How do you qualify for Social Security?

To qualify for Social Security benefits you’ll need to earn credits by working and paying Social Security taxes.

The 40 credits needed to qualify for benefits is equal to about 10 years of full-time work. This credit requirement may be different if you’re disabled, or your spouse is deceased.

Where does the money for Social Security come from?

During your working years, a portion of your income was taxed for your Social Security benefits.

In 2019, you and your employer would each pay 6.2 percent of your wages up to the annual maximum of $132,900 that you earn for Social Security taxes. Any additional income you earn over $132,900 is not subject to Social Security taxes.

If you’re self-employed, you’ll need to pay all of the 12.4 percent Social Security tax.

How do I claim Social Security benefits?

Apply for Social Security online here, or call 1-800-772-1213. You can find your local Social Security office here.

Note that in most cases you must be at least 61 years and 9 months old to apply. You’ll need some information handy, including your and your spouse’s Social Security number, your bank account and routing numbers, and your employer’s information. Check out a full list of what you may need here.

Those applying for survivors benefits cannot apply online. Call 1-800-772-1213 for an appointment.

How are Social Security benefits calculated?

AIME: Income for each year you worked is adjusted for inflation. The top 35 inflation-adjusted years are then used to calculate your avg. indexed monthly earnings.

PIA: Your AIME is then applied to the Social Security bend point formula to find your primary insurance amount.

COLA: Your PIA is adjusted to account for cost of living adjustments based on the year you claim benefits.

Claiming Age: If you claim your benefits before your exact retirement age, your benefits will be reduced. If you claim after, your benefits will be increased. These max out at age 70.

When should I enroll in Social Security?

Deciding when to claim social security is a challenge for most people. While you can collect Social Security as early as age 62, your benefits will be reduced by up to 30 percent. If you wait until age 70 to begin collecting, your benefit will be a higher amount for the rest of your life. There’s no extra benefit for waiting past age 70 to claim.

Some people can’t afford to delay when Social Security is their main source of income. Before you become eligible for benefits, contact your local Social Security office to discuss your individual situation and help figure out what’s best for you.

What is the maximum benefit someone can earn on Social Security?

The maximum benefit you can receive from Social Security depends on when you retire, and can change each year due to inflation or cost of living adjustments.

In 2019, if you retired at your full retirement age, your maximum benefit would be $2,861 per month. If you begin collecting at age 62, that maximum would be reduced to $2,209. If you start collecting at age 70 in 2019, your maximum would be $3,770.

Are my Social Security benefits taxable?

It’s unlikely you’ll have to pay federal income taxes on your Social Security benefits if that is your only source of income. However, if you have additional sources of income you may be required to pay taxes on your Social Security benefits.

The IRS uses your “combined income” to determine whether your Social Security benefits will be taxed. The IRS calculates combined income as your adjusted gross income plus nontaxable interest (such as from municipal bonds), plus half of your Social Security benefits.

That means, if you file your taxes:

-As an individual, and your combined income is between $25,000 and $34,000, you may pay taxes on up to 50 percent of your Social Security benefits. If it’s more than $34,000, you may need to pay taxes on up to 85 percent of benefits.

-As a joint return, and you and your spouse’s combined income is between $32,000 and $44,000, you may be taxed on 50 percent of your Social Security benefits. If it’s more than $44,000, the 85 percent limit applies.

Your Social Security Benefit Statement form, which you can receive in the mail or view online, will help you determine whether your benefits are taxable.

There are 13 states that also tax Social Security benefits, with different rules for when those taxes kick in. The 13 states are:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • Rhode Island
  • North Dakota
  • Vermont
  • Utah
  • West Virginia

Can my family collect my Social Security benefits if I die?

Although Social Security payments end once someone dies, eligible spouses or children may be entitled to benefits.

Surviving spouses can receive full survivors benefits once they reach their own full retirement age, or reduced benefits as early as age 60. If the surviving spouse is disabled, he or she is eligible for survivors benefits at age 50 if the disability began before or within seven years of the spouse’s death. Those who have a child in their care (who is under age 16 or disabled) may receive benefits at any age.

The deceased spouse must have worked long enough under Social Security for the survivor to receive benefits.

Surviving children (including, in some cases, adopted or stepchildren and dependent grandchildren), can receive benefits if:

-They’re unmarried,

-Under age 18, or 18-19 and a full-time student (though they cannot be in a grade higher than 12),

-Or, 18 or older and with a disability that began before age 22.

Children can receive up to 75 percent of a deceased parent’s Social Security benefit amount.

Social Security limits the amount that one family can receive. The family maximum payment ranges from 150 to 180 percent of the parent’s full benefit amount.

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