Calculate The Best Time To Start Social Security
If you are confused about when to start, you can use the Social Security Explorer part of the NewRetirement Retirement Planner to compare your monthly income and maximum lifetime payout at different ages.
Or, you might consider the following rules of thumb:
- Take Early: The only people who should consider taking their Social Security early are those who absolutely need the money immediately, or those who do not expect to live for very long, due to illness
- Take at Full Retirement Age: Should you have reason to believe that you will not live past the age of 80, then generally speaking you will maximize your social security benefits if you take them when you reach your Full Retirement Age.
- Wait as Long as Possible: On the other hand, if you are confident that you will live past the age of 80 or 85, then most experts recommend that you defer your social security for as long as you can , so as to maximize the benefits you receive from it.
- Other: If you have dependent children, the additional benefits you receive for them might make filing when you are younger worthwhile.
It can also be a very good idea to have an overall retirement plan before you decide when to start your Social Security benefits. The NewRetirement Retirement Planner can help you assess all of your sources of retirement income and whether or not you will have enough to cover your expenses. This tool was recently named a best retirement calculator by the American Association of Individual Investors .
How Does The Spousal Benefit Work
The Bipartisan Budget Act of 2015 tightened some of the rules on spousal benefits, eliminating several strategies that couples once used to maximize how much they received. However, spouses can still claim benefits regardless of whether they ever held paid jobs, based on their partners record. To qualify, the spouse with a work record must already be receiving retirement or disability benefits, and the non-working spouse must be at least age 62.
As with other Social Security benefits, spousal benefits are permanently reduced if the nonworking spouse starts to collect before reaching full retirement age. If the non-working spouse waits until full retirement age, then they will receive a spousal benefit of up to 50% of their partners full retirement benefit.
Spouses who are widowed become eligible for 100% of their partners full benefit unless they also had a job and the benefit that theyve earned through their income is higher. Generally, the widowed spouse must be at least 60 years of age to receive benefits from the deceased spouses record, and the amount will be reduced if the surviving spouse elects to receive benefits before their full retirement age.
In addition, should the surviving spouse remarry before age 60, they will forfeit the deceased spouses benefit. In some cases, divorced spouses are also eligible for spousal benefits based on their former partners record.
Theres A Social Security Spousal Benefit
Marriage brings couples an advantage when it comes to Social Security. Namely, one spouse can take whats called a spousal benefit, worth up to 50% of the other spouses Social Security benefit. Put simply, if your monthly Social Security benefit is worth $2,000 but your spouses 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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When Will I Be Eligible To Receive Social Security Benefits
You must be 62 years old to begin receiving retirement benefits. When you reach the age of 61 and 9 months, you can apply.
If you begin collecting before reaching full retirement age, or FRA, Social Security cuts your amount.
Only then will you be eligible for 100% of your basic monthly benefit, which is based on your 35 highest-earning years.
If you wait until youre 70 to apply, youll earn more delayed retirement credits, which will increase your payment even more.
Other types of Social Security benefits may have a different start age:
- Spousal benefits can start as early as age 62, as long as the spouse whose work record youre claiming is already receiving retirement benefits.
- You can apply for survivor benefits on the record of a deceased spouse or ex-spouse when you are 60 years old 50 years old if you are disabled or any age if you are caring for the deceaseds under-16 or disabled child.
How Much Income Will You Need
Another important piece of the puzzle is to look at how much retirement income you’ll need, based partly on an estimate of your retirement expenses. If there is a large gap between your projected expenses and your anticipated income, waiting a few years to retire and start collecting Social Security benefits may improve your financial outlook.
If you continue to work and wait until your full retirement age to start collecting benefits, your Social Security monthly benefit will be larger. What’s more, the longer you stay in the workforce, the greater the amount of money you will earn and have available to put into your overall retirement savings. Another plus is that Social Security’s annual cost-of-living increases are calculated using your initial year’s benefits as a base–the higher the base, the greater your annual increase.
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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.
Documents Required To Apply For Social Security Benefits
The SSA may need to see certain documents in order to pay benefits. If you apply online, a list of documents needed will appear at the end of the Social Security application, along with instructions on where to submit them. Documents that might be needed are:
- Your original birth certificate or other proof of birth. You may also submit a copy of your birth certificate certified by the issuing agency.
- Proof of U.S. citizenship or lawful alien status if you were not born in the United States.
- A copy of your U.S. military service paper if you had military service before 1968, and
- A copy of your W-2 form and/or self-employment tax return for last year.
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You Have No Other Steady Source Of Income
If you reach age 62 and are let go from your job, you may have no choice but to file for benefits in the absence of outside income to pay your bills.
Granted, you do have the option to charge expenses temporarily on a credit card while you look for new work or to take out another type of loan. But doing so is risky, because unfortunately, finding a job can be difficult when you’re older, what with age discrimination rampant in the workforce. The longer you carry any sort of debt, the more interest you accrue on it. A better bet may be to file for Social Security as soon as you can to get your hands on the money you need to keep functioning. That way, you’ll avoid debt, and if you do find a job shortly after claiming benefits early, you can undo them as discussed earlier and file again later to avoid a lifelong reduction.
Many seniors file for Social Security at 62 simply because they can. Although that’s a decision that can backfire, there’s nothing wrong with claiming benefits at 62 if you have a well-thought-out reason for doing so.
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What Are Social Security Benefits
Social Security is a program run by the Social Security Administration to provide retirement or survivor benefits and disability income to millions of Americans. These benefits are given to qualifying United States citizens as retirement income for themselves, their spouses or their surviving children. People with qualifying disabilities may also receive benefits as income if they become unable to work due to their health, but, according to the SSA, 49 million of the 65 million people who receive monthly Social Security benefits are retirees.
While Social Security benefits are a form of income meant to help you live more comfortably, the SSA notes that these payments were “never meant to be the only source of income for people when they retire.” Instead, theyre meant to supplement other sources of income, such as a pension or withdrawals from a retirement account. In addition, according to the SSA, financial experts agree that most people need about 70% of their pre-retirement income to live comfortably in retirement, but Social Security payments only replace around 40% of pre-retirement income. Its always a wise idea to start planning other ways to save for retirement, no matter your age, to avoid relying solely on Social Security if possible.
Should You Jump On The Retirement Bandwagon
If you’re thinking about retiring, an estimated 6% COLA hike might tempt you to throw in the towel at work and claim Social Security benefits at 62. But heres why you dont want to do that.
And she uncovered something most people don’t know.
Her take is that anyone who is age 62 or older in 2022 and who is eligible for Social Security will profit from next years COLA even if they have not yet filed for benefits.
I worry that some people may rush to claim Social Security this year to benefit from the exceptionally large cost-of-living adjustment expected next January,” Franklin told me by email.
“Im sure most people do not realize that they automatically will benefit from next years COLA even if they have not yet filed for Social Security as long as they are at least 62 or older in 2022,” said Franklin, who wrote “Maximizing Social Security Benefits,” an online book that is available for $29.95 at MaximizingSocialSecurityBenefits.com.
If there are future inflation adjustments, she noted, those who are 62 and older would see inflation adjustments baked into future payments each year until they claim benefits all the way up to when they reach age 70.
She points out that the Social Security Administration notes: “Youre eligible for cost-of-living benefit increases starting with the year you become age 62. This is true even if you dont get benefits until your full retirement age or even age 70.”
Those who turn 62 next year and afterward face another issue, too.
No : You May Have $0 Or Low
Social Security bases your benefit level on your highest 35 years of covered earnings. The younger you are when you claim benefits, the bigger the chance that you’ll have $0 or really low-income early-career years on that list. If you’re able to keep working past age 62, you might be able to replace those with some decent, late-career-level earnings numbers.
Having more earnings on your record can make a key difference in what you get from the program, especially if you’re planning on Social Security providing a large portion of your retirement income.
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Social Security Benefits If Youre Married
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.
Ct De Devreme Pot Aplica
Pentru a fi eligibil pentru beneficii, trebuie s avei cel puin 62 de ani pentru întreaga lun.
Vei îndeplini acest criteriu în luna în care v-ai împlinit 62 de ani dac v-ai nscut în prima sau a doua zi a lunii.
Dac v-ai nscut într-o alt zi a lunii, va trebui s ateptai pân în luna urmtoare pentru a finaliza aceast condiie.
Avei la dispoziie pân la patru luni pentru a aplica înainte de începerea beneficiilor de pensionare. Dac împlinii 62 de ani pe 2 decembrie, de exemplu, putei începe s primii beneficii în decembrie.
Putei aplica în august dac dorii ca beneficiile dvs. s înceap în decembrie. Dac împlinii 62 de ani dup 2 decembrie, ei nu vor considera c avei 62 de ani pentru întreaga lun decembrie.
Când împlinii 62 de ani în ianuarie, putei începe s primii beneficii pentru întreaga lun. Putei aplica în septembrie dac dorii ca beneficiile dvs. s înceap în ianuarie.
Ei pltesc prestaii de la Securitatea Social în luna urmtoare celei în care sunt datorate.
Dac suntei eligibil pentru beneficiile din decembrie, vei primi prima plat în ianuarie.
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Can You Apply For Social Security At 62 And Still Work
Work credits are the units of measurement for their work. Based on your annual wages, you can get up to four work credits per year. Each year, as general salary levels rise, the amount of earnings required for a labor credit increases.
You must have earned an average of one work credit for each calendar year between the age of 21 and the year you turn 62 or become crippled or blind, up to a maximum of 40 credits, to be eligible for most types of benefits .
Regardless of your age, you must have a minimum of six work credits.
You must have worked long enough and recently enough under Social Securitys rules to be eligible for benefits based on a disability other than blindness.
The number of work credits youll need to qualify for disability payments is determined by your age at the time of your disability.
In most cases, youll need 20 work credits acquired in the ten years preceding your disability. Younger workers, on the other hand, may just need a few credits to qualify.
One Size Does Not Fit All When It Comes To Social Security
These are just three of many potential situations in which claiming Social Security at 62 could be the right move, even if it does result in a lower monthly benefit. They just go to show that there’s not a one-size-fits-all approach and that all seniors need to consider their personal goals and financial situation when deciding what’s best.
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You Can Claim Social Security Benefits Earned By Your Ex
Just because you’re divorced doesn’t mean you’ve lost the ability to get a Social Security benefit based on your former spouse’s earnings record. You can receive a benefit based on his or her record instead of a benefit based on your own work record if you were married at least 10 years, you are 62 or older, and single.
Like a regular spousal benefit, you can get up to 50% of an ex-spouse’s benefit — less if you claim before full retirement age. And the beauty of it is that your ex never needs to know because you apply for the benefit directly through the Social Security Administration. Taking a benefit on your ex’s record has no effect on his or her benefit or the benefit of your ex’s new spouse. And unlike a regular spousal benefit, if your ex qualifies for benefits but has yet to apply, you can still take a benefit on the ex’s record if you have been divorced for at least two years.
Note: Ex-spouses can also take a survivor benefit if their ex has died after the divorce, and, like any survivor benefit, it will be worth up to 100% of what the ex-spouse received. If you remarry after age 60, you are still eligible for the survivor benefit.
A claiming strategy if youre divorced: Exes at full retirement age who were born on January 1, 1954, or earlier can apply to restrict their application to a spousal benefit while letting their own benefit grow.