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How To Get Your Social Security Benefits

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Your Social Security Full Retirement Age Plays A Big Role Know It

How to Calculate Your Social Security Benefits

First things first:Determine your Social Security full retirement age. For people born between 1943 and 1954, full retirement age is 66. It gradually climbs toward 67 if your birthday falls between 1955 and 1959. For those born in 1960 or later, full retirement age is 67.

You can claim your Social Security benefits a few years before or after your full retirement age, and your monthly benefit amount will vary as a result. More on that in a moment.

List Each Year’s Earnings

Your earnings history is shown on your Social Security statement, which you can now obtain;online.

In the table below, sample earnings for a hypothetical worker born in 1953 are shown in Column C. Only earnings;below;a specified annual limit are included. This annual limit of included wages is called the;”Contribution and Benefit Base“;and is shown as Max Earnings in Column H in the table.

If You’re Not Sure Why You Received A Payment

Contact the authorizing agency directly to find out why they sent the payment. You may be able to find the authorizing agency in the memo line of the check. View this diagram of a sample Treasury check to help you locate the authorizing agency contact information on your own check. Scroll about half way down the page to see the diagram.;

If you’re unable to find which;agency authorized the payment, .;They;can help you determine which government agency you need to contact. To find which;RFC;you need to call, look for its city and state at the top;center of the check.;

Use the Treasury Check Verification System to verify that;the check is legitmate and issued by the;;government. ;

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Can I Use The Calculator To Figure Out Social Security Disability Insurance And Supplemental Security Income

No. SSDI is aimed at people who cant work because they have a medical condition expected to last a year or more or result in death. Your SSDI benefits last only as long as you suffer from a significant medical impairment while not earning significant other income.

SSI is a separate program for people with little or no income or assets who are 65 or older, as well as for those of any age, including children, who are blind or who have disabilities. The maximum monthly SSI payment for 2021 is $794 for a single person and $1,191 for a couple. But some states add to that payment, and you may receive less than the maximum if you or your family has other income. Get more information about SSDI and SSI from the Social Security Administration.

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Make Sure You Work At Least 35 Years

How to Increase Your Social Security Benefits

Social Security uses a standard formula to set benefits, which is based on average wages in your 35 highest earning years.

While a 10-year work history should make you eligible for benefits, if you don’t put in a full 35 years, you will have a much lower average wage. That’s because a $0-earning year will be included in your calculation for each year you fall short.;

Now, you may want to do more than just avoid having zeros included when your benefits are determined. If you’re hoping for a big Social Security check you may want to work for more than 35 years.

This makes sense if your current salary is higher than during any of your previous work years. If you work for a 36th or 37th year or even longer, you can push out several of your lower-earning years in your calculation, thus giving your average benefit a boost.;

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How Is Social Security Calculated

There is a three-step process used to calculate the amount of Social Security benefits you will receive.

Step 1:;Use your earnings history to calculate your;Average Indexed Monthly Earnings .Step 2:;Use your AIME to calculate your;primary insurance amount .Step 3:;Use your PIA, and adjust it for the age when you will begin receiving benefits.

You can use a copy of your Social Security statement that provides your earnings history to plug your own numbers into the formulas below.

Tax On Social Security Benefits

You may have to pay taxes on your Social Security benefit, depending on your income level. If your retirement income is over a certain amount, then part of your Social Security benefits may be taxable.

Single-filers with an income between $25,000 and $34,000 will have to pay income tax on up to 50% of their benefits. If they make more than $34,000, then up to 85% of the benefits may be taxable.

Keep this in mind when filing your tax return. You may also be able to withhold your taxes from your Social Security benefits payments, so you arenât stuck with a large tax bill on Tax Day. Check your SSA account online or visit your local Social Security office for more information.

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How Does The Calculator Estimate My Retirement Benefits Payment

Our simplified estimate is based on two main data points: your age and average earnings. Your retirement benefit is based on how much youve earned over your lifetime at jobs for which you paid Social Security taxes. Your monthly retirement benefit is based on your highest 35 years of salary history. You can get your earnings history from the Social Security Administration .

Your Social Security benefit also depends on how old you are when you take it. You can start collecting at age 62, the minimum retirement age, but youll get a bigger monthly payment if you wait until full retirement age, which is 66 but is gradually moving to 67 for people born in 1960 or after. If you can wait until 70 to start collecting, youll receive your maximum monthly benefit.;

A single person born in 1960 who has averaged a $50,000 salary, for example, would get $1,332 a month by retiring at 62 the earliest to start collecting. The same person would get $1,911 by waiting until age 67, full retirement age. And he or she would get $2,370, the maximum benefit on those earnings, by waiting until age 70. Payments dont increase if you wait to collect past 70.

Other factors affecting the size of your benefit include whether youve worked for state or local government for more than 10 years; your Social Security payment may be decreased if you paid into the civil service retirement program, for example.

How Should I Decide When To Take Benefits

14 Easy Ways to Increase Your Social Security Benefits

Consider the following factors as you decide when to take Social Security.

Your cash needs: If youre contemplating early retirement and you have sufficient resources , you can be flexible about when to take Social Security benefits.;;

If youll need your Social Security benefits to make ends meet, you may have fewer options. If possible, you may want to consider postponing retirement or work part-time until you reach your full retirement ageor even longer so that you can maximize your benefits.

Your life expectancy and break-even age: Taking Social Security early reduces your benefits, but youll also receive monthly checks for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but the credit for waiting means each check will be larger.

At what age will you break even and begin to come out ahead if you delay Social Security? The break-even age depends on the amount of your benefits and the assumptions you use to account for taxes and the opportunity cost of waiting . The SSA has several handy calculators you can use to estimate your own benefits.

If you think youll beat the average life expectancy, then waiting for a larger monthly check might be a good deal. On the other hand, if youre in poor health or have reason to believe you wont beat the average life expectancy, you might decide to take what you can while you can.

A quick note about life expectancy;

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The Disability Determination Process

The Social Security Administration requires each state to process its own disability applications, with some exceptions. West Virginia residents disability applications generally will be processed in West Virginia. Each state processes claims independently, and all must follow the same rules and regulations set forth by Congress.

Next Steps To Consider

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

Investing involves risk, including risk of loss.

Past performance is no guarantee of future results.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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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.

What If I Cant Apply For A Card Online

How to Increase Your Social Security Benefits

If you canât apply for a Social Security card online, then you will need to show the required documents in person at your local SSA office. The documents needed will depend on your current citizenship status and your age.

Different documents are needed if you are an adult and a U.S.-born citizen, a foreign-born U.S. citizen, or a noncitizen. Also, if you are replacing a Social Security card for a child, youâll want to check the SSA website to determine which documents you will need.

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Social Security Isnt Just For Retirement

      First created in 1935 as part of then-President Franklin D. Roosevelts New Deal, the Social Security Administration originally called the Social Security Boardsprang out of a need to assist the millions of retired or elderly Americans who had lost everything in the Great Depression. After the program was launched, it was expanded to help children, widows, and disabled people who might otherwise become destitute.

      Today, the SSA, an independent agency of the federal government, still oversees those social insurance programs, each with specific requirements that must be met to be eligible to collect benefits.

      Earn As Much As You Can Throughout Your Career

      Social Security benefits are meant to replace a portion of your wages — specifically, around 40%. The higher your wages throughout your working life, the bigger your benefits will be.

      In fact, workers who earn up to the maximum taxable wage for most or all of their working life could see a maximum benefit as high as $3,895 in 2021. Of course, you’d need a salary of $142,800 this year to be on track for that amount .;

      To maximize;your personal benefit, always advocate for yourself — whether that involves asking for a higher salary when you’re offered a job, being proactive about looking for new opportunities, or campaigning for raises during your performance reviews.

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      NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.

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      When Should I Start Collecting Social Security

      Maximizing Social Security Benefits

      Ultimately, the decision of when to begin collecting Social Security is one you have to make. It depends on your age, your health status, how much you spend and how much you have saved. Its generally best to start collecting as late as you can, because you get a larger monthly payment, which is adjusted for inflation each year.

      Consider a retiree who was born in 1950 and averaged $50,000 a year in salary. If she has $3,000 a month in expenses, her Social Security check would cover 48 percent of her expenses if she started Social Security at age 62. If she waited till age 70, her check would cover 84 percent of her expenses. Every year she delays retirement, her Social Security payout which is adjusted annually for inflation rises by about $1,635.

      Traditionally, the retirement system in the U.S. has been a three-legged stool: Social Security, savings and pensions. Social Security was never intended to be the sole source of income for retirement. Increasingly, however, employers have been moving away from their employer-sponsored pension plans in favor of tax-deferred retirement savings accounts, such as 401 plans.

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      Using Your Benefit Estimates

      As your statement will show, your Social Security retirement benefits will vary depending on when you claim them before or after your full retirement age . The longer you wait to start receiving payments, the higher your benefit amount will be.

      However, it’s not always better to wait until your full retirement age to claim your Social Security benefits. If you need your Social Security benefits for living expenses, or you have a health condition that makes it unlikely that you will live past age 75 or so, you may be better off collecting your benefits sooner rather than later. You can use a calculator at the Social Security website to see which retirement age makes the most financial sense for you .

      For comprehensive practical information about how and when to claim Social Security benefits, see Social Security, Medicare & Government Pensions, by Joseph Matthews with Dorothy Matthews Berman .

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    • When Will I Receive My Social Security Check

      The Social Security Administration’s payment calendar helps recipients plan for payments. If you were born in the first 10 days of your birth month, then you receive payments by the second Wednesday of the month. Those born on the 11-20 receive payments by the third Wednesday. Those born on the 21-31 receive payments by the fourth Wednesday. However, those who began receiving payments before May 1997 receive payments by the third day of each month.

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      Whats Full Retirement Age

      Full retirement age is when youre eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1951 or later, your full retirement age is now some point after age 65all the way up to age 67 for those born after 1959. If you were born before 1951, youve 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

      1950 or earlier

      Brief History Of Social Security

      Social Security Benefits Increase in 2021

      The Social Security program was created by the Social Security Act that President Franklin D. Roosevelt signed into law in 1935. The first checks went out in 1940. Originally it paid benefits only to workers 65 and older, but in the 1970s the government altered it to allow workers to claim benefits as early as 62. It also instituted annual cost-of-living adjustments to help Social Security keep pace with inflation.

      The program has worked fairly well so far, but many people fear for the future, when there will be fewer workers to support a greater number of Social Security recipients. The latest Social Security Trustees’ Report indicates the program’s trust funds would be depleted by 2035, after which it would be able to pay out only about 76% of benefits to retirees and about 92% to disabled workers.

      The government has proposed several possible solutions for ensuring the long-term sustainability of the program, but at present no plans have been set. There’s no risk of the program disappearing in the next decade or two, but it’s possible future benefits may not go as far as they do today. That’s why today’s workers need to prioritize their personal retirement savings, so they can cover most of their expenses on their own.

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