About Social Security Benefit Amounts
How does the Social Security Administration determine benefits? The more your parent paid into social security, the larger the benefit. Itâs that simple. It doesn’t matter where they worked – for the government, private sector, or even as a contractor. If your surviving parent reached full retirement age, they are eligible for the entire survivors’ benefit amount. Widows and widowers from age 50 to full retirement age receive between 59 to 99 percent of benefits.
What Income Is Included In The Annual Limit
For those who are working for an employer, wages only are counted as income. For those who are self-employed, profits from the business are counted as income.
Income from other areas, such as other government benefits, money made through investments, earned interest, and pension payments are not included in the annual limit.
Am I Eligible For A Va Survivors Pension As The Child Of A Deceased Wartime Veteran
You may be eligible for this benefit if youre unmarried and you meet at least one of these requirements.
At least one of these must be true:
- Youre under age 18, or
- Youre under age 23 and attending a VA-approved school, or
- Youre unable to care for yourself due to a disability that happened before age 18
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Payment Amounts By Age December 2020
The average monthly federally administered SSI payment was $576. Payments varied by age group, ranging from an average of $675 for recipients aged under 18 to $468 for those aged 65 or older. The maximum federal benefit rate in December 2020 was $794 for an individual and $1,191 for a couple, plus any applicable state supplementation.
Other Things You Need To Know
There are limits on how much survivors may earn while they receive benefits.
Benefits for a widow, widower, or surviving divorced spouse may be affected by several additional factors:
- If you remarry before age 60 , you cannot receive benefits as a surviving spouse while you are married.
- If you remarry after age 60 , you will continue to qualify for benefits on your deceased spouse’s Social Security record.
- If you receive benefits as a widow, widower, or surviving divorced spouse, you can switch to your own retirement benefit as early as age 62. This assumes you are eligible for retirement benefits and your retirement rate is higher than your rate as a widow, widower, or surviving divorced spouse.
- In many cases, a widow or widower can begin receiving one benefit at a reduced rate and allow the other benefit amount to increase.
- If you will also receive a pension based on work not covered by Social Security, such as government or foreign work, your Social Security benefits as a survivor may be affected.
However, if your current spouse is a Social Security beneficiary, you may want to apply for spouse’s benefits on their record. If that amount is more than your widow’s or widower’s benefit, you will receive a combination of benefits that equals the higher amount.
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Advanced Filing Strategies For Survivors
In early 2018 the Office of the Inspector General released a report with some shocking news. 82% of widows and widowers who are receiving Social Security survivors benefits are actually entitled to a higher monthly benefit payment. The only problem is, the SSA never made them aware of this. This affected an estimated 9,224 widows and widowers 70 and older who could have received an additional $131.8 million in Social Security benefits had they been told they could delay filing for retirement benefits until reaching age 70.
Theres no need to wait for them to tell you about itlets jump in right now.
Prior to 2016 there were several popular Social Security filing strategies that would allow an individual to file for certain benefits and later switch back to their own benefits. The benefit of this was to allow their own benefits to grow with the 8% per year delayed retirement credits However, law changes in 2016 did away with many of the Social Security filing strategies. The one that remains belongs to survivors and it can be powerful. Heres how it works.
If you have a benefit based on your own work history, it could make sense to file for a reduced survivors benefit as early as 60. While you are drawing your survivor benefit, your own benefit grows every month you delay filing for it. Generally, these adjustments could grow your benefit by 77% from age 62 to age 70. At age 70, you simply switch back to your own benefit .
Costs Due To Marriage Rules
A person who is widowed before age 60 and who remarries before that age may generate costs under the ARLA option. Such a person cannot collect a widow benefit on the prior spouse’s work record until the remarriage ends . Consider a woman who is widowed at age 55 when her first husband dies. Suppose she remarries before age 60 and is widowed by her second husband at age 65. Only at age 65 can she file for widow benefits on her first husband’s record. If her first husband filed for a reduced benefit, she could not receive the full PIA at age 65 because of the RIB-LIM feature of current law. Under ARLA, she could receive the full PIA because her first husband was deceased from the time she was age 60 until she was age 65, and she did not establish entitlement on his work record. Thus, in that case, the ARLA option would generate costs relative to current law.
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Why We Have An Earnings Limit
Not long ago, a viewer on my YouTube channel asked me to give her a good reason why we have the Social Security earnings limit. The comments that followed showed how many viewers shared the belief that the earnings limit is unfair and should be eliminated.
In my response, I explained that the rationale behind the entire program of Social Security was to create a safety net. The original intent of the Social security program was not to supplement retirement income, but to keep the elderly out of poverty.
I also added that todays earnings limit is relatively generous compared to where the Social Security earnings limit began. The original Economic Security Bill President Roosevelt sent to Congress featured a very restrictive earnings limit.
That bill stated, No person shall receive such old-age annuity unless . . . He is not employed by another in a gainful occupation.
Whoa! This means that if you had even a single dollar in wages from a job, you could not collect a Social Security benefit at all.
Thankfully, the system we have in place today allows for individuals to have some earnings from work while they are receiving a Social Security benefit.
However, its very important to stay informed on the dollar amount of this limit because it changes every year.
For 2022, the Social Security earnings limit is $19,560. For every $2 you exceed that limit, $1 will be withheld in benefits.
2022 Social Security Earnings Limit
Income Earned Before The Year You Reach Full Retirement Age
If you are collecting Social Security benefits, earn more than the annual earnings limit, and will not be reaching your full retirement age that year, Social Security will take back $1 of Social Security for every $2 you earn over the limit . That is a serious reduction.
This reduction applies to any year in which you are collecting benefits before you reach full retirement age. It applies to income earned the entire year, even if you were not collecting Social Security the entire year. So the income you earn before the month you start collecting Social Security benefits still counts toward that annual earnings limit.
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Make The Most Of Your Social Security Benefits
Guidance on when to claim benefits based on your personal needs.
Guidance on when to claim benefits based on your personal needs.
Social Security represents the single largest source of income for the majority of older Americans, accounting for 50% or more of total retirement income for at least half of all married couples and more than two-thirds of unmarried individuals.
Social Security benefits represent one of the few sources of guaranteed income that retirees can count on for the rest of their lives. You can generally claim Social Security anytime between age 62 and 70, but the longer you wait to start benefits, the bigger your monthly benefits will be for the rest of your life.
While there has been a growing appreciation of the value of maximizing Social Security benefits in recent years by delaying benefits, the coronavirus pandemic and its devastating impact on the economy has prompted some Americans to rethink their previously planned Social Security claiming strategy to meet immediate income needs. The following article explains:
- basic rules for claiming Social Security benefits
- consequences of claiming reduced benefits early
- possible remedies for reversing those claiming decisions in the future
- and the value of delaying benefits for those who can afford to wait.
Costs Due To Dual Entitlement
Widows who have worked in covered employment may be eligible for both a retirement benefit and a widow benefit. Some widows will claim a retirement benefit first and then, sometime later, will claim a widow benefit, thus becoming dually entitled beneficiaries are dually entitled). The widow will receive the retirement benefit in full plus the difference between the widow benefit and the retirement benefit. Consider an “average” dual-entitlement case. The husband’s PIA is equal to $943.30 and the wife’s PIA based on her own work is $588.20. Those are the average PIA amounts for men and women for December 1997 . Assume that both claimed worker benefits on their 62nd birthday and the woman was widowed on her 63rd birthday. The RIB-LIM amount is 0.825 × 943.3, or 778.2. Under current law, the widow should claim the benefit as soon as possible because it is at its maximum. When she does, her retirement benefit will be equal to , or 470.6, and her widow benefit will be , or 307.6.
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For Your Surviving Divorced Spouse
If you have a surviving divorced spouse, they could get the same benefits as your widow or widower if that marriage lasted 10 years or more.
Benefits paid to a surviving divorced spouse won’t affect the benefit amounts your other survivors will receive based on your earnings record.
after they reach age 60
If your former spouse is caring for your child who is under age 16 who has a disability and gets benefits on your record, they will not have to meet the length-of-marriage rule. The child must be your natural or legally adopted child.
Income Earned During The Year You Reach Fra
During the year you reach FRA, and up to that month you reach FRA, Social Security will deduct $1 for every $3 you earn that is over the annual earnings limit. For the year in which you will reach FRA, the earnings limit is different.
In 2021, this earnings limit is $50,520 , which means that you can earn up to $50,520 before having any pay deducted. The limit is $51,960 for those reaching FRA in 2022. During the year in which you reach FRA, Social Security only counts earnings that you receive before the month you reach FRA.
For example, let’s assume you were born in 1955, which means your FRA is age 66. You turned 66 in June 2021 and began your Social Security benefits at that time. You earned $44,000 from January through May of 2021. Your benefits will not be reduced, because you earned less than $50,520 during the months before you attained full retirement age.
The Social Security Administration website provides additional examples of how this deduction works. You can also use the earnings test calculator and plug in your date of birth and expected earnings to see whether you think a reduction will apply to you.
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Why Not Claim Early Rather Than Draw Down An Ira And Other Savings
Its conventional wisdom to delay tapping an individual retirement account, instead enabling it to grow tax deferred. Roughly 40 percent of beneficiaries claim reduced Social Security benefits at 62 or 63.
But many researchers say reversing the order living on retirement savings in the early years and holding off on collecting benefits is likely to increase monthly income over a lifetime.
Resources For Claiming Social Security Benefits
See how complicated this can be and why some widows and widowers get confused?
Fortunately, there are some useful resources you can tap to help claim Social Security benefits wisely.
Biden has another proposal that would help survivors living into their 80s or beyond.
Aside from Carlson’s book, there’s “Get What’s Yours: The Secrets to Maxing Out Your Social Security” by economist Laurence J. Kotlikoff and journalists Philip Moeller and Paul Solman. For a small fee, several online tools offer help maximizing survivor benefits: SocialSecuritySolutions.com, MaximizeMySocialSecurity.com and SocialSecurityChoices.com.
Biden would like survivors to generally have the option of collecting 75% of the combined Social Security benefit received by the household before one spouse died. This change would deal with the situation where the death of a spouse reduces Social Security payments by as much as 50% if both spouses had claimed and they had similar work and earnings histories.
Biden has another proposal that would help survivors living into their 80s or beyond. Social Security widows and widowers who have been claiming benefits for 20 years would get a bonus equal to 5%.
“The idea is: It’s a time when other assets may be exhausted and you may have increased medical expenses, so increase the benefit,” says Altman.
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The Widow’s Limit Provision Of Social Security
The widow’s limit provision of Social Security establishes caps on the benefit amounts of widows whose deceased spouse filed for early retirement benefits. Currently, 33 percent of Social Security’s 8.1 million widow beneficiaries have lower benefits because of that provision. This paper describes the widow’s limit provision and evaluates proposed changes to it. The proposals considered range from the modest s to receive adjustments to the capped amounts by delaying receipt of benefits) to the substantial ‘s limit).
The author is with the Division of Economic Research, Office of Research, Evaluation, and Statistics, Office of Policy, Social Security Administration
Acknowledgments: The author would like to thank Ben Bridges, Tom Hungerford, James Little, Tim Kelley, Bert Kestenbaum, Michael Leonesio, Joyce Manchester, Peter Orszag, Hilary Waldron, and Marty Zemel for helpful comments.
Working papers in this series are preliminary materials circulated for review and comment. The findings and conclusions expressed in them are the authors’ and do not necessarily represent the views of the Social Security Administration.
Number Of Recipients 19742020
The Supplemental Security Income program provides income support to needy persons aged 65 or older, blind or disabled adults, and blind or disabled children. Eligibility requirements and federal payment standards are nationally uniform. SSI replaced the former federal/state adult assistance programs in the 50 states and the District of Columbia.
Payments under SSI began in January 1974, with 3.2 million persons receiving federally administered payments. By December 1974, this number had risen to nearly 4 million and remained at about that level until the mid-1980s, then rose steadily, reaching nearly 6 million in 1993 and 7 million by the end of 2004. As of December 2020, the number of recipients was about 8.0 million. Of this total, 4.6 million were between the ages of 18 and 64, 2.3 million were aged 65 or older, and 1.1 million were under age 18.
If You Haven’t Applied For Retirement Benefits Yet
Spouses who are eligible for both the survivor benefit and the retirement benefit based on their own work record can maximize their total benefits by taking them in the most advantageous order. The Social Security Administration explains how this works:
If you are also eligible for retirement benefits , you have an additional option. You can apply for retirement or survivors benefits now and switch to the other benefit at a later date.
The right order for you will depend on the size of each benefit. If both payouts currently are about the same, it may be best to take the survivor benefit at age 60. It’s going to be reduced because you’re taking it early, but you can collect that benefit from age 60 to age 70 while your own retirement benefit continues to grow. Then you can collect your own benefit starting at age 70 when it maxes out.
Conversely, if your own benefit is small compared to the survivor benefit , you could take your own benefit at age 62, which is the earliest age at which you’re eligible. Then, at age 66, you could switch over to the survivor benefit. However, the survivor benefit would be reduced since it was taken early or before full retirement age.
Child Beneficiaries December 2020
About 2.9 million children under age 18 and students aged 1819 received OASDI benefits. Children of deceased workers had the highest average payments, in part because they are eligible to receive monthly benefits based on 75% of the worker’s PIA, compared with 50% for children of retired or disabled workers. Overall, the average monthly benefit amount for children was $653.
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When A Family Member Dies
We should be notified as soon as possible when a person dies. However, you cannot report a death or apply for survivors benefits online.
If you need to report a death or apply for benefits, call 1-800-772-1213 . You can speak to one of our representatives between 8:00 am 7:00 pm. Monday through Friday. You can also contact your local Social Security office.