9 Frequently Asked Social Security Questions

Do you know if you're eligible for Social Security retirement benefits, or how much your benefits could be? Social Security is a source of retirement income that is relied upon by millions of Americans, but there are many aspects of the program that are unknown or misunderstood by some people. Here are nine of the most common Social Security questions that you may have, and the answers to clear up any misconceptions. 1. Am I eligible for Social Security? To be considered "fully insured" for Social Security purposes, and therefore eligible for a retirement benefit based on your work record, you need 40 "quarters of coverage." One quarter of coverage represents $1,320 of earnings through employment covered by Social Security -- that is, where you pay Social Security payroll tax. You can earn a maximum of four quarters of coverage per calendar year. For most people, the simple way to say this is that you'll need to work for at least 10 years with earnings greater than $5,280 (in 2018 dollars) per year. Image Source: Getty Images. 2. How is my starting benefit determined? While you're eligible for benefits with 10 years of work experience, it's important to realize that Social Security considers much more than that. Specifically, all of your career Social Security-taxed earnings, indexed for inflation, are considered. The 35 highest-earning index years are then averaged together and divided by 12 to produce your average monthly indexed earnings. If you've worked for fewer than 35 years under covered employment, zeros are used in the calculation for the missing years. This average is then applied to a formula, set by the Social Security Administration (SSA) each year. For 2018, the formula is: 90% of the first $896 32% of the amount greater than $896, but less than $5,399 15% of the amount greater than $5,399 3. When can I get my retirement benefit? You can start receiving Social Security retirement benefits as early as age 62, or as late as age Continue Reading

3 Social Security Mistakes That Could Cost You a Fortune

Social Security is more critical to the financial well-being of millions of Americans than many people realize. According to the Social Security Administration, most elderly beneficiaries get 50% or more of their income from Social Security, while 23% of married elderly beneficiaries and 47% of unmarried beneficiaries get 90% or more of their income from it.Thus, it's important for us to understand how Social Security works and how we might get the most out of it instead of forfeiting benefits that could have been ours. Here are three mistakes to avoid.Image source: Getty Images.1. Assuming your benefits will support youMany people assume that Social Security benefits, while not enough to permit a life of luxury, will nonetheless be enough to support them in retirement. If you're assuming that and not socking away money regularly for your retirement, you may end up in trouble.Social Security does make up the majority of retirement income for millions of people -- but many of them are struggling and not really enjoying retirement the way we all want to. On average, Social Security benefits make up about a third of retirees' income. More specifically, the average monthly retirement benefit was recently $1,407, which amounts to nearly $17,000 per year. If your earnings have been above average, you'll collect more than that -- but it won't be a princely sum, as the maximum monthly Social Security benefit for those retiring at their full retirement age in 2018 was just $2,788, or about $33,500 for the whole year. You can get an estimate of your expected Social Security benefits by setting up a my Social Security account with the SSA. It's smart to do so to help with your planning.2. Collecting Social Security too early -- or too lateAnother mistake to avoid is getting your benefits at a suboptimal time. The full retirement age for Social Security used to be 65 for everyone, but it has been increased for many of us. For those born in 1937 or earlier, it remains 65, for Continue Reading

Your Top 4 Social Security Questions Answered

Around 90% of seniors in the U.S. receive Social Security benefits, with 50% of married couples and 71% of singles relying on these benefits to provide at least half their retirement income . If you're nearing retirement and about to become one of the 62 million Americans receiving Social Security benefits, it's important you understand exactly how Social Security works. This is especially true since some of the decisions you'll make when applying for benefits have big implications in terms of your monthly income. If you're like most people and not quite sure what to expect, the good news is we've got the answers to your top Social Security questions right here. Image Source: Getty Images. 1. How much will my Social Security benefit be? The amount of Social Security benefits you'll receive is determined based on a formula that takes into account your 35 highest years of earnings. The formula determines the Social Security benefits you'd receive at Full Retirement Age (FRA) which is determined based on your birth year. For people born in 1960 or later, FRA is 67. You can, however, claim benefits as early as 62, although benefits are reduced by an amount equal to five-ninths of 1% per month for the first 36 months before FRA and by an additional five-twelfths of 1% for each prior month. This benefit reduction is permanent; if you reduce benefits by claiming early, you'll receive reduced benefits for the rest of retirement. The few options you have for raising your benefits again once you've claimed early are impractical for most. You could work while receiving benefits before reaching FRA to reduce benefits you receive each month and Social Security would then recalculate your benefits at FRA to take this into account. You could also rescind your application if you change your mind within 12 months of claiming benefits, but you'd have to repay all the benefits you'd already been paid. You can also claim benefits late, resulting in Social Security Continue Reading

No citizenship to get Social Security

Q: To get Social Security retirement benefits, must a person be a United States citizen? -Tanya Hunte, Brooklyn A: No. An individual can get Social Security retirement benefits so long as he or she is “lawfully present” in the United States. The person need not become a U.S. citizen. Individuals considered lawfully present include permanent residents, asylees and refugees, lawful nonimmigrants [such as a student], people granted temporary protected status, asylum applicants, certain parolees and a few others whom the United States Citizenship and Immigration Services has allowed to stay. Social Security retirement benefits are based on taxes paid by workers. They are not a form of public assistance like welfare. Typically, a person must work a total of 40 quarters [10 years] to qualify. Sometimes a surviving spouse may get benefits. The government will count contributions paid while a worker is here unlawfully, even if the worker is using a false Social Security number. Many non-U.S. citizens can retire abroad and still get Social Security retirement benefits. It depends on the country where the person retires. You can get more information on your right to retirement benefits by calling the Social Security Administration at (800) 772-1213, or on the Web at www.ssa.gov. Civic knowledge test for seniors Q: How can I find out if I am a U.S. citizen? I came to the United States from Trinidad on Sept. 7, 1947. I was just 18 years old. In 1956 I applied for my citizenship and passed the test. However, I never received a citizenship certificate. In 1960 I married a U.S. citizen who had served in the U.S. Armed Forces during World War II. I am now a senior citizen in my 80th year and I would like to have citizenship papers. I have three children and have lived in the United States 61 years. If I was never naturalized, did my marriage to a U.S. citizen make me a citizen? -Eileen Bolden (Kerr), Brooklyn A: Your marriage to a U.S. Continue Reading

Actor Antwon Tanner faces jail in Social Security con

The actor who starred in the hip Volkswagen "Da Da Da" commercial is really dumb, dumb, dumb. Antwon Tanner, who currently plays the character Skills on "One Tree Hill," surrendered Thursday in Brooklyn Federal Court to face shocking charges of allegedly selling bogus Social Security numbers and cards after he was caught in a sting operation. Tanner, 34, has no prior criminal record. He faces up to five years in prison if convicted. "It's really sad," said a source familiar with the investigation. "He's got a real career." Tanner pleaded not guilty at the arraignment and was released on a $250,000 bond. He and his defense lawyer refused to answer reporters' questions. The two-count indictment alleges Tanner and others engaged in the fraudulent scheme between December 2005 and July 2008. Tanner, who lives in California, supplied 16 Social Security numbers and three bogus Social Security cards to a middleman who sold them to an undercover Immigration and Customs Enforcement agent, the source said. Some of the Social Security numbers were unassigned while others were traced to dead people and to persons who did not know their identification numbers had been stolen by Tanner, the source said. At the same time Tanner was pocketing thousands of illicit dollars, the diminutive actor's career was taking off. He appeared in the film "Coach Carter" with Samuel L. Jackson in 2005 and the acclaimed Volkswagen commercial in which he plays the passenger in the auto bopping his head to the catchy soundtrack "Da Da Da." Tanner participated in the scheme from the West Coast and did not meet personally to hand over the fake numbers, the source said. Some of the bogus documents were sent in the mail. A spokesman for the CW Network, which airs "One Tree Hill," declined to comment on Tanner's arrest. Join the Conversation: Continue Reading

Consumers can refuse to disclose Social Security number

Rose Martin likes the idea of getting her phone, Internet and cable TV service from one provider. She also likes her privacy. The Brooklyn woman didn't think the two were mutually exclusive - until she contacted Verizon to arrange for service. "I provided my name, address and place of birth. But when the representative asked for my Social Security number, I was alarmed. The way I see it, giving your Social Security number, on top of all that other information, is giving too much information." "This practice could expose me to identity theft. Why is it necessary?" she asked. Many privacy advocates have been asking that question for a long time. The SSN was created in 1936 for the sole purpose of recording a worker's contributions to the Social Security fund. In 1961, Congress authorized the Internal Revenue Service to use SSNs as taxpayer identification numbers. Since then, more and more government agencies and private businesses have adopted SSNs as unique consumer identifiers. You'll find the numbers - often clearly posted - on employee files, medical records, health insurance accounts, credit and banking accounts, university ID cards, utility accounts and even customer loyalty programs. In theory, you're not required to provide your SSN unless you're doing something of interest to the IRS, like getting a job or opening a bank account. But many private businesses will ask for it anyway, often because they plan to run a credit check, and using a SSN is the easiest way to run it. You can refuse to provide your Social Security number, but the business can also refuse to provide the service you want. Verizon, for instance, uses SSNs to both run a credit check and submit consumer payment data to credit reporting agencies. However, some consumers have successfully resisted disclosing their SSNs to utility companies by persuading the company to accept a deposit instead. The key is persistence. You may be able to keep you SSN confidential. But Continue Reading

Retirement misconceptions, from A to Social Security

Retirement planning might be the most daunting financial problem facing Americans, yet plenty of individuals have misconceptions about it. Here are some of the misguided assumptions that people make. I'll just keep working during retirement.There are many reasons Americans think they will continue to hold a job once they reach their 60s or 70s. Some people don't have much confidence in Social Security, haven't saved enough or figure they'll need income for another reason. Others might want to stay active, recognizing that jobs can provide psychological motivation and social interaction.However, the percentage of people who actually keep working is far below the percentage who think they will. Some 79% of workers polled by the Employee Benefit Research Institute said they plan to work for pay in retirement. But just 29% of retirees, in the same poll, said they actually work or have worked for pay.Most people of retirement age who remain on the job said they do so because they like working or social aspects of employment, though financial factors also play a role.The survey has consistently found a wide gap between the expectations of current workers to remain employed and the proportion of retirees who actually are. I'm behind in retirement planning but can make it up by saving a bit more for a few extra years.The American College of Financial Services recently conducted a retirement quiz. It's a challenging test, for which most participants received failing grades.One interesting question — stop reading here if you plan to take the quiz (at theamericancollege.edu) and don't want to see the answer — asked people to assess which of the following strategies would be least helpful in making up ground: Saving an extra 3% of salary over the five years prior to retirement, delaying Social Security benefits for two years or working two more years.The Continue Reading

Social Security dilemma: Should the rich pay more?

Though Social Security and Medicare are both vital programs that provide a financial foundation for seniors in retirement, it's arguably Social Security that's currently the more important of the two for the average American.According to an Urban Institute study that examined the estimated lifetime benefits of Social Security and Medicare for an average-earning male ($47,800 salary in 2015 dollars), lifetime Social Security benefits ($294,000) are expected to top lifetime Medicare benefits ($195,000), net of premiums, by $99,000.Unfortunately, this top-tier social program is also in serious trouble. According to the Social Security Board of Trustees' 2017 report, the program will begin paying out more in benefits than it's generating in revenue beginning in 2022. By 2034, some $3 trillion in asset reserves will be completely exhausted.The silver lining for seniors is that Social Security won't be going bankrupt, even if its excess cash is depleted, thanks to the way the program is funded. Payroll taxes on earned income accounted for 87.3% of the $957.5 billion that Social Security collected in revenue in 2016, meaning that as long as Americans continue to work and pay their taxes, Social Security will keep bringing in revenue that can be doled out to eligible beneficiaries.However, that doesn't mean the current payout schedule is sustainable. The Trustees opine that an across-the-board cut in benefits of up to 23% may be needed to sustain payouts to beneficiaries through the year 2091. Considering that more than three in five seniors are leaning on Social Security for at least half of their monthly income, a possible 23% cut to benefits is deeply concerning. More: Something evil lurks in fake checks and phantom financial doings More: Financial choices: The 4 best tax breaks for savers More: With sketchy tax-reform details, year-end planning could be challenging Congress essentially has two paths it can take to "fix" Social Security: Continue Reading

Social Security is safer than you are being led to believe

There are several myths going around about the safety of Social Security, or, more specifically, the lack thereof. For example, have you heard that Social Security is broke, or that the government raided the Social Security trust funds?Fortunately, these aren't accurate, but there is still legitimate cause for concern about Social Security's future. Here's the good news and bad news about Social Security's financial condition, and whether Social Security benefits are safe or are at risk of being cut.To discuss the safety of Social Security, we need to clear up two common Social Security myths.First, Social Security is not broke or bankrupt, nor is it in danger of going broke anytime soon. In fact, the program ended 2016 with $2.85 trillion in reserves. At the current rate benefits are being paid out, that means Social Security could afford to pay benefits to all retirees for approximately three years even if no more payroll taxes were collected.Of course, payroll taxes are being collected. Lots of them. In fact, the Social Security program was able to cover all of its expenses last year without tapping into its reserves, and it even added $35 billion to the trust fund. These surpluses are expected to continue through 2021, so you can expect the reserves to grow even higher in the coming years.The other common myth you may here is that "Social Security doesn't actually have any money — the government raided its reserves and left nothing but IOUs," or something to that effect.To be fair, this one is partially true. The Social Security trust fund isn't just a pile of cash sitting in a warehouse somewhere. The Social Security Administration (SSA) invests the money to generate an additional stream of income, specifically in special government bonds.In principle, this is no different than if you took some of your retirement savings and bought U.S. Treasury bonds. Is your 401(k) a pile of cash stashed in a safe deposit box? Of course not — that wouldn't be a Continue Reading

10 things to know about Social Security before you retire

Social Security is, for tens of millions of Americans, an indispensable financial foundation. As of August, more than 42 million seniors were receiving a monthly stipend from the Social Security Administration (SSA), with 62% of these seniors counting on their check for at least half of their monthly income.Yet despite how vital this social program is, knowledge of the ins and outs of Social Security is often lacking. Back in 2015, just 28% of the 1,500-plus people who took MassMutual's 10-question true-or-false quiz on Social Security got a passing grade, defined as seven or more answers correct. Only one person managed a perfect score. Put plainly, what you don't know about Social Security could cost you dearly once you retire.With that in mind, let's have a look at 10 important things you should know about Social Security before you retire.Without question, the most important thing you'll want to know is how your benefit is calculated. There are actually four factors that determine your monthly benefit, three of which you can control: your work history, your earnings history, and the age at which you file.When calculating your payout, the SSA takes into account the income you earned in your 35 highest-earning years. This is why it's important, should you want to maximize your payout, to work for at least 35 years, if not more. Each year less of 35 worked causes a $0 to be averaged into your annual earnings history, which will lower your ultimate payout.The age at which you sign up for benefits matters, too -- we'll discuss that in greater detail in the next point. The key here is understanding that you can begin taking benefits at age 62 or any age thereafter, and that the longer you wait to begin taking Social Security benefits, the bigger your benefit will be. Benefits grow by 8% annually beginning at age 62 and up until age 70.The fourth factor that helps determine your payout is your birth year, which you have no control over. Your full retirement age Continue Reading