What If I Delay Taking My Benefits
If you retire sometime between your full retirement age and age 70, you typically earn a “delayed retirement” credit . For example, say you were born in 1951 and your full retirement age is 66. If you started your benefits at age 68, you would receive a credit of 8% per year multiplied by two . This makes your benefit 16% higher than the amount you would have received at age 66. .
That higher baseline lasts for the rest of your retirement, and serves as the basis for future increases linked to inflation. While its important to consider your personal circumstancesits not always possible to wait, particularly if you are in poor health or cant afford to delaythe benefits of waiting can be significant.
If you decide to wait past age 65, you may still need to sign up for Medicare. In some circumstancesyour Medicare coverage may be delayed and cost more if you do not sign up at age 65.
To review your situation, your annual Social Security statement will list your projected benefits at age 62, full retirement age, and age 70, assuming you continue to work and earn about the same amount until age 62, full retirement age, or age 70 before retiring. If you need a copy of your annual statement, you can request one from the Social Security Administration .
Possible Entitlement To Pbs
From 1 July 2014, the PBS was closed to further registrations. Existing registered members may still be eligible to claim a pension bonus payment. The claim for a pension bonus must be lodged together with the claim for Age.
A claimant cannot receive a payment under the PBS if they receive an income support payment, including Age, after reaching age pension age.
Act reference:SSAct section 43 Qualification for Age, section 92A Simplified outline, section 92H Date of qualification for the Age
At What Age Can You Collect Social Security
Individuals under 50 years old and applying for social security disability benefits could have a more difficult case than a claimant whose is more than 50 years of age. There is no specific age you have to be to collect social security disability benefits. Individuals between 19 and 50 are considered young workers and have more exertional and mental hurdles to overcome than older claimants. Individuals, whether they are under 50 or those workers over 50 who are seeking disability benefits should have strong medical documentation from their health care providers and seek the assistance of a social security lawyer to help build a strong disability case. It is harder to receive disability benefits than at any time in history. The percentage of claimants receiving disability benefits today is much lower than just 2 years ago and continues to get more difficult. It is critical now to have good legal representation otherwise, you could be denied benefits from unfavorable decisions and be without monthly benefits for years costing you tens of thousands in income. The stakes are too high to be without an experienced social security attorney working for you to get the benefits you deserve.
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Spouse’s Benefit And Government Pension Offsets
The spouse or divorced spouse of a retirement beneficiary is eligible for a Social Security spouse benefit if the spouse or divorced spouse is 62 or older. The benefit amount is equal to 50 percent of the retirement beneficiary’s Primary Insurance Amount if the spouse claims the benefit at the full retirement age or later. If a person is eligible for both a retirement benefit based the person’s own work in Social Security covered employment and a spouse benefit based on a spouse’s work in covered employment, SSA will pay a total amount approximately equal to the higher of the two benefits. For example, if at the full retirement age, a spouse claims a retirement benefit of $300 and a spouse benefit of $450, SSA will pay the person a $300 retirement benefit and a $150 dollar partial spouse benefit for a total benefit of $450.
A spouse is eligible after a one-year duration of marriage requirement is met and a divorced spouse is eligible for spousal benefits if the marriage lasted for at least ten years and the person applying is not currently married. Payment of benefits to a divorced spouse does not reduce the Social Security benefits of the retired worker or family members of the retired worker, such as the worker’s current spouse. A divorced person can claim spousal benefits once the former spouse is eligible for retirement benefits, regardless of whether the former spouse has claimed those retirement benefits.
How Your Social Security Benefits Are Calculated
Your Social Security benefits are based on the 35 calendar years in which you earned the most money. If you have fewer than 35 years of earnings, each year with no earnings will be factored in at 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.
You can estimate your own benefit by using Social Security’s online Retirement Estimator.
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What Is The Lowest Social Security Retirement Benefit
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 share. month in 2020. The number of recipients receiving the special minimum PIA has dropped from around 200,000 in the early 1990s to around 32,100 in 2019.
What is the lowest monthly Social Security benefit?
DEFINITION: The special minimum benefit is a special minimum primary insurance amount adopted in 1972 to provide adequate benefits to long-term low-wage 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 share. month in 2020.
Can I get Social Security if I only worked 10 years?
Some U.S. workers are not eligible for Social Security retirement benefits. Workers who have not earned the required 40 credits are not eligible for social security. Some government and railway employees are not entitled to social security.
Social Security Retirement Age
Full retirement age is when you first become eligible for full Social Security retirement benefits. If you were born in 1960 or later, your full retirement age is 67. If you were born before that, the age is somewhere between 65 and 66 years and 10 months, depending on your birth year.
No matter what your full retirement is, you can start collecting benefits as early as age 62 or as late as age 70. Your birth year and your age when you start to collect benefits affect your monthly benefit amount.
|Social Security Benefits by Age and Year of Birth|
Year of Birth
You can earn delayed retirement credits each month that you wait to collect beyond your full retirement age, up until age 70. This increases your monthly payment by two-thirds of 1% for each month that you waitor 8% a year.
Even though more money is usually better, that’s not always the case with collecting Social Security benefits. Here are four times when it might be better to forgo the larger check and start collecting benefits sooner.
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Get Ssa Benefits While Living Overseas
U.S. citizens can travel to or live in most, but not all, foreign countries and still receive their Social Security benefits. You can find out if you can receive benefits overseas by using the Social Security Administrations payment verification tool. Once you access the tool, pick the country you’re visiting or living in from the drop-down menu options.
Contrast With Private Pensions
Although Social Security is sometimes compared to private pensions, the two systems are different in a number of respects. It has been argued that Social Security is an insurance plan as opposed to a retirement plan. Unlike a pension, for example, Social Security pays disability benefits. A private pension fund accumulates the money paid into it, eventually using those reserves to pay pensions to the workers who contributed to the fund and a private system is not universal. Social Security cannot “prefund” by investing in marketable assets such as equities, because federal law prohibits it from investing in assets other than those backed by the U.S. government. As a result, its investments to date have been limited to special non-negotiable securities issued by the U.S. Treasury, although some argue that debt issued by the Federal National Mortgage Association and other quasi-governmental organizations could meet legal standards. Social Security cannot by law invest in private equities, although some other countries and some states permit their pension funds to invest in private equities. As a universal system, Social Security generally operates as a pipeline, through which current tax receipts from workers are used to pay current benefits to retirees, survivors, and the disabled. When there is an excess of taxes withheld over benefits paid, by law this excess is invested in Treasury securities as described above.
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You Need More Money In The Early Retirement Years
In the first stage of retirement, many people are healthy, have a lot of energy, and spend more money on hobbies, travel, and other entertainment. As a result, many newbie retirees need increased cash flow during the earlier years of retirementand less as they get older.
If you fall into this category and want to boost your cash flow now, early Social Security benefits could help. Sure, you’ll have a lower payout than if you waited. But if enjoying your retirement while you’re healthiest is more important than collecting a larger Social Security check later, it makes sense to start early.
Age : Wait And Accumulate Delayed Retirement Credits
At 70, you will get the maximum amount of benefits that you can get from Social Security. It does not make sense to delay your Social Security retirement age past 70 because your benefit amount will not increase. Waiting until 70 to begin your Social Security if you are married and are the higher earner results in a higher survivor benefit for your spouse.
What Is The Minimum Social Security Benefit
The minimum Social Security benefit provision is an alternative benefit that increases benefits paid to low-income individuals.
Where the regular Social Security benefit formula bases the benefit amount on an individuals lifetime earnings, the minimum Social Security benefit formula is based on the number of years a person has worked with earnings at or above a certain threshold.
The benefit amounts are still calculated through both formulas, but with the minimum Social Security benefit provision, the higher of the two benefits is the amount provided to qualified individuals.
In 2019, there were 64 million Social Security recipients about 32,092 of them qualified for the minimum benefit. While its not a provision that impacts most people qualifying for Social Security, its still an important concept to understand if you want to broaden your full understanding of how the system works.
To start, lets break down how benefits are normally calculated. Then, we can jump into the specific formula used for workers who fall under the minimum Social Security benefit provision umbrella.
What Is A Social Security Card
Your Social Security card is an important piece of identification. You’ll need one to get a job, collect Social Security, or receive other government benefits.
When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.
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What Happens To A Persons Social Security When They Die
As long as you remain alive, you continue drawing benefits based on your work record and how much youve earned over your lifetime. When you die, the benefits cease there is no accrued balance that is paid out to your estate or to your survivors. Social Security does not pay benefits for the month of your death.
Social Security Income Limit 2021
Note: The Social Security earnings limit changes each year. The most current version of this article uses numbers for 2021.
At one of my first speaking engagements, I heard a great story from one of the attendees. Her experience provides us with one of the best examples Ive ever heard of how much the Social Security income limit can catch you by surprise.
A few years earlier, shed been at her bridge club when the topic turned to Social Security. As she and the other card players chatted about the best way to leverage Social Security Benefits, the consensus around the table seemed to be that filing at 62 was the smartest thing to do.
This lady, trusting the advice of some of her closest friends, did just that: She filed for benefits as soon as she turned 62.
She then told me shed always wanted to buy a brand-new Toyota Camry. She figured that, once she started receiving Social Security income, it would be the perfect time to buy the car. She was still working, which meant her Social Security check would be extra income.
As she told the story to me, she bought the car and took out a car loan to do it. She planned to repay the loan using some of the income she expected to receive from her Social Security benefits since she filed for them.
Imagine her surprise, then, when a nasty letter from Social Security Administration showed up in her mailbox. The letter claimed she had been paid benefits that she was not eligible for!
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You’re In Poor Health
Retirement can last 20 or 30 years if you’re a healthy senior, but unfortunately, many people develop illnesses as they age. That’s why planning for healthcare costs in retirement is so important.
If you’re in poor health, you may need the extra money that Social Security benefits provideand opt to claim benefits early. And, sadly, if you think you may not live to be very old, you could come out ahead on a lifetime basis.
This strategy could backfire if you have a spouse. If you start collecting early, it will lower your monthly benefit. But it will also lower any survivor benefits your spouse is entitled to after you pass. If your spouse outlives you for many years, this could be a serious financial hit.
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.
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How Workers Can Get Estimates Of Benefits
The Social Security Administration provides benefit estimates to workers through the Social Security Statement. The Statement can be accessed online by opening an online account with SSA called my Social Security. With that account, workers can also construct “what if” scenarios, helping them to understand the effect on monthly benefits if they work additional years or delay the start of retirement benefits. The my Social Security account also offers other services, allowing individuals to request a replacement Social Security card or check the status of an application.
A printed copy of the Social Security Statement is mailed to workers age 60 or older.
In 2021, SSA began producing Retirement Ready fact sheets, available online and as part of the online Statement, that tailor retirement planning information to different age groups .
SSA also has a Benefits Calculators web page with several stand-alone online calculators that help individuals estimate their benefits and prepare for retirement. These include benefit calculators for spouses, calculators for persons affected by the Windfall Elimination Provision or the Government Pension Offset and calculators to determine a person’s full retirement age or the effect of the earnings test on benefits.
SSA also provides a life expectancy calculator to help with retirement planning.
Court Interpretation Of The Act To Provide Benefits
The United States Court of Appeals for the Seventh Circuit has indicated that the Social Security Act has a moral purpose and should be liberally interpreted in favor of claimants when deciding what counted as covered wages for purposes of meeting the quarters of coverage requirement to make a worker eligible for benefits. That court has also stated: “… he regulations should be liberally applied in favor of beneficiaries” when deciding a case in favor of a felon who had his disability payments retroactively terminated upon incarceration. According to the court, that the Social Security Act “should be liberally construed in favor of those seeking its benefits can not be doubted.” “The hope behind this statute is to save men and women from the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey’s end is near.”
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