Thursday, June 16, 2022

When Can I Take Social Security Benefits

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Do Unemployment Benefits Affect Ssi Or Ssdi Benefits And Vice Versa

ð´ Earnings Limits If I Work and Collect Social Security

Most people who receive Social Security benefits do not want to risk losing the monthly payments that provide partial replacement income. That is why many Americans who receive benefits through Social Security Disability Insurance or Supplemental Security Income are reluctant to apply for unemployment benefits when they lose their job out of fear that they could lose their SSDI or SSI benefits.

Should you worry about losing your eligibility for SSI or SSDI benefits if you wish to apply for unemployment compensation benefits in Florida?

Do Unemployment Benefits Affect Your SSDI or SSI Eligibility?

The Social Security Administration considers unemployment benefits unearned income. Thus, these benefits will likely have no effect on your SSDI benefits if you are not working.

As for your SSI eligibility, things are more complicated. Since unemployment benefits are unearned income, these payments will reduce SSI dollar for dollar .

In 2020, the monthly federal payment maximum is $783 for an eligible individual. Thus, anyone receiving unemployment benefits that exceed $803 is not eligible for SSI due to excess income.

Under certain circumstances, you might lose your eligibility to collect unemployment benefits: These include but are not limited to:

  • Insufficient earnings
  • Leaving your job to attend school.

Do Social Security Benefits Affect Unemployment Benefits?

Can You Collect Both Unemployment and Social Security Benefits?

Resources:

If You Were Born In 1956 Your Full Retirement Age Is 66 And 4 Months

You can start your Social Security retirement benefits as early as age 62, but the benefit amount you receive will be less than your full retirement benefit amount.

The chart below provides examples of the percentage of your full retirement benefit amount you and your spouse would receive from age 62 up to your full retirement age.

What Determines Your Social Security Benefit

Your Social Security benefit amount is largely determined by how much you earned during your working years, your age when you retire, and your expected lifespan.

The first factor that influences your benefit amount is the average amount that you earned while working. Essentially, the more you earned, the higher your benefits will be. The SSA’s annual fact sheet shows workers retiring at full retirement age will receive a maximum benefit amount of $3,148 for 2021. The Social Security Administration calculates an average monthly benefit amount based on your average income and the number of years you are expected to live.

In addition to these factors, your age when you retire also plays a crucial role in determining your benefit amount. While you can begin receiving Social Security benefits as early as age 62, your benefit amount is reduced for each month that you begin collecting before your full retirement age. Full retirement age is 66 and ten months for those who turn 62 in 2021. It increases by two months each year until it hits the current full retirement age cap of 67 for anyone born in 1960 or later.

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How To Claim Survivors Benefits

To begin receiving survivors benefits, you must make a claim with the Social Security Administration. Survivors benefits claims may not be made online. You can start the claims process over the telephone, 1-800-772-1213, or go to your local Social Security office. Making an appointment may reduce your wait time.

The death should be reported to the Social Security Administration as soon as possible. In many cases, the funeral home can make that notification. You will have to provide the funeral home with the deceaseds Social Security number.

How Much Can I Earn On Social Security Disability In 2020

Can I Take a Spousal Benefit Without Triggering My Own ...

Receiving social security disability benefits can provide life-changing income for those that can no longer work due to their disability. But if the social security administrations determines you are able to make money even though it may not be the full amount you once earned you can still be denied SSD benefits.

For those who do receive disability benefits, the amounts may not be enough to live the same lifestyle they once had. To combat this issue, individuals collecting social security disability checks will attempt to earn money while still drawing disability checks. However, although you can return to work, there are guidelines to the amount that can be earned, and this amount is adjusted every year as well. So the big question is, how much can I earn while collecting social security disability in 2020?

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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.

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.

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Social Security Benefits If Youre Married

Determining Social Security calculations is a bit more complicated if you are married because you have the option to base benefits on your spouses salary history.

If the lesser earning spouses benefits are based on the higher earning spouses, then the limit of those earnings will be 50 percent of the higher earning spouses benefit amount.

To illustrate this, lets talk about A and B, a married couple.

  • A makes significantly more money than B.
  • A makes so much more money that As monthly Social Security benefits are going to be more than twice of Bs, based on Bs salary history.
  • The good news for B is that they can choose to have their Social Security benefits based on As salary history and can receive as much as 50 percent of As monthly benefit. This is the case even if B didnt hold a job outside the home.

On the other hand, if Bs monthly benefit would have been more than half of As, based on Bs salary history, then B can claim that amount.

In short, B can claim the higher of these two possibilities: Bs own Social Security earnings or half of As.

This all assumes that B doesnt begin claiming benefits until B reaches full retirement age. If B begins claiming earlier, then Bs benefits will be less. In addition, if B is claiming benefits based on As earnings, then B does not benefit by waiting later than full retirement age.

B will not be given more monthly benefits if B waits until age 70, for example, based on As earnings.

The Best Reason To Take Social Security Long Before Age 70

ð´Can I Apply For Social Security Retirement Benefits In Advance of Age 62

    The most popular age to sign up for Social Security is 62, namely because it’s the earliest age seniors are allowed to start collecting benefits. Far fewer seniors sign up for benefits at age 70 because many don’t want to wait that long, or can’t afford to.

    There’s a definite upside to claiming Social Security at the age of 70. For each year you delay your filing past full retirement age , your benefit will increase by 8%. If your FRA is 67 and you claim benefits at 70, those monthly payments will get a 24% boost — for life.

    Still, filing for Social Security at 70 isn’t right for everyone. And here’s one very good reason to claim your benefits sooner.

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    Earnings Limit On Survivor Benefits

    If you file for any Social Security retirement benefit before your full retirement age, there is a limit to how much you can earn. The fact that this also applies to survivor benefits will often catch individuals by surprise.

    If you are under full retirement age you are limited to $18,240 in wages or net earnings from self employment. If you exceed that limit, your benefit will be reduced by $1 for every $2 you go over. The one exception is the calendar year you turn full retirement age. For that period, your limit is a much higher $48,600. The amount theyll reduce your benefit by is more generous as well.

    Once you are full retirement age, there is no limit to the amount you can earn while drawing Social Security. You can read my article on the Social Security earnings limit or watch my video.

    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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    What To Consider Before Filing For Social Security

    A larger benefit check sounds great, but there are tradeoffs, and soon-to-retire folks should consider multiple issues before they decide one way or the other on when to file. If you really want to consider all the avenues, then youll have to think about your finances and longevity two issues that people have a hard time grappling with.

    But heres the key tradeoff: you can file early and take a reduced benefit, expecting that a shorter lifespan will mean you receive more now, or you could file at full retirement age or later and claim a bigger check, and eventually live long enough to claim more than the first approach.

    Social Security is like longevity insurance, says Brent Neiser, a certified financial planner and former chair of the Consumer Advisory Board at the Consumer Financial Protection Bureau. Its a stream of payments that will not stop throughout your life, so delaying your benefits to keep those payments as large as possible forms a helpful base to your retirement plan.

    Neiser urges those who have not saved enough for retirement to use whatever means possible to postpone their Social Security benefits until after their full retirement age to help boost their future income.

    You can use personal savings to help bridge the gap, but ideally you should plan to work a little longer , Neiser says.

    Reductions Based On Workers Comp Benefits

    Can I Claim Spousal Social Security Benefits

    If youre collecting workers compensation benefits, your disability benefits will be reduced.

    SSI

    Workers compensation benefits are counted as unearned income toward the SSI income limit and will reduce your SSI check.

    SSD

    If you receive both workers compensation and SSD, your monthly benefits from SSD will be reduced. This is because the Social Security Administration limits the total amount of combined monthly benefits you can receive. However, veterans disability compensation will not lower your SSD check.

    The basic rule is that your workers compensation and SSD benefits combined cannot exceed 80% of the average current earnings you made before you became disabled, or the total amount your family receives monthly from SSD at the time you get your first workers compensation check, whichever is higher.

    If your workers compensation payment and SSD check combined take your monthly payment above 80% of your pre-injury salary, the Social Security Administration will reduce your SSDI check so that you receive only 80% of your prior monthly earnings. The specific rules about how workers compensation reductions are made vary by state.

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    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.

    But Wait What Social Security Benefit Can I Claim And When

    Smiling retired couple looking at adorable dog while resting in park

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    A Reference Guide for Social Security Benefits

    Many people are not aware of the Social Security benefits they are entitled to. I understand why they dont its very confusing. Heres a straightforward, easy-to-reference guide to the various benefits available to you that will enable you to make an informed and correct claiming strategy.

    Lets start with a holistic approach:

    Lets talk about your own retirement benefit:

    • You are always paid your retirement benefit first if you have one.
    • The earliest you can apply for benefits is age 62.
    • Its the only benefit that accrues delayed retirement credits.
    • The Annual Earnings Limitation applies before full retirement age.
    • The Windfall Elimination Provision may apply if you have another government pension.
    • You can voluntarily suspend your own retirement benefit at our full retirement age.
    • There is no reason to wait past 70 to file for benefits.

    Spousal Benefits only apply to your current spouse:

    The MAXIMUM spousal benefit at your own full retirement age is equal to 50% of your spouses Primary Insurance Amount if they are collecting their own retirement benefit. If your own retirement benefit is greater than 50% of your spouses Primary Insurance amount, you will not receive a spousal benefit.

    Spousal Benefits in cases of divorce:

    The MAXIMUM ex-spousal benefit is the same as the current spousal benefit described earlier.

    Childrens Benefits:

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    Can I Work And Collect Survivor Benefits

    Yes, but if you havent reached full retirement age, Social Security will reduce your benefit by the following amounts in 2021:

    • $1 for every $2 you earn over $18,960.
    • $1 for every $3 of earnings above $50,520 the year you reach full retirement age.
    • Once you hit full retirement age, your earnings wont impact your benefits.

    These rules apply whether youre taking retirement benefits or survivor benefits early.

    However, if youre caring for the deceased persons child, the childs benefits arent affected by your earnings. Even if you earned $100,000, youd still get 75% of their benefit on behalf of the child. But you wouldnt get 75% for yourself because your earnings would phase out your benefit.

    Early Benefits Can Still Pay Off

    How to Calculate Your Social Security Benefits

    However, taking early benefits can still pay off despite the reduced monthly check. But youll want to be sure you budget for a reduced benefit.

    No one can predict how long youll live, but if youre facing a potentially significant reduction in life expectancy and are short of income, taking Social Security early may be appropriate, says Neiser.

    Married women are also good candidates for claiming early benefits because they are likely to outlive their husbands. Those widows then become eligible to receive the greater of either their benefit or their late husbands benefit.

    However, this scenario works only if the husband does not claim his benefits early. By not claiming early benefits, the husband effectively increases the monthly benefit his wife eventually receives. So youll want to calculate how filing early will affect your spousal benefit here.

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    The Tax Impact Of 401 Savings

    Once you begin taking distributions from your 401, or other retirement savings plan, such as an IRA, you won’t owe Social Security tax on the distribution for the reason described above you paid your dues during your working years. But you may have to pay income taxes on some of your benefits if your combined annual income exceeds a certain amount.

    The income thresholds are based on your “combined income,” which is equal to the sum of your adjusted gross income , which includes earned wages, withdrawals from any retirement savings accounts s, any non-taxed interest earned, and one-half of your Social Security benefits). If you take large distributions from your traditional 401 in any given year that you receive benefitsand remember, you’re required to start taking them from all 401s once you turn 72you are more likely to exceed the income threshold and increase your tax liability for the year.

    According to the Social Security Administration, for 2020, if your total income for the year is less than $25,000 and you file as an individual, you won’t be required to pay taxes on any portion of your Social Security benefits. If you file jointly as a married couple, this limit is raised to $32,000.

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