your break-even age occurs when the total value of higher benefits starts to exceed the total value of lower benefits .

For example, if you are eligible to collect a reduced $900 benefit at age 62 plus 1 month, and your benefit would increase to $1,251 at age 65 and 10 months, your estimated break-even age is 75 years and 5 months.

If you expect to live beyond that age, it could make financial sense to delay drawing benefits. The Social Security Administrations life expectancy calculator can help you decide.

When it comes to calculating a start date for Social Security benefits, however, theres not an age thats appropriate for everyone. Consider your own financial needs, health and other retirement plans before making the call. If you cant reasonably afford to live without taking benefits, it may make little sense to delay taking your benefit.

Watch Out For Hidden Costs

Obtaining Your Social Security Number

Youll also want to consider other lifestyle factors, especially Medicare. Americans become eligible for federal health insurance coverage at age 65, well after when you can begin to file for Social Security.

If you stop working at age 62 and lose health insurance, you have to get supplemental insurance to bridge the gap until you turn 65 and Medicare kicks in, Neiser says.

If you work during retirement, you have another incentive to delay collecting Social Security. Earning too much at a job after you begin collecting your benefit can reduce your payout, but only if you have yet to hit full retirement age.

However, when you hit full retirement age, your benefit will increase to account for any benefit that was withheld earlier due to working. Heres how much you can earn and not get hit.

If youre younger than full retirement age for all of 2021, the Social Security Administration will deduct $1 of your monthly check for every $2 you earn above $18,960 per year.

If you reach full retirement age in 2021, the administration deducts $1 of your monthly check for every $3 you earn above $50,520 until the month you reach retirement age.

Youll also owe Social Security and Medicare tax on your earnings, even if youre already receiving benefits.

So those are some potential pitfalls to claiming Social Security early.

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Full Retirement Age: Age 6567 Depending On Date Of Birth

Your full retirement age is determined by your day and year of birth, and it is the age in which you get your full amount of Social Security benefits. For every year you delay taking your benefits from full retirement age up until you turn 70, your benefit amount will increase by almost 8% a year. It is referred to as a delayed retirement credit. This increase can result in more lifetime income for you and your spouse. Even after factoring in a potential return on investment and the monthly benefits you could have received if you claimed early, there can still be a $50,000$100,000 increase in lifetime benefits by waiting until you are older.

When Can You Begin To Claim Social Security Survivor Benefits

Survivor benefits to family members from a contributor depend on the age when that worker died, with fewer credits needed the younger the worker dies. The Social Security Administration has a special rule whereby the surviving children, and spouse who is caring for the children can receive survivors benefits after the worker has attained just six credits in the three years prior to his or her death.

The Social Security Administration will continue to pay survivors of someone already receiving retirement or disability benefits at the time of their death based on that entitlement.

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How Do You Apply For Social Security Benefits

If you are eligible for Social Security benefits, you can apply online, by phone or by appointment at a local Social Security office.

How to Apply for Social Security Benefits

Online
Applying online is the easiest way to apply for Social Security benefits. The Social Security website allows you to apply for retirement, spouses, Medicare and disability benefits at the same site. You can also apply for Supplemental Security Income benefits.
Phone
If you dont have Internet access, you can sign up by phone. You can call the Social Security Administration at 1-800-772-1213 .
In-person
The Social Security Administration has restrictions on office visits during the COVID-19 pandemic. It does allow in-person visits for certain services. You should check with the SSAs Coronavirus page to see if you can make an in-person appointment at your local office.

Do You Have To Pay Taxes On Social Security After Age 70

Collecting Social Security at 62 How They Feel About It Now

Heres why: Every dollar you make beyond the 85% threshold will result in 85 cents taxation of your benefits, plus youll have to pay extra income taxes. After the age of 70 there is no increase anymore, so you should claim your benefits even if they will be partially subject to income tax.

At what age is Social Security not taxable?

Between the ages of 65 and 67, depending on the year of birth, you are at full retirement age and are eligible for tax-free Social Security retirement benefits.

How much can a 70 year old earn before paying tax?

The tax exemption thresholds for the elderly and for the young have varied over the past 20 years. Seniors pay no taxes until they earn $ 32,279 annually, while younger families have an effective tax-exempt threshold of $ 20,542.

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When Should You Start Collecting Social Security Benefits

To determine when you should start taking your benefits, its important to understand how much your check is affected by when you claim your benefit. As mentioned before, you can claim your benefit as early as age 62, but reaching full retirement age can secure your full benefit.

So when exactly is full retirement age? That depends on when you were born.

Year of birth
65 + 2 months for each year past 1937
1943-1954
66 + 2 months for each year past 1954
1960 and later67

While the full retirement age used to be 65, changes to the program have increased that age. For example, those born in 1955 now have to wait an extra two months beyond age 66 to claim their full benefit. Someone born in 1959, for example, would have to wait until age 66 and 10 months to get the full benefit. Anyone born in 1960 or later, receives their full benefit at 67.

But some retirees choose to wait even longer. You may wait until as late as age 70 to claim your benefit, but then you must take it. Youll receive a bigger check for doing so.

So what is the upside to delaying your Social Security benefit after age 62? Your check wont get hit by a serious benefit reduction. Heres how much a $1,000 monthly check will become if you claim your benefit as soon as youre eligible at age 62.

Year of birthIf you file at 62, benefit reduced by:A $1,000 check becomes
$700

Is Your Full Retirement Age Affected By Where You Live

Your FRA is not affected by where you live. Most Social Security rules, including those that determine benefit amount and claiming age, are set by federal law. However, some states do tax Social Security benefits, so where you live can affect tax levels on your retirement income. But again, the age at which you claim benefits won’t affect your tax rate — your income is the key factor.

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The Basics Of Social Security

First off, every eligible worker can begin receiving Social Security benefits at age 62, but you’ll get a reduced monthly payment if you don’t wait until you’re at full retirement age. Your monthly payment will depend a few things, including your income throughout your working years, how much you paid into the Social Security system and at what age you claim benefits. Benefits are adjusted yearly based on the cost of living.

Full retirement age depends on the year you were born:

  • If you were born between 1943 and 1954, full retirement age is 66
  • If you were born between 1955 and 1959, full retirement age is between 66 and 67, depending on your birth year
  • If you were born after 1960, full retirement age is 67

The Social Security website provides a calculator to help individuals understand how much their benefit will be reduced if they collect early. For example, if you were born in 1960 and wanted to collect as soon as you hit age 62, you’d receive 70% of your full retirement age payout. But if you waited until age 64 you’d get 80% of the full benefit.

By delaying the receipt of your benefits past full retirement age, you’ll earn even more than the full benefit for every year after full retirement age and before you hit age 70, you’ll collect 8% more each year.

  • If you’re full retirement age is 66, you can earn up to 132% of your full benefit by waiting until you’re 70
  • If you’re full retirement age is 67, you can earn up to 124% of your full benefit by waiting until you’re 70

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