How are my Social Security benefit amounts calculated?
Do you often question just how your Social Security benefits are calculated? You’re not alone! I’m sure most people assume they just pick numbers out of a hat – and I’m convinced that my idea is not too far off!
The Social Security Administration tells that the calculations to determine how much you are entitled to are, and I quote, “complicated.” And we trust these people with our money…why? They tell that the amount of your benefits are determined by an elaborate formula based entirely on the raw mean (average) of the yearly earnings that you reported from the time you began working.
Just incase this is not difficult enough to understand, the SSA tells that they calculate your average earnings on a different scale based on your age. If you turn 62, or should you become disabled on or before 12/31/1978 then the Social Security Administration averages the dollar value of your previous earnings and then bases the value of the monthly benefits that you are awarded, on this amount.
Now, should you reach age 62 or become disabled on or any time after 1/1/1979, then the SSA divides your earnings up into two specific categories. These categories are determined by the year you earned your wages that you are looking to claim on. The first category includes all wages that you earned before 1951. These wages are credited with the true dollar value up to a certain amount per year. The second category includes all wages earned from the year 1951 on. These years have annual limits placed on earning credits – regardless of how much you have acquired during this time.
Can I keep a job even after I start collecting Social Security benefits?
If you are approaching the age of retirement, or are collecting benefits from dependents and have some questions about still working while receiving these benefits then there is a very simple answer to your questions. We’ll look at if it is permissible to work while receiving your Social Security benefits. This information is useful when planning your employment future or for when discussing your financial future with your financial consultant.
There is a very simple question to this very common question. The short answer is – yes, you absolutely can. In fact, this is very common. If you are past the retirement age and chose to still work you are able to do so without forfeiting any Social Security benefits. There is no limit to the money you can earn when working past retirement either.
Now, on the contrary, if you seek to collect your Social Security benefits prior to the year that you are the age of full retirement as determined by the Social Security Administration, then you will lose $1 of your benefits for every $2 that you earn during a set yearly period. This limit applies solely to any income that you earn working. It does not count on any earnings from anything else like any investments, pension plans or savings accounts. Even if you have a source of rental income, this will not count toward the penalty. These sources of income will not at all affect the amount of Social Security benefits you receive. Be sure to keep this in mind before attempting to claim Social Security before you have reached the age of full retirement.
When can I start collecting Social Security retirement benefits?
If you feel you are considering retirement, or are just curious to know roughly when you are able to retire and claim Social Security retirement benefits you will greatly benefit from the knoweldge about to be presented here. We’ll look into what the retirement age is, as determined by the Social Security Administration and how recent policy change might effect this current determination. This information is defiantly useful when starting to plan retirement or when discussing retirement with your financial advisor.
In the past the Social Security Administration considered the age of retirement to be 65. At this age you would be able to begin accepting retirement benefits from Social Security. The amount of these benefits were determined on the basis that the majority of workers would chose to stop working a full time job, and want to start claiming their retirement benefits at the age of 65.
In recent times, however people are, for the most part living longer, healthier lives. This makes the Social Security Administration feel that the age for retirement is changing because people are choosing to persue active work at and through the age of 65. On this basis, they determined that the policy should change the age that you are able to claim full retirement benefits. They did just that by raising the age that you can claim full retirement benefits to age 67. Noe well that this change only applies to anyone born after the year 1960. If you were born before 1938 then you can still fully retire at age 65. The SSA is attempting to gradually increase this age from 65 to 67 by rolling it out over many years based on the year you were born in.
Who is eligible to collect Social Security benefits?
Confused about Social Security benefits eligibility? You came to the right place to help clarify your confusion. We’ll take a look at why most of the eligibility requirements truly vary from person to person, as well as some clear cut specifics that you will need to know about. This information is great if you are trying to determine your eligibility for these benefits, or help a friend or loved one do the same.
Most of the specific requirements for eligibility to receive Social Security benefits greatly vary based on the type of benefits you are looking into, the age of the person that is seeking these benefits and if you are attempting to claim benefits as a dependant or a survivor. If you are looking to claim as a dependant or survivor, then another factor to help determine eligibility is the age of the worker that you are claiming off of.
The general requirement that holds true for all Social Security programs (not including the Supplemental Security Income or SSI) is that the person who worked to earn the Social Security benefits and whose earnings are being claimed upon and recorded must have worked in what is known as “covered employment” for enough years to be eligible. This means they they earned enough of, what is known in the Social Security system as, “work credits.” This must be completed by the time that the person is seeking to claim retirement, dies or becomes disabled. In the most common situation, this is referring to at least ten years of eligible work.
To claim Social Security Retirement benefits you must be between the ages of 62 and 70 to qualify to start claiming your benefits.
What is a Social Security Statement?
A Social Security Statement is a record of all of the income that you have made and you have paid Social Security taxes on while you were working. Your Social Security Statement also includes a summary of estimated benefits that you and your family should receive because of the aftermentioned earnings.
Statements are provided in two fashions. You can receive an automatic yearly mailed statement. These are sent to anyone working, or anyone who used to work and is aged 25 years and older. If you need a statement at a separate time or before you qualify for an automatic mailing, you can receive one at any time as long as you are working at the present.
You are strongly suggested to keep your Social Security Statement in a very safe place with other essential paperwork because you can use it in numerous ways. This statement can help you when taking care of your financial planning. This is because the statement provides benefit estimates that are essential to planning your future. Once you combine your Social Security Benefits, savings, investments and even pension, you can begin planning a solid financial future.
Another reason your Social Security Statement is critical is because it can help you verify that you have reported all earnings correctly. In addition, it helps you ensure that the Social Security Administration has an accurate record essential information about you, such as you name and date of bitrh. If there is a mistake on such pertinent information, you may have a delay when attemptin to receive the Social Security benefits. Once you notice a mistake, contact the Social Security Administration and request it to be adjusted to ensure that this does not cause any delay.
Lastly, your statement provides information about protection you earn with Social Security. It shows how you are building protection, just incase you should become disabled or die even before you reach the retirement age.
How do I replace a lost Social Security card?
To replace your lost Social Security card there is a certain order of distinct steps to follow.
Step one is to acquire and complete an “Application for a Social Security Card” - this is form SS-5. When completing this step you will need to be able to prove your identity and age. You are not required to prove citizenship or immigration status when replacing a card because the Social Security Administration already has this information on file.
Note well that the SSA will only accept certain document to prove your identity. For the document to be accepted it must have your name and other identifying information about you. If you are citizen of the United States, the SSA will check your driver’s license, state issued non-driver ID card, or a United States passport. If you can not present these forms of identification, the SSA will attempt to verify an employee ID card, school issued ID card, health insurance card (Note: Medicare cards are not accepted), United States military ID or an adoption decree.
If you are not a citizen of the United States, the Social Security Administration will need to verify your current immigration documents. These documents will be from the Department of Homeland Security and include the following forms; I-551 (with your valid, unexpired foreign passport), I-94 (again, with a valid, unexpired foreign passport) or forms 1766 or 1688B (work permit).
For the most part you can complete the process by mail, but if you live in certain areas you must apply at a Social Security Center near you. Be sure to check if this applies to you before starting the process.
What’s the Stimulus Check? How much do I get?
If you are seeking more information about the tax stimulus check, you should find the information presented here very helpful and informative. Specifically, we’ll look at how the check came to be and just how much to expect. After reading the information presented, you should be able to have a better why this check is issued, and you will know have reasonable expectations about how much to expect from the government.
The stimulus check was passed by George Bush in February of 2008 in a plan to stimulate the economy. His plan is that if the government returns money spent on taxes to the taxpayers, they will in turn spend that money in retailers. He feels that this will in time stimulate the economy.
The amount you receive in the form of the stimulus check is determined by how you are filing and who you are filing for. If you are an individual tax payer you can expect your stimulus check to be made out for $600. If you are filing a joint tax return with your spouse you will receive a total of $1200. The plan states that you will also receive $300 for every child you have that was born after December 1990.
Whether the stimulus plan works, or not, as far as the economy goes, the additional return is definitely one to anticipate. When you receive the check, you should keep it’s purpose in mind, and at least make an effort to spend it in retail store. Who knows? It might just work! It’s also very important to know ahead of time how much to expect so when you receive your check you know right away if you have been granted the correct amount. Enjoy spending your found money!
What is a Social Security Number?
A Social Security Number (or SSN) is a 9 digit number issued to citizens, permanent residents, and temporary residents of the United States of America.
The number is issued to an individual by the Social Security Administration, an agency of the federal government. Its primary purpose is to track individuals for taxation purposes. In recent years the SSN has become a de facto national identification number.
The first SSNs were issued by the Social Security Administration in November 1936 as part of the New Deal Social Security program. By the end of 1937, over 37 million numbers had been issued.
Before 1986, people often did not have a Social Security number until the age of about 14, since they were used for income tracking purposes, and those under that age seldom had substantial income.
In 1986, American taxation law was altered so that individuals over 5 years old without Social Security numbers could not be successfully claimed as dependents on tax returns.
Since then, parents have often applied for Social Security numbers for their children soon after birth.
Contrary to popular belief, there is no law requiring a natural born US Citizen to apply for a Social Security number to live or work in the United States. Although some people do not have an SSN assigned to them, it is becoming ever increasingly difficult to engage in legitimate financial activities without one.
What is Disability?
Disability is not a pleasant experience at all. And as if the problems weren’t enough already, even beginning to understanding how a disability claim works can be very difficult for the layperson. It doesn’t have to be that way.
The Social Security Administration has a strict set of rules to determine if a claimant meets the criteria of disability. To be entitled for Social Security disability benefits, you must establish through your lawyer or attorney, proof of your “disability,” as defined under the law. The Federal Social Security Disability Act requires that you are not able to engage in “substantial and gainful activity” due to reasons that have a medical or mental impact upon you. Do you qualify?
Can I claim spousal benefits if I’m divorced?
This topic is very common and will often fall into question. We’ll take a look at the answer to this frequently asked question and discuss the details and situations that this applies to, as well as how to qualify. This information is very useful when planning retirement and other very important aspects of your financial future with your financial advisor.
The answer to this question is yes, but there are certain conditions that need to be met for this to be true. You qualify for your former spouses benefits if both your and your former spouse are age 62 or older. For the opportunity to claim, you and your spouse must have been married for at least ten years. In addition, you must have been divorced for at least two years in most cases. This rule does not apply, however if your former spouse was eligible for, and claiming retirement benefits from before you were divorced. If this was not the case, you will be eligible to claim their benefits once your former spouse reaches the age of full retirement and is eligible to start collecting their retirement benefits. Note, that they do not have to actually claim their benefits for you to be eligible, as long as they qualify to start collecting then you are eligible to start collecting your spousal benefits.
If you are collecting benefits from your former spouse’s work and later remarry another party then you will lose your right to these benefits. You may qualify to claim dependant benefits from your new spouse’s work. In the case that you divorce your new spouse, as long as you remained married to them for ten years, you can either claim from your first, or second spouse.
How does Social Security decide if I am disabled?
Trying to investigate what protocol the Social Security Administration uses to determine your disability? Don’t expect a straight forward answer from the SSA. They do make reference to their five step evaluation process to determine this, which we will discuss here.
The first thing you need to know about attempting to claim disability under Social Security, you should know that this is granted based on your inability to work because of any outstanding medical condition that is disabling you. To be considered disabled by the Social Security Administration you must be entirely unable do the work you previously did. It is at the digression of the SSA if you would have been able to adjust or not to your previous employment, or any other form of work because of your medical condition. Another factor when being considered is that your disability must either last, or is expected to last a year for you to qualify. This is also true if your medical condition is believed to be leading to your death.
You can not claim disability benefits unless you are fully disabled in the eyes of the SSA. This means that you are not partially disabled or you are disabled for a short period of time. As long as all of these qualifications are met….well then you need to meet even more qualifications. These are outlined in the document “Disability Benefits” (This is document number 05-10029 put out by the SSA.) The SSA strongly suggests that you read over this document to better understand their decision process.
Do members of Congress have to pay into Social Security?
This has become a common question since a chain email was sent around spreading a rumor that Congress does not have to worry about what happens to Social Security because the members are not required to pay into it. This article will discuss if that statement is true, or like too many things, just a rumor floating around online.
The truth is that Members of Congress do have to pay into Social Security just like everyone else. This has been in effect since 1984 when Congress Members began paying into, and receiving Social Security benefits just like everyone else. In January 1984, even the President and Vice president were included in being forced to pay into Social Security like everyone else. This also included Federal judges and other people in politics. Since January, all of these parties have been paying into Social Security just like everyone else has, regardless of how long they have been in office. Prior to 1984 most of the Federal government employees and officials participated in the Civil Service Retirement System, or CSRS which was established in 1920, about 15 years before the establishment of the Social Security System. Because of this outdated system between 1920 and 1948 Congress Members were not paying into the later established Social Security system.
Now that it has been clarifies that Members of Congress do, in fact, pay into the Social Security system it is very interesting to think about how this knowledge affects their decision on the controversial topic of the Social Security System.
Social Security Disability Lawyers
Let’s face it: It is only fair that qualified people should be able to receive the Social Security benefits they have earned. But getting what you deserve is not always easy in this day and age. Hiring a Social Security lawyer or attorney is often the only way to assure you get the highest possible benefits. Social Security lawyers can assist you in filing a benefits claim.
However, you should be clear about one thing: Social Security is not the same as welfare. One determining factor in whether social security benefits are paid to an individual or his family is whether that person has previously contributed something to the system. If your case is not 100% clear cut, or even if it is, an experienced lawyer can help you get the best deal.
Lawyers that specialize in social security disability claims are standing by to help you interpret your situation and inform you of your legal rights pertaining to social security denials and appeals. Generally speaking, social security disability lawyers and attorneys are very knowledgeable. They can help you ensure that you follow all the rules.
But are they honest?
In a word, yes. The vast majority of Social Security disability lawyers is very honest and ethical. They are highly experienced professionals who specialize in handling Social Security disability claims and appeals. They have a vast knowledge of the Social Security laws. So don’t worry, approach a Social Security lawyer so he can provide you with helpful legal assistance in filing a social security disability claim.
The Social Security Administration strictly governs what lawyers may charge you. Any fee you pay to a Social Security lawyer must be approved by the Social Security Administration.
So give it a try, contact a Social Security lawyer today!
Can I collect more than one type of benefit at a time?
If you qualify for multiple types of Social Security benefits and are curious if you can claim more than one you may be surprised at the answer. Let’s look at how the Social Security Administration addresses this question and what they say happens if you should find yourself in this situation. This information is crucial if you are in this situation and must being planning your financial future.
According the Social Security Administration, it is not permissible at this time to claim more than one benefit at any given time. This is regardless of if you qualify for multiple types of benefits at the same time. You are not entitled to claim more than one type of Social Security benefit at once. If you do find yourself in this situation, as per current policy, the Social Security Administration will award you only the highest benefit that you qualify for, but they put a strict emphasis on that you can never claim more than one benefit at once.
Because the Social Security Administration will not let you claim multiple benefits at once, but will allow you to accept the highest benefit that you qualify for, you should do extensive research into which benefit this applies to. This will help you ensure that you are receiving the most possible money that you are entitled to. Once you have done that, you should attempt to claim only that Social Security benefit from the SSA. Always ensure that you conduct your due diligence and consult your financial advisor before making any decision that will impact the rate of your Social Security benefit payout.
Are Social Security disability benefits taxable?
Trying to decipher if your disability Social Security benefits are taxable? Join the club…The Social Security Administration often provides ambiguous answers to critical, and essential questions like this. Hopefully, this article is able to shed some light and clarify the ambiguity of this issue.
According to the Social Security Administration many situations impact if your Social Security disability benefits are taxable. They say that most people who get the Social Security disability benefits will pay tax on them, while others will not. Well that sure clarifies it! Some more digging into the topic shows that the Social Security Administration says that you must pay federal taxes on these benefits I you are filing a federal tax return as an individual and your income exceeds $25,000. Should you be filing a joint federal tax return, then you must pay tax on these benefits if you and your spouses join income exceeds $32,000.
Your best bet to get more information on this topic, and hopefully a clearer answer would be to call the Internal Revenue Service directly. They put out a publication known as “Social Security and Equivalent Railroad Retirement Benefits.” (This is publication number 915.) You are also able to have federal taxes directly withheld from your benefits check. The Social Security Administration does not have the ability or authority to withhold local, or state taxes from your benefit payments. This is most commonly because many states and local jurisdictions do not tax Social Security benefits. For more information about this be sure to contact your state or local region taxation branch for further clarification about if this applies to you or your area.
Is it true that Social Security was originally just a retirement program?
This question often lingers on everyone’s mind. Was this program started to solely address retirement? What has the program done to change over the years do address more issues that face citizens?
It is true that in 1935 a law was passed to establish Social Security and under this law Social Security was being created as a retirement plan. For the most part what the law did was provide retirement benefits to the primary worker that was retiring. In 1939, this began to change when the law was amended and adjusted to also included survivor benefits, as well as additional benefits for the spouse and children of the retiree that was initially covered under the original Social Security law. In the year l956, Social Security was further expanded, yet again. This time it was to aid and support the disabled. This was done with the addition of Social Security disability benefits. The Social Security act was originally much larger of a topic than just the program that we have today that we all know of as “Social Security.” The initial 1935 law included the first compensation program for unemployment on a national level. This law also added aid to the states for numerous health and well being programs, such as welfare. The act also attempted to help the stated by establishing the Aid to Dependant Children program under it.
It’s amazing to see how far Social Security has come over the history of the United States, but we all have to hope that Social Security continues to expand creating better programs and does not fall dormant.
What are Social Security Benefits?
Social Security benefits are monetary payments that are made to disabled persons who are no longer able to work according to the Social Security System. This system is ran by the Department For Work And Pensions (DWP). In order for a person to be entitled to receive this type of a benefit they will need to have worked for 5 out of the past 10 years.
There are various types of benefits available under the Social Security System. These benefits have been designed so as to meet the different types of needs that various people may have. Some of these various benefits include:
- There is a state pension available for people who have reached retirement age.
- If you are the parent of a disabled child, then you may be eligible to receive Social Security Child Benefits.
- For those employees who have to take an extended leave of absence from their job due to illness, there is the Statutory Sick Pay.
- Those persons who are out of work and seeking a new job may be eligible to receive the Job Seeker’s Allowance.
As you can see, there really are a wide variety of benefits that are available from the Social Security Administration. Of course, there is also a set of guidelines that clearly state who and who is not eligible for each type of benefit. In order to find out whether or not you are eligible for any of these benefits you will need to go through an application process.
How To Decode a Social Security Number
Today we look at the structure of Social Security Numbers.
The Social Security number is a nine-digit number in the format “111-22-3333.” The number is divided into three parts.
- The first set of three digits (111) is called the “Area Number”
- The second set of two digits (22) is called the “Group Number”
- The final set of four digits (3333) is the “Serial Number”
AREA NUMBER
The Area Number is assigned by the geographical region. Prior to 1972, cards were issued in local Social Security offices around the country and the Area Number represented the State in which the card was issued.
This did not necessarily have to be the State where the applicant lived, since a person could apply for their card in any Social Security office.
Since 1972, when SSA began assigning SSNs and issuing cards centrally from Baltimore, the area number assigned has been based on the ZIP code in the mailing address provided on the application for the original Social Security card.
The applicant’s mailing address does not have to be the same as their place of residence. Thus, the Area Number does not necessarily represent the State of residence of the applicant, either prior to 1972 or since.
Generally, numbers were assigned beginning in the northeast and moving westward. So people on the east coast have the lowest numbers and those on the west coast have the highest numbers.
Note: One should not make too much of the “geographical code.” It is not meant to be any kind of useable geographical information. The numbering scheme was designed in 1936 (before computers) to make it easier for SSA to store the applications in our files in Baltimore since the files were organized by regions as well as alphabetically.
GROUP NUMBER
Within each area, the group number (middle two (2) digits) range from 01 to 99 but are not assigned in consecutive order.
For administrative reasons, group numbers are issued in the following order:
- ODD numbers from 01 through 09
- EVEN numbers from 10 through 98
- EVEN numbers from 02 through 08
- ODD numbers from 11 through 99
As an example, group number 94 will be issued before 15.
SERIAL NUMBER
Within each group, the serial numbers (last four (4) digits) run consecutively from 0001 through 9999.
What is the Social Security Act?
Following the horrific Great Depression of the 1930s, President Franklin D. Roosevelt announced to Congress his intention to create a social security program. The year was June 8, 1934. Roosevelt developed a Committee on Economic Security. Their charge was to study economic security and come up with recommendations. Based on that group’s findings, the Social Security Act was signed into law on August 14, 1935. Besides providing general welfare for citizens, it provided social insurance for retired persons over the age of 65.
Initially, the Social Security Act was created to aid retired workers. Today, through amendments to the Act, the goal of the program has expanded. Individuals in the United States may now apply for financial assistance during times of unemployment, illness, disability in addition to old age benefits. The families of deceased persons can also receive financial aid upon the death of their loved ones.
When the act was first passed, individuals, through work, could acquire credits that would go towards their retirement insurance. Their payroll taxes would help foot the bill. Four years after the initial law was passed and put into effect, in 1939, the first amendment to the Social Security Act was enacted. Spouses and the children of retired workers could now receive benefits and monies. This group could also collect money in the event of the premature death of a working spouse or parent.
The original Social Security payments were paid out in lump sums. It wasn’t until the 1940s when the government began to issue checks monthly. This payment schedule is the same one that is used presently.
