Tuesday, May 3, 2022

What Would My Social Security Payment Be

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When Is It Worthwhile To Continue Working While On Social Security For Higher Benefits

Social Security payments to increase by 6% l GMA

In the end, whether or how beneficial it is to continue to work while on Social Security in order to generate higher Social Security benefits in the future depends heavily on two factors: what income replacement tier the Social Security recipient will be in and what the existing earnings history already was . Similar to the consequences of retiring early , the consequences vary depending on where the individual is in the AIME calculation.

Social Security Benefits Will Be Paid Monthly On One Out Of Three Wednesdays

    On Oct 13, 2021, the Social Security Administration announced its annual changes to the Social Security program for 2022. When it comes to managing your life as a retiree, it almost goes without saying that you’ll need to keep abreast of the yearly Social Security tweaks and adjust your budget accordingly. However, with so much new information to keep track of, it can be easy to forget some of the smaller details, such as when benefit payments are distributedespecially considering that this answer isn’t exactly clear-cut and varies from person to person. As such, we have put together a Social Security benefits payment schedule for 2022, which can be found below.

    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

    RETIREMENT AGE
    SSA deducts $1 from your benefits for every $3 you earn above the limit

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    Investigate Divorced Spouse Benefits

    If youre currently unmarried but a previous marriage lasted at least 10 years, you could qualify for spousal benefits based on your exs work record. The amount can be up to 50% of the workers benefit at his or her full retirement age. If you remarry, however, the divorced spouse benefit stops. You must be at least 62 to get spousal benefits.

    If your ex has died and the marriage lasted at least 10 years, you could qualify for survivor benefits of up to 100% of your exs benefit. You can remarry at 60 or older and still receive divorced survivor benefits. Survivor and divorced survivor benefits can begin at age 60, or at age 50 if the survivor is disabled, or at any age if youre caring for your exs child who is under 16 or disabled . People receiving survivor benefits can switch to their own benefit later if thats larger, and vice versa.

    Pro tip: Your ex must be at least 62 for you to receive a divorced spousal benefit, but does not need to be receiving his or her own benefit. Survivor benefits are based on what your ex was receiving or would have received at full retirement age. If you start benefits before your own full retirement age, however, the amount you get will be reduced.

    Fact #: Most Elderly Beneficiaries Rely On Social Security For The Majority Of Their Income

    When Social Security recipients should expect third ...

    Social Security provides the majority of income to most elderly Americans. For about half of seniors, it provides at least 50 percent of their income, and for about 1 in 4 seniors, it provides at least 90 percent of income, across multiple surveys and the study that matches survey and administrative data.

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    Congress Must Act Sooner Rather Than Later

    In theory, the AWI problem could be fixed anytime before 2022, when, for example, workers who turn 60 this year are first eligible to retire at the age of 62. But that delay would cause significant anxiety for these workers, whose future benefits would be at risk. Moreover, people decide when to retire based on projections of their incomes in their initial year of retirement and in the remainder of their lives. It would be most unfair to workers decision-making processes to have the expectations of their future incomes be uncertain for some period of time while they are trying to make such an important decision.

    Congress needs to act sooner rather than later to ameliorate this problem. One possibility would be to include a fix in the stimulus legislation to cope with the economic effects of the COVID-19 pandemic that Congress is currently considering.

    Q What If I Make A Mistake

    A. Good news! Social Security offers a do-over.

    This little-known provision lets you stop your current benefits, pay back all youve collected and restart your benefits at a new, higher rate, based on your current age.

    You can only do this oncewithin 12 months of your initial decision to start benefits.

    How do you know if this is a good idea for you? You have to make sure you have the ability to pay back all the benefits youve received. So you may want to consider it if you have a high net worth or have a windfall from an inheritance or the sale of a business.

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    Calculating Ssdi: Covered Earnings

    If you are eligible for SSDI benefits, the amount you receive each month will be based on your average lifetime earnings before your disability began. This is the only factor that determines your benefit amount, although it may be reduced if you’re receiving disability payments from other sources . In other words, your SSDI benefit amount is not based on how severe your disability is, and unlike SSI, you cannot be denied SSDI because you have too much unearned income or too many resources .

    Your past earnings must be covered under the Social Security program in order to count towards the amount of SSDI benefits you will receive. “Covered earnings” are wages you have received from jobs that have paid into Social Security. If you have received a paycheck that had money withheld for “Social Security taxes” or “FICA,” the wages you made at that job are covered earnings and will count toward calculating your benefit amount. Most wages are covered earnings.

    Your SSDI payment will be based on your average covered earnings over a period of years, known as your average indexed monthly earnings . A formula is then applied to your AIME to calculate your primary insurance amount the basic figure the SSA uses in setting your actual benefit amount.

    For example, someone in their fifties who made $100,000 for the past few years might expect a disability payment of $2,500 per month. Someone in their fifties who made $60,000 per year might expect a disability payment of $2,000 per month.

    How To Get A Copy Of Your Social Security Statement

    How the pandemic could cut your Social Security payments

    The SSA mails out Social Security Statements to follks age 25 and over before their birthdays during their 25, 30, 35, 40, 45, 50, 55, and 60 years. For those age 60 until retirement, the SSA will send out statements every year. You can also go online to get a copy of your statement or view it online. Go to www.ssa.gov/mystatement/ and open an account with Social Security to view your statement.

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    Q What If I Work During Retirement

    A. That can be a little trickybut just until you reach your full retirement age . Lets say you start your Social Security benefits before your full retirement age. If you also work during that time, your benefit could be reduced if your wage is over certain limits.

    But theres some good news. Once you reach your full retirement age , you can work with no reduction to your benefit- no matter how much you earn.

    Age
    Up to 85%

    Note: State and local taxes may differ.

    The moral of the story? If you think youll have a lower provisional income later in retirement, waiting to start your Social Security benefits may help you save on taxes. Calculating your provisional income can be tricky a financial or tax professional can help you weight your options.

    Exceptions To The Usual Schedule

    Your payment will arrive on an alternate schedule if you fall into certain categories. It will be made on the third day of the month if:

    • Your state is paying your Medicare premiums
    • You started receiving benefits prior to May 1, 1997
    • You reside in another country
    • You’re receiving both Social Security benefits and SSI payments

    But there’s an exception to the Social Security/SSI rule. You’ll receive payment on the first of the month rather than the third day if you’re receiving SSI due to disability, blindness, or age.

    SSI is needs-based. It’s not something you paid into over the course of your working career, like Social Security retirement or disability benefits or Medicare, so it’s possible to collect for these reasons without also receiving Social Security retirement or disability benefits. SSI is intended to pay for basic food, shelter, and clothing needs.

    Your payment will come the weekday just before the usual date if your payment date falls on a weekend or a federal holiday.

    You can find calendars on the Social Security Administration’s website, Schedule of Social Security Benefit Payments 2021, to pin down the exact dates in 2021 depending on your circumstances.

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    The Source Ofand Solution Tothe Problem

    When the current Social Security formula was put in place in 1977, no provision was made for the contingency that economic conditions would be so dire that average wages would fall in any given year. This problem first surfaced in 2009 during the Great Recession. The AWI, however, fell by a relatively small amount, and policymakers chose not to do anything about it. As a result of the COVID-19 pandemic, however, the decline in the AWI is likely to be about four times as big now as it was during the Great Recession.

    There is ample precedent for fixing this problem. The first precedent concerns Social Security cost-of-living allowances . As mentioned above, payments in years after beneficiaries first year of retirement are indexed to inflation using a version of the consumer price index . However, under the law, if prices fall in any year, benefits are not adjusted downward rather, they remain the same. The second precedent concerns the Social Security contribution and benefit base, also known as the taxable maximum. The taxable maximum is the dollar amount of annual earnings above which the Social Security payroll tax does not apply. The taxable maximum is indexed to the AWIbut like COLAs, it is never adjusted downward.

    What Is Full Retirement Age

    How much can i get for social security disability ...

    For Social Security purposes, your full or “normal” retirement age is between age 65 and 67, depending on the year you were born. If, for example, your full retirement age is 67, you can start taking benefits as early as age 62, but your benefit will permanently be 30% less than if you wait until age 67.

    If you can manage without receiving your Social Security benefits at full retirement age, you can wait until age 70. That will give you the maximum benefit each month.

    There’s no advantage to waiting past age 70 to start collecting benefits.

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    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.

    What If My Payment Doesn’t Come

    Contact the Social Security Administration at 1-800-772-1213 or find a Social Security office near you if your direct deposit or debit card funds aren’t made on time. The SSA asks that you wait three days before reaching out to them, however.

    The risk of your “check” being stolen is virtually eliminated if you use the Direct Deposit option because the money is transmitted electronically and directly to your bank account.

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    Social Security: How To Find Your Benefit Amount And Other Online Tips For Seniors

    In the past, your Social Security statement and benefit amount was only available via a paper statement sent to your home. Now, you can access your benefit amount online through a mySocialSecurity account on the SSA website.

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    Your online Social Security statement will show all the earnings youve had each year and how much you could receive per month in Social Security benefits when you retire. The Statement contains important information for you to be able to properly plan for a comfortable retirement.

    You can access your earnings, Social Security benefit estimates and printable Statements. If you are a retiree and already receive benefits, you can view your payment history, current status and manage your benefits through the online account.

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    In order to set up your personal Social Security account, you will need to access the SSA website here. From there, select Create Account to get started. You must be at least 18 years of age, have a valid Social Security number, a U.S. mailing address and an email address in order to use this system.

    Once you sign up, you can verify your earnings history, view estimated benefits based on your past earnings, view Social Security and Medicare taxes youve paid over your lifetime, print your current Statement and request a replacement Social Security card.

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    How Do I Increase My Social Security Benefits After Retirement

    Four Ways to Maximize Social Security Payments

    To increase your monthly benefit, don’t start taking Social Security payments right when you reach full retirement age. The longer you wait, the more you’ll get each month. If you want to get the highest possible amount of Social Security benefits each month, you need to wait until age 70 to retire.

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    How To Calculate Social Security Benefits In Excel

    If you are in your late 50s and approaching retirement, you can create a useful model of your future benefits. It works best to do this in a Microsoft Excel spreadsheet, as follows:

    • Using a recent Social Security statement, list in spreadsheet column A your taxable Social Security earnings year by year.
    • List in column B the most recently published NAWI adjustment factors as published by the SSA.
    • Multiply columns A and B and output the result to column C.
    • Identify in column D the 35 highest values in column C. Add these together and divide the sum by 420 . This will approximate your AIME.
    • Use the most recently published bend points to convert your AIME into a PIA.

    You also can fill in hypothetical values for estimated taxable Social Security earnings in future years until you plan to stop working. To be conservative, use a NAWI adjustment factor of 1.0000 in column B for all future years.

    A financial advisor who fully understands this process can help verify your calculations, advise you on when to start Social Security benefits, and estimate the future benefits you can expect to receive.

    Social Security Disability Programs

    In addition to retirement benefits, the Social Security Administration manages two programs that provide benefits to people who are disabled or blind.

    Social Security Disability Insurance Program
    SSDI supports disabled or blind individuals by providing benefits based on their workers contributions to the Social Security trust fund. Your contributions are based on your earnings or your spouses or parents earnings while in the workforce. Your dependents may also be eligible for SSDI benefits based on your earnings.
    Supplemental Security Income Program
    SSI benefits are paid out as cash assistance to people with limited incomes and resources who are elderly, blind or disabled. These benefits may also include blind or disabled children. SSI payments are a federal benefit funded by the general fund of the United States not the Social Security trust fund. Some states provide additional state supplemental benefits in addition to the federal SSI payments.

    In some cases, people may be eligible for both SSI and SSDI at the same time. The Social Security Administration calls these concurrent benefits. This can happen when a disability qualifies you for Social Security Disability Benefits, but you only get a small amount of monthly SSDI benefits. This may qualify you to receive SSI benefits as well.

    Comparing SSDI and SSI Programs

    FEATURE
    Up to 85%

    Income Taxes for Other Benefit Programs

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