Supplemental Security Income Benefits
Supplemental Security Income helps people who are unable to earn sufficient wages on their own. It is available to adults with disabilities, children with disabilities and people 65 or older. Individuals with enough work history may be eligible to receive SSI in addition to disability or retirement benefits. The amount individuals receive varies based on their other sources of income and where they live.
What If My Local Social Security Office Is Closed Due To Covid
Due to the current pandemic, local offices remain closed to walk-in traffic. Your best option is utilizing your My Social Security account and attempting to complete your request online. You can also call SSA at 800-772-1213. In some limited cases, in-person appointments can be made for people unable to complete their request online or over the phone.
What Will My Social Security Payment Be
Well, finding out how much your Social Security payment will be is relatively easy simply look at the annual statement you get from the agency or get a Statement of Estimated Benefits, which you can do at your my Social Security online account . But, understanding how your benefit amount is determined before you claim is paramount to getting your optimum Social Security payment. There are a few basic factors which go into determining how much your benefit will be, including your lifetime earnings record and the age at which you claim. If youre approaching retirement age the former is something you likely have little control over now, but the latter is definitely within your control and can make a significant difference in how much your monthly check will be. And even for those still some years away from retirement, knowing how your Social Security benefit is determined will help you make an informed decision when the time comes. This article by Motley Fools Kailey Hagen, appearing at KOAMnewsnow.com explains the five factors that determine how much youll get from Social Security.
Also, if youre unsure about how these basics apply to you, or if you have any questions about your individual situation under Social Security, note that the AMAC Foundation provides a free-to-the-public service to help Americans navigate the complexities of this program. Learn more about it here
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What Beneficiaries Can Expect In 2022
Starting Jan. 1, 2022, approximately 64 million Americans will receive a 5.9% COLA to their Social Security benefits. This represents the largest cost-of-living adjustment in 39 years, due to a spike in inflation resulting from ongoing economic difficulties caused by the COVID-19 pandemic. Previously, COLA averaged just 1.65% per year over the prior 10 years while inflation remained low.
According to estimates released by the SSA, this increase will amount to $92 for the average retired worker, raising their total benefits to $1,657 per month in 2022. Couples, meanwhile, will experience an averagebenefits increase of $154 to $2,753 per month. Disability benefit payments will increase $76 to $1,358 per month. Disabled workers with a spouse and one or more children will experience an average$133 increase to $2,383 per month. Lastly, widows and widowers will find their averagebenefits increasing by $86 to $1,553 per month. Notably, widowed mothers with a minimum of two children will receive an average$178 increase to $3,187.
Does Social Security Pay For Life
Yes, Social Security benefits are paid for life once they begin. Disability payments continue as long as the person is considered disabled. In some cases, family Social Security benefits allow spouses or dependents of deceased workers to receive benefits. Childrens benefits may also pay up until the child reaches age 18.
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Primary Insurance Amount Calculation
For 2022, the SSA established the first bend point as $1,024 and the second bend point as $6,172. Using the AIME from the earlier example of $10,141 and the bend points, we can calculate the primary insurance amount .
Below are the steps to calculating the PIA:
- Multiply the first $1,024 of the person’s AIME by 90% = $921.60
- Subtract the 1st and 2nd bend point and multiply that difference by 32% = $5,148*.32 = $1,647.35*
- Subtract the 2nd bend point amount from the total AIME amount and multiply the difference by 15%. = $3,969*.15 = $595.35
*Please note that the calculation results are required to be rounded down to the next lower multiple of 10 cents.
- The PIA is the sum of the three calculation results: = $3,164.30
*The multipliers90%, 32%, and 15%are set by law and do not change annually. The bend points are inflation-indexed but only through age 62. PIA is effectively locked in at age 62.
Ways You Can Lose Your Social Security Benefits
Social Security serves mostly older retirees, but also the disabled through Social Security Disability Insurance . The Supplemental Security Income program gives extra help to the most vulnerable people, those who are disabled or blind and have limited resources. Together, the Social Security Administration paid $1 trillion to 65 million monthly beneficiaries in 2021.
If you collect benefits or plan to in the near future, its important to understand how the things you do or dont do can shrink your slice of that pie. Keep reading to learn about how you could lose some or all of your Social Security benefits.
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Lost Or Stolen Federal Payments
Report your lost, missing, or stolen federal check to the agency that issued the payment. It’s usually one of these paying agencies. If your documentation indicates it’s a different agency, and you need its contact information, look in the A-Z Index of U.S. Government Departments and Agencies.
To get an update on your claim, contact the Treasury Department Philadelphia Financial Center at 1-855-868-0151, option 1.
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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Create A Monthly Budget For Your Social Security Check
The first thing retirees should do with their Social Security check is confirm they received the correct amount, said Kimberly Foss, certified financial planner and founder of Empyrion Wealth Management. After you confirm that your payment is accurate, it’s time to budget it properly.
Bill Kearney, owner of Integrated Financial Concepts, recommends creating a spending plan before spending your Social Security checks. Here’s how:
Assess your expected monthly costs, including rent or mortgage payments, food, healthcare, debt and other living expenses.
Tally expected income and where the income will come from.
Match up your expenses with your expected income sources. In other words, figure out what your Social Security payments cover vs. your pension or withdrawals from retirement accounts.
How To Start Saving For Retirement
While it may seem daunting to start saving hundreds of dollars every month, you can start small and increase your savings rate over time. Experts generally recommend saving between 10 and 20% of your annual income, but if you have credit card debt or other high interest debt, you should prioritize paying that off before you start investing.
If your employer matches your 401 contributions, you’ll want to focus on maximizing the match. By doing so, you’re essentially earning free money. A 401 is considered a pre-tax retirement account. With a 401, money is automatically deducted from your paycheck, and you won’t pay taxes on that income until you withdraw it in retirement
After you’ve maximized your employer’s 401 match, you might consider opening an individual retirement account . The traditional IRA and the Roth IRA are the two most common types of IRAs. For IRAs, the contribution limit is $6,000, but individuals over the age of 50 can make catch-up contributions for a max limit of $7,000.
Like a 401, a traditional IRA is a pre-tax retirement account where individuals don’t pay taxes on their investments until they withdraw them in retirement. An traditional IRA has no income limits so it’s available to everyone regardless of how much money you make.
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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.
How Your Social Security Benefits Are Calculated
Your Social Security benefits are based on the 35 calendar years in which your income was the highest. If you have fewer than 35 years of earnings, each year with no earnings will be entered as zero. You can increase your Social Security benefit at any time by replacing a zero or low-income year with a higher-income year.
There is a maximum Social Security benefit amount you can receive, though it depends on the age you retire. For someone at full retirement age in 2021, the maximum monthly benefit is $3,113. For someone filing at age 70, the maximum monthly amount is $3,895.
The First Thing You Should Do With Your Social Security Check
Whether you’re 20 years old or 10 years away from retirement, it’s important to plan how you’re going to supplement your income and spend your money during your golden years. For many soon-to-be retirees, this means making a plan for their Social Security checks.
Americans 65 and older spend an average of about $48,791 annually between 2016 and 2020 on essentials such as food, housing, transportation and healthcare, according to the Bureau of Labor Statistic’s 2019 Consumer Expenditure Survey. But the average monthly Social Security benefit for retired workers is $1,619.67 — which comes out to only $19,436.04 annually. If you plan to rely on Social Security alone, you’ll quickly realize that this amount probably isn’t enough to fully fund your retirement lifestyle.
Still, you don’t want to blow through your Social Security check. That’s why it’s important to carefully budget and spend your benefits wisely. Keep reading to learn more about what you should do with your Social Security check.
Fact #: Social Security Is Particularly Important For People Of Color
Social Security is a particularly important source of income for groups with low earnings and less opportunity to save and earn pensions, including Black and Latino workers and their families, who face higher poverty rates both during their working lives and in old age. The poverty rate among Black and Latino seniors is over 2.5 times as high as for white seniors. There is a significant racial retirement wealth gap, leading seniors of color to face more retirement insecurity than white seniors. African American and Latino workers are less likely to be offered workplace retirement plans and likelier to work in low-wage jobs with little margin for savings. Social Security helps reduce the economic disparities between white seniors and seniors of color.
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There Are Social Security Survivor Benefits For Spouses And Children
If your spouse dies before you, you can take a Social Security survivor benefit. However, that won’t be in addition to your own benefit. You must choose one or the other. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death .
A widow or widower can start taking a survivor benefit at age 60. However, the payment will be reduced because it’s taken before full retirement age. If you remarry before age 60, you are not eligible for a survivor benefit. If you remarry after age 60, you may be eligible for a survivor benefit based on your former spouse’s earnings.
Eligible children who are under age 18 or were disabled before age 22 can also receive a Social Security survivor benefit. It would be worth up to 75% of the deceased’s benefit.
How Much Are My 2022 Social Security Payments
The 2021 average monthly benefit for all retired workers was $1,565. A 5.9% increase will raise the average benefit to about $1,657, which is about $100 a month. For disabled workers who receive Social Security benefits, they can expect an average increase of $76 per month.
The average 2021 monthly benefit for SSI is $794 per month and is expected to increase to $841 for 2022, an increase of $47. About 3 million Americans who receive both Social Security and SSI benefits will also benefit from these changes.
SSA will notify those who receive Social Security benefits and SSI about their new benefit amounts by mail and online starting in December.
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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.
Fact #: Social Security Benefits Are Modest
Social Security benefits are much more modest than many people realize the average Social Security retirement benefit in June 2020 was about $1,514 a month, or about $18,170 a year. For someone who worked all of their adult life at average earnings and retires at age 65 in 2020, Social Security benefits replace about 40 percent of past earnings. This replacement rate will slip to about 35 percent for a medium earner retiring at 65 in the future, chiefly because the full retirement age, which has already risen to 66, and is gradually climbing to 67 over the 2017-2022 period.
The average Social Security retirement benefit in June 2020 was $1,514 a month, or about $18,170 a year.
Moreover, most retirees enroll in Medicares Supplementary Medical Insurance and have Part B premiums deducted from their Social Security checks. As health care costs continue to outpace general inflation, those premiums will take a bigger bite out of their checks.
Social Security benefits are modest by international standards, too. The United States ranks just outside the bottom third of developed countries in the percentage of an average workers earnings replaced by the public pension system.
Social Security lifted 1.5 million children out of poverty in 2018, as the chart shows.
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Next Round Of $1657 Social Security Payments For 2022 To Be Sent Tomorrow Heres How Cola Boosted Your Monthly Cash
- 11:31 ET, Jan 25 2022
- Invalid Date,
THE next round of $1,657 Social Security payments will be sent out to retirees on Wednesday, and here’s how the cost-of-living adjustment has boosted your monthly cash.
The 5.9 percent COLA increase means retired Americans will see an increase to their payment.
Retirees will see a boost of $92 on average, bringing their monthly benefit to $1,657 from $1,565.
Now, those born from the 20th onward can expect to receive their payments tomorrow.
The spouses of retired workers will receive a boost of $47, taking average payments from $794 to $841.
Disabled employees will pocket an extra $75 on average as their check increases to $1,358 a month from $1,253.
Meanwhile, the Social Security Administration also confirmed that the maximum earnings subject to Social Security tax will increase this month.