benefits

Social Security Survivor’s Benefits and the Lump-Sum Death Benefit

Posted on May 18, 2023 by - Family Benefits, Widow Benefits

Social Security Survivor's Benefits and the Lump-Sum Death Benefit

What is it?

When planning your estate, consider how much your survivors might receive from Social Security. Social Security survivor’s benefits can provide much-needed income to your family and ensure that their financial life after your death is easier.

Who will be eligible to receive survivor’s benefits after your death?

Knowing your insured status is essential to determining who will be eligible to receive Social Security survivor’s benefits based on your earnings record. If you were fully insured, meaning that you have 40 Social Security credits (quarters of coverage) at the time of your death, more of your survivors may be eligible for benefits than if you were currently insured (having 6 credits during the last 13 quarters prior to your death).

If you are fully insured

If you are fully insured, survivor’s benefits can protect those family members who are most dependent on you for financial support. If you are fully insured at the time of your death, benefits may be paid to the following family members:

  • Your spouse
  • Your divorced spouse
  • Your dependent child or children
  • Your dependent parents

If you are currently insured

If you are currently insured at the time of your death, benefits may be paid to these family members only:

  • Your spouse (only if caring for a dependent child)
  • Your divorced spouse (only if caring for a dependent child)
  • Your dependent child or children

The following table illustrates who may be eligible to receive survivor’s benefits and under what conditions:

Social Security Survivor's Benefits and the Lump-Sum Death Benefit

What benefits will your survivors receive after you die?

Your eligible surviving family member will receive a monthly benefit based on your primary insurance amount (PIA) unless the survivor is eligible for a greater benefit based on his or her own PIA. Survivor’s benefits are expressed as a percentage of your PIA:

Survivor’s benefits may be reduced for one or more of the following reasons:

Social Security Survivor's Benefits and the Lump-Sum Death Benefit

Beneficiary is younger than normal retirement age when he or she elects to receive benefits

This factor affects the surviving spouse or the surviving divorced spouse of the worker. If the surviving spouse is at least normal retirement age, the benefit payable is 100 percent of the deceased worker’s PIA. However, if the surviving spouse elects to receive benefits early (as early as age 60 or age 50 if disabled), the benefit payable will be reduced by 0.475 percent for each month between the month benefits begin and the month in which the spouse will reach normal retirement age. So, a surviving spouse with a normal retirement age of 66 who is age 61 will receive 71.5 percent of the deceased spouse’s PIA instead of 100 percent (60 months x 0.475 = 28.5 percent reduction). If the surviving spouse is disabled, the benefit will never drop below 71.5 percent of the deceased spouse’s PIA, even if the disabled spouse elects benefits at age 50.

Example(s): After Peter died at age 60, his wife, Patty, applied for survivor’s benefits. She was 62. Because she elected to receive benefits 48 months before her normal retirement age, she was entitled to receive 77.2 percent of her deceased husband’s PIA (48 months x 0.475 = 22.8 percent reduction).

Benefit is subject to the family maximum

Survivor’s benefits may also be reduced if they exceed the family maximum benefit. This commonly happens when benefits to children are payable along with a benefit to a surviving spouse. Because the family maximum benefit generally ranges from 150 to 180 percent of the worker’s PIA, a spouse’s benefit combined with the benefits for two children could easily exceed the family maximum. In this case, the benefit for each family member will be reduced accordingly.

The survivor’s earnings are more than the annual exempt amount

Benefits may be reduced when a surviving spouse’s earned income exceeds the annual earnings exempt amount.

Benefits to eligible family members end when:

  • A surviving spouse entitled to parent’s benefits remarries (unless the new spouse is another benefit-eligible individual).
  • A surviving spouse entitled to parent’s benefits loses eligibility because the child attains age 16 or loses disability status.
  • A surviving divorced spouse remarries prior to age 60 (or age 50 if disabled). If the subsequent marriage ends, however, the spouse will again be eligible for benefits based on the deceased ex-spouse’s earnings.
  • A dependent child turns 18 and is no longer enrolled in school. (If the child is enrolled full-time in secondary school, benefits may be payable to age 19.)
  • A dependent child marries (unless the child is over 18 and disabled and marries another benefit-eligible individual).
  • A dependent parent marries (unless parent marries another benefit-eligible individual).
  • The beneficiary dies.

Who is eligible to receive the Social Security lump-sum death benefit?

Upon your death, your surviving spouse living in the same household with you at the time of your death will receive a $255 lump-sum death benefit. If there is no surviving spouse, the death benefit will be split among your children who are eligible for benefits based on your PIA. In the event you have no surviving spouse or children, the benefit will not be paid.

Planning tips for Social Security survivor’s benefits

When you have dependent children

If you have dependent children, check your Social Security record to make sure you are at least currently insured. If you die currently insured, your family might receive some income from survivor’s benefits. If you are not currently insured, consider working to obtain the required credits.

When you have no dependent children but are married

If you have no dependent children and are nearing retirement, check your Social Security record to make sure you are fully insured. If you die fully insured, your spouse may receive some income from survivor’s benefits when he or she turns age 60 (or age 50, if disabled).

When you have any family members who may be eligible for benefits on your Social Security record

Make sure your family members know your Social Security number and what benefits they may be entitled to when you die. To apply for benefits, your spouse may also need proof of marriage or divorce and copies of children’s birth certificates.

We love to help you retire better. Check out our many Social Security planning options. Also, we love to keep in touch with our newsletter; click here to sign up.

Broadridge Investor Communication Solutions, Inc. prepared this material for use by Social Security Benefit Planners, LLC.
Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on individual circumstances. Social Security Benefit Planners, LLC  provide these materials for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Social Security Benefit Planners, LLC and its affiliates are in no way associated with or approved, endorsed, or authorized by the Social Security Administration.

 

 

Estimating Your Social Security Benefits

Posted on April 19, 2023 by - Retirement Benefits, Social Security Benefits

What is estimating your Social Security benefits?estimate social security benefits

Estimating your Social Security benefits is particularly important when you are planning for retirement, although you may be interested in estimating survivor benefits or disability benefits as well. When planning for retirement, you should neither overlook nor overstate the value of your Social Security benefits. Predicting the future of Social Security is difficult, because to keep the system solvent, some changes must be made to it. The younger and wealthier you are, the more likely that these changes will affect you. But even if you retire in the next few years, remember that Social Security was never meant to be the sole source of income for retirees. As President Dwight D. Eisenhower said: “The system is not intended as a substitute for private savings, pension plans, and insurance protection. It is, rather, intended as the foundation upon which these other forms of protection can be soundly built.” Estimating your Social Security benefits now will not only help you plan an effective long-term retirement strategy, but it can also help you understand what benefits might protect your family if you were to die or become disabled.

Obtaining a benefits estimate

You can estimate your retirement benefit online based on your actual earnings record using the Retirement Estimator calculator on the Social Security website, ssa.gov. You can create different scenarios based on current law that will illustrate how different earnings amounts and retirement ages will affect the benefit you receive. Other benefit calculators are also available that can help you estimate disability and survivor benefits. You can also sign up to view your Social Security Statement that contains a detailed record of your earnings, as well as estimates of retirement, survivor, and disability benefits. If you’re not registered for an online account and are not yet receiving benefits, you’ll receive a statement in the mail every year, starting at age 60.

Understanding how your benefit amount is calculated

Your Social Security benefits will be based on your average lifetime earnings, expressed as your primary insurance amount (PIA). Calculating your PIA is complicated because some factors used in the benefit formula change annually.   Instead of calculating it yourself, it’s easiest to obtain a benefit estimate directly from the SSA (see preceding section).

However, knowing how your PIA is calculated may be useful in benefit planning. Currently, the two PIA calculation methods most frequently used are:

  1. The simplified old-start benefit method–This method is used if age 62, disability, or death occurred prior to 1979. It averages actual (not indexed) earnings and uses a table to calculate the PIA.
  2. The wage indexing method–This method has been used since 1979. Indexing earnings is a way of adjusting them to reflect changes in wage levels throughout years of employment. This ensures that your benefits reflect increases in the standard of living. In general, the wage indexing method calculates your PIA by indexing your lifetime earnings up to and including the year you turn 59. Then, your highest earnings for a specific number of years (usually 35) are averaged and a benefit formula is applied to this figure to calculate the PIA.

Two other benefit computation methods are less frequently used:

  1. “Special minimum” benefit tables are used sometimes to compute benefits payable to some individuals who have long periods of low earnings and who have at least 11 years of coverage.
  2. Flat-rate benefits are provided to workers (and to their spouses or surviving spouses) who became age 72 before 1969 and who were not insured under the usual requirements.

How to calculate your PIA using the wage-indexing method

The wage indexing method can be used to calculate retirement, survivor’s, and disability benefits. However, the method used to calculate disability benefits is slightly different. The following discussion applies only to calculating your PIA for retirement and death benefits.

Follow these steps to calculate your PIA:

  • Count the number of years elapsed between 1951 (or the year you turned 22, if later) and the year you turned 61. If you were born in 1929 or later, this number will be 40.

Example(s): Peter retired from his job in 1992. He was 62. He turned 22 in 1952, so count the number of years between 1952 and 1991 (the year he turned 61). Forty years have elapsed.

  • Use the number of elapsed years to determine the number of benefit computation years. To do this, subtract five from the number of computation elapsed years. This figure will be used to calculate your average indexed monthly earnings (AIME). If you were born in 1929 or later, this number will be 35.

Example(s): Peter’s computation elapsed year figure is 40. 40-5=35. So, Peter’s benefit computation year figure is 35.

  • Use your earnings record to calculate your indexed earnings. To do this, use the appropriate table to determine what the indexing average wage was or will be in the year you turn 60. Then, look to see what the indexing average wage was in the year you are indexing. These figures become part of an indexing ratio applied to each year of earnings starting with 1951 and ending with the year you turn 59. (Earnings before 1951 are generally disregarded. Earnings in the year you turn 60 (your indexing year) and earnings in all later years are considered in calculating your PIA, but they are not indexed.) The indexing ratio can be expressed as the actual earnings in the year being indexed multiplied by the indexing average wage in the year you turned 60 divided by the indexing average wage in the year being indexed. The result will equal your indexed earnings for the year being indexed.

Example(s): Peter started working in 1951 and retired in 1992. For each year starting with 1951 and ending with 1989 (the year he turned 59), calculate his indexed earnings. His indexing year is 1990 (the year he turned 60). For example, Peter’s earnings in 1965 were $2,000. In 1965, the indexing average wage was $4,658.72. In 1990, the indexing average wage was $21,027.98. Calculate his 1965 indexed earnings:

$2,000 multiplied by $21,027.98 divided by $ 4,658.72 = $9,027.36

Tip: Actual earnings are earnings credited to an individual’s Social Security record. However, each year’s actual earnings are subject to a maximum earnings limit. If your earnings for the year you are indexing exceed the maximum limit, then you must substitute the maximum earnings limit amount for your actual earnings amount in the ratio.

Example(s): In 1965, the maximum earnings limit was $4,800. Had Peter’s actual earnings exceeded that amount, he would have replaced his actual earnings figure in the ratio with $4,800 to calculate his indexed earnings for 1965.

Once you have indexed your earnings for each year you have worked before age 60, you will be able to use those figures to calculate your average indexed monthly earnings (AIME).

  • Calculate your AIME by selecting your highest earnings for the benefit computation years (including any earnings not subject to indexing). Add these up and divide by the total number of months elapsed during these years.

Example(s): Peter had 39 years of indexed earnings and two years of earnings (1990 and 1991) not indexed but included in the calculation. Select his 35 highest earning years. The earnings for these years total $950,000. Divide this figure by 420 months (35 x 12). His AIME is $2261.90.

  • Calculate the PIA for the year you attain age 62 by applying percentages to certain dollar amounts of the AIME. The percentages are fixed, but the dollar amounts (called bend points) are adjusted each year for inflation.

Example(s): Peter attained age 62 in 1992. His PIA would be calculated using 1992 bend points–90 percent of the first $387 of his AIME, and adding 32 percent of the AIME in excess of $387 through $2,333, and adding 15 percent of the AIME in excess of $2,333. So, Peter’s PIA is calculated to be the sum of $348.30 (90 percent of $387) plus $599.65 (32 percent of $1,873.90) or $947.95, rounded to the next lower multiple of 10 cents, $947.90.

Bend points make calculating your future PIA difficult because the bend points for each year are only published on or before November 1 of the preceding year. For 2021, the bend points are $996 and $6,002.

  • Adjust your PIA to account for changes in the cost-of-living allowance (COLA) yearly.

Example(s): If Peter’s PIA was $947.90 when he retired in October 1992, then his PIA was adjusted for COLA in December 1992, and his January 1993 benefit check reflected the change.

Using your PIA to determine your benefit amount

Once the PIA has been calculated, all your benefits (and those of your family members who are dependent upon your Social Security record) will be based on this figure. Your PIA is the maximum benefit that you could receive once you become eligible.

Your maximum benefit may be payable if:
  • You retire at full retirement age
  • You are a widow or widower who is at least full retirement age
  • You are a disabled worker

In other circumstances, the benefits that you receive will be a certain percentage of your maximum benefit. For example, if you elect to receive early retirement benefits, your maximum benefit will be reduced by a certain percentage for each month of early retirement. If you or your family members are eligible for reduced benefits, the reduction will be expressed as a percentage of your PIA.

Example(s): Mr. Jones retired at age 66 (his full retirement age) after working for many years. His PIA was determined to be $1,176. He receives the maximum retirement benefit (100 percent of his PIA) so his monthly benefit check is $1,176. His wife retired at age 66 as well (her full retirement age). Since her own PIA was less, she decided to base her retirement income on her husband’s PIA. She is entitled to 50 percent of his PIA, so she receives a monthly benefit check of $588.

The following chart summarizes the relationship between your PIA and your eventual benefits:

Factors that can increase or decrease your benefit

Early retirement

If you elect to receive retirement benefits early (before full retirement age), your benefit will be reduced proportionately. You can elect to receive retirement benefits as early as age 62. For each month of early retirement, your total benefit will be reduced by 5/9 of 1 percent, up to 36 months, and by 5/12 of 1 percent thereafter. For example, if you elect to receive retirement benefits at age 62 and your full retirement age is 66, then you would receive approximately 25 percent less each month than you would at age 66.

Delayed retirement

If you delay receiving retirement benefits past full retirement age, you will receive a higher benefit when you retire. Late retirement may increase your average earnings (which may, in turn, increase your benefit). You will also receive a special delayed retirement credit. This credit is figured as a percentage of your Social Security benefit and is paid in addition to your regular benefit amount. It does not affect your PIA upon which your benefit is based.

This credit varies depending on the year in which you were born and how many months or years after full retirement age you retire (up to the maximum age of 70). For example, if your full retirement age is 67, you will earn an extra 8 percent of your benefit for every year you delay retirement up to age 70. This means that if you delay receiving your retirement benefit until age 70, your benefit payment will be 24 percent greater than it would have been if you began receiving retirement benefits at age 67.

Earnings during retirement

Any income you earn after you retire must be reported to the Social Security Administration and may temporarily reduce your retirement benefit if you have not yet reached full retirement age. However, some of your annual earnings are exempt and won’t affect your benefit.

Simultaneous benefits

Occasionally, you may be entitled to receive benefits based not only on your earnings record, but on someone else’s as well. This often happens when a married couple retires.

Example(s): Mr. Jones is not planning on retiring and receiving Social Security retirement benefits until he is 68. His PIA is $1,176. His wife, who is 63, wants to retire now, but she can’t begin receiving a spouse’s retirement benefit until her husband begins receiving his retirement benefits. However, since she is already over the age of 62, she can receive retirement benefits based on her own PIA. Her benefit, adjusted for early retirement, will be $400. Later, when her husband retires, she can receive her own retirement benefit and a spouse’s benefit of $188, the difference between her own worker’s benefit ($400) and the spouse’s benefit she would have received based on 50 percent of her husband’s PIA ($588).

A family maximum benefit applies

Your family may receive benefits based on your earnings record. There is, however, a limit to the amount of monthly benefit that can be based on an individual’s Social Security record. The limit varies but generally ranges from 150 to 180 percent of your PIA. Benefits to family members may be reduced if they exceed the family maximum. The formula used to compute the family maximum is similar to that used to compute the PIA.

If you are interested in our Social Security planning options, learn more here! We understand that retirement planning can be daunting, and we are here to make it easier for you. Our newsletter is a great way to stay up-to-date with our latest offerings and get helpful retirement planning tips. Signing up is easy; click here. We appreciate your interest in our services and look forward to helping you retire better!

Broadridge Investor Communication Solutions, Inc. prepared this material for use by Social Security Benefit Planners, LLC.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on individual circumstances. Social Security Benefit Planners, LLC  provide these materials for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Social Security Benefit Planners, LLC and its affiliates are in no way associated with or approved, endorsed, or authorized by the Social Security Administration.

The Birth of Social Security in America

Posted on May 16, 2017 by - Social Security Benefits

How do I collect Social Security?

We take Social Security for granted, but where did this important insurance program come from and when did it start? It hasn’t been around forever, has it? The answer is no. Social Security began after the Great Depression, when millions of Americans who had lost their savings were facing an old age defined by stark poverty. Few workers had pensions through their jobs, and President Franklin Roosevelt wanted to do something to alleviate the poverty that faced so many older workers in their retirement years.

Since its creation in 1935, millions of retirees have been able to live more comfortably because of this national insurance program, which they collectively funded through payroll taxes during their working years you will see this as FICA on your payroll statement. Though Social Security wasn’t meant to be the only source of income for beneficiaries, it was in its early years and, unfortunately, it still is today for many. As per Social Security fact sheet in 2017 21% of married couples and 43% of unmarried persons rely on Social Security for 90% or more of their income. Many people do not realize that this is a program that has a life insurance, disability and retirement income benefits that you and your family can benefit from.

With changing demographics that include more retirees and fewer workers, Social Security has had to evolve over the years. President Reagan signed into law several revisions to Social Security after Congress passed suggestions made by the Greenspan Commission, which had reviewed the program’s financial picture. These changes included an increase in the payroll tax that pays for benefits as well as a gradual increase in the retirement age, from 65 to 67.

In the future, it’s likely that more changes will have to be made to keep the program financially sound. The prospect can sound alarming, but making necessary tweaks to keep a valuable program that provides millions of Americans with the basic income they need is well worth the effort. Long live Social Security!

For a full customized projection of your Social Security income please sign up for a plan option or learn more at www.socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Broke as a Joke? Social Security’s Finances

Posted on May 8, 2017 by - Social Security Benefits

What is the future of Social Security?

Is Social Security broke? Reading the news can sometimes leave you with the impression that Social Security is practically out of money. This massive program provides key income and takes in millions of dollars each year, but is it going belly-up?

Here’s how it works. The payroll taxes that you and everyone else pay each month (FICA and Medicare) go to the treasury, where they are counted as credits to the Social Security Trust Fund. Those who receive Social Security benefits get their money from what’s paid in, but there is some left over. The excess is invested in special issue U.S. Treasury bonds, which earn interest. The interest is credited to the trust fund, as well.

Right now, more money comes into the program through taxes and interest than goes out in benefit payments. Years of this excess pay-in has created a surplus that amounted to $2.7 trillion by 2014’s close. That figure will continue to increase until 2019, when the surplus is expected to reach $2.8 trillion.

But as the Baby Boomers retire and smaller birth cohorts begin to fill the ranks of the workers whose taxes fund Social Security, there will be more money going out in the form of benefits than there is coming in through payroll withholding taxes. At that point, the treasury bonds that the Social Security Trust Fund owns will be needed to help cover the benefits that beneficiaries receive.

The program is expected to fully utilize its surplus in 2034, which will leave payroll taxes as the only source with which to make benefit payments. According to current projections, those taxes will cover approximately 79% of the anticipated amount needed. Congress will have to decide whether to cut benefits or increase funding, which they could easily do by raising the limit on the amount of income to which FICA and Medicare taxes apply.

Social Security isn’t exactly going broke, but it will need to be tweaked in order to provide the benefits that today’s workers have been promised when they retire. Do you have an opinion on how to handle the future shortfall in the program’s budget? Let your senators and representatives know!

To receive your own customized Social Security benefit projections please visit our website www.socialsecuritybp.com to learn more or sign up for a plan.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Is More than Just a Retirement Plan

Posted on May 3, 2017 by - Retirement Benefits, Social Security Benefits

How to Retire on Social Security?

Social Security Isn’t Just for Retirement

When you think of Social Security, you probably think about retirement. It’s true that the program provides critical income for millions of retired Americans, but Social Security also does much more.

Designed as a safety net to provide older people who could no longer work with a basic income, Social Security has grown into a much broader safety net over the years, offering financial benefits to protect not only retirees, but also disabled workers and the families that have lost a family member.

Just a few years after the program began, it was expanded to provide benefits for the spouse and any minor children of a deceased worker. Starting in 1939, survivors could receive financial support from Social Security if the family’s breadwinner died. This makes it function as the largest life insurance program in the country, although it’s not generally considered to be one.

Would you think of the payroll deductions you contribute to Social Security as disability insurance premiums? Probably not, but in 1954, Social Security also began making payments to disabled workers and their dependent spouses and/or children. Trying to purchase the same kind of disability protection that Social Security offers can be prohibitively expensive, or even impossible for some workers. With Social Security, everyone who has worked enough to buy into the program is covered. Typically, you need to show that you have earned over the minimum amount to vest currently $5,200 per year five out of the last ten years.

Retirement benefits are an important and well-known part of Social Security, but don’t mistakenly believe that’s the only thing it does. Social Security protects working Americans and those who depend on them in many different and equally valuable ways.

There are over 2,700 regulations that oversee Social Security which affect life, disability and retirement benefits. Please check out our website www.socialsecuritybp.com to learn more or to sign up for a customized plan.  

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Is a Lifesaver for Many Women

Posted on April 25, 2017 by - Social Security Benefits

How do Women collect Social Security?

Social Security a Women Lifesaver

Social Security is a retirement, disability and life insurance program and if you’re a Woman, this can be a lifesaver in retirement. It’s not that women are more interested in a financially secure old age than men. Americans of both sexes rely on Social Security for critical support in their retirement years, but for a variety of reasons, it’s often women who depend on it the most.

  • Longer lives – Women, on average, live longer than men. Without sufficient private retirement savings, this longevity can result in Social Security being the sole or majority source of income. The potential of running out of retirement savings is a problem that affects many retirees, but because of their longer life expectancy, more women end up counting on Social Security alone to support them.
  • Smaller paychecks – Sadly women on average don’t earn as much as men. They often work in fields that are lower-paid than those where men predominate, and even in the same job women frequently earn less than a man does in the same position. Fair? Maybe not, but it’s a fact. That makes it harder to save for retirement and reduces pension benefits, where they exist. As a result, Social Security often forms a greater part of women’s retirement income than men’s.
  • Fewer working years – Between raising children and caring for aging parents, women often take years out of their careers that men do not. While some men do choose to stay home with children or serve as caregivers for parents, it is far more likely that a woman will do so, statistically speaking. Since the formula that determines Social Security benefits is biased toward lower-earning workers, women get some protection from the hit they would otherwise take from a shorter work history.
  • Less other retirement income – Men are more likely than women to have pensions through their jobs, and to have larger pensions than the women who do qualify (partly because of women’s shorter work histories and lower wages). Without this additional income in retirement, women tend to be more dependent on the benefits they receive from Social Security than men are.

Social Security shouldn’t be your only plan for retirement income, but whether or not it is supplemented by private savings, if you’re a woman, it’s a critical component. Having a plan with your spouse before taking benefits can make a huge difference in how much money is available in retirement. Sign up today to have your own customized Social Security plan www.socialsecuritybp.com or info@socialsecuritybp.com.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Benefits for Children

Posted on April 18, 2017 by - Children's Benefits, Social Security Benefits

Social Security for Children

You would be surprised to know that according to the Social Security Administration, there are approximately 4.4 million children who receive $2.5 billion in aid each month.

Children of disabled, retired or deceased parents may receive Social Security benefits, which are intended to help families provide for their children through high school. When a parent dies or becomes disabled, Social Security is given to help the family meet the financial needs of the family. The law also protects unmarried and dependent grandchildren who were being cared for by the deceased, disabled, or elderly.

What children qualify for Social Security? It makes no difference whether your child is adopted, biological, or dependent step children, they maybe eligible if they meet certain requirements.

  • Has a parent(s) who is disabled or retired and eligible for Social Security benefits.
  • Is unmarried.
  • Is younger than 18 years old or up to age 19 if he or she is a full time high school student.
  • Is 18 years or older and disabled (as long as the disability began before the individual turned age 22).

 

How to Receive Benefits

First, the family must present the child’s birth certificate, the parents’ Social Security number and the child’s Social Security number. There may be additional documents required as well. Depending upon the circumstances, the applicant must provide a parent’s death certificate and/or evidence of disability from a doctor.

If your child is disabled, the Social Security Administration has a fact sheet and starter packet to help you navigate the process of receiving benefits. This information will guide you along the path to sign up for and obtain benefits and includes a frequently asked questions section as well.

If you are taking care of a child and are receiving benefits, then his or her benefits may stop at a different time than your own. For example, if the child is not disabled, then the caretaker’s benefits will terminate when the child turns 16 years old. If the child is disabled and you have responsibility and control of the child, then your benefits may continue. For these types of specific circumstances, it’s best to contact the Social Security Administration.

The Social Security benefit for children is an important government tool to help keep families — especially the youngest of the bunch — solvent during times of death and disability. Be sure to check in with the Social Security Benefit Planners in evaluating your own case.

Social Security & Your Full Retirement Age: Are you leaving retirement money on the table?

Posted on April 12, 2017 by - Retirement Benefits

The Social Security term “full retirement age” or FRA is unfamiliar to many people, but it shouldn’t be. Your birth year is one of two factors in determining your Social Security retirement income. Your full retirement age (FRA) is the point at which you can begin taking Social Security retirement benefits at the full amount based on your individual work history. The second factor is how much you paid into the Social Security insurance program which is shown as a FICA deduction. If you have not pulled your statement recently you can go to www.ssa.gov to review your personal history.

Although you can elect to take benefits as early as age 62, that’s rarely a good idea. Taking benefits before your FRA will cost you big-time – as much as 30% of your monthly benefits! So, what is your full retirement age? That depends on when you were born. Congress has gradually raised the FRA, meaning that it is different for different birth cohorts. There are some nice increases in your Social Security retirement checks by delaying your start date with age 70 being when your benefits max out.

For those born in 1954 or earlier, the FRA is 66 years. You can start collecting full benefits as soon as your 66th birthday. Those born later will have to wait a bit longer before taking retirement benefits to receive the full amount:

Birth Year                                                                                     Full Retirement Age
1943-1954                                                                                   66
1955                                                                                            66 years and 2 months
1956                                                                                            66 years and 4 months
1957                                                                                            66 years and 6 months
1958                                                                                            66 years and 8 months
1959                                                                                            66 years and 10 months
1960 or later                                                                                67 years

Almost 50% of American’s elect to take Social Security at age 62! Don’t risk losing almost a third of valuable retirement income but not understanding the true cost of taking this early.

Sign up today to have one of our Social Security retirement advisors www.socialsecuritybp.com help you understand when is the best time to start taking benefits.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #7: Is Retirement Income Taxable?

Posted on March 27, 2017 by - Retirement Benefits, Social Security Myths

MYTH: Your benefits are not taxable in retirement.

Surprise! If you continue to have earned income in retirement while receiving Social Security, then part of your Social Security income can be included in your taxable income. That’s not to say that everyone pays taxes on Social Security
benefits or that the full amount is taxable, but it’s important to know that some of your benefits may be taxed. About half of all beneficiaries paid federal tax on Social Security in 2015.

To figure out whether your benefits are taxable or not, you’ll need to understand the IRS’ definition of “combined income.” This means your adjusted gross income plus any nontaxable income you receive, added to one half of your Social Security benefits. The total of these three numbers will determine whether your benefits are taxed, and how much.

If you are single and have a combined income of  $25k to $34k you’ll owe taxes on up to 50% of your Social Security benefit. Couples that earn between $32K and $44K a year and file jointly will owe the same rate if their combined income is between $32k and $44k.

For single filers with combined incomes over $34k and married filers whose combined income exceeds $44k, the portion of benefits that may be taxable is 85%. That’s assuming the married couple files taxes jointly. Filing a separate return makes it far more likely that your benefits will be taxable.

You may also pay state taxes on part of your benefits if you live in Minnesota, North Dakota, Vermont and West Virginia; these states mirror the federal tax schedule. The following nine states may also tax a portion of Social Security but provide exemptions based on income and age: Montana, Colorado, New Mexico, Utah, Nebraska, Kansas, Missouri, Connecticut and Rhode Island. The remaining 37 states not listed above do not tax Social Security.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Expert Faye Sykes on the Air with Ryan Poterack

Posted on March 22, 2017 by - Radio Shows

Planning today for tomorrow. Social Security expert Faye Sykes, NSSA, CLTC, National Social Security Advisor and CEO of Social Security Benefit Planners joined radio show host Ryan Poterack with expert advice on Social Security planning. LISTEN NOW!

Not associated with or endorsed by the Social Security Administration or any other government agency.

Podcast: Play in new window | Download

Social Security Myth #6: No more Social Security?

Posted on March 21, 2017 by - Family Benefits, Social Security Myths

MYTH: Social Security will go broke in the next 20 years.

That’s a scary statement, and it gets tossed around frequently. Should you worry about it? Not really. Social Security is essentially a pay-as-you-go system. The workers today are paying through their FICA taxes for the benefits current retirees are receiving.

In 2017, if you are W-2 employee you pay 7.65% of your income into the program and your employer pays an equivalent amount. Self-employed workers are required to pay the full amount of 15.3% (but they may be able to deduct some of the expense when they file their annual tax returns).

Any surplus money currently goes into a trust fund and is invested into treasury bonds. By 2034 the trust is projected to run out of money, and this is the source of the scary “going broke” concept. Even if the projection is accurate, however this doesn’t mean that benefits will stop all together. The payroll taxes alone from those working in 2034 should still cover about 79% of promised benefits.

But it’s true that in this scenario there would not be enough money for the program to continue exactly as it is. Congress will need to act by raising taxes, cutting Social Security benefits or both. We should expect a solution to be hammered out long before 2034. Though either of these options would be hard choices that will no doubt inspire real debate, the risk to millions of Social Security beneficiaries that vote will hopefully get politicians of all persuasions to act in plenty of time to prevent the program from facing a true crisis.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #5: The precise amount of SS benefits

Posted on March 9, 2017 by - Social Security Myths

MYTH: The maximum Social Security benefit in 2017 is $2,687.

There’s a lot of misinformation floating around about the precise amount of Social Security benefits. That’s partly because the amount changes every year, and partly because the amount received differs based on individual work history and the age at which you claim benefits. If you work until reaching your full retirement age and paid a sufficient amount into the program to qualify for the maximum benefit, the current amount of your monthly benefit will be $2,687.

If you delay benefits beyond your retirement age, you will increase your benefit amount by 8% for each year you delay, up to age 70. There are no further increases after reaching age 70 so it doesn’t make sense to delay further. However, there is an annual cost of living increase each year. Since these yearly increases were implemented, they have averaged 2.5%.

Collecting benefits early decreases the amount of your monthly benefit – up to 30%! Not only that, but with a smaller amount in benefits, the annual increases you get will be smaller as well (because they’re a percentage of a smaller number). That’s one good reason to delay benefits at least until your full retirement age if you can. A bigger benefit means a bigger cost of living increase each year, and over time, that can mean a big difference in the amount of money you have to spend each month.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #4: Only Minor Children Get Benefits When You Die.

Posted on March 7, 2017 by - Children's Benefits, Family Benefits, Social Security Myths, Widow Benefits

MYTH: Social Security only helps minor children at your death.

You probably know that Social Security can provide benefits to children, but if you’re like most people, you believe that this can only happen if you die. That’s not the way it works, though.

Social Security was set up in 1935 to protect Americans, including their
children, through a paid insurance program known as FICA. That’s what the FICA taxes that come out of your paycheck each month are paying for. This program provides financial assistance in cases of disability, at retirement and at death.

If a parent – or in some cases, a guardian grandparent – is caring for a minor child or children and is receiving retirement or disability benefits through Social Security, the children may be eligible to also receive benefits. They may qualify for benefits if their parent or guardian dies as well.

In all three situations, the biological, adopted or dependent step-children may be able to receive benefits until they turn 18 – or longer, if they haven’t finished high school. Children with disabilities can continue receiving benefits for even longer.

The amount of benefits a child can receive varies but can be up to 75% the amount the deceased parent would collect from Social Security. A family limit applies when there are multiple children surviving the parent. This “family cap” is usually between 150% and 180% of the parent’s full benefit. No matter how many children are eligible to receive benefits, the total amount cannot exceed the family limit.

In cases where one parent passes away, a non-working parent or one who earns less that $16,920 per year may also receive additional Social Security family benefits until the child reaches age 16. Again, if the child is disabled, these benefits can continue beyond that age for the adult who exercises parental control and responsibility for the disabled child.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #2: You Didn’t Pay In, You Can’t Collect

Posted on February 21, 2017 by - Social Security Myths, Spousal Benefits

social security myth

MYTH: If you are married and were a non-working spouse or did not have enough work credits to qualify on your own, you are not eligible for Social Security.

It seems obvious enough. If you didn’t pay into the system, you can’t collect from it. Fortunately for many homemakers, that’s not how it works in all cases. Social Security has protections in place for spouses that raised children or otherwise didn’t pursue a career while their husbands (or wives) earned the household income.

While both spouses are living, the non-working spouse can collect up to half the amount of the working spouse’s full retirement age benefit. If widowed, the non-working spouse will receive the full Social Security benefit that the deceased spouse was receiving.

If both spouses qualify for benefits based on their individual work histories, the one with the lower benefit will receive additional Social Security income for a total benefit amount equal to one half the amount received by the higher-earning spouse.

To be eligible for Social Security, an individual must have paid into the system for at least 40 quarters, paying Social Security taxes through payroll withholdings or directly to the IRS. That means at least ten years of paid work.

Social Security reviews the last 35 years of work history to determine your benefit amount, and zero income years will take your benefits down. If you own a business and your spouse assists you in running it, make sure to pay for the work – at least $5,200 a year. This will allow your spouse to earn Social Security credits and become fully vested in the system, which means more income in retirement for both of you.

Not associated with or endorsed by the Social Security Administration or any other government agency.

Social Security Myth #1: You Can’t Change Your Mind

Posted on February 14, 2017 by - Social Security Benefits, Social Security Myths, Spousal Benefits, Widow Benefits

social security myths

MYTH: Once you start receiving Social Security income you cannot change your mind.

Many people believe this to be true but the reality is quite different. There is a 12-month window, once you start collecting Social Security benefits, in which you can indeed change your mind.

During this grace period, you can decide to delay benefits in order to increase the amount you will eventually receive each month. You’ll have to pay back the full amount that you received in Social Security income before you can start the clock again, but in most cases it’s worth it.

Almost 50% of Americans choose to start collecting retirement benefits from Social Security at the age of 62. That locks in a permanent reduction of 25-30% over the amount they could receive if they delayed benefits until their full retirement age.

Your full retirement age varies based on the year you were born. Each year you delay benefits past retirement age will yield 8% in annual increases – up to age 70, that is. At 70 everyone has to start collecting benefits, with no increase for continued waiting.

Since the annual Social Security cost of living increase is a percentage of your previous benefit amount, delaying the time you start benefits will mean even more in retirement income once you decide to claim Social Security.

If you thought you needed to take your Social Security benefits early but things change, or you realize that you can afford to wait after all, it’s a good idea to stop the clock, repay what you’ve received and wait until your full retirement age – or age 70, if possible. After all, you’ve paid into Social Security to earn these benefits. You might as well collect as much as possible from the program.

Not associated with or endorsed by the Social Security Administration or any other government agency.