Sunday, August 14, 2022

When Are You Able To Collect Social Security

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Factors That Affect Social Security Benefits

When should you collect social security?

The math seems to say that everyone should wait until age 70 to reap the best benefits, but this isnt always the case. There are times when it might make sense to start collecting earlier. If, for example, you are in poor health or if the family breadwinner is ill and can no longer work, collecting before your full retirement age could help prevent debt from mounting up.

Your marital status also plays a factor. If youre single and in poor health, you could end up using your savings to pay for medical bills between the ages of 66 and 70. In this case, you might be better off collecting Social Security benefits at a lower rate than holding out for the higher payments youd receive at age 70.

If, however, youre single, in good health and either still working or have plenty of savings, consider waiting until age 70 in order to benefit from the higher payments.

With married couples, it could be best for the spouse who earns the most money to hold off until 70, while the spouse who makes less starts collecting at 62. This approach will ensure that when one of you passes away, the surviving spouse will receive the higher benefitsgenerally the amount their spouse would have received at age 70, even if the spouse died before that age.

For more help with retirement planning, consider contacting a Certified Financial Planner. They can help you ensure youre maximizing your Social Security benefits and answer any questions you have about your other assets.

Do I Qualify For The Exception To This Rule Can I Draw Both Ssdi And Retirement

There is one exception that allows qualified individuals to draw both retirement and SSDI benefits at the same time, but this is rare and still does not allow them to collect more than their full retirement benefit.

This occurs when someone opts for early retirement between age 62 and their full retirement age but is then approved for SSDI benefits. Some people set themselves up for this by filing for early retirement after an injury or illness caused them to have to quit work. They can begin receiving early retirement to help them cover bills until their SSDI claim receives approval and the waiting period for those benefits expires.

Once this happens, they can begin receiving additional money from the SSA each month on top of their early retirement benefits. This will bring them to their full retirement benefit amount. They are also most likely qualified for retroactive benefits, which will bring them to their full retirement amount for any month they suffered a disability but were not yet approved for SSDI.

How Much Can I Earn While On Social Security // 2021 Limits

Many people find themselves in a position needing to work another job while receiving Social Security benefits. Perhaps the retirement benefits they receive are not enough to make ends meet. So, how does working affect the benefits that you will receive? The Social Security Administration has strict rules about working while receiving benefits. They place an earnings limit on the amount that you can earn before your monthly benefit becomes affected. So, what is this earnings limit and how will it affect your benefits? Keep reading to learn all the details of how an extra income might affect your Social Security income.

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Applying For Social Security Benefits

  • 1Apply online. There are a few different ways in which you can make your claim for Social Security retirement benefits. The most straightforward of these is to apply online through the SSA website: . Completing this application should take less than 15 minutes and will provide the basic information required in order to begin processing your claim. This includes questions about you, your family, and your work.XTrustworthy SourceUS Social Security AdministrationIndependent U.S. government agency that administers Social Security and related informationGo to source
  • With this option you can begin whenever you like, and you don’t need to make an appointment or wait in a line.
  • You don’t have to complete the entire form all in one go. You can save your progress part of the way through.XTrustworthy SourceUS Social Security AdministrationIndependent U.S. government agency that administers Social Security and related informationGo to source
  • Once you have submitted the application it will be reviewed by the SSA.
  • After the review the SSA will contact you if they need any further information or documentation from you.
  • Once they have everything they need, your claim will be processed and you will receive a letter in the mail about the outcome.XTrustworthy SourceSocial Security AdministrationIndependent U.S. government agency responsible for the administration and management of Social SecurityGo to source
  • Your birth certificate or another proof of birth.
  • When Is The Best Time To Claim Social Security Benefits

    Will I Be Able To Collect Social Security?

    When is the optimal time to claim Social Security? Financial Planner David Rae explains.


    There are reasons to claim Social Security at 62, but there are also reasons to wait until you are older. Claiming benefits too early could result in receiving a significantly lower amount. In other cases, you may be creating tax headaches if you receive Social Security and are still working.

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    The Basics Of Social Security

    First off, every eligible worker can begin receiving Social Security benefits at age 62, but you’ll get a reduced monthly payment if you don’t wait until you’re at full retirement age. Your monthly payment will depend a few things, including your income throughout your working years, how much you paid into the Social Security system and at what age you claim benefits. Benefits are adjusted yearly based on the cost of living.

    Full retirement age depends on the year you were born:

    • If you were born between 1943 and 1954, full retirement age is 66
    • If you were born between 1955 and 1959, full retirement age is between 66 and 67, depending on your birth year
    • If you were born after 1960, full retirement age is 67

    The Social Security website provides a calculator to help individuals understand how much their benefit will be reduced if they collect early. For example, if you were born in 1960 and wanted to collect as soon as you hit age 62, you’d receive 70% of your full retirement age payout. But if you waited until age 64 you’d get 80% of the full benefit.

    By delaying the receipt of your benefits past full retirement age, you’ll earn even more than the full benefit for every year after full retirement age and before you hit age 70, you’ll collect 8% more each year.

    • If you’re full retirement age is 66, you can earn up to 132% of your full benefit by waiting until you’re 70
    • If you’re full retirement age is 67, you can earn up to 124% of your full benefit by waiting until you’re 70

    Who Is Eligible To Collect Social Security Benefits

    The specific eligibility requirements for Social Security benefits vary depending on the type of benefits, the age of the person filing the claim and, if you are claiming as a dependent or survivor, the age of the worker.

    There is one general requirement, however, that applies to all Social Security programs except for SSI : The worker on whose earnings record the benefit is to be paid must have worked in “covered employment” for a sufficient number of years. This means that the worker must have earned enough of what Social Security calls “work credits” by the time he or she claims retirement benefits, becomes disabled, or dies .

    For Social Security retirement benefits, you must be between the ages of 62 and 70 to start collecting benefits.

    To check on your eligibility, see Nolo’s article Checking you Social Security Earnings and Benefits or call the Social Security Administration at 800-772-1213.

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    What To Do: Do The Math Before Retiring

    As you’re approaching retirement, check your earnings statement first to make sure you have enough credits to qualify for Social Security. If you don’t already have 35 years of earnings, consider whether working an additional year or two could help boost your Social Security benefits.

    For example, if you worked a first career where you weren’t covered by Social Security, working for an extra year or two might ensure you qualify for Social Security benefits or boost your monthly benefit amount.

    Earn Ssa Work Credits In Some Countries

    When Can I Start Collecting My Social Security

    You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.S. benefits.

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    Doing A Breakeven Analysis And Other Ways To Decide How Soon To Start

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          A Tea Reader: Living Life One Cup at a Time

          If youre about to retire, you may be wondering whether you should start claiming your hard-earned Social Security benefits now. Here are a few key factors to consider in making that decision.

          When You Can First Claim Social Security Payments Depends On The Program And Credits Earned

          The Social Security Administration oversees the Old-Age, Survivors, and Disability Insurance program, best known for providing retirement benefits to seniors, but as the name indicates, it also provides survivor benefits and disability income.

          Each of the three programs has different requirements and number of credits needed in order to claim the monthly income support. Workers can earn up to four credits per year which will determine the level of benefits recipients will receive when they begin to claim. In the case of retirement, you need to earn 40 credits in order to be eligible for benefits upon retirement, but there is a different calculation for survivors and disabled beneficiaries.

          Read Also: How Much Do You Get In Social Security

          You Cant Work Anymore

          Even the best retirement financial plans and projections can go awry. For example, you might have planned on working until youre 70 so you could maximize your retirement benefits. If you get laid off at 62, however, and have difficulty finding another job, you might need to start taking your benefits just to get by.

          Additionally, continuing to work in your industry simply might not be possible or healthy for you later in life. If your job requires manual labor, you might decide the risk of injury or other damage to your health isnt worth continuing to work. In this case, the healthier lifestyle youll get by retiring early could outweigh the smaller monthly Social Security benefit.

          See: 17 Tips To Live Comfortably Off Just a Social Security Check

          Is My Spouse Eligible To Receive Social Security Spousal Benefits

          How to Collect Social Security: 3 Steps (with Pictures)

          Spouses are eligible to receive 50 percent of their spouses full retirement benefit if they wait until they reach full retirement age. If they apply for a spousal retirement benefit before that time, the amount is pro-rated, depending on the age at which the spouse applies. For example:

          If a spouse applies for a spousal retirement benefit at age 62 and the full retirement benefit is age 67, the applicant will get 32.5 percent of the spousal benefit.

          If a spouse applies for a spousal retirement benefit at age 62 and the full retirement benefit is age 65, the applicant will get 37.5 percent of the spousal benefit.

          The benefit increases as ages go up, to a maximum of 50 percent at full retirement age. It should also be noted that only one spouse can apply for a spouses benefit when a couple is married.

          In cases of divorce, the divorced spouse can get retirement benefits on the spouses record if the marriage lasted for at least 10 years. To collect this benefit, the spouse must be at least 62 years old and not married. That benefit does not impact the amount a spouse and their current married partner can get.

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          How Much You’ll Have To Earn To Reach The Maximum Benefit Amount

          Your income is another crucial factor in reaching the highest benefit amount. The more you’re earning, the more you’ll be eligible to collect in benefits — up to a certain point.

          Once you surpass the maximum taxable earnings limit , a higher income won’t result in additional benefits. To earn this maximum benefit amount, then, you’ll need to reach the maximum taxable earnings limit.

          This limit changes from year to year to account for inflation. This year, the limit is $142,800 per year, but in 2022, it will increase to $147,000 per year. If your goal is to collect the maximum $2,364 per month at age 62, you’ll need to be reaching these limits consistently throughout your career.

          While You Can Start Collecting Benefits At Age 62 Should You Collect Early Or Delay

          Selects editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

          For many elderly people, Social Security benefits make up one of their primary sources of income in retirement. For half of seniors, Social Security comprises about half of their retirement income, according to the Center on Budget and Policy Priorities. Some studies estimate that without Social Security, between 30% and 40% of senior citizens would be considered below the poverty line.

          The age at which you decide to collect your Social Security benefits has a big impact on how much you’ll earn from the program over time because the longer you wait, the higher your monthly payout will be.

          “Don’t just call Social Security and apply at age 62. Everybody has options. A married couple could receive $1 to $1.5 million in benefits over their lifetime. And single people could maybe half of that,” says Marc Kiner, a CPA at Premier Social Security Consulting. “And do not assume that Social Security will review your options with you.”

          Select spoke to Kiner and Jim Blair, the lead consultant at Premier, about some of the factors you should consider when deciding when to apply for Social Security benefits.

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          Can You Collect Social Security At 62 And Still Work

          Yes, you can begin collecting Social Security as early as age 62, and you can still work while you collect these benefits. However, there is a limit to the amount that you can make while receiving benefits. Most people working full time will earn more than the limit of $18,960, and their benefits will be reduced by $1 for every $2 that they earn over the limit. If working part-time or full-time and earning less than this limit, then there will be no reduction in benefits.

          Avoid The Social Security Tax

          Can you work while collecting social security? (maybe)

          Social Security benefits may be subject to federal income tax. How much goes to Uncle Sam depends on a somewhat complicated formula.

          To determine what percentage of your benefits are taxable, the Social Security Administration looks at your combined incomealso known as your provisional income. This is your adjusted gross income plus non-taxable interest, like what you earn on municipal bonds or income-producing assets in your Roth accounts, and half of Social Security benefit income.

          Unfortunately, its likely that you will have to pay some taxes on your benefits. The only way to avoid paying federal income taxes on your Social Security benefits is to have a combined income below $25,000 , says Brotman. Between $25,000 and $34,000, half of your Social Security becomes subject to federal income tax, and above $34,000 up to 85% of your Social Security income is taxable.

          Brotman advises that you should just plan as if you will owe taxes on up to 85% of your Social Security benefits.

          You can mitigate these taxes with strategic withdrawals of your non-Social Security retirement income. Money withdrawn from a Roth retirement account is free of income taxes and therefore not included in the calculation for combined income. Strategically drawing down your assets from both taxable traditional retirement accounts and Roth accounts can help you reduce your combined incomeand the amount you may owe in taxes on your Social Securitywithout forcing you to live on less.

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          What To Do: Check Your Social Security Statement While Working

          To avoid losing money due to errors in your earnings record, check your statement annually. If you notice errors, gather proof of your earnings to send to the Social Security Administration, such as your W-2 or pay stubs. Once the Social Security Administration has verified your claim, it will correct your record.

          It’s much easier to prove an error that happened the previous year, when you still have your records handy, than it is for 10, 20 or more years ago because you probably don’t have a paper trail going back that far.

          Born Before January 2 1954

          At FRA, Maria will be eligible to receive $1,200 a month based on her own record, and Tom will be eligible to receive $2,000 a month based on his record.

          • She can collect on her own record, which will pay her $1,200 a month.
          • She can collect on Tom’s record, which will pay her half of Tom’s benefits $1,000 a month.

          Why might Maria consider taking the lower payment at FRA? Because that decision could pay off for her in the long run.

          If she collects on Tom’s record first, Maria’s own benefits would increase to $1,584 a month at age 70. Maria has a family history of longevity, and she’s in relatively good health at age 66. So she decides to claim on Tom’s record first, then switch to her own record at 70.

          Tom never needs to know that Maria is claiming based on his record, and Maria’s claim doesn’t affect his ability to claim. But if Maria remarries between 66 and 70, she won’t be able to claim on Tom’s record.

          The option to claim on Tom’s record first and allow her primary insurance amount to grow is only available to Maria because she was born before January 2, 1954.

          Had she been born on or after that date, at FRA she would have qualified for $1,200 a month based on her own record or $1,000 a month based on Tom’s record. If she delayed Social Security until age 70, her own benefits would increase 8% for each year she waits past her FRA. But her benefits based on Tom’s record wouldn’t grow.

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