Wednesday, June 15, 2022

How Soon Can You Collect Social Security Benefits

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Disadvantages To Taking Social Security Early

ð´Can I Apply For Social Security Retirement Benefits In Advance of Age 62
  • Your Social Security benefit will be permanently reduced. Depending on how early you start taking Social Security, your benefit could be reduced by as much as 30%.
  • Your benefit will be reduced further if and while you continue earning wages.
  • Regardless of your life expectancy, if you are married and have higher lifetime earnings than your spouse, taking Social Security early will reduce your benefit, as well as your spouseâs and/or your dependent childrenâs survivor benefit. Surviving spouses get the full Social Security benefit of the higher-earning spouse.

How Do You Apply For Benefits

When you are ready to apply for Social Security benefits, you can apply in a number of ways. For individuals living in the United States, applications can be taken over the phone, online or by visiting a local Social Security office.

Individuals who do not reside within the United States or any of its territories must contact the nearest U.S. Social Security office, Embassy or consulate.

How Long Does It Take To Get Your First Social Security Check

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Social Security retirement benefits are available to American workers who have paid into the system throughout their working years. Originally established after the Great Depression, Social Security is a supplemental retirement program designed to ensure retired citizens have some level of income from which to live after they stop working.

Social Security benefits make it possible for all individuals who have worked and paid into the Social Security fund to count on a benefit check that will provide income to cover living expenses and other financial needs once they are retired.

Give me my check!

For many people Social Security is the only retirement benefit that they can count on, while others will add this income to distributions from other retirement accounts they have funded throughout the years. Here we take a closer look at some common questions asked about Social Security retirement benefits.

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Who Is Eligible For Social Security Benefits

Social Security Survivor Benefits for a Spouse

American workers who have contributed Social Security for 10 years or earned 40 credits are eligible for Social Security benefits beginning at age 62 or for qualifying disabilities.

In 2022, the amount needed to earn one credit is $1,510 paid into Social Security. The credits you earn remain on your Social Security record regardless of job changes or temporary unemployment. Workers can earn up to four credits each year.

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Born Before January 2 1954

At FRA, Maria will be eligible to receive $1,200 a month based on her own record, and Tom will be eligible to receive $2,000 a month based on his record.

  • She can collect on her own record, which will pay her $1,200 a month.
  • She can collect on Tom’s record, which will pay her half of Tom’s benefits $1,000 a month.

Why might Maria consider taking the lower payment at FRA? Because that decision could pay off for her in the long run.

If she collects on Tom’s record first, Maria’s own benefits would increase to $1,584 a month at age 70. Maria has a family history of longevity, and she’s in relatively good health at age 66. So she decides to claim on Tom’s record first, then switch to her own record at 70.

Tom never needs to know that Maria is claiming based on his record, and Maria’s claim doesn’t affect his ability to claim. But if Maria remarries between 66 and 70, she won’t be able to claim on Tom’s record.

The option to claim on Tom’s record first and allow her primary insurance amount to grow is only available to Maria because she was born before January 2, 1954.

Had she been born on or after that date, at FRA she would have qualified for $1,200 a month based on her own record or $1,000 a month based on Tom’s record. If she delayed Social Security until age 70, her own benefits would increase 8% for each year she waits past her FRA. But her benefits based on Tom’s record wouldn’t grow.

Claim At Full Retirement Age

If you start collecting Social Security retirement benefits at your full retirement age , you’ll receive 100% of your primary insurance amount . But remember that you can collect more than 100% of your PIA by waiting beyond your FRA.

You’ll earn an extra 0.67% each month that you delay your Social Security benefits past your FRA. That’s an extra 8% for each year that you wait past FRA and what other investment can guarantee an 8% annual increase?*

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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.

Social Security Benefits If Youre Married

Should I Collect Social Security Early and Invest it?

Determining Social Security calculations is a bit more complicated if you are married because you have the option to base benefits on your spouses salary history.

If the lesser earning spouses benefits are based on the higher earning spouses, then the limit of those earnings will be 50 percent of the higher earning spouses benefit amount.

To illustrate this, lets talk about A and B, a married couple.

  • A makes significantly more money than B.
  • A makes so much more money that As monthly Social Security benefits are going to be more than twice of Bs, based on Bs salary history.
  • The good news for B is that they can choose to have their Social Security benefits based on As salary history and can receive as much as 50 percent of As monthly benefit. This is the case even if B didnt hold a job outside the home.

On the other hand, if Bs monthly benefit would have been more than half of As, based on Bs salary history, then B can claim that amount.

In short, B can claim the higher of these two possibilities: Bs own Social Security earnings or half of As.

This all assumes that B doesnt begin claiming benefits until B reaches full retirement age. If B begins claiming earlier, then Bs benefits will be less. In addition, if B is claiming benefits based on As earnings, then B does not benefit by waiting later than full retirement age.

B will not be given more monthly benefits if B waits until age 70, for example, based on As earnings.

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Theres An Annual Social Security Cost

One of the best features of Social Security benefits is that the government adjusts the benefits each year based on inflation. This is called a cost-of-living adjustment, or COLA, and helps your payments keep up with increasing living expenses. The Social Security COLA is quite valuable its the equivalent of buying inflation protection on a private annuity, which can get expensive.

Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. In 2021, Social Security beneficiaries saw a 1.3% COLA in their monthly Social Security benefits.

The Kiplinger Letter predicted in September that the COLA for 2022 could be 6%, which would be the largest adjustment since 1982. The final COLA for 2022 will be announced on Oct. 13.

Heres what COLAs have been in other recent years:

  • 2009: 5.8%
  • 2021: 1.3%

Social Security Survivor Benefits For Spouses

Surviving spouses can receive benefits based on the benefit amount that the deceased was receiving from Social Security at the time of death.

  • A surviving spouse can get reduced benefits as early as age 60. Full benefits are available at full retirement age. Benefits are for life.
  • A surviving spouse who has a disability can collect benefits as early as age 50. The benefit begins upon the death of the retiree and continues until the surviving spouse is age 65. At that point, they are eligible for the aged benefit.
  • Surviving spouses can get benefits at any age if they take care of their spouses child who is under age 16 or disabled and receives Social Security benefits.
  • Surviving divorced spouses who are age 60 or older can get survivor benefits if the marriage lasted at least 10 years. Divorced spouses dont have to meet the length-of-marriage rule if they take care of the former spouses child who is younger than age 16 or disabled.

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The Source Ofand Solution Tothe Problem

When the current Social Security formula was put in place in 1977, no provision was made for the contingency that economic conditions would be so dire that average wages would fall in any given year. This problem first surfaced in 2009 during the Great Recession. The AWI, however, fell by a relatively small amount, and policymakers chose not to do anything about it. As a result of the COVID-19 pandemic, however, the decline in the AWI is likely to be about four times as big now as it was during the Great Recession.

There is ample precedent for fixing this problem. The first precedent concerns Social Security cost-of-living allowances . As mentioned above, payments in years after beneficiaries first year of retirement are indexed to inflation using a version of the consumer price index . However, under the law, if prices fall in any year, benefits are not adjusted downward rather, they remain the same. The second precedent concerns the Social Security contribution and benefit base, also known as the taxable maximum. The taxable maximum is the dollar amount of annual earnings above which the Social Security payroll tax does not apply. The taxable maximum is indexed to the AWIbut like COLAs, it is never adjusted downward.

How To Get A Social Security Card

At what age can i collect full social security, ALQURUMRESORT.COM
  • Gather your documents. Learn what documents you’ll need to get a card. Select your situation:
  • Adult or child
  • Original, replacement, or corrected card
  • U.S. born citizen, foreign born U.S. citizen, or noncitizen
  • Apply online for a replacement card. Apply online if youre not changing anything on your card and you are eligible. This option is available in most states. You will need to make a my Social Security account first. Or complete an application. If you can not apply online, fill out an application and return it to the SSA. Find out where to take it in person or mail it.
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    Can You Get Medicare At 62

    You can only enroll in Medicare at age 62 if you meet one of these criteria: You have been on Social Security Disability Insurance for at least two years. You are on SSDI because you suffer from amyotrophic lateral sclerosis, also known as ALS or Lou Gehrig’s disease. … You suffer from end-stage renal disease.

    How Do I Estimate My Monthly Retirement Benefits

    You can estimate your monthly retirement benefits by calculating your PIA, the monthly benefit youre eligible to receive once you reach your FRA. To determine your PIA, the Social Security Administration uses your best 35 years of employment to arrive at your Average Indexed Monthly Earnings . If you havent worked for 35 years, some of the included earnings may be zero.

    If you continue working after reaching your FRA, the SSA will automatically recalculate your benefits each year you continue to work. If your current income is greater than any of your previously calculated best 35 years, your benefits will be adjusted upward. The increase generally will be made in October of the following year but will be retroactive to January 1.

    Social Security retirement benefits are automatically modified each year for cost-of-living adjustments , which are either positive or zero never negative. COLAs are based on the Consumer Price Index and have averaged between 1% and 2% over the past 10 years.

    For more information, the SSA offers a helpful Social Security retirement calculator.

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    No One Else Is Relying On Your Benefits

    In the event of your death, a surviving spouse, minor or disabled child can receive money from the Social Security Administration based on the amount of your benefits. For example, a surviving spouse can receive between 71.5% and 100% of your benefit amount, depending on the surviving spouses age. A disabled child can receive 75% of your benefits each month even after youre gone.

    If no one else can qualify for benefits based on your record, you might want to retire early because no one is depending on that money. If everything else falls into place and you meet the minimum Social Security retirement age, consider collecting your benefits early and enjoying life.

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    Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Here’s A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits

    Collecting Social Security at 62 How They Feel About It Now

    For many Americans, Social Security benefits are the bedrock of retirement income so maximizing this stream of income is critical.

    The rules for claiming Social Security benefits can be complex, but this guide will help you successfully navigate the details. Educating yourself can ensure that you claim the maximum amount to which you are entitled.

    Here are 12 essential details you need to know.

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    How Long Can You Receive Social Security Benefits

    Once youâve earned your benefit and begin taking it, youâll receive it until you die. If youâre eligible for Social Security and pass away before age 62 â the earliest age you can begin taking your retirement benefit â your surviving spouse and/or dependent children will be entitled to your benefit. The highest monthly Social Security benefit between you and your spouse will equal the survivor benefit once one of you passes away.

    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.

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    What If I Change My Mind

    If you receive Social Security benefits at a reduced rate, but then change your mind, you have the option of withdrawing your application and paying back to the government what you’ve already received . Then, you could restart benefits at a later date to take advantage of a higher payout. But you are limited to one withdrawal per lifetime.

    For example, let’s say you elected to receive early benefits at age 62, but then decided to go back to work at age 63. You could withdraw your Social Security application within the first 12 months of receiving benefits, pay back the years’ worth of benefits you received, go back to work, and then wait until a later age to restart your benefit checks at a higher level.

    For important details about repaying benefits please read the SSA publication If You Change Your Mind.

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