Monday, May 16, 2022

When Can I Take My Social Security

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What Happens To The Money Social Security Withholds

Can I Use My Grandkids Social Security To Pay Debt?

The Social Security Administration calculates the appropriate amount that you’ll forfeit and then takes it out of your monthly benefits. You’ll see entire monthly checks held back by the government to cover the withholding. For example, if you normally get Social Security of $1,000 per month but you have to forfeit $4,000, then Social Security will hold back four months’ worth of checks.

As painful as it is to lose your benefits, there is some payback. If you lose a month’s worth of benefits, then Social Security treats you as if you retired a month later than you did. Once you hit full retirement age, you’ll start getting larger monthly checks based on that later retirement date. You might not get all your lost money back, but the bigger checks will gradually send some of it your way.

Before You Make Your Decision

There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:

  • If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
  • That there are other things to consider when making the decision about when to begin receiving your retirement benefits.


Uncertainty About Social Securitys Future Makes Forecasting Tricky

Live it up.

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Conventional wisdom about Social Security bites the dustagain.

As you undoubtedly already are well aware, most financial planners recommend thatso long as you can afford to do soyou should wait until age 70 to begin receiving your Social Security benefits. Your monthly payment in such an event will be 32% higher than if you begin receiving benefits at age 66. So long as you live to your early 80s, those higher monthly payments should make up for the foregone income over the four years from age 66 to 70.

A few months ago, you may recall, I presented one argument for why conventional wisdom could be wrong. In this column I present another.

This additional reason traces to Social Securitys uncertain fate at the hands of our elected officials. If you take at face value some of the proposals being given serious consideration in Congress and in President Trumps administration that reduce future Social Security benefits, then the financial planners could be giving the wrong advice to wait until age 70.

In fact, the presidents budget director, Mick Mulvaney, supports raising the eligibility age for receiving those benefits to age 70 anyway. If he were to get his way, future retirees might not even have the option of beginning to receive benefits at age 66.

If youre skeptical, however, you might want to take the money and run. That is what Band, who is 66, has decided to do.

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What You Need To Know If The Irs Levies Your Social Security Benefits

Many people rely on their social security benefits as a way to bridge the gap between their retirement income and their monthly expenses. For others their social security may be their only source of income in retirement. Which ever may be the case, if you owe back taxes to the IRS you may be asking yourself the question, can the IRS garnish my social security? In short: Yes.

The IRS uses what is called the Federal Payment Levy Program . This program is used to implement a continuous levy on federal payments issued by the Bureau of Fiscal Services . Payments from the BFS include:

  • Federal employee retirement annuities,
  • Federal payments made to you as a contractor/vendor doing business with the government ,
  • Federal employee travel advances or reimbursements,
  • Certain Social Security benefits paid to you,
  • Some federal salaries,
  • Medicare provider and supplier payments.
  • Railroad Retirement Board benefits paid to you.
  • Military Retirement


  • You have 30 days from the receipt of the Cp91 or CP298 to respond before the IRS begins to levy your social security benefits. When responding to this notice you can avoid the levy by negotiating an installment agreement with the IRS or by filing an appeal but, the appeal is only a temporary solution to give you more time to resolve the issue.
  • The amount that the IRS is able to levy your social security is 15% of your monthly benefits.


    Eligibility When Your Ex

    Can I Use My Grandkids Social Security To Pay Debt?

    If your ex-husband dies, you may receive benefits on his record, as long as your marriage lasted for at least 10 years. If you dont meet the 10-year marriage rule, you can still qualify for benefits if all of the following are true: youre caring for your ex-husbands natural or legally adopted child the child is under age 16, or disabled, and the child is getting benefits on your ex-husbands work record. Your benefits will continue until the child reaches age 16 or the childs disability ceases. The amount of benefits you receive as a divorced spouse will not affect the amount of benefits other survivors receive on your exs record.

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    How Much Money Can You Have In The Bank On Social Security Retirement

    Because SSDI is this type of benefit, a persons assets have nothing to do with their potential eligibility to draw and collect SSDI. In other words, whether you have $50 or $50,000 in the bank makes no difference to the SSA.

    Social Security Disability Benefits And Garnishment Know The Risks

    Social Security Disability benefits can provide a lifeline for individuals unable to work. However, its important for recipients to understand that their benefits could be subject to garnishment.

    Obtaining Social Security Disability benefits often takes time and patience. But, when benefits are granted, they can provide the much needed lifeline for individuals who are unable to work.

    However, its important for recipients of various types of Social Security Disability benefits to understand that in certain circumstances their benefits could be in danger. If recipients have outstanding debts that are turned over to debt collectors or collection agencies, their benefits could be seized or garnished from their bank accounts.

    Therefore, its important to know which benefits and which debts are off limits.

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    How Back Pay Works

    Suppose worsening arthritis sidelined you from your job Jan. 15, 2020. You applied Feb. 1 for Social Security Disability Insurance but your claim was denied. You appealed and eventually got a hearing with an administrative law judge.

    Based on new evidence you were able to present at the hearing, the judge ruled in your favor, determining that your disability did indeed begin in January 2020. Based on your earnings history, Social Security calculates that youre entitled to an SSDI benefit of $1,200 a month. But now its May 2021, and you havent drawn a paycheck in more than a year.

    Thats where back pay comes in. Fifteen months elapsed from the time you became disabled what the SSA calls your onset date to when your claim was finally approved. By law SSDI benefits have a five-month waiting period they start the sixth full month after the onset date so youre entitled to 10 months of past-due benefits.

    Social Security typically pays past-due SSDI in a lump sum within 60 days of the claim being approved. If a lawyer or other professional advocate represented you in your disability case, the SSA will pay their fee out of your back pay.

    The SSA must approve your fee agreement with a lawyer or advocate in advance, and the fee is generally capped at $6,000 or 25 percent of back pay, whichever is less. In this case, with past-due benefits totaling $12,000, your representative would get up to $3,000 off the top.

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    Reasons To Take Social Security At Age 62

    Can You Take Social Security at 62 and Still Work Retirement Question

    For most people, the reasons to take Social Security at a later age far outweigh the reasons to take it at 62. There are exceptions, though:

    • Your earned income will be below the annual earnings limit, so your benefits won’t be withheld.
    • You have health issues and/or a shorter-than-average life expectancy, and, if married, your spouse has a larger benefit than your own.
    • You have no other accounts to withdraw from and no way to earn income, so you must take Social Security at 62.

    Many people underestimate the true value of their Social Security benefits. By looking at how much you receive over your life expectancy, you’ll be able to make an informed decision about whether to take your benefits at age 62.

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    How Does Work Affect Your Social Security Payments

      Many people continue to work beyond retirement age, either by choice or out of necessity. But if you are receiving Social Security benefits, you need to be aware of how working can affect your benefit payments. Earning income above Social Security thresholds can cause a reduction in benefits and mean your benefits will be taxed.

      Whether it makes sense to work and collect Social Security at the same time is a complicated assessment that depends on how much you earn and when you begin taking Social Security benefits.

      Local Elder Law Attorneys in Your City

      City, State

      If you work and are full retirement age or older, you can earn as much as you want and your benefits will not be reduced. However, individuals may begin taking Social Security retirement benefits early beginning at age 62. If you are younger than full retirement age, there is a limit to how much you can earn and still receive full benefits. If you earn more than $18,960 , Social Security will deduct $1 from your benefits for each $2 you earn over the threshold. In the year you reach full retirement age, you can earn up to $50,520 without having a reduction in benefits. However, if you exceed $50.520 in earnings, Social Security will deduct $1 from your benefits for each $3 you earn until the month you reach full retirement age. Once you reach full retirement age, your benefits will no longer be reduced.

      For more information on Social Security, .

      Social Security Benefits For Workers Turning 60 In 2020 Will Very Likely Drop Due To The Coronavirus Pandemic

      As a result of the COVID-19 pandemic, about 3 million retired workers who turn 60 years old in 2020 will very likely have much lower lifetime Social Security benefits than previously expected. Without legislative changes, the average earner stands to lose nearly $1,500 per year for the rest of their life. Fortunately, there is a simple legislative changeexplored in detail belowthat would fix these problems without lowering the benefits of any other cohort of retirees. Chairman of the U.S. House Ways and Means Social Security Subcommittee, Rep. John Larson , has introduced such legislation*and Congress should fix this situation as soon as possible.

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      There Are Social Security Benefits For Surviving Spouses And Children

      If your spouse dies before you, you can take a Social Security survivor benefit, but not in addition to your own benefit. You must choose one or the other. If you are at full retirement age, that benefit is worth 100% of what your spouse was receiving at the time of his or her death .

      A widow or widower can start taking a survivor benefit at age 60, but the benefit will be reduced because it’s taken before full retirement age. If you remarry before age 60, you cannot get a survivor benefit. But if you remarry after age 60, you may be eligible to receive a survivor benefit based on your former spouse’s earnings record.

      Eligible children who are under age 18 or were disabled before age 22 can also receive a Social Security survivor benefit, worth up to 75% of the deceased’s benefit.

      Are You Currently Healthy

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      Your health status may affect your timing decision, although possibly not in the way you expect. Beneficiaries already struggling with poor health in their early 60s may be tempted to take benefits as early as they can.

      Receiving lower payments earlier means you get more benefits over a lifetime if you pass away relatively young. In general, the break-even point falls at about age 80 and 4 months when comparing lifetime benefits starting at 62 with a reduced benefit and starting at 70 with an increased benefit. For those who are currently ill and concerned they wont live to age 80, early benefits may sound like the right call.

      But Weston cautions against this: Starting early is a common timing mistake, especially if you think you wont live beyond the break-even age where the larger checks for waiting more than offset the smaller checks you passed up. Westons concern about this strategy is if you outlive the break-even point and are stuck receiving a reduced benefit while also suffering from poor health. Most people dont understand how long theyre likely to live and the risks if they outlive their savings, Weston explains.Be sure to take careful stock of your financial and physical health when deciding when to start benefits.

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      What Happens If You Claim After Your Fra

      If you wait until youre age 70 to start claiming benefits, then youll get an extra 8% per yearor, in total, 132% of your primary insurance amount for the rest of your life. Claiming after you turn 70 doesnt increase your benefits further, so theres no reason to wait longer than that.

      The longer you can afford to wait after age 62 , the larger your monthly benefit will be. Nevertheless, delaying benefits doesnt necessarily mean that youll come out ahead overall. You also need to weigh in some other factors, including your expected longevity and whether you plan to file for spousal benefits. You will also need to consider the tax, investment opportunity, and health coverage implications.

      Children Can Collect Social Security Benefits Too

      Minor children of Social Security beneficiaries can be eligible for benefits. Children up to age 18 and disabled children older than 18 may be able to receive up to half of a parent’s Social Security benefit. The disability must have occurred before the age of 22. As long as the disability prevents the person from working, the adult child can continue collecting the benefit even after the parent has died.

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      Other Factors Affecting Social Security Benefits

      In some cases, other types of retirement income may affect your benefit amount, even if you collect benefits on your spouse’s account. Your benefits may be reduced to account for the income you receive from a pension based on earnings from a government job or from another job for which your earnings were not subject to Social Security taxes. This primarily affects people working in state or local government positions, the federal civil service, or those who have worked for a foreign company.

      If you work in a government position and receive a pension for work not subject to Social Security taxes, your Social Security benefits received as a spouse or widow or widower are reduced by two-thirds of the amount of the pension. This rule is called the government pension offset .

      For example, if you are eligible to receive $1,200 in Social Security but also receive $900 per month from a government pension, your Social Security benefits are reduced by $600 to account for your pension income. This means your Social Security benefit amount is reduced to $600, and your total monthly income is $1,500.

      The windfall elimination provision reduces the unfair advantage given to those who receive benefits on their own account and receive income from a pension based on earnings for which they did not pay Social Security taxes. In these cases, the WEP simply reduces Social Security benefits by a certain factor, depending on the age and birth date of the applicant.

      Pension Benefits Can Lower Earnings

      When to Pull From Your IRA Before Claiming Social Security

      Some pension plans offer a larger initial monthly benefit when you take early retirement the pension benefit then automatically goes down when you become eligible to draw on Social Security. If you are not aware of this, you may think you will get your full pension benefit plus Social Security.

      Not all pensions work this way, so attend all classes or seminars offered by your employer to make sure you fully understand your pension and health benefits prior to taking early retirement. Ask plenty of questions, and set up a one-on-one appointment with a benefits advisor or HR person if you can.

      In addition, if you worked in education or for the state or a government entity, be aware when you do begin your Social Security benefits that they may be less than what your statement shows due to something called the Windfall Elimination Provision and/or the Government Pension Offset.

      For example, suppose your neighbor Lois worked as a teacher for 43 years, and in retirement she expects to get her pension plus $1,300 a month in Social Security. She will be shocked when she learns her Social Security will be less than $300 a month due to the government pension offset that applies if you get a pension for years of work where you were not covered under the Social Security system.

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