Married Divorced You Have Options
Social Security offers a lot of benefits to people in a lot of different scenarios, and some of the most complex choices occur if youre married or divorced. So spouses and ex-spouses need to carefully consider the options and what works best for them, especially in the area of survivors benefits when one spouse predeceases the other.
If married, you have to consider your spouse, says Eric Bond, wealth advisor with Bond Wealth Management in the Los Angeles area. How much the surviving spouse will receive at the passing of the first spouse will depend on when that spouse started their Social Security.
The largest benefit stays in the household when a spouse dies, says Beau Henderson, lead retirement planning specialist with RichLife Advisors in Gainesville, Georgia. This is why we need to think about the impact of our claiming decision on both lives. There are a lot of scenarios and they need to be modeled to give you the best result.
And just because youre divorced doesnt mean you cant claim Social Security benefits on your ex-spouses earnings. But there are specific requirements that you need to meet.
The existence of a spouse or ex-spouse complicates the planning process and means that you need to model more scenarios to see what maximizes your benefits.
Make Payments To The Federal Government
Learn how to use Pay.gov to make secure, electronic payments to government agencies from your checking or savings account. You can use the online service for VA medical care copayments, U.S. district court tickets, U.S. Coast Guard;merchant mariner user fee payments, and more.
If you need help, contact Pay.gov customer service.;
How Your Primary Insurance Amount Is Calculated
Once you have your AIME, you can calculate your primary insurance amount , the base rate for your Social Security payments. The PIA calculation relies on so-called bend points that determine how much of your income will be replaced by Social Security benefits in retirement.
Think of bend points as similar to tax brackets, in that they determine a percentage of your benefits based on incremental buckets of earnings. There are three bend point buckets: one for 90% of income replacement, one for 32% and one for 15%.
These bend point buckets help give lower lifetime earners a higher percentage of income replacement, and higher lifetime earners a lower rate of income replacement, says Jim Blankenship, certified financial planner and author of A Social Security Owners Manual.
The dollar amounts of bend points are adjusted for inflation each year, but the percentages of each bend point are set by law and remain unchanged. AIME amounts are always rounded down to the nearest $0.10. For 2021, the bend points are:
90% of the first $996 of your AIME, plus
32% of your AIME between $996 and $6,002, plus
15% of your AIME over $6,002
For a worker with an AIME of $6,250, the calculation would look like this:
90% of $966 = $896.40, plus
32% of $5,006 = $1,601.92, rounded down to $1,601.90, plus
15% of $248 = $37.20
This worker would earn a monthly Social Security benefit of $2,535.50 .
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Does Ssi Count As Income For An Apartment
When applying for an apartment, landlords should consider SSI benefits as part of their tenants income as long as they are long-term, recurrent payments. SSI benefits of all types are legal types of income, which means that landlords are typically required to accept them.
It is crucial for landlords to be familiar with SSI and SSDI income and how these payments work. Otherwise, you could be excluding great potential tenants. As long as you see proof of benefits from tenants who receive SSI, this income should be considered valid when reviewing their rental application.
Additionally, many states prohibit landlords from discriminating against tenants due to the type of income they receive. Be sure that you are familiar with your states laws before refusing to accept a certain type of income so that you do not accidentally violate any important rules.
These protections exist to safeguard tenants from unreasonable judgment or discrimination, and the penalties for disregarding the rules can be quite severe.
Who Can Use The Retirement Estimator
You can use the Retirement Estimator if you have enough Social Security credits to qualify for benefits and you are not:
- Currently receiving benefits on your own Social Security record.
- Waiting for a decision about your application for benefits or Medicare.
- Age 62 or older and receiving benefits on another Social Security record.
- Eligible for a Pension Based on Work Not Covered By Social Security.
If you are currently receiving only Medicare benefits, you can still get an estimate. For more information, read our publication Retirement Information for Medicare Beneficiaries.
If you cannot use the Retirement Estimator or you want a survivors or disability benefit estimate, please use one of our other benefit calculators.
Other Ways You Can Apply
Apply With Your Local Office
You can do most of your business with Social Security online. If you cannot use these online services, your local Social Security office can help you apply. Although our offices are closed to the public, employees from those offices are assisting people by telephone. You can find the phone number for your local office by using our Office Locator and looking under Social Security Office Information. The toll-free Office number is your local office.
Apply By Phone
If You Do Not Live in the U.S. Or One of Its Territories
Contact the if you live outside the U.S. or a U.S. territory and wish to apply for retirement benefits.
Mailing Your Documents
If you mail any documents to us, you must include the Social Security number so that we can match them with the correct application. Do not write anything on the original documents. Please write the Social Security number on a separate sheet of paper and include it in the mailing envelope along with the documents.
Can Tenants Have More Than One Type Of Income
Some landlords may be surprised when a tenant has one, two, or even three or more primary income streams. Remember, however, that everyone has a different life setup. It is not uncommon for people to have multiple sources of income. Sometimes, income isnt always what you imagine it to be.
For example, a single mother who applies to rent your property may provide a court letter that shows she is receiving court-mandated child support benefits. These benefits are a type of income that can typically be used on rent as it directly supports housing the child.
Some potential tenants may be contractors or freelancers who work for a variety of clients or on various projects at one time, which can lead to a less traditional income verification process. Remember to be open-minded about this when considering the income while also verifying it carefully.
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Check Your Credit Report
The Social Security Administration can tell you if someone is working on your SSN and the IRS can tell you if someone is filing taxes on it, but only your credit agencies can tell you if someone is using your SSN to acquire and use credit in your name.
There are three major credit reporting agencies in the United States:;Equifax, Experian, and TransUnion. They each have slightly different methodologies and scoring programs, but they all more or less provide the same service.
You are entitled to a free copy of your credit report every 12 months . By contacting each service and requesting your report, you can immediately spot any suspicious activity on your credit accounts. Look for credit card applications, loan applications, and any debt you dont recognize.
Requesting your reports is simple:
- TransUnion: 1-800-680-7289 transunion.com
is a reputable service, and if you sign up for it you can keep a monthly eye on your credit score and your credit history, making it very difficult for an identity thief to put one over you in the long run.
What If I Continue Working In My 60s
Many people whose health allows them to continue working in their 60s and beyond find that staying in the workforce keeps them young and gives them a sense of purpose. If this sounds like something youâd like to do, know that working after claiming early benefits may affect the amount you receive from Social Security. Why? Because the Social Security Administration wants to spread out your earnings so you donât outlive them. If you claim Social Security benefits early and then continue working, youâll be subject to whatâs called the Retirement Earnings Test.
If youâre between age 62 and your full retirement age, and youâre claiming benefits, you need to know about the Earnings Test Exempt Amount, a threshold that changes yearly. For 2021, the Retirement Earnings Test Exempt Amount is $18,960/year . If youâre in this age group and claiming benefits, then every $2 you make above the Exempt Amount will reduce by $1 the Social Security benefits you’ll receive.
Contrary to popular belief, this money doesnât disappear. It gets credited back to you – with interest – in the form of higher future benefits. You may hear people grumbling about the Social Security âEarnings Taxâ, but itâs not really a tax. Itâs a deferment of your benefits designed to keep you from spending too much too soon. And after you hit your full retirement age, you can work to your heartâs content without any reduction in your benefits.
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What Is The Social Security Income Limit
The earnings limit is also known as the income limit, or the earnings test. The official term is earnings test, but income limit and earnings limit are the terms that youll hear most often.
For our purposes, know that all these terms mean the same thing and there are four quick facts about the Social Security income limit that you should know before we jump all the way into explaining the test or limit:;
Your Personal Mysocial Security Account Is For Your Use Only
Social Security is dedicated to protecting the information and resources entrusted to us, including your personal information and investment. For your protection, youre the only one who can create your personal mySocial Security account for your own exclusive use. No one can create or use an account on your behalf, even with written permission. Dont share the use of your account with anyone else under any circumstances, as unauthorized use of this service is a misrepresentation of your identity to the federal government and could subject you to criminal or civil penalties, or both.
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Special For Adult Disabled Children
For a parent awarded SSD benefits for their adult disabled child, meaning a child over age 18, different rules apply. There is no five month waiting period. However, complex rules determine the “entitlement date.” You may need the assistance of an attorney to understand the benefits your adult child is entitled to.
For disabled parents, back pay for their adult disabled child will not go back any further than 12 months before the parent applied for benefits. If the child does not become disabled until after age 18, the earliest benefit date will be the first full month after the adult child is disabled.
Tips For Saving On Taxes In Retirement
- A financial advisor;can help you align your tax strategy to maximize your retirement income.;SmartAssets free tool;matches you with financial advisors in your area in 5 minutes. If youre ready to be matched with local advisors who can help you achieve your financial goals,;get started now.
- What you pay in taxes during your retirement will depend on how retirement friendly your state is. So if you want to decrease tax bite, consider moving to a state with fewer taxes that affect retirees.
- Another way to save in retirement is to downsize your home. Moving into a smaller home could lower your property taxes and it could also lower your other housing costs.
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Errors Can Dramatically Affect How Much In Social Security Income You Can Claim
Let me give you an example of how this can affect your benefit amount. For this example, I used the actual online calculator from the Social Security Administration. If you want to follow along, you can just go to the Online Calculator and crunch the numbers for yourself.
In the example calculation I ran, I assumed the following:
A worker has 35 years of earnings that started in 1984 and ended in 2018. Instead of going for a really high annual earnings amount, which would have exaggerate the effect, I assumed that this individual started in 1984 with a salary of $35,000 and had a 2% raise every year.
Under that assumption, this individual would have a full retirement age benefit of $2,418 dollars. Thats the baseline benefit amount wed expect this person to receive.
But what happens if information is missing from the earnings record? I went back to our calculation and assumed just one year of earnings in 1990 wasnt included on the workers record due to clerical error.
For one missing year, the benefit would decrease to $2,385 dollars. For two missing years, it would decrease to $2,353 dollars. For three, it would be $2,322. For four, it would be $2,291 and for five, it would be $2,260.
Thats a difference of $158 dollars per month.
Now, you might be thinking, Devin, that doesnt sound like such a crisis. $158 extra per month would be nice, but thats not paying for much.
I dont think anyone would willingly give up any of those amounts.
Simple Strategies To Maximize Your Benefits
Richard has more than 30 years of experience in the financial services industry as an advisor, a managing director, directors of training and marketing, and currently as a consultant to the industry. Richard has written extensively on a broad range of wealth management, investment, and personal finance topics that have appeared on sites such as Kiplinger, Best Company, Newsmax, and Yahoo Finance. He is an expert on Finra Exams and Retirement Planning.
When Social Security was introduced in 1935, it was never intended to be a primary income source that could support people in retirement. Rather, its sole purpose was to provide a safety net for people who were unable to accumulate sufficient retirement savings. For the next several decades, the majority of Americans never gave much thought to their Social Security because of shorter lifespans and a reliance on guaranteed pensions.
Things are very different today.Social Security planning is now a vital element in securing income sufficiency in retirement and there are strategies to maximize your benefits.
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Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our reporters and editors focus on the points consumers care about most how to save for retirement, understanding the types of accounts, how to choose investments and more so you can feel confident when planning for your future.
Claim Spousal Benefits And Delay Yours
If you and your spouse were born before January 2, 1954, and have both reached full retirement age, you can claim spousal benefits and let your own benefits keep growing. Then, when you reach age 70, you can switch to your higher benefit.
One caution: You can’t have claimed your own benefit if you want to make use of this “restricted;application,” as it’s called.
In order to claim a spousal benefit, your spouse must have filed for their own Social Security benefits .
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Beginning Benefits Before Fra
If you choose to begin to receive benefits before you reach your full retirement age, one or both of the following calculations will apply:
- 5/9 of 1%:;Your benefits are reduced by 5/9 of 1% per month, up to a maximum of 36 months, depending on how many months you have until you reach FRA.
- 5/12 of 1%:;If you are more than 36 months away from reaching FRA, the reduction above is applied, and then for the number of months greater than 36, the;benefit is further reduced 5/12 of 1% per month.
Therefore,;if your FRA is age 66, your benefits would be reduced by 25% if you begin taking them at age 62. Find that figure by taking 5/9 of 1%, or 0.56; multiply by 36 months to get 20%. Then, 5/12, or 0.42, multiplied by the remaining 12 months, is 5% for a total of 25%.