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Posts Tagged ‘Pia’

We continue our discussion of social security issues that may affect your retirement decisions. Part of this discussion can be found in an earlier article.

Spousal benefits are calculated with little or no earnings history by the spouse becasue of marriage to a wage earner who has earned social security credits. The spousal benefit is equal to half the workign spouse’s PIA. As an example, ifthe working spouse benefi is $2,230 per month the spouse benefit would be half that, or $1,115. If the spouse has worked and is entitled to ther own benefit, social security will compare the two amounts and pay the higher benefit. The spouse can apply at age 62 as along as the husband is eligible for benefits even if he has not applied.

Divorce does not preclude receiving social security benefits if the following facts are available. Did the previous marriage last at least 10 years and is the non-woking spouse still single? Marrying again would change your ability to receive benefits unless you are at least age 60. If you and your spouse have been divorced for at least two years, he does not need to apply for his benefits in order for you to receive yours. He does to be eligible for benefits and be at least 62, though. All you need to do is present proof that you were married to him and give enough identifying information that the social security can look up his records.

If your spouse dies, you can apply for survivor benefits as early as age 60. The survivor benefits equals 100% of your spouse’s benefits and is subject to reduction if you apply before you turn 66. If your spouse dies when receiving social security, you can switch over to your survivor benefit if it is higher. There are some further limitations if this situation occurs so now is the time to plan for this potential shortfall of monthly income. Life insurance benefits are normally used to make up this shortfall since you are now eligible for only one social security monthly payment versus two previously when your spouse was alive.

If you are working and receiving social security without being at least age 65 some of your benefits may be withheld. The max you can earn before benefits are withheld is $14,160 per year or $1,180 per month. For every $2 you earn over the earning limit, $1 in benefits will be withheld. A long term planning issue relates to a reduction in your benefits after you reach full retirement age. You will end up with a lower benefit than if you had waited until full retirement age to apply.

After you reach your full retirement age (65,66,67), you can earn any amount from working and no benefits will be withheld. The earnings test amount increases as you near your 66th birthday. It’s $37,680 per year now but this amount will change every year due to inflation so don’t memorize the amount. Any earnings made prior to applications for benefits does not count toward the earning test. This earnings test applies to spousal and survivor benefits as well as earned benefits.

Pension income from former mployer does not affect social security benefits. Other retirement income, such as 401K or IRA distributions also do not affect social security benefits.

Benefit reductions occur becasue of several bills passed by Congress. If you worked in a job not covered by social security you may not be eligible for any social security benfits. This reductions may also affect spousal benefits. Terms like Government Pension Offset,  Windfall Elimination Provisions need to be reviewed by going to the social security website, www.socialsecurity.gov, for more information. If you or your spouse are eligible for any type of government pension benefit (Federal, State, Local) and you have paid some into social security you still will not be eligible to receive any benefit due to your government pension. Get some professional help before you give up on getting any of your social security benefits because the law has a few loopholes that you may be eligible for. Don’t rely on the Social Security office to counsel you in this matter.

As you’ve now figured out this is a very complex and difficult topice to write about since the law is difficult, and confusing, and there are just too many expectations to all of these rules. Get professional help – don’t try this on your own!

For more information please visit: http://www.hargrave-lyons.com