When To Apply For Social Security
As stated above, you are eligible to apply for Social Security retirement benefits when you are 61 and nine months. You can start collecting benefits as soon as you turn 62.
However, just because you can, does not mean that you should.
The longer you delay starting your benefits, the more your monthly income will be. In fact, the difference in lifetime income between starting at age 62 and waiting until your maximum retirement age can be more than $100,000 and for many people much much more.
While you can start benefits at age 62, the Social Security Administration considers that early. Depending on your birth year, you do not reach what the SSA calls full retirement age until sometime between ages 66 and 67.
- For every month prior to your full retirement age that you begin taking benefits, around 0.55% is deducted from your payout.
- And, for every year that you defer your benefits, you will receive a larger amount when you finally do begin drawing Social Security. The amount of the bonus is dependent, once more, on your birth date. For example, someone born in 1944 has a full retirement age of 66. If they start benefits at age 69, they will receive eight percent more benefits for each year they delay.
Will My Social Security Benefits Be Reduced If I Work
A worker who claims benefits before full retirement age may run into the earnings limit, in which Social Security temporarily withholds $1 in benefits for every $2 in earnings above a certain amount in 2021, the limit is $18,960.
And though a person may need benefits to supplement low earnings, the downside of permanently reduced benefits also exists if you claim early, whether or not you exceed the earnings limit, Ms. Floyd said.
A working widow who collects a survivor benefit could also face the earnings limit. A widow can claim a survivor benefit as young as 60, though her benefit will be reduced by claiming before full retirement age. If she is working and exceeds the earnings limit, part of those reduced benefits will be withheld.
The earnings limit also applies to the spousal benefit claimed by a nonworking spouse if the other spouse is working and both are younger than full retirement age. Social Security withholds benefits on total household earnings that exceed the limit.
Withheld benefits are not lost forever, however. At the beneficiarys full retirement age, Social Security will adjust the monthly benefit upward to account for the withheld benefits. The beneficiary will continue to receive the higher payment even after she recoups the withheld benefits, which could take 12 years.
Deferring Your Old Age Security Pension
You do not have to start receiving your OAS pension when you turn 65. You can start receiving it any time after age 65. The longer you delay receiving it, the more money you will receive. Your monthly pension payment will be increased by 0.6 percent for every month you delay receiving it after age 65, up to a maximum of 36 percent at age 70.
If you choose to delay receiving your OAS pension after age 65:
- you will not be eligible for the Guaranteed Income Supplement for low-income seniors during the period you are delaying your OAS pension
- your spouse or common-law partner will not be eligible for the Allowance for the period you are delaying your OAS pension. The Allowance is a monthly benefit available to the spouse or common-law partner of an OAS recipient who is eligible for the GIS
To decide when to start receiving your OAS pension, you should consider your personal situation. It may affect other benefits that you, or your spouse or common-law partner could receive. You should take into account your:
- current and future sources of income
- employment status now and in the future
- plans for retirement
Three Things To Keep In Mind
For most people, Social Security benefits will represent a portion of their income during retirement yearsnot their sole source of income. It’s important to be aware of three important factors that will affect the amount of Social Security benefits you will eventually receive:
- When you choose to begin taking benefits
- Whether or not your benefits are taxed
- Whether or not you continue working
Do Social Security Benefits Start The Month Of Your Birthday
When To Enroll in Retirement BenefitsThe choice to begin accepting benefits as early as allowed versus delaying until full retirement age or later is a personal one. Regardless of the age you choose to collect, the payment schedule hinges on the month of your birthday. In the case of family survivors, the point of reference is the birthday of the deceased who earned enough credits for the family to be eligible for survivor benefits.
Schedule of SS paymentsSocial Security benefits are not prorated. They start the month following the birthday. The schedule, according to AARP, follows this rule: When the birth date falls between the 1st and 10th of the month, the payment is issued on the second Wednesday of the month following the birthday month. For birth dates between the 11th and 20th of the month, expect to be paid on the third Wednesday after the birthday month. For birth dates from the 21st through the last date of the month, recipients will have to wait until the fourth Wednesday of the month that follows the birthday.
Consequences of Early RetirementThe reason people struggle with the decision of whether to collect at age 62, full retirement or 70 is the exponential difference in benefits. Contrary to what some believe, 66 is not always the full retirement age as defined by the SSA. Retirement age varies with the beneficiarys year of birth, ranging anywhere from age 65, for retirees born in 1937 or earlier, to age 67 for those born in 1960 or later.
How Do You Find Out When I Started Receiving Social Security
You can find more information to help you decide when to start receiving retirement benefits at www.ssa.gov/benefits/retirement. If you have my Social Security account, you can get your Social Security Statement at www.ssa.gov/myaccount to check your earnings and get personalized benefit estimates.
When did I start getting Social Security? Q1: When did Social Security start? A: The Social Security Act was signed by FDR on 8/14/35. Taxes were first collected in January 1937 and the first one-off lump sum payments were made in the same month. Regular ongoing monthly benefits began in January 1940.
When Benefits Will Begin
If your application is approved before you reach at least the minimum retirement age for people born in the same year as you, you will typically begin receiving your Social Security retirement benefits one month after you are entitled to receive them. For instance, if you are eligible to receive benefits beginning in February, you will receive your first payment in March.
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You Want To Take Advantage Of Delayed Retirement Credits
If you delay your retirement until past your FRA but before you turn 70, you become eligible for delayed retirement credits. This can slightly boost your monthly payout. For instance, if you were born in 1943 or after, you get an 8% yearly increase in the primary insurance amount of your benefit. This results in a payout increase of two-thirds of 1% every month. So, you may want to stop payments and restart them after a few years.
What Month Should I Say That I Want To Start Benefits If I Want To Get My First Payment In January
I am 64, turning 65 in March 2022. My FRA is 66.5. I am retiring Dec 31, 2021, and want to receive my first SS payment in Jan 2022. I have two questions: 1. when I apply for SS, what month should I indicate that I want to start receiving my payments? 2. If I get my first payment in Jan 2022, and because SS is paid 1 month in arrears, when I file my income taxes for 2021, will the Jan 2022 month’s payment be considered as earned in income in 2021 and be included in my 2021 income? Or is it considered as 2022 income since it was paid in 2022? Thank you.
Hi. As you state, Social Security pays benefits a month behind. So, In order for you to receive a payment in January 2022 you’d need to a) claim your benefits effective with the month of December 2021, AND b) you’d need to be eligible to be paid for December. The only way that you’d be eligible to be paid for December 2021 is if you either a) earn less than $18,960 in the calendar year of 2021, or b) you earn $1,580 or less in December 2021 . Therefore, if you’re planning to work through December, your earnings may prevent you from being able to be paid in January unless your earnings are below the above mentioned limits.
Earnings Limit For Social Security Disability Benefits
So far we have been mainly focused on income limits for those on Social Security retirement benefits. Many people on Supplemental Security Income and SSDI wonder how work affects your benefits as well. In fact, they often ask, How much can I earn while on Social Security Disability in 2021? When it comes to SSI and SSDI, the rules are a little different. Receiving SSDI or SSI benefits means that a person has been found to be disabled and unable to perform substantial gainful activity. This essentially means that they are unable to perform any type of full-time work and thus earn an income. For those qualifying for SSDI or SSI benefits, an earner can make no more than $1,310 per month. Any income above this amount, even from self-employment, will make them ineligible to receive SSI or SSDI benefits.
Remember that those receiving SSI or SSDI might have to worry about Social Security taxes on their Social Security earnings as well. Since the income limits and average benefits are lower, most people receiving disability benefits will not be required to pay any taxes on their benefits. Remember that the Social Security tax limits are adjusted almost every year too, so make sure that you are aware of the current rules. Recipients of SSI and SSDI are also automatically enrolled in Medicare after a certain period of time.
How To Calculate Social Security Benefits
Lets say your FRA is 66. If you start claiming benefits at age 66 and your full monthly benefit is $2,000, then youll get $2,000 per month. If you start claiming benefits at age 62, which is 48 months early, then your benefit will be reduced to 75% of your full monthly benefitalso called your primary insurance amount. In other words, youll get 25% less per month, and your check will be $1,500.
That reduced benefit wont increase once you reach age 66. Rather, youll continue to receive it for the rest of your life. It may go up over time due to cost-of-living adjustments , but only slightly. You can do the math for your own situation using the Social Security Administration Early or Late Retirement Calculator, one of a number of benefit calculators provided by the SSA that can also help you determine your FRA, the SSAs estimate of your life expectancy for benefit calculations, rough estimates of your retirement benefits, individualized projections of your benefits based on your personal work record, and more.
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Benefits Available To Children & Parents
Eligible spouses arent the only ones that can receive Social Security survivor benefits. Dependent children and parents may also be entitled.
If you want to learn more, here are the best resources on the topic:
Social Security Benefits for Dependent Parents -Article by Mike Piper, the author of Social Security Made Simple.
How Should I Decide When To Take Benefits
Consider the following factors as you decide when to take Social Security.
Your cash needs: If youre contemplating early retirement and you have sufficient resources , you can be flexible about when to take Social Security benefits.
If youll need your Social Security benefits to make ends meet, you may have fewer options. If possible, you may want to consider postponing retirement or work part-time until you reach your full retirement ageor even longer so that you can maximize your benefits.
Your life expectancy and break-even age: Taking Social Security early reduces your benefits, but youll also receive monthly checks for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but the credit for waiting means each check will be larger.
At what age will you break even and begin to come out ahead if you delay Social Security? The break-even age depends on the amount of your benefits and the assumptions you use to account for taxes and the opportunity cost of waiting . The SSA has several handy calculators you can use to estimate your own benefits.
If you think youll beat the average life expectancy, then waiting for a larger monthly check might be a good deal. On the other hand, if youre in poor health or have reason to believe you wont beat the average life expectancy, you might decide to take what you can while you can.
A quick note about life expectancy
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Social Security Disability Benefits
The final category of Social Security benefits applies if you suffer an injury or illness that leaves you unable to work. These benefits are paid from the Disability Insurance Trust Fund.
A person qualifies for disability benefits after working long enough to be eligible for Social Security before becoming disabled. You must meet certain criteria defined by the SSA, including severe disabilitya disability that has lasted or is expected to last at least one year or result in death, with the person deemed unable to perform any work. The benefit begins six full months after the onset of the disability. This benefit is for life unless the SSA determines that you no longer qualify.
Could I Be Eligible For The Canada Pension Plan And The Quebec Pension Plan
If you contributed to the CPP or the QPP in at least one year, you will be eligible for a retirement pension from one plan or the other as early as age 60.
The amount of your CPP retirement pension will depend on how much and for how long you have contributed to the CPP and on your age when you want your pension to start.
If you start your CPP retirement pension at age 65, you will get the full pension amount that you are eligible to receive. However, you can choose to start receiving a reduced pension as early as age 60 or an increased pension for every month you delay receiving it up to age 70.
For more information about CPP pension amounts and eligibility, visit Canada Pension Plan.
You must apply to receive your CPP or QPP retirement pension.
Note: Post-Retirement Benefit
The Post-Retirement Benefit is a lifetime benefit that can increase your retirement income if you work while receiving the CPP retirement pension. Contributions are mandatory for working CPP retirement pension recipients under age 65 and their employers. At age 65, these workers can choose to stop contributing. There are no contributions after age 70. For more information, visit Canada Pension Plan Post-Retirement Benefit .
The CPP and QPP also provide disability and survivor benefits. You must apply to receive these benefits.
- TTY: 1-800-603-3540
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No More File And Suspend
Note that the claiming strategy called file and suspend, which allowed married couples who have reached their FRA to receive spousal benefits and delayed retirement credits at the same time, ended as of May 1, 2016. However, spouses born before Jan. 2, 1954, who have attained their FRA may still be able to file a restricted application. It allows them to claim spousal benefits while delaying their own benefits up to age 70.
Social Security benefits can be taxable if your combined income is high enough.
It Depends On The Type Of Benefit And Other Factors
Most people think of Social Security benefits as a monthly payment that you start getting in retirement and receive for the rest of your life. In fact, Social Security is an umbrella term for several federal benefits programs. One of the largest government programs anywhere in the world, Social Security is expected to have paid out more than $1 trillion to about 65 million Americans in 2020.
There are three key groups of people who receive Social Security benefits: retired workers, survivors of retirees, and people with disabilities and their families. How long does Social Security last? It depends on the type of benefit.
Will You Pay Taxes On Your Social Security Benefits
If, in addition to Social Security benefits, your retirement income includes taxable income in the form of wages, interest, dividends, and other sources, you could end up paying taxes on part of your benefits.
It all depends on your provisional income. Provisional income includes your adjusted gross income, plus tax-exempt interest, plus half of your Social Security benefits. Single taxpayers reporting $25,000 or less in provisional income pay no taxes on their Social Security benefits. For married taxpayers filing jointly, the threshold is $32,000. If your taxable income exceeds those limits, a part of your Social Security benefits will be taxable.