Special Rules For People Who Are Blind Or Have Low Vision
We consider you to be legally blind under Social Security rules if your vision cannot be corrected to better than 20/200 in your better eye or if your visual field is 20 degrees or less, even with a corrective lens. Many people who meet the legal definition of blindness still have some sight and may be able to read large print and get around without a cane or a guide dog.
If you do not meet the legal definition of blindness, you may still qualify for disability benefits if your vision problems alone or combined with other health problems prevent you from working.
There are a number of special rules for people who are blind that recognize the severe impact of blindness on a person’s ability to work. For example, the monthly earnings limit for people who are blind is generally higher than the limit that applies to non-blind disabled workers.
In 2021, the monthly earnings limit is $2,190.
Consult With A Disability Attorney
If you are unable to work because of a medical condition and you are 65 or older, you should consult with a disability attorney. You might be eligible for disability benefits, so you wont have to retire earlier than you anticipated. Complete the Free Case Evaluation Form, so you can have your case reviewed by a Social Security disability lawyer right away and your claim can get on the right track!
Paying Taxes On Your Retirement Benefits
Social Security retirement benefit recipients must pay Federal income taxes on their benefits. Due to personal income levels, about one-third of recipients actually have to pay some amount annually.
Each year, the Social Security Administration will mail recipients a Form SSA-1099 that shows the amount of benefits received during the preceding year. This form should be used to complete tax returns and help determine in any taxes are owed.
As a general rule, if you file as an individual and your combined income is between $25,000 and $34,000, you may have to pay taxes on up to 50 percent of your Social Security benefits. If your combined income is more than $34,000 you may be required to pay taxes on up to 85 percent of your benefits.
If you file a joint return and you and your spouses income is between $32,000 and $44,000, then 50 percent of your benefits may be taxed. If your combined income is about $44,000, then up to 85 percent of your benefits may be subject to income tax.
To assist with tax planning, Social Security can withhold Federal taxes throughout the year for benefit recipients which may be preferable to making quarterly estimated tax payments.
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Full Retirement Age: Age 6567 Depending On Date Of Birth
Your full retirement age is determined by your day and year of birth, and it is the age in which you get your full amount of Social Security benefits. For every year you delay taking your benefits from full retirement age up until you turn 70, your benefit amount will increase by almost 8% a year. It is referred to as a delayed retirement credit. This increase can result in more lifetime income for you and your spouse. Even after factoring in a potential return on investment and the monthly benefits you could have received if you claimed early, there can still be a $50,000$100,000 increase in lifetime benefits by waiting until you are older.
Does Working After Full Retirement Age Increase Social Security Benefits
Working after full retirement age could increase your Social Security benefits. Your benefits are based on average wages over your 35 highest-earning years .
Even after you’ve reached full retirement age, and even if you’ve already claimed benefits, the Social Security Administration continues to recalculate your average annual wage to account for new income. If your earnings after FRA are higher than previous years and raise your average wage for your 35 top-earning years, your benefits could rise accordingly.
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When You’re Eligible For Medicare
Older people who are U.S. citizens or permanent legal residents can qualify for traditional Medicare coverage as early as age 65.
You might also be eligible for Medicare if you are under age 65 and meet one of the following conditions:
- You are on dialysis or you’ve had a kidney transplant because of end-stage renal disease
- You have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months
- You have Lou Gehrig’s disease.
You are automatically enrolled in Medicare Part A if you qualify for Medicare and you’ve received Social Security or Railroad Retirement Board benefits for at least four months before you turn 65. You can then choose to enroll in other parts of the program or to delay enrollment.
If you are over 65 and do not meet any of the above criteria, you still may be eligible to purchase coverage through Medicare Part A. If you are unsure whether you are eligible, you can check using the Medicare Eligibility & Premium Calculator.
The work credit requirement is an algorithm used to determine how long a worker paid into the system.
What If I Take Benefits Early
If you choose to receive your Social Security check up to 36 months before your full retirement age, be aware that your benefit is permanently reduced by five-ninths of 1% for each month.
If you start more than 36 months before your full retirement age, the benefit is further reduced by five-twelfths of 1% per month, for the rest of retirement.
For example, let’s assume that you stop working at age 62. If your full retirement age is 66 and 2 months you elect to start benefits at age 62, the reduced benefit calculation is based on 50 months. This means that the reduction for the first 36 months is 20% and 5.83% for the remaining 14 months. Overall, your benefits would be permanently reduced by 25.83%.
Effect of early retirement on benefits
1.Represents Full Retirement Age based on DOB Jan. 2, 1955
2.PIA = The primary insurance amount is the basis for benefits that are paid to an individual
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Spouses And Social Security
You can claim Social Security benefits based on your spouse’s work record. If claiming spousal benefits provides more, claiming before your FRA on a spouse’s record means you’ll lose even more than claiming on your own recordthe benefit reduction for a spouse is up to 35% while the reduction for claiming your own benefit is up to 30%. For instance, if you’re the spouse of Colleen in the above example and you are the same age, you’d be eligible for only $650 a month at age 6235% less than the $1000 a month you would get at your FRA of 67.
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Your decision to take benefits early could outlive you. If you were to die before your spouse, they would be eligible to receive your monthly amount as a survivor benefitif it’s higher than their own amount. But if you take your benefits early, say at age 62 versus waiting until age 70, your spouse’s survivor Social Security benefit could be up to 30% less for the remainder of their lifetime.
The Downside Of Claiming Early: Reduced Benefits
Consider the following hypothetical example. Colleen is 62 as of 2022. If Colleen waits until age 67 to collect, she will receive approximately $2,000 a month. However, if she begins taking benefits at age 62, she’ll receive only $1,400 a month. This “early retirement” penalty is permanent and results in her receiving up to 30% less year after year.
However, if Colleen waits until age 70, her monthly benefits will increase another 24% over what she would receive at her FRA, to a total of $2,480 per month.1 If she were to live to age 89, her lifetime benefits would be about $112,000 more, or at least 24% greater, because she waited until age 70 to collect Social Security benefits.2
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How Should I Decide When To Take Benefits
Consider the following factors as you decide when to take Social Security.
Your cash needs: If you’re contemplating early retirement and you have sufficient resources , you can be flexible about when to take Social Security benefits.
If you’ll 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 you’ll 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 you’ll beat the average life expectancy, then waiting for a larger monthly check might be a good deal. On the other hand, if you’re in poor health or have reason to believe you won’t beat the average life expectancy, you might decide to take what you can while you can.
A quick note about life expectancy
Working After Full Retirement Age Faq
Retirees may work while collecting Social Security benefits, but those younger than their FRA will be subject to the retirement earnings test .
Under this test, if your earnings exceed a certain limit , you will temporarily forfeit some or all of your benefits. Once you reach full retirement age, your benefit is recalculated and you may receive most of that money back.
How To Calculate The Social Security Breakeven Age
Your Social Security breakeven age is the point in your life when the total of those lower benefits comes to equal the total of benefits that you would have received if you had waited to take your benefits at FRA, or even later.
For example, if you were born in 1960, your FRA is 67. If you choose to begin receiving Social Security income at age 62, which will be in 2022, then your FRA benefit will be reduced by 30%. Assuming that the full monthly benefit would be $1,000, you will be left with a monthly Social Security check of only $700.
If a co-worker with the same birth date and similar earnings history elects to receive their benefit at FRA five years later, then their benefit will be $1,000 each month. For the first five years, you received a total of $42,000 , while your co-worker received nothing, so you are ahead. Once your co-worker starts receiving benefits, however, they get $300 more each monthor $3,600 more each yearthan you do. So when will your co-worker catch up to you in total benefits?
Lets divide the amount by which you are ahead by the higher amount per year that your co-worker receives. The answer is when you are both 78 years and eight months, or 11.67 years after your FRA. After this point, your co-worker will earn more over their lifetime than you will.
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:
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Is There An Age Limit For Disability
The SSA does not set an age limit for applying for disability. But, you must know that there are a few specific rules for applicants over 65 years old. If you are over 65 the SSA requires a full review of your medical records to show any possible age-specific impairments related to aging. Various age-related impairments that prohibit someone for at least 12 months are more likely to be considered a disability if they are long-term ailments.
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.
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What Is The Lowest Social Security Monthly Payment
DEFINITION: The special minimum benefit is a special minimum primary insurance amount enacted in 1972 to provide adequate benefits to long-term low earners. The first full special minimum PIA in 1973 was $170 per month. Beginning in 1979, its value has increased with price growth and is $886 per month in 2020.
An Example Of Taxed Benefits
Lets say you receive the maximum Social Security benefit for a worker retiring at FRA in 2021: $3,148 per month. Your spouse receives half as much, or $1,574 a month. Together, you receive $4,722 a month, or $56,664 per year. Half of that, or $28,332, counts toward your combined income for determining whether you have to pay tax on part of your Social Security benefits. Lets further assume that you dont have any nontaxable interest, wages, or other income except for your traditional individual retirement accounts required minimum distribution of $10,000 for the year.
Your combined income would be $38,332half of your Social Security income, plus your IRA distributionwhich would make up to 50% of your Social Security benefits taxable because youve exceeded the $32,000 threshold. Now, you may be thinking, 50% of $56,664 is $28,332, and Im in the 12% tax bracket, so the tax on my Social Security benefits will be $3,399.84.
Fortunately, the calculation takes other factors into account, and your tax would be a mere $225. You can read all about the taxation of Social Security benefits in the Internal Revenue Service Publication 915.
Benefits For A Disabled Child
A child under age 18 may be disabled, but we don’t need to consider the child’s disability when deciding if he or she qualifies for benefits as a dependent. The child’s benefits normally stop at age 18 unless he or she is a full-time student in an elementary or high school or is disabled.
Children who were receiving benefits as a minor child on a parents Social Security record may be eligible to continue receiving benefits on that parents record upon reaching age 18 if they are disabled.
What Happens If You Claim After Your Fra
If you wait until your age 70 to start claiming benefits, then youll get an extra 8% per yearor, in total, 132% of your primary insurance amount for the rest of your life. Claiming after you turn 70 doesnt increase your benefits further, so theres no reason to wait longer than that.
The longer you can afford to wait after age 62 , the larger your monthly benefit will be. Nevertheless, delaying benefits doesnt necessarily mean that youll come out ahead overall. Other factors should be considered, including your expected longevity and whether you plan to file for spousal benefits. You should also consider the tax, investment opportunity, and health coverage implications.
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How Can Someone Older Than 65 Be Approved For Disability
If you are older than 65 and you want to apply for disability benefits, there are two ways to qualify for approval. The first way to be approved is to either meet or equal a listing. The Social Security Administration uses a medical guide called the Blue Book to determine if an individual is classified as disabled and qualifies for benefits. Listings can be equaled if your impairment is very similar to a condition and is as limiting as a Blue Book listing, but it is not the same as the Blue Book listing.
The other option is using a medical-vocational allowance. Using this approach, the SSA will consider all your medical issues, restrictions, limitations, work history, skills, and educational background to decide if you are still able to work. Your age will come into play as you will not be able to adjust to a new kind of work as easily as you would have at a younger age.