Welcome To Our Social Security Video Guide:

“The 8 Most Frequently Asked Questions About Social Security”

After a combined 20 years of analyzing hundreds of social security situations, we’ve narrowed down 8 of the most frequently asked questions by our clients.

Below you will find videos that address each question with an in-depth explanation from one of our experienced advisors. If you find that your question(s) are left unanswered after reviewing the page, we’d be happy to help!

Simply provide us with your name, email, and brief message about your situation, and we will respond in 24 hours or less.

 

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how will my social security benefit be calculated?

First, in order to qualify for Social Security (SS), you must accumulate 40 credits.  You can earn up to 4 credits per year, and 1 credit equals $1000 in earnings.  So, you need to earn at least $4000 for 10 years just to QUALIFY for SS.  This does not mean that you can CLAIM at this point, this simply means you QUALIFY when the time comes, which we will discuss later. SS also averages your top 35 years of income, along with your age when you claim, into a formula to determine how much you will receive.  If you worked more than 35 years, your top 35 years of income will be put into this calculation.  If you worked for LESS than 35 years, SS will fill 0’s until they get to 35 years of income.  So, if you only have 30 years of earnings, SS will add 5 years of 0’s to your average.  Long story short, it benefits you to work at least 35 years for a higher SS amount in retirement. Lastly, SS only taxes your income up to the first $132,900 for 2019.  So, according to SS, it does not matter if you make more than this amount, as that is the cap that they will use for your SS calculation. Your SS can also go up based on Cost of Living Adjustment (COLA).  In 2019, everyone who is receiving SS received a 2.8% raise.

If you have questions about your estimated SS benefit, contact us today and we will be glad to help! 

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at what age should I start collecting my social security benefits?

There is no blanket answer to this question because everyone’s situation is different. There are many factors that you must weigh before making one of the biggest decisions of your retirement. Some of those factors include but are not limited to; do you come from a family that has lived long healthy lives, have you lived a healthy lifestyle (eat healthy, exercise, go to the doctor), what is your plan for health insurance, could you use other assets to help maximize your benefit, should you consider delaying to make sure a survivor receives the maximum amount if you were to pass. Because there as so many factors that need to be considered, along with this being one of the biggest decisions you will make in retirement, we highly recommend understanding all of your options before making this decision. Here at Perspective Wealth Planning we make this process simple with our social security analysis report. This report lays out all of your options in an easy to understand document, and you will have the benefit of talking with a financial professional about your report in-case you have any questions.

Best of all there is no cost for us to send you an individualized social security analysis! Click here to contact us and get started today!

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What is the difference between collecting benefits early, at FRA, or delaying?

Your SS benefit is tied to your Full Retirement Age (FRA), and that depends on your date of birth. See the chart below for FRA based on birth date.

Social Security Full Retirement Age Chart.png

One caveat to FRA is that if you were born on January 1st of any year, your FRA would be based on the PREVIOUS December. So, if you were born on January 1st, 1959, your FRA would be based off of December, 1958.  So, let’s talk about the different times you can collect.  At your FRA, you can receive 100% of your calculated SS benefit.  If you claim your SS EARLIER than FRA, you will receive a reduced benefit.  To keep things simple, we are going to use an age 67 FRA in the following example.  If you claimed your SS benefit at 62, you would have approximately a 30% reduction in your benefit from what it would be at your FRA.  At age 65, this reduction would be approximately 13.3%.  The closer you get to your FRA, the less the reduction.  It is also important to note, if you claim your SS benefit EARLIER than your FRA, that benefit will never go up (except for COLA).  You will receive this same benefit for life.  Now, what if you DELAY taking your SS benefit until AFTER your FRA.  Again, based on FRA of 67, you could receive an increase of approximately 8% PER YEAR, until you reach age 70.  After age 70, there is no more increase in benefit, so there is no reason to wait until after age 70 to claim your SS benefit. 

If you have questions on when is the right time for YOU to claim your SS benefit, click here to contact us and we would be glad to help! 

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can i collect my social security benefit while working?

The short answer to this question is yes, you can work and collect SS. But there are a few important things you need to consider.  Assuming FRA of 67, you can claim any time after you turn 62, and if you work then your SS may be docked from the time you claim until your FRA.  This may sound confusing, so I will show you an example.  For 2019, you can earn UP TO $17,640 prior to your FRA and have NO penalty from SS.  But what if you make over that amount and have not reached FRA yet?  If you earn over $17,640 and are between 62 and your FRA, SS will dock you $1 for every $2 you earn.  Example, if you make $21,640 and claimed your SS benefit before your FRA, you will be docked $2000 from your yearly SS benefit.  Now, the YEAR you reach your FRA, that changes to $1 docked for every $3 of earnings based off of a DIFFERENT income limit.  The income limits can change each year, but for 2019 it is $46,920 for the year you reach FRA.  Example, if you made $3000 above this limit of $46,920, SS would dock your benefit by $1000 for that year. It is important to note that this only comes into play UP UNTIL the month you reach FRA. Once you reach FRA, you can earn as much as you want and there are no penalties.  So, if you made $100,000 in earnings the year after your FRA, you will not be docked anything from your SS benefit.  One advantage here is that if you get docked due to your earnings prior to FRA, that amount that you were docked will be ADDED back into your SS checks once you reach FRA.  This gets more complicated if you retire and claim your SS benefit mid-year OR if you are self-employed. 

These are things that we can discuss in more detail with you, as all of these situations are different! Click here to contact us to go over your specific situation.

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is a stay-at-home spouse eligible to receive a social security benefit?

The answer here is YES.  A stay-at-home spouse, or a spouse that has less than the 40 qualifying credits, can get a SS benefit based off of the working spouses earnings record.  This stay-at-home spouse must be at least 62 to claim the spousal benefit.  The benefit amount can be up to 50% of the working spouse’s SS benefit.  So, if Mrs. Smith is receiving $2000/month in SS benefits and Mr. Smith has always stayed at home to care for the children, Mr. Smith can receive UP TO $1000/month in SS benefits, based on a few different factors.  If the stay-at-home spouse still qualifies for a SS benefit, but their amount is less than half of the working spouses, then the stay-at-home spouse will receive THEIR OWN benefit first, and also receive a secondary benefit that will make up the difference to equal half of the working spouses.  Example, if Mrs. Smith has a benefit of $300/month and Mr. Smith has a benefit of $2000/month, Mrs. Smith is still entitled to $1000/month in total SS benefit.  She will first receive her $300/month, but she will also receive another $700/month in spousal benefits.  

If you still have questions regarding this top, we’d be happy to answer them free of charge. click here to contact us

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what will happen to my social security if i get a divorce?

As long as you were married to your ex-spouse for 10 or more years, you can potentially collect a SS benefit based off of their work history. You also must not currently be married to someone else. You must be at least 62, and the same benefit reductions are in place here as if you were still married to your ex-spouse. Your ex-spouse has to also be eligible for benefits, although they do not need to be using them!  If your ex-spouse is not using their benefit yet, then you need to be divorced for at least 2 years before you can claim a benefit off of their work history. If you have been married and divorced twice, you can choose to claim off of either ex-spouses work history, as long as each marriage lasted 10 or more years. You can still receive a SS benefit from an ex-spouse even if they have a current spouse that is also receiving a spousal benefit!

If you still have questions regarding this top, we’d be happy to answer them free of charge. click here to contact us

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what will happen to my social security benefit if my spouse passes away?

There are 2 answers to this question.  First, if you and/or your spouse are ALREADY receiving your SS benefit, a few things can happen.  The surviving spouse would take over the higher of the 2 SS benefits, but would lose the lower one.  Example, if Mr. Smith passes away and has a $2000/month SS benefit and Mrs. Smith is the surviving spouse and has a $1200/month SS benefit, Mrs. Smith would take over Mr. Smith’s $2000/month benefit, but she would lose her $1200/month benefit.  What happens if your spouse passes away and you are UNDER your FRA?  You can actually start collecting based off of your deceased spouses FRA SS amount as early as age 60.  This is 2 years earlier than you could be able to claim your own early benefit.  Now, there are a few stipulations to this.  First, if you remarry before age 60, you CANNOT receive your deceased spouses benefit UNLESS that marriage ended through death, divorce, or annulment.  Second, if you remarry after age 60, you can continue to receive your deceased spouses benefit.  With both of these examples, you CANNOT claim benefits from your deceased spouse AND new spouse, you would receive the higher of the 2.  Lastly, if you are caring for a deceased spouse’s child(ren)- whether they are biologically yours or not- you can receive SS benefits UNTIL they reach age 16.  At age 16, that SS benefit will terminate. 

If you still have questions regarding this top, we’d be happy to answer them free of charge. click here to contact us

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if i pass away will my children receive my social security benefit?

Your children will not receive your direct SS benefit if you pass away.  They will receive THEIR OWN benefit, depending on their age and a few stipulations.  If your children are UNDER the age of 18, they will receive a SS benefit if you were to pass away.  In most cases, these benefits terminate when the child turns 18. This is not a benefit for the caregiver, this is a direct benefit for the child. One of the exceptions to this rule, if your child is under the age of 19 but still in high school (up to 12th grade). The SS benefit will continue until your child graduates, or two months after his/her 19th birthday, whichever comes first.  Also, if your child has a disability that was diagnosed PRIOR to age 22, they can also continue to receive this SS benefit after the age of 18.  For more information on this topic, please reach out to us and we would be glad to explain this subject to you in more detail.  The last, and most complicated topic in this section, is in regards to a grandchild receiving benefits from their grandparent, if that grandparent is the grandchild’s legal guardian.  There are a few stipulations to this. First being that the grandparent(s) must have already claimed their SS benefit.  Second, the grandchild MUST be a dependent of the grandparents.  Third, both parents must be either deceased or disabled, or the grandparent must be the legally adoptive parent of the grandchild.  If these 3 conditions are met, then a grandchild can potentially receive benefits based on the grandparent’s SS earnings history. 

This is a complex topic, so please feel free to click here and contact us with more questions.

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