Social Security is the primary source of retirement income for millions of Americans over the age of 65. Based on contributions made over your years of employment, the amount of your monthly benefit is calculated based on how much you earned during your employment years, when you were born and when you start taking benefits.
Here are 10 things you need to know about Social Security:
Benefits Calculation — Social Security adjusts your actual earnings to account for changes in average wages since the year the earnings were received, and then calculates your average indexed monthly earnings during the 35 years when you earned the most.
Income Tax – While Florida does not tax Social Security benefits, you will have to pay federal taxes on a portion of your benefits if your income as an individual is above $25,000 or $32,000 for a married couple filing jointly.
Maximizing Benefits – The longer you can wait to file for Social Security, the bigger your monthly check will be. While you can start claiming at age 62, you can boost your benefits by waiting until your full retirement age or longer.
Wait Gain – If you wait as long as possible to claim your benefits, your monthly check could increase by 8 percent each year after your full retirement age, plus two-thirds of one percent more for each month you put off making a claim.
Max Payout – For 2016, the maximum monthly payout available is $2,639 at full retirement age. To attain the maximum amount, a worker needs to earn the maximum taxable amount each year after the age of 21.
Social Security and Unemployment Benefits – Your Social Security benefits are not affected by payment to you of unemployment insurance benefits; however, your unemployment benefit may be affected by receiving Social Security benefits or other retirement income.
Living Overseas – As long as you are a U.S. citizen, you can move overseas and will continue to receive your Social Security benefits.
Military Service Credit – Social Security recognizes earnings for active duty military service or training, and in some cases, special earnings can be credited to your military pay rate for Social Security purposes.
Spousal Options – Spouses may receive benefits of up to 50 percent of the highest wage earner’s monthly benefit if that amount is higher than what they might receive based on their own work record. In addition, spouses who both worked and who have reached full retirement age can claim twice – first by signing up for a spousal payment, and then claiming on their own record.
What The Numbers Mean – The first three digits of your Social Security number refer to a geographical region, going from east (lowest numbers) to west (highest numbers). The middle two numbers are called group numbers, and are issued in nonconsecutive order from 01 to 99. The last four digits are issued in sequential order.
The Estate, Trust & Elder Law Firm, P.L., provides attorney services ranging from estate planning for young families to advanced and crisis long-term care for seniors. Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.
