What You Should Know About Social Security Retirement

Social Security benefits can help you to retire in comfort and with financial peace of mind.

 

Social Security benefits replace a portion of your income prior to retirement, based on your lifetime earnings at the age of your retirement. The more you earn before you retire, whether from a higher rate of pay, working more hours or multiple jobs or simply waiting until a later age to retire, the greater your Social Security retirement benefits will be.

Note, your children and spouse may be able to receive Social Security retirement benefits on your record before or after your death, in certain circumstances. Knowing what documents all of you need in advance of applying for Social Security benefits will help you to have a smoother and more successful experience. Keep in mind, some people’s Social Security benefits are taxable. Make sure you know whether you need to pay income tax on your Social Security benefits.

Age is a Factor

The age at which you choose to retire is a factor in how much Social Security benefits you will receive. That is not the only way, however, your age is a factor in your Social Security retirement. Certain regulations governing Social Security eligibility and earnings impose varying qualifications for people of different ages. For example, the following shows the full retirement age at which you will receive full Social Security retirement benefits based on when you were born:

  • 1960 and later – 67 years of age.
  • 1959 – 66 and 10 months of age.
  • 1958 – 66 and eight months of age.
  • 1957 – 66 and six months of age.
  • 1956 – 66 and four months of age.
  • 1955 – 66 and two months of age.
  • 1943 – 1954 – 66 years of age.

Beyond that, certain new laws governing Social Security implemented over the years created new age distinctions by default. Workers who retire before the law goes into effect are beholden to the relevant laws preceding it and workers retiring after the law goes into effect are beholden to that new law. For example, to qualify for benefits, you must have worked 10 years or 40 quarters, as long as you were born in 1929 or later.

How to Apply for Benefits

Once you know the age at which you intend to retire, plan on starting the application process for Social Security retirement benefits around four months prior to the date at which you will need them to start. You can apply for Social Security online or by calling a toll-free telephone number. Alternatively, you can also make an appointment to meet with a Social Security official in an office and get help submitting your application in person. The following are among the documents you will need on hand in order to complete your Social Security application successfully:

  • Birth certificate
  • Social Security number
  • W-2 forms for the past year, or self-employment tax return for that period
  • Military discharge papers, if applicable
  • Social Security numbers and births certificate of your spouse and children, if they will be applying for benefits on your record
  • Proof of citizenship or status of lawful alien
  • Financial institution’s name, routing number and your account number where your benefits can be deposited directly. Alternatively, you could request your benefits be received on a prepaid debit card.

Only original documents will be accepted by the SSA. If you submit copies of any required documents, they must first be certified by the respective office issuing each document. Original documents can be returned. Rejections of an application for Social Security benefits can be appealed.

Social Security Benefits for Spouses and Family Members

Your spouse, including your widow or widower after your death, and certain other family members may be able to receive Social Security benefits from your account. Your widower or widow can receive Social Security benefits from your work at 60 years of age or, if disabled, 50 years of age. He or she can opt to receive a reduced benefit on your Social Security record until reaching retirement age him or herself, at which point he or she can switch to receiving full benefits on his or her own record. If your widow or widower has not earned enough work credits to qualify for Social Security retirement benefits upon reaching retirement age, he or she may be able to continue receiving some amount of benefits on your record until those benefits runs out. Your spouse can receive up to half of your full Social Security retirement benefit amount if he or she has never worked or has low lifetime earnings. If you qualify for Social Security benefits for both yourself and your spouse while you are still alive, the SSA will pay your benefits to you first before paying benefits to your spouse on your record.

 

Other family members who may be entitled to receive Social Security retirement benefits on your record include:

  • Children 18 years of age and younger (or 19 years of age if enrolled full time in high school).
  • Children of any age, if disabled.
  • Past spouses 62 years of age and older.

Your children must be unmarried and your dependents must qualify for benefits on your record. If you have multiple children, your full benefit will be divided up amongst them up to a limit of 150 to 180 percent in total. If your spouse or children are due still greater benefits than the percentage of your own benefits, the extra amount will be deducted from the total benefits available to them on their own Social Security record. A former spouse is entitled to Social Security benefits on your record if you were married for a minimum of 10 years before you divorced. Moreover, even if you are still working, your divorced spouse can still collect benefits on your record as long as you were divorced for a least two years and you are both 62 years of age or older. Benefits that past spouses receive on your record do not impact how much in benefits you and your current spouse are entitled to receive.

Tax Implications

Approximately 40 percent of those who receive Social Security retirement benefits are required to pay incomes taxes on those benefits. There are a variety of circumstances in which this may be the case for you. To find out if you will need to pay income taxes on your Social Security benefits once you start receiving them, speak with a tax professional.

 

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