What About Unmarried Children
An unmarried child of the deceased may be able to receive benefits if one of the following applies:
- They are younger than 18 years of age; or, they are up to age 19, if they are a full-time student in an elementary or secondary school.
- They are age 18 or older with a disability that began before the age of 22.
Receiving Social Security Payments
Social Security benefits are only paid out electronically; you will not receive a Social Security check in the mail. You can either receive a direct deposit into your bank account or opt for a prepaid debit card. When you apply to receive your Social Security benefits, you will have the chance to provide your account number and the routing number of your bank or credit union.
What Happens If My Ex Dies Before Me
Assuming all claiming rules apply, if your ex dies first and you are unmarried, in general you can receive the monthly payment amount that your ex was receiving. You only file as a surviving ex-spouse if he or she was receiving more than you currently receive in payments.
If your ex had remarried, you are still entitled to survivor benefits, as is the current spouse. Call or make an appointment with your local Social Security Administration office to discuss your personal situation.
How likely are you to live to be 85, 90, or older?
Tip: To learn about trends in aging and people living longer, read Viewpoints: Longevity and your retirement.
Also Check: What Age Can I Sign Up For Social Security
Do You Have A Security Freeze Or Fraud Alert On Your Credit Report
If you have a security freeze, fraud alert, or both on your credit report, you can still open a mySocial Security account by temporarily lifting it.
If you dont want to temporarily lift your security freeze or fraud alert, you can visit your local Social Security office to open an account in person. For more information on security freezes and fraud alerts, read the Federal Trade Commissions .
If I Use My Own Social Security Benefits Now Will I Be Able To Claim My Ex
As long as your ex-spouse isn’t currently receiving benefits, then you can claim your own and eventually switch to spousal benefits when your ex-spouse files for social security. When you file for benefits after your ex, you’ll be subject to the ‘deemed filing rule,’ which will grant you the higher of the two benefits.
Recommended Reading: How To Replace My Lost Social Security Card
How Does The Social Security Administration Calculate Benefits
Benefits also depend on how much money youâve earned in life. The Social Security Administration takes your highest-earning 35 years of covered wages and averages them, indexing for inflation. They give you a big fat âzeroâ for each year you donât have earnings, so people who worked for fewer than 35 years may see lower benefits.
The Social Security Administration also makes annual Cost of Living Adjustments, even as you collect benefits. That means the retirement income you collect from Social Security has built-in protection against inflation. For many people, Social Security is the only form of retirement income they have that is directly linked to inflation. Itâs a big perk that doesnât get a lot of attention.
Social Security Bend Points
The Social Security benefits formula is designed to replace a higher proportion of income for low-income earners than for high-income earners. To do that, the formula uses what are called bend points.” These bend points are adjusted for inflation each year.
Bend points from the year you turn 62 are used to calculate your Social Security retirement benefits. The example in the table below uses 2020 bend points. It works like this:
- You take 90% of the first $906 of AIME.
- You take 32% of the next $5,785 of AIME.
- You take 15% of any amount over that $5,785.
- You total those three numbers.
The result is your primary insurance amount, or PIA, the amount you will receive if you begin benefits at your Full Retirement Age .
Your PIA is rounded to the next lowest dime, and your benefit amount is rounded to the next lowest dollar.
Technically, your PIA is calculated, rounded to the next lowest dime, and then any inflation adjustments are applied. That number is then rounded to the next lowest dime. Then any increase or decrease based on age is applied. That number is then rounded down to the next lowest dollar.
You can see current and;historical bend points and the current year’s bend points on the Bend Formula Bend Points page of the Social Security Administration’s website.
In the example in the table below, you can see how the AIME calculated in the previous step was plugged into the bend point formula to calculate the PIA.
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Applying To Delay Your First Payment
If you received a letter from us and want to delay your first payment:
Examples of delaying Old Age Security
Delaying 1 year
Michael turned 65 in July 2019. If he decides to delay receiving the Old Age Security pension for 1 year, his monthly amount will increase by 7.2% to account for the 12-month deferral period from August 2019 to July 2020.
If Michael’s payment amount is $549.89 per month, his increased monthly payment would be $589.48.
Delaying 5 years
Rita will be turning 65 in December 2019. If she decides to delay receiving the Old Age Security pension for the maximum deferral period of 60 months, her monthly amount will increase by 36% at age 70 .
If Rita’s payment amount is $549.89 per month, her increased monthly payment would be $747.85.
Delaying with an earlier start date than the date of application
John could receive his Old Age Security pension in August 2018 and he decided to delay receiving it. In December 2019, John applied for Old Age Security. He writes on his application that he would like his benefit to be effective as of October 2019, 3 months earlier than his application date. His monthly benefit amount will then increase by 8.4% to account for the 14-month period from August 2018 to September 2019. The monthly increase does not apply to the period from October 2019 to December 2019.
If John’s payment amount is $549.89 per month, his increased monthly payment would be $596.08.
Social Security Calculation Step 4: Adjust For Filing Age
The easy way to look at it is to think about it in annual numbers.
Your benefit will be lower if you file at 62 and higher if you file at 70.
If you file after your full retirement age, your benefit will increase by 8% per year. If you file in the 3 year window immediately prior to your full retirement age your benefit will decrease by 6.66% per year of early filing. For anything more than 3 years before your full retirement age, your benefit will decrease by an additional 5%.
A lot of people dont want to retire on their birthday so its important to break this down by a monthly amount.
Myth #1: You Must Claim Your Social Security Benefit At Age 62
Some people think you have to start claiming your Social Security benefits at age 62. That’s a myth: 62 is the earliest age you can claim your benefit, but it’s not the only age to do so.
Your base benefit is calculated according to your “full retirement age,” or FRA, and your FRA is determined by your date of birth. The Social Security Administration calculates your base Social Security benefit based on your average indexed monthly earnings during the 35 years in which you earned the most .
Tip: You’ll find your FRA at Social Security’s website, SSA.gov, or on a paper statement mailed to you by the SSA. If you were born between 1955 and 1959, your FRA is 66 plus some months. If you were born in 1960 or later, your FRA is 67.
If you claim Social Security benefits any time before your FRA, you lock in a permanent reduction in monthly income. Claiming at 62 translates to a reduced monthly income of 25% to 30%, relative to your FRA monthly benefit. That means you may receive a lot less monthly retirement income, every year, for potentially several decades. A key consideration for when you claim Social Security benefits is maximizing your income for a retirement that could last longer than 30 years.
Wait until age 70 and lock in a “bonus”:
Read Viewpoints on Fidelity.com: Longevity and retirement
Myth #2: You’ll Never Get Back All The Money You Put Into The Program
Everyone’s situation is different, but if you live a long time, you may collect more than you contributed to the system.
Due to the complexity of claiming strategies and number of variables involved, the SSA no longer offers a break-even calculator on its website. Social Security is designed to provide a safety net of income for the retired, the disabled, and survivors of deceased insured workers. The contributions you and your employers make during your working years provide:
While the government does not have a specific account set aside just for you with your FICA contributions , one of the most powerful features of Social Security is that it provides an inflation-protected guaranteed income stream in retirement, ensuring against the risk you’ll outlive your savings. Even if you live to 100 or more, you’ll continue to receive income every month. And, if you predecease your spouse, your spouse also receives survivor benefits until their death.
Read Also: How To Get Your Social Security Card Fast
What Happens If I Work And Get Social Security Retirement Benefits
You can get Social Security retirement benefits and work at the same time. However, if you are younger than full retirement age and make more than the yearly earnings limit, we will reduce your benefit.;Starting with the month you reach full retirement age, we will not reduce your benefits no matter how much you earn.
- We use the following earnings limits to reduce your benefits: If you are under;full retirement age;for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.
For 2021;that limit is;$18,960.
- In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit, but we only count earnings before the month you reach your full retirement age.
If you will reach full retirement age in 2021, the limit on your earnings for the;months before full retirement age is;$50,520.
Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.
Use our;Retirement Age Calculator;to find your full retirement age based on your date of birth.
Use our;Retirement Earnings Test Calculator;to find out how much your benefits will be reduced.
What counts as earnings:
;Your benefits may increase when you work:
When youre ready to apply for retirement benefits, use our;online retirement application, the quickest, easiest, and most convenient way to apply.
If you need to report a change in your earnings after you begin receiving benefits:
When Is The Best Time To Claim On Your Ex
When to claim depends on how long you think you’ll live. If you are generally healthy and active or have relatives who have lived a long time, you’ll probably want to plan for 20, 25, 30, or more years in retirement. With Social Security, the longer you wait to claim, the larger the amount of monthly payments you’ll generally receive on your own work record. However, your benefit as an ex-spouse will not get any larger than half your ex’s PIA. And, that is only if you wait until your FRA to claim.
Let’s look at an example: Clair and her ex were married for 17 years, from 1975 to 1992. She worked and qualifies for her own Social Security benefits. Now, at age 64 , Clair is thinking about retirement and wants to know when she should claim, on whose record, and how much she would receive in monthly benefits under each scenario.
|Clair claims at 64|
|For illustrative purposes only.|
If Clair claims at 64, she locks in a permanent reduction of her monthly benefits. If she waits till 70, she’ll get a higher amount, but would have to use other assets to pay her retirement expenses between now and age 70.
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.
Myth #4: Your Benefits Are Based Only On Wages You’ve Earned Before Age 65
How your Social Security benefit is calculated can seem mysterious. However, it’s important to know a few essential facts to aid your claiming strategy. You can use the tools on SSA.gov to do the calculations.
- Your benefit is calculated based on your highest 35 years of earnings; they don’t have to be consecutive years or before age 65.
- If you work past age 65, those earning years will be included, so long as they are high enough to be part of your highest 35 years.
- Even working part-time after turning 65 may be part of your highest 35 years of earnings.
- To be eligible for Social Security, you must have a minimum of 10 years of covered employment , which equates to 40 credits in the Social Security system.
- If you don’t have 35 years with earnings, zeros will be included in the calculation.
Read Viewpoints on Fidelity.com: Social Security tips for working retirees
Factors That Affect How Much You’ll Get In Retirement
Most retirees rely on Social Security. One in four gets 90% of their retirement income from the program. About half rely on it for 50% of their income.
Although Social Security is only one part of a secure retirement plan, it’s helpful to get a rough idea of how much you can expect. If you’re eligible for Social Security, your monthly benefit is based on two factors:
- How much money you earned during your working career
- The age you choose to start getting payments
Let’s look at how each of these affects your future Social Security income.
How To Value Your Benefits
Suppose;you’ll;receive $1,500 a month from Social Security beginning at age 66. Each year, that $1,500 a month can be expected to go up a little if the cost of living measured by the;consumer price index;increases.
Now, suppose you’ll live another 20 years. How much is that income stream worth?
You can answer that;question by taking the;present value;of that stream of cash flow. To pay yourself $1,500 a month increasing at 2% a year for 20 years, you’d need $263,977 in the bank earning a 5% annual rate of return. You’d need $348,535 if you live for 30 years.;
And if you assume that you’re using safe investments, earning 2% instead of a portfolio earning 5%the same rate of assumed inflation at which your income increases each yearyou would then need $352,941 in the bank for the income to last 20 years. You’d need $529,411 for it to last 30 years.
How To Calculate Social Security Benefits
If youd just like a ballpark estimate of your benefit, the Social Security Administration offers a quick calculator to give you a sense of your potential benefit. This calculator simply asks for your current annual salary, your birth date and your projected retirement date, although it does allow you to fill in your actual income by year to get a more accurate estimate.
This estimate does not take early or late application for benefits, taxes and Medicare, or COLA increases into account. Youll likely need to download the Social Security Administrations full calculator software or work with a financial advisor to determine your full benefits considering those factors.
Knowing how much you can expect to receive in Social Security gives you an important piece of your retirement income puzzle. With that in hand, you can make the financial plans you need for a secure and fulfilling retirement.