Posts Tagged ‘Normal Retirement Age’
When to Take Social Security
Shelby Smith asked:
One of the most important retirement decisions facing most Americans is: WHEN TO START SOCIAL SECURITY BENEFITS. Conventional wisdom has always been “take it as early as possible — age 62″. Why? Several reasons are given: (a) it might not be there if you wait; (b) you can take the benefits and invest them and have more money later; (c) I might die early and never get a dime.
About three-fourths of Americans have heeded this advice and for most it was, or will prove to be, a big mistake. Why? There are several reasons: spousal benefits, higher benefits for delaying, penalties for starting early, penalties if you work while drawing benefits and are less than normal retirement age, and Social Security benefits get favorable income tax treatment.
Spousal benefits: If you qualify for Social Security benefits they will last the rest of your life — what’s more, if you’re married and your spouse is entitled to a lower amount, she/he will “step up” to the higher amount at your death. The spousal benefits say a spouse gets at least 50% (even if they paid zero into their Social Security account) of what the other spouse qualifies for AND the larger amount when the first spouse passes on. So by delaying your benefits your surviving spouse could get a bigger Social Security check every month for the rest of her/his life. Since “break-even” is about age 80 and joint life expectancy is closer to 90 for a married couple age 62, the odds of getting more are overwhelming. In fact, if Las Vegas gave the same odds you’d be booking reservations today.
For every year you delay taking Social Security benefits beyond age 62, your benefits grow between 7.5% and 8.0% annually PLUS a cost of living adjustment (COLA) based on inflation. In the past 30 years inflation has averaged over 3% annually…so your Social Security benefits will grow by over 10% a year. Where else can you get an investment backed by the U.S. Government and pay you over 10% annually? Stop looking, they don’t exist unless you want to take loads of risks. So if you are healthy, married and can afford to wait, postponing Social Security until age 70 will pay great dividends. Social Security will be there because with 50 million current getting benefits and another 76 million (the boomers) coming of age, politicians who vote to do away with Social Security will be unemployed.
If you start benefits at age 62 (the earliest time possible) you get about 25% less than if you wait until your normal retirement age (age 66 for most 62-year olds). This 25% less is for the rest of your life AND COLA is applied to a lower amount to compound the injury. Again, postponing make a great deal of sense.
If you start Social Security before normal retirement age and continue to work, your benefits will be reduced $1 for every $2 you make over about $13,000 annually. Yes, you’ll get this back later but when you consider taxes and the time value of money you’ll be worse off.
The big reason to delay is because Social Security benefits are taxed differently than other income: it is never 100% taxed and it is easy to manage the taxes on your Social Security benefits. PLUS, if taxes rise you’ll want to have as much of your retirement money in tax advantaged places (like larger SS benefits) as possible. Which way to you think income taxes are headed? Let’s see: record federal deficits, fighting terrorism, rebuilding our highways, bridges & infrastructures, an aging population, cleaning up the environment, etc. which must be financed by the federal government with income taxes. No doubt in my mind…how about you?
If you’d like to make sure you get Social Security right — and also take your qualified money (IRA, 401(k), 403(b), TSP, etc.) at the right time and use your other savings & investments wisely, I invite you to read my Guide to Social Security…and a Better Retirement by going to http://www.theretirementpros.com/eReport_Social_Security.php
You’ll have one chance to get Social Security right, so get all the info you can to make a good decision — most Americans haven’t and they’ll pay a lot more in taxes on their retirement money. Less money in retirement means less of a retirement. For more info on Retirement Planning, go to the Retirement Pros website at http://www.theretirementpros.com/
Dustin
One of the most important retirement decisions facing most Americans is: WHEN TO START SOCIAL SECURITY BENEFITS. Conventional wisdom has always been “take it as early as possible — age 62″. Why? Several reasons are given: (a) it might not be there if you wait; (b) you can take the benefits and invest them and have more money later; (c) I might die early and never get a dime.
About three-fourths of Americans have heeded this advice and for most it was, or will prove to be, a big mistake. Why? There are several reasons: spousal benefits, higher benefits for delaying, penalties for starting early, penalties if you work while drawing benefits and are less than normal retirement age, and Social Security benefits get favorable income tax treatment.
Spousal benefits: If you qualify for Social Security benefits they will last the rest of your life — what’s more, if you’re married and your spouse is entitled to a lower amount, she/he will “step up” to the higher amount at your death. The spousal benefits say a spouse gets at least 50% (even if they paid zero into their Social Security account) of what the other spouse qualifies for AND the larger amount when the first spouse passes on. So by delaying your benefits your surviving spouse could get a bigger Social Security check every month for the rest of her/his life. Since “break-even” is about age 80 and joint life expectancy is closer to 90 for a married couple age 62, the odds of getting more are overwhelming. In fact, if Las Vegas gave the same odds you’d be booking reservations today.
For every year you delay taking Social Security benefits beyond age 62, your benefits grow between 7.5% and 8.0% annually PLUS a cost of living adjustment (COLA) based on inflation. In the past 30 years inflation has averaged over 3% annually…so your Social Security benefits will grow by over 10% a year. Where else can you get an investment backed by the U.S. Government and pay you over 10% annually? Stop looking, they don’t exist unless you want to take loads of risks. So if you are healthy, married and can afford to wait, postponing Social Security until age 70 will pay great dividends. Social Security will be there because with 50 million current getting benefits and another 76 million (the boomers) coming of age, politicians who vote to do away with Social Security will be unemployed.
If you start benefits at age 62 (the earliest time possible) you get about 25% less than if you wait until your normal retirement age (age 66 for most 62-year olds). This 25% less is for the rest of your life AND COLA is applied to a lower amount to compound the injury. Again, postponing make a great deal of sense.
If you start Social Security before normal retirement age and continue to work, your benefits will be reduced $1 for every $2 you make over about $13,000 annually. Yes, you’ll get this back later but when you consider taxes and the time value of money you’ll be worse off.
The big reason to delay is because Social Security benefits are taxed differently than other income: it is never 100% taxed and it is easy to manage the taxes on your Social Security benefits. PLUS, if taxes rise you’ll want to have as much of your retirement money in tax advantaged places (like larger SS benefits) as possible. Which way to you think income taxes are headed? Let’s see: record federal deficits, fighting terrorism, rebuilding our highways, bridges & infrastructures, an aging population, cleaning up the environment, etc. which must be financed by the federal government with income taxes. No doubt in my mind…how about you?
If you’d like to make sure you get Social Security right — and also take your qualified money (IRA, 401(k), 403(b), TSP, etc.) at the right time and use your other savings & investments wisely, I invite you to read my Guide to Social Security…and a Better Retirement by going to http://www.theretirementpros.com/eReport_Social_Security.php
You’ll have one chance to get Social Security right, so get all the info you can to make a good decision — most Americans haven’t and they’ll pay a lot more in taxes on their retirement money. Less money in retirement means less of a retirement. For more info on Retirement Planning, go to the Retirement Pros website at http://www.theretirementpros.com/
Dustin
Understanding the Basics of Social Security Spouse Benefits
Melvin Magadia asked:
Disability can bring a lot of hassle and inconvenience to you and your loved one as well. You could lose your income or worse result to your death. The good news is you can be qualified to avail of disability benefits under the law of your state.
If you are a spouse of a disabled employee who has their paid social security taxes, you are eligible to avail of social security spouse benefits. Here we will look at the basic principle of how spouses can available of disability benefits.
Determining your social security benefits can be easy. In fact, you do not even have to go out of your house. If you have a personal computer, all you need to do is log on to the Internet and check out what the search engines have for you. There are trusted websites that focus on social security disability. You can also check out the official website of the Social Security Administration (SSA).
Current, divorced, or former spouses are entitled to receive benefits if the marriage lasts for a minimum of ten years. However, although the law allows workers to avail of benefits for up to five spouses, each marriage should have followed proper divorce.
Since age 70 is the latest age for retiring and because pre-teen marriage is not recognized in any state, the number of successive benefits will not be more than five in a ten-year period. The non-working spouse may be eligible to receive benefits only upon application of the disabled worker.
The earliest age that the spouse can avail of benefits is at 60 years old. The beneficiary will receive full benefits since they retired at the start of the normal retirement age. However, if the spouse decides to avail of the benefits before the retirement age, it will be subjected to actuarial reduction.
If you are a handicapped widow or widower, the minimum age requirement in order to avail of social security spouse benefits is 50 years old. Under the law, you are qualified to receive disability benefits, if you become handicapped immediately after the demise of your spouse at age 50.
When availing of spousal benefits, your application can be facilitated if you have the following documents:
• Death certificate
• Your SS number as well as the dead worker’s number
• Birth certificate
• In the case of a widow or widower, marriage certificate
• Divorce papers, if applicable
• SS number of dependent
• Your dead spouse’s W-2 form, or federal self-employment tax return, for the current year
• Depository bank and account numbers
If these documents are not available, the Social Security Administration can obtain them for you.
Understanding these provisions can be too much for you. By hiring a competent social security disability lawyer, things will not be as complicated as they are before you hired an attorney. They can make things more convenient and hassle-free. Just make sure that you are comfortable with the lawyer otherwise, everything will just be waste of time and money.
When hiring these lawyers, you do not have to worry about attorney’s fees. Most of them charge a contingency fee. This means that they will not collect anything from you until the issue has been resolved and compensation has been determined.
Our Los Angeles attorneys are experts in handling Social Security spouse benefits claims. For your inquiries and free case evaluation, please do visit our website.
Theodore
Disability can bring a lot of hassle and inconvenience to you and your loved one as well. You could lose your income or worse result to your death. The good news is you can be qualified to avail of disability benefits under the law of your state.
If you are a spouse of a disabled employee who has their paid social security taxes, you are eligible to avail of social security spouse benefits. Here we will look at the basic principle of how spouses can available of disability benefits.
Determining your social security benefits can be easy. In fact, you do not even have to go out of your house. If you have a personal computer, all you need to do is log on to the Internet and check out what the search engines have for you. There are trusted websites that focus on social security disability. You can also check out the official website of the Social Security Administration (SSA).
Current, divorced, or former spouses are entitled to receive benefits if the marriage lasts for a minimum of ten years. However, although the law allows workers to avail of benefits for up to five spouses, each marriage should have followed proper divorce.
Since age 70 is the latest age for retiring and because pre-teen marriage is not recognized in any state, the number of successive benefits will not be more than five in a ten-year period. The non-working spouse may be eligible to receive benefits only upon application of the disabled worker.
The earliest age that the spouse can avail of benefits is at 60 years old. The beneficiary will receive full benefits since they retired at the start of the normal retirement age. However, if the spouse decides to avail of the benefits before the retirement age, it will be subjected to actuarial reduction.
If you are a handicapped widow or widower, the minimum age requirement in order to avail of social security spouse benefits is 50 years old. Under the law, you are qualified to receive disability benefits, if you become handicapped immediately after the demise of your spouse at age 50.
When availing of spousal benefits, your application can be facilitated if you have the following documents:
• Death certificate
• Your SS number as well as the dead worker’s number
• Birth certificate
• In the case of a widow or widower, marriage certificate
• Divorce papers, if applicable
• SS number of dependent
• Your dead spouse’s W-2 form, or federal self-employment tax return, for the current year
• Depository bank and account numbers
If these documents are not available, the Social Security Administration can obtain them for you.
Understanding these provisions can be too much for you. By hiring a competent social security disability lawyer, things will not be as complicated as they are before you hired an attorney. They can make things more convenient and hassle-free. Just make sure that you are comfortable with the lawyer otherwise, everything will just be waste of time and money.
When hiring these lawyers, you do not have to worry about attorney’s fees. Most of them charge a contingency fee. This means that they will not collect anything from you until the issue has been resolved and compensation has been determined.
Our Los Angeles attorneys are experts in handling Social Security spouse benefits claims. For your inquiries and free case evaluation, please do visit our website.
Theodore
