Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Here’s A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits
For many Americans, Social Security benefits are the bedrock of retirement income. Maximizing that stream of income is critical to funding your retirement dreams.
The rules for claiming Social Security benefits can be complex, but this guide will help you wade through the details. By educating yourself about Social Security, you can ensure that you claim the maximum amount to which you are entitled.
Here are 12 essential details you need to know.
Social Security Benefits For Children
More than four million children receive Social Security benefits each month because one or both of their parents are disabled, deceased or retired.
These funds help stabilize families and children at a critical time in their lives, helping them to complete high school and give them a good start toward college or being able to work full time with a high school diploma.
Biological, adopted and dependent step-children are eligible to get benefits if they meet certain criteria:
- At least one parent who is disabled or retired and eligible for Social Security benefits.
- A parent who passed away after attaining enough work credits in a job where he or she paid Social Security taxes.
- The child must be unmarried and under age 18, or
- 18-19 years old and a full-time student who is in no higher than grade 12. College students are excluded.
- 18 years or older and disabled.
When a child meets these criteria and a parent begins receiving Social Security retirement benefits, the child may be eligible for up to half of the parents full benefit amount or 75 percent if the parent is deceased. However, there is a maximum amount per family that ranges from 150 to 180 percent of the parents full benefit amount. When payments exceed this threshold, each family members benefit is reduced proportionally until the total is equal to the maximum amount allowed for the family.
How To Get Half Of Your Spouses Social Security Retirement Check
NEW YORK One day, in 2010, Paul Solman, business and economics correspondent for The News Hour with Jim Lehrer, and Larry Kotlikoff, a professor of economics at Boston University, were chatting about money when Kotlikoff asked Solman when he planned to start taking Social Security retirement income. Solman said that his wife and he had decided to delay collecting checks until they would get the maximum amount at age 70. Kotlikoff pointed out that they would be leaving $50,000 on the table.
That’s because there’s a little-known strategy that couples can use to increase their Social Security income: when one spouse reaches age 66, he or she can file for — and immediately suspend — Social Security retirement income. By doing this, when the second spouse turns 62, she can claim spousal benefits , even if she never worked, providing additional income and allowing her husband to maximize his benefit by delaying payments until he reaches age 70. Taking spousal benefits also allows the second spouse to delay receiving payments based on work history and maximizing her benefits, as well.
Solman and Kotlikoff, along with Philip Moeller, a financial journalist, write about this and other Social Security strategies in their new book, Get What’s Yours: The Secrets To Maxing Out Your Social Security .
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Survivor And Death Benefits
Wage earners depend on Social Security retirement benefits to help meet financial needs when they stop working, but sometimes these earners can pass away early and unexpectedly. When workers pay into Social Security, a majority goes to fund disability and retirement costs, but a portion of their taxes go toward survivors benefits as well.
When a worker passes away, some family members may be eligible for survivors benefits if the worker earned enough credits during their working lifetime. Eligible family members include widowed spouses who are 60 or older, 50 or older if they are disabled, or any age if caring for a child who is under 16 years old. Children of deceased workers are also eligible if they are not married and under 18 years old, or under 19 years old but still in school. If youre divorced and you or your spouse pass away, the surviving spouse could be eligible for a widows benefit as well.
If a worker has enough work credits when they pass away, Social Security will also make a one-time payment of $255. This payment can be made only if the spouse or child meet certain specified requirements.
To apply for survivors benefits, Social Security will need the following, either original copies or certified copies, from the issuing agency.
Eligibility Requirements For Divorced Spouses
Before you can receive benefits on your ex-husbands Social Security work record, you must meet all of the following spousal-benefit eligibility requirements: your ex is entitled to Social Security retirement benefits your marriage lasted at least 10 years you are unmarried youre at least 62 years old, and the benefit youre entitled to on your own work record is less than the benefit youd receive on your exs record. If your ex-husband hasnt applied for benefits yet, but qualifies for them and is age 62 or older, you can receive benefits on his record if youve been divorced from him for at least two years and meet all of the requirements listed above.
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Explore The Benefits You May Be Du
How Retirement Benefits Work
Social Security replaces a percentage of your pre-retirement income based on their lifetime earnings. The portion of your pre-retirement wages that Social Security replaces is based on your highest 35 years of earnings and varies depending on how much you earn and when you choose to start benefits.
When you work, you pay taxes into Social Security. We use the tax money to pay benefits to:
- People who have already retired.
- People who are disabled.
- Survivors of workers who have died.
- Dependents of beneficiaries.
The money you pay in taxes isnt held in a personal account for you to use when you get benefits. We use your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust fund that pays monthly benefits to you and your family when you start receiving retirement benefits.
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How Disability Benefits Differ
Social Security Disability Insurance benefits are for people who are eligible for Social Security retirement benefits, but became disabled before they reached full retirement age. When a beneficiary begins to receive disability benefits, certain members of their family may also qualify for benefits, including:
How Does Work Affect Social Security Benefits
You can receive Social Security benefits and work at the same time. In fact, you can collect at age 62 whether youre working or not. However, if you collect benefits before your full retirement age, your benefits will be temporarily reduced by $1 for every $2 you earn above $18,960 per year in 2021. If you work during the year you reach full retirement age, $1 in benefits will be deducted for every $3 you earn above a higher limit , but only counting earnings before the month you reach your full retirement age.
Once you reach full retirement age, you can receive your benefits with no limit on your earnings. You are also paid back the earnings that were held while you were working.
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Whats Full Retirement Age
Full retirement age is when youre eligible to receive full Social Security benefits. Your full retirement age depends on your birth year: Under current law, if you were born in 1951 or later, your full retirement age is now some point after age 65all the way up to age 67 for those born after 1959. If you were born before 1951, youve already reached age 66 and full retirement age.
Retirement ages for full Social Security benefits
If you were born in
Your full retirement age is
1950 or earlier
What Is Social Security
The Social Security program was established in 1935 to provide retirement income for certain U.S. workers. It was later expanded to cover most of the workforce. Today, it remains Americas pension plan and the financial lifeline that many people use to stay afloat in their old age.
Social Security provides 37% of elderly men and 42% of elderly women with at least 50% of their income. For 12% of elderly men and 15% of elderly women, its at least 90% of their income. There are specific rules for filing or updating your Social Security.
How does Social Security work? Regardless of your age, you really should know. Here are the answers to 10 questions that people most often ask.
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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.
Not married? Read Viewpoints on Fidelity.com: Social Security tips for singles
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.
Csrs And Fers Federal Employees
CSRS& FERS Civil Service Retirees Are Eligible to Collect Social Security Under Certain Circumstances
FERS retirees receive Social Security benefits and in certain cases a supplement if they retire under age 62. CSRS retirees may receive benefits if they worked 40 quarters, 10 years in the private sector. CSRS retiree benefits are reduced by the Windfall Elimination Provision .
If You Only Qualify For A Teachers Retirement System Pension
If you have never paid Social Security tax and only qualify for your teachers retirement, its likely youll never receive a Social Security benefit.
Although this makes perfect sense to some, others think its still pretty unfair that this isnt true for everyone. For example, if you had chosen to stay at home as the household manager, you would not have paid into the Social Security system. However, you would be eligible for spousal and survivor benefits.
These intricate Social Security regulations and how differently they may affect a workers retirement income make it critical that you plan ahead and prepare. Before you make your elections on your teachers pension, you must consider how your monthly cash flow would change with a spouses death.
As a teacher, you have plenty to keep up with and these complex rules on Social Security dont make it any easier. Thats why its important to have a quick and easy source of information at your disposal so can make the best decisions for you and your family.
How Much Is The Social Security Spousal Benefit
If youre eligible and can qualify, the spousal benefit can be as much as 50% of the higher-earning spouses full retirement age benefit.
If your spouses full retirement age benefit amounts to $2,000 per month, your spousal benefit at your full retirement age could amount to $1,000 per month.
Its important to note that this benefit cannot be more than 50% of the higher-earning spouses full retirement benefitbut it can be less!
Thats because the benefit is also based on your filing age. Depending on how old you are when you file, the spousal benefit amount will range between 32.5% and 50% of the higher-earning spouses full retirement benefit.
Check out the chart below to get an idea of how the benefit works and what your payment might be if you can take advantage of spousal benefits. The chart assumes that your full retirement age is 67 and your spouses full retirement age benefit is $2,000 per month.
Did you notice the steep penalty for filing early? You receive significantly less in payments if you choose to file sooner rather than wait until full retirement age.
You may have also noticed that the spousal benefit does not increase beyond your full retirement age. When considering your own Social Security benefit, there can be a lot of advantages to waiting to file and delaying when you start receiving payments well past your retirement age, but thats not the case here.
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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.
Question: When Am I Eligible For Social Security
Claiming your Social Security benefit is complicated–especially if you are divorced. A larger benefit coming from your ex-spouse could make a difference in your cash flow throughout retirement. Here’s how to find out whether you’re eligible If you get remarried, you are not eligible for Social Security benefits based on your ex-spouse’s work record. If you were drawing divorced spouse benefits while single and then you remarry, those benefits will be terminated. You are required by law to report your change in marital status to Social Security. If your ex-spouse has passed away, you could be eligible for survivor’s benefits. How Military Service Affects Social Security Benefits. If you served in the military between 1940 and 2001, then you should be eligible for additional earnings credits, which should be factored into your lifetime earnings that are used to calculate your Social Security Benefits If you apply to start drawing benefits in 2021, Social Security would need to withhold $1 of your benefits for each $2 that you earn in excess of $18,960 this year. However, you could be paid at. Social Security Disability Insurance benefits are for people who are eligible for Social Security retirement benefits, but became disabled before they reached full retirement age. When a beneficiary begins to receive disability benefits, certain members of their family may also qualify for benefits, including: spouse divorced spouse.
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How To Apply For Social Security Benefits
The application process by itself is fairly easy and can be accomplished either online, by telephone or in person at a local Social Security office. Generally, people can apply for Social Security when they turn 62, but in many instances, it makes good financial sense to delay applying for benefits.
Social Security also provides benefits for spouses and children as well. Spouses who have not been high wage earners throughout their lives can actually piggyback off of their spouses earnings and draw as much as 50 percent of a retirement benefit using their spouses Social Security record. Certain rules do apply in this set of circumstances. Divorced spouses may also qualify for benefits if their marriage lasted for at least 10 years and they do not remarry before applying for benefits.
In addition, if children meet requirements, they can also apply for benefits from their parents Social Security work records as well. They may be eligible for funds if a parent passes away and they are under 18 and still in school.
Once a benefit amount has been set, that dollar amount cant go down, but it can go up, based on cost of living increases. Some benefit recipients may experience a temporary reduction based on income from other sources, but the base amount will always remain steady.
For an overview of Social Security and to start applying for retirement benefits, go to www.socialsecurity.gov or call Social Security at 1-800-772-1213.