According to the United States Government, over 59 million individuals will receive approximately $863 billion in Social Security benefits this year. With numbers like that, chances are good that you or someone you know may be eligible for benefits soon. This article answers some common questions about Social Security benefits.
What are Social Security benefits?
If you or your employer have paid Medicare and Social Security taxes from your paycheck, you are entitled to several government benefits including 1) retirement, 2) disability, 3) and medicare. After a quick overview of the programs, this post ultimately deals with questions about retirement benefits.
Retirement
Originating in 1935 after the New Deal, the United States Social Security system is a type of insurance program where employees and their employers contribute an amount per paycheck so that they are guaranteed benefits in retirement when they lose their ability to work due to disability, or after the death of a family member. To be considered eligible for retirement benefits, you must pay Social Security taxes for 40 credits of work, which amounts to around 10 years of employment.
Disability
The Social Security Act also created a disability insurance benefits program called SSDI, which is a program for workers who suffer a total disability and can no longer work in their original occupation. You may qualify for SSDI if you have worked for at least two years and paid sufficient Federal Insurance Contributions Act (FICA) taxes. However, you may still be denied these benefits if Social Security Administration determines you are not medically disabled. The Social Security Office denies many first applications, only later to award benefits after appeal, so if you are considering applying for benefits, you may want to contact a local attorney who can assist in the administrative process.
Medicare
Medicare is a federal health insurance program for individuals who are 65 or older and for others with specific qualifying disabilities.
Do I qualify for Social Security retirement benefits?
Depending on your date of birth, the normal age of retirement (a government term related to the age in which benefits can kick in) is 65-67. The government has a calculator here.
You can apply for benefits if you are at least 61 years and 9 months old, or as late as age 70.
How do I apply for Social Security benefits?
You can apply for Social Security benefits either online, or in person at the Social Security office if there is one in your city.
The Social Security Administration recommends starting the application process at least four months in advance of your planned retirement, and you will need information such as your birth certificate, Social Security card, and other government-issued documents. This list published by the Social Security Administration gives the full list of documents that may be needed for your application.
When is the best time to apply?
Every individual's needs are different, but factors that may impact your decision to collect retirement can include your health, your financial needs, your other sources of income, and your plans to work after you start collecting your benefits. This is because the total dollar amount of your benefits will vary based on how old you are when you claim the benefit and whether or not you are still working.
If you are getting a divorce, you should also be thinking about Social Security. If you were married at least 10 years and do not ever re-marry, you may qualify for benefits based on your former spouse's earnings when you both reach age 62. The result is that you could receive the higher of benefits based on your own work history or half of your former spouse's benefit, even if he or she has remarried.
How much Social Security am I entitled to?
As of 2014, the maximum benefit per month for a person who earned the maximum taxable earnings for 35 years or more is $2,663 per month. However, the average monthly retirement benefit is $1,328. Check out these calculators to figure out your expected payment.
What are some common reasons that benefits are denied or delayed?
There are some common sticky issues with Social Security benefits (both retirement and disability benefits):
Incomplete records
Applicants can be denied benefits if they fail to provide the correct information. You can use this chart to learn what information is necessary to avoid hiccups in the process. The Social Security Administration can take as long as four months to process an application, so it is crucial to pay careful attention to detail about what documents are needed to process your application correctly.
You make too much
The amount you receive in retirement and disability can be reduced dramatically if your earned income is above a certain amount. However, if you collect Social Security when you reach full retirement age (65 or 67 depending on your birth year), there is no earnings level that will reduce your benefits. But, if you take your benefits before you reach full retirement age then $1 of benefits will be withheld for every $2 made over $15,720.
What should I do if my application is denied?
The Social Security Administration has a publication on how to appeal if you are not happy about the benefits that you receive.
If you still have questions after reading this article and want to learn more, you should consider contacting an attorney skilled in Social Security benefits law to learn more about your options.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
