Direct Deposit: Its The Law
Effective March 2013, a new law went into effect requiring that all Social Security benefits be paid electronically. This means benefits due to you are directly deposited into a bank account of your choosing. The change means a quicker delivery of benefits as well as being safer and more convenient for customers.
The U.S. Treasury administers the Direct Deposit program and can answer questions for customers who call their helpline at 1-800-333-1795. For information and to sign up for the electronic delivery of funds, go to the Go Direct website at
The Treasury will also grant waivers in rare instances. To request a waiver or for more information, call 1-855-290-1545.
How to contact the Social Security Administration
TTY number: 1-800-325-0778
E-mail: Fill out a contact form located at
Social Security Spousal Benefits Requirements
Based on actuarial studies, after a married couple reaches 65 years old, a majority of the time, one spouse will outlive the other by as much as 10 years. So the decision on who should file for benefits and when that should take place can have a major long-term impact on the income of a surviving spouse.
Spouses who never worked or have had low earnings throughout the course of their life are entitled to receive up to half of their spouses full retirement benefit. Depending on your personal situation, you may receive your own benefit or a blended amount of both you and your spouses benefit. Either way, you will receive a combination of benefits that gives you the highest possible amount.
One strategy often employed is for a spouse to take their spouses retirement benefit and delay taking their own benefit. By doing so, you can continue to accrue delayed retirement benefits which will result in a larger benefit amount when you file for your own retirement benefit.
Your Social Security Retirement Benefit May Be Reduced If You Have A Foreign Pension
This falls under the Windfall Elimination Provision . In general, a pension based on earnings not covered by Social Security like a foreign pension may affect your Social Security benefit. SSA has another simple online screening tool to help you figure out whether you will be affected. You could also learn more about the WEP in general from SSA’s website here.
You probably have heard of something called the Government Pension Offset before. It may affect your spousal and survivors benefits if you have a government pension based on earnings but you didn’t pay Social Security taxes. But that generally doesn’t apply to a foreign pension. If you are interested, you could learn more about it from SSA’s website here.
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Who Is Eligible For Social Security
Typically you need to have worked and paid taxes for at least 10 years to be eligible to apply for Social Security retirement benefits. You may need fewer working years to receive Social Security disability benefits, or survivors benefits.
You will not receive Social Security benefits if you receive Railroad Retirement Board benefits. Additionally, U.S. citizens can still get benefits if they live abroad.
How Much Will I Be Paid
The amount you will receive is calculated based on your
- lifetime earnings
- changes in average wages throughout your career
- the 35 years where you earned the most
- the Social Securities basic benefits rate
- the age you plan to retire at
Social Security records all the above information, applies their own formula and calculates your benefits.
The lowest Social Security payment is estimated to be around $628.00. Social Security payments go up from there.
It is important to keep in mind that if you retire earlier, you will receive a smaller Social Security benefit. If you retire later you will receive a higher Social Security benefit.
Use the Social Security Benefits calculator here. This tool provides many different Benefits calculators. Browse the different kinds of calculators and choose the one relevant to you.
To learn more about the base benefits click here.
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How Do Benefits Work And How Can I Qualify
While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to:
Those who are currently retired
To people with disabilities
To the surviving spouses and children of workers who have died
Each year you work, youll get credits to help you become eligible for benefits when its time for you to retire. Find all the benefits Social Security Administration offers.
There are four main types of benefits that the SSA offers:
Learn about earning limits if you plan to work while receiving Social Security benefits
If You Are Still Working And Receiving Old Age Security Payments
If you are still working and your income is higher than $79,054 , you will have to repay part of your Old Age Security pension payment. Delaying your first payment can let you keep more of your pension.
If you are planning on receiving the Guaranteed Income Supplement and your income is less than what you reported on your tax form last year, contact us.
Social Security Entitlement Requirements
Many people who are eligible for Supplemental Security Income may also be entitled to receive Social Security benefits. In fact, the application for SSI benefits is also an application for Social Security benefits. We often need to obtain additional information from the person before we can award Social Security benefits.
The following sections provide information on who may be entitled to Social Security benefits.
TO BE ELIGIBLE FOR SOCIAL SECURITY BENEFITS AS A WORKER YOU MUST BE:
Age 62 or older, or disabled or blind and
“Insured” by having enough work credits.
For applications filed December 1, 1996, or later, you must either be a U.S. citizen or lawfully present alien in order to receive monthly Social Security benefits.
HOW MUCH WORK DO YOU NEED TO BE”INSURED”?
We measure work in “work credits”. You can earn up to four work credits per year based on your annual earnings. The amount of earnings required for a work credit increases each year as general wage levels rise.
To be eligible for most types of benefits , you must have earned an average of one work credit for each calendar year between age 21 and the year in which you reach age 62 or become disabled or blind, up to a maximum of 40 credits. A minimum of six work credits is required, regardless of age.
The rules are as follows:
|Born After 1929|
WHO CAN RECEIVE BENEFITS ON YOUR EARNINGS RECORD?
If you are receiving retirement or disability benefits, your spouse may qualify if he or she is:
Will A Government Pension Impact My Retirement Benefits
If you worked for an employer that didnt withhold FICA taxes from your salary, such as a government agency, the pension you receive based on that work may reduce your Social Security retirement benefits. This reduction, as part of the windfall elimination provision , affects individuals who earned a pension in any job where FICA taxes werent paid and who worked in other jobs long enough to qualify for Social Security retirement benefits.
In addition to a reduction in individual benefits, spousal and/or survivor benefits may also be reduced accordingly. In this case, Social Security benefits will be reduced by two-thirds of the government pension.
Theres A Social Security Spousal Benefit
Marriage brings couples an advantage when it comes to Social Security. Namely, one spouse can take what’s called a spousal benefit, worth up to 50% of the other spouse’s Social Security benefit. Put simply, if your monthly Social Security benefit is worth $2,000 but your spouse’s 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.
Increasing The Eligibility Age For Social Security Pensions
Social Security faces a long-term financing problem. Many young workers believe the problem is so severe they may never receive a Social Security check. The most logical solution to Social Securitys financing problem is to trim promised benefits and increase payroll taxes moderately. A sensible way to reduce future benefits is to increase the early eligibility age and normal retirement age for retirement pensions. This reform is justified by the substantial increase in life spans that has occurred since Social Security was established in the 1930s. An increase in life spans, when the normal retirement age remains unchanged, is equivalent to a sizable increase in lifetime Social Security benefits.
Increasing the retirement age is unpopular with voters. Unfortunately, so are all other reforms that would restore Social Security to solvency, including tax hikes and cuts in the formula for calculating full pensions.
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How Will My Retirement Benefits Be Taxed
Approximately one-third of people who collect Social Security benefits are required to pay income taxes on these benefits. Individuals with higher total incomes must include up to 85% of their benefits as income for federal income tax purposes, designated by special step-rate thresholds. However, the taxation thresholds for your benefits arent currently indexed for inflation.
Before You Make Your Decision
There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:
- If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
- That there are other things to consider when making the decision about when to begin receiving your retirement benefits.
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Workers Who Die Before Age 62
The minimum age to start claiming Social Security retirement benefits is 62. If someone dies young, then dependent children and spouses may be entitled to survivor benefits. At age 60, for example, widows and widowers can begin receiving Social Security benefits based on their deceased spouses earnings record . Terminally ill patients can apply for Social Security Disability Insurance , which means they will still receive some benefit from their contributions to the system.
What if you are terminally ill and have reached the minimum retirement age? If you are single, claiming right away may be the most sensible strategy. However, if you have a spouse, postponing may provide your spouse with greater benefits. The spousal benefit can be as much as 50% of the worker’s benefit, depending on the spouse’s age at retirement and if the spouse is eligible for retirement benefits based on their own earnings record. The Social Security Administration has an online calculator that helps determine benefits for spouses.
If you do not qualify for Social Security payments, then you will need to ensure that you have sufficient income to support your lifestyle in retirement.
Can I Apply For My Spouses Social Security Benefits
Yes, you can apply for a spouses benefits. You must be at least 62 years old or taking care of a disabled child or a child under 16 years old.
If you apply for these benefits before you reach your full retirement age, your benefits would be lower than if you waited to receive them at your full retirement age.
Read more about the details of applying for a spouses benefits here.
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How Can I Increase My Monthly Retirement Benefits
If you can wait until after your full retirement age to collect benefits, your benefit amount will increase each month until you turn 70. These monthly raises, called “delayed retirement credits,” can boost your benefits by as much as 124% of your PIA if you have an FRA of 67 and you wait until age 70 to collect. Maximizing your Social Security benefits can help close a gap between the money youve saved and the income you want in retirement.
Percent of PIA collectable by Age3
Collect at Age 67
Collect at Age 70 or Later
*Assumes FRA of 67
Can You Still Work While Receiving Social Security
You can continue to work while you receive Social Security benefits. But there is a limit to how much you can earn and still receive full benefits. The earning limit may be adjusted each year.
If you earn above the limit, Social Security will deduct a certain amount of your benefits each year.
Social Security Benefits, Earning Limits and Penalties
|SSA deducts $1 from your benefits for every $3 you earn above the limit|
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What Questions Will Social Security Ask Me When I Am Applying For My Benefits
You will be asked about your date of birth, your Social Security Number, any former spouse, or your current spouse. You will be asked to confirm the names of any unmarried children or any children under 19 or disabled.
You will be asked about your bank account information, your citizenship, any previous benefits you have applied for or received.
Questions about your previous or current employment, earnings the year before, and any military service will be asked.
There are many other questions you may be asked, it is best to be prepared to answer anything related to your past financial, medical, military, tax, and family history.
How Do I Apply For Social Security
There are a few ways you can apply for Social Security benefits:
Complete an online application form on the SSA website
Apply by phone. Call 1-800-722-1213 or 1-800-325-0778 if you are dear or hard of hearing.
Apply in person. Visit your local SSA office to apply in person.
You will need to provide personal information, like your date and place of birth and Social Security number, as well as any information about your spouse, employer, and military service. If youâre applying for childrenâs benefits, youâll need to provide their information as well.
Your Social Security Benefits Will Be Taxed
Most people know that you pay tax into the Social Security Trust Fund throughout your career, but did you know that you may also have to pay tax on your Social Security benefits once you start receiving them? Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits haven’t been increased since then.
As a result, it doesn’t take a lot of income for your Social Security benefits to be pinched by Uncle Sam. For example, a married couple with a combined income of more than $32,000 may have to pay income tax on up to 50% of their Social Security benefits. Higher earners may have to pay income tax on up to 85% of their benefits.
You may also have to pay state income taxes on your Social Security benefits. See our list of the 13 States That Tax Social Security Benefits.
Whats Your Social Security Break
If youre looking to maximize your total lifetime Social Security payout, youll want to conduct a break-even analysis to determine when you should start drawing your benefits.
Your break-even age occurs when the total value of higher benefits starts to exceed the total value of lower benefits .
For example, if you are eligible to collect a reduced $900 benefit at age 62 plus 1 month, and your benefit would increase to $1,251 at age 65 and 10 months, your estimated break-even age is 75 years and 5 months.
If you expect to live beyond that age, it could make financial sense to delay drawing benefits. The Social Security Administrations life expectancy calculator can help you decide.
When it comes to calculating a start date for Social Security benefits, however, theres not an age thats appropriate for everyone. Consider your own financial needs, health and other retirement plans before making the call. If you cant reasonably afford to live without taking benefits, it may make little sense to delay taking your benefit.
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Are Social Security Checks Retroactive
You may be able to collect Social Security Benefits up to 6 months prior. However, if you choose to collect retroactive Social Security benefits you will lose any credits you earned during those months from delaying your retirement.
For example, say you wait until 70 years old to retire. However, when applying for your Social Security Retirement benefits, you decide to collect retroactive benefits, you will lose the benefits increase you previously received during those months.
So if you had received a 1.1% increase for each month you delay retiring, you will lose that payment increase for the months you receive a retroactive payment.