We get a lot of questions about Social Security benefits because they can be complicated. Here’s some information that could help you.
Please note: Make sure you fully understand all aspects of the most up-to-date Social Security benefits guidelines before making decisions about your personal situation.
35 years are used to calculate your benefits: Most people know the amount of money you'll receive each month depends on when you begin claiming your benefits. If you claim before your full retirement age, you'll receive less each month. If you wait until 70, you'll receive the largest monthly payment possible. But many recipients don't understand the math behind their benefits. Your monthly benefit is determined by a 35-year average of your covered wages, with each year's wages adjusted according to inflation. If you worked more than 35 years, the Social Security Administration will use your 35 highest-earning years to calculate your monthly benefits.
If you keep working you can still get benefits: There’s a common misconception that you can’t work and get Social Security benefits at the same time. If you are collecting benefits while under your full retirement age and still working, the government will withhold $1 in benefits for every $2 you earn past a certain yearly limit. If you begin collecting your benefits at full retirement age and continue to work, the government will withhold $1 of benefits for every $3 you earn past a higher threshold amount. If you want to keep working in retirement, you can. Your Social Security benefits are not being taken way. Those benefits are just being deferred.
Benefits decisions affect your spouse if you die: Benefits for a surviving spouse can be confusing. The surviving spouse always has a choice to receive either their own monthly benefits or the full amount of their departed spouse's, whichever is higher. The surviving spouse will receive the highest amount of money if the highest-earner in the marriage waits as long as possible to claim benefits. To be sure the surviving spouse receives the maximum amount of benefits each month, the spouse earning the most money should delay claiming benefits until reaching the age of 70.
Social Security won’t go bankrupt: If Congress does nothing to overhaul Social Security buy 2033, the Social Security Administration will only be able to pay out 75 percent of the payments that recipients are scheduled to receive. This means that even in a worst-case scenario, the recipients will still receive 75 percent of their benefits each month. Due to the possible negative implications on future Congressional elections – it’s likely that they will do something before 2033 to make sure Social Security payments are funded.
Marriages less than 10 years can decrease benefits: If you've already been married eight or nine years, it could make financial sense to wait until 10 years to end your marriage. If you've been married at least 10 years, you can claim either your benefits or an amount equal to half of what your former spouse earned, whichever is higher. Divorcing before your 10th anniversary will cancel your Social Security divorced spouse benefit, meaning that you will not be able to collect half of your ex-spouse's benefit. If your marriage lasted 10 years or more, you will be able to collect as soon as you turn age 62, as long as your spouse is collecting benefits, and you have not remarried.
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SOURCES: FMG Suite, MotleyFool, ssa.gov
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