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Social Security 5 Year Rule

I Am Getting Ready To Retire What Steps Do I Take

What’s the Best Age to Claim Social Security 62, 66, or 70?

Six to eight months before your intended retirement date, we recommend you review the Pre-Retirement Guide publication and obtain an estimate of your retirement benefit by contacting one of our offices and requesting one. Up to six months before your intended retirement date, you will need to complete and return an Application for retirement benefits. Applications can be mailed to you or are available in our offices. Counselors are available to assist you in completing your application in both our Carson City and Las Vegas offices, or you may mail in your completed application directly to our Carson City office.

How Do I Change My Direct Deposit Instructions For My Retirement Check

Print and complete the Electronic Funds Transfer Authorization form and return it to one of our offices. Forms received by the 14th of the month take effect the same month. You may also make this change yourself through your PERS secure, on-line account. Due to our pre-notification process, you may receive your monthly check by mail for that month only, and then the following month, we will direct deposit your benefit into the new bank account.

What Is The Va 5 Year Rule

The VA 5 year rule allows the VA to reevaluate your existing VA disability rating within 5 years of your initial examination, if and only if, your disability condition is expected to show material improvement over time.

However, the VA may still reevaluate your disability rating past the 5 year deadline if your condition has significantly improved, as shown by medical evidence.

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Checklist For Your Social Security Claiming Strategy

  • Know your numbers. Find out your FRA, earnings history, and estimated benefits.
  • Stay current. Sign up for your most current statements on SSA.gov.
  • Do the math. Use calculators on SSA.gov to check out your monthly benefit options.
  • Get the facts. Don’t succumb to myths use primary resources such as SSA.gov.

Is An Employer Required To Make Plan Contributions For An Employee Who Has Turned 72 And Is Receiving Required Minimum Distributions

Social Security

Yes, you must continue contributions for an employee, even if they are receiving RMDs. You must also give the employee the option to continue making salary deferrals, if the plan permits them. Otherwise, you will fail to follow the plan’s terms, causing your plan to lose its qualified status. You may correct this failure through the Employee Plans Compliance Resolution System .

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Effect Of Delaying Retirement Benefits

1Represents Full Retirement Age based on DOB January 2, 1960

2PIA = The primary insurance amount is the basis for benefits that are paid to an individual

That higher baseline would last for the rest of your retirement and serve as the basis for future increases linked to inflation. While it’s important to consider your personal circumstancesâit’s not always possible to wait, particularly if you are in poor health or can’t afford to delayâthe benefits of waiting can be significant.

Be aware that if you decide to wait past age 65, you may still need to sign up for Medicare. In some circumstances your Medicare coverage may be delayed and cost more if you don’t sign up at age 65. If you start Social Security benefits early, you’ll automatically be enrolled into Medicare Parts A and B when you turn age 65.

Your annual Social Security statement will list your projected benefits between age 62 to 70, assuming you continue to work and earn about the same amount through those ages. If you need a copy of your annual statement, you can request one or view it online on the Social Security Administration portal.

How Do I Change My Mailing Address

Retirees may change their mailing address in writing or changed by the retiree on the PERS website through their secure account. If you choose to submit a written request, you may do so by printing and completing the Change of Address for Benefit Recipients form , or submit a written statement that includes your signature. Forms received by the 14th of the month take effect the same month.

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Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Heres A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits

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When youre years away from retirement, Social Security seems straightforward: Youll leave your job, file for benefits and receive a monthly check for the rest of your life boom! But in reality, getting the most out of Social Security is anything but simple. As you near retirement, the decisions you make could have a significant impact on the amount of money you receive, and some of these choices are irrevocable. Youll need to move carefully to maximize this income stream.

Here are 12 essential details you need to know.

Your Benefits Are Calculated Based On Your Top 35 Years Of Earnings

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Your Social Security benefits are determined by your work history — specifically, your highest 35 years of earnings — so the more you make during the peak of your career, the more you stand to collect when you’re older. That’s why if you didn’t work a full 35 years during your career , it pays to consider staying at your job longer in order to boost your benefits.


Imagine you only have 32 years of work on record. This means you’ll have three $0s factored in when your benefits are calculated. But if you replace those $0s with an actual salary, your benefits stand to increase. The same holds true if you’re earning far more at present than you were earlier on in your career, which tends to be the case for most workers. Replacing three years of $20,000 in earnings with three years of $120,000 in earnings could bring up your total benefit amount, leaving you with a higher income stream for life.

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Cola Increase In 2023

Knowing well the possibilities of retirement in the United States can be fundamental to have a good Social Security. The money you can receive each month is greater if you know some secrets that increase your Social Security checks quite a bit. These secrets are not really secrets nor are they hidden, as the information is totally free, but not everyone knows all the details.

These tricks work only in the situation where you have not started collecting your retirement. When you start collecting your Social Security retirement benefit, you can no longer change any of the monthly payments. All you can do is wait for the COLA increase and the $200 per month increase through the new bill to take effect.

What Is The Difference Between The Employee/employer Pay Plan And The Employer Pay Plan How Does The Choice Of Plan Affect My Retirement Benefit

Under the Employee/Employer Pay Plan the member pays 50% of the retirement contributions through a payroll deduction and the employer pays the other 50% of the contributions. If you terminate employment, you may elect to refund the employee contributions you personally paid into the system, which will cancel your membership in PERS. Under the Employer Pay Plan , the employee pays for their portion of the contribution through a salary reduction or in lieu of pay increase and the employer pays 100% of the retirement contributions to PERS. Under this plan, the member does not accrue refundable contributions and will retain their service credit in the event of termination. In addition, your average compensation is adjusted at the time of retirement if you are under the ER Paid plan.

Whether or not you will have the choice between the two contribution plans when you are newly hired depends upon the public employer in which you work. Some public employers require mandatory participation under the ER Paid plan for their employees and others, like the State, allow for a choice.

Regardless of which plan you are under, you share equally in the PERS contribution rate and there is no difference in how your monthly benefit will be calculated.

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Social Security Disability Payments Are Modest

At the beginning of 2019, Social Security paid an average monthly disability benefit of about $1,234 to all disabled workers. That is barely enough to keep a beneficiary above the 2018 poverty level . For many beneficiaries, their monthly disability payment represents most of their income. Even these modest payments can make a huge difference in the lives of people who can no longer work. They allow people to meet their basic needs and the needs of their families.

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You May Not Be Receiving The Benefits You Deserve The 5

An IRS rule that can aid your retirement income strategy

The 5-year rule protects a Veteran from receiveing Veterans disability benefits based on the assumption that their condition has improved over time. Because of this, many Veterans have had their disability scores increased while still seeking treatment for their disabilities. If you are continuing to get treatment and suffer from a service-connected disability, you deserve to continue receiving disability compensation from the VA. If your condition is re-evaluated and your disability rating gets lowered, you can dispute the VAs decision to lower your rating by making an appeal.

Appealing a VA decision can help you keep the benefits that you deserve in some cases, the appeals process can even lead to an increased disability rating. If your rating has gone down after a VA re-evaluation, one of the best steps to take is recruiting a reliable attorney and appealing the VAs decision. An attorney can help you make a successful appeal by assisting you in navigating the often-complicated VA appeals process.

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Workers Who Retire In Certain Foreign Countries

U.S. citizens who travel toor live inmost foreign countries after they retire usually can receive Social Security benefits. However, if that country is Azerbaijan, Belarus, Cuba, Kazakhstan, Kyrgyzstan, Moldova, North Korea, Tajikistan, Turkmenistan, or Uzbekistan, then the government will not send them Social Security payments. Exceptions may be available in all of these countries except Cuba and North Korea. The governments Payments Abroad Screening Tool is an easy way to check if you will be able to continue receiving Social Security benefits while living abroad or if restrictions will apply.

Why Does It Vary By Age

So now that you know why there’s a maximum Social Security benefit, it’s also important to know why there are different max limits for retirees of different age groups. It’s because benefits increase as people wait to claim them.

Retirees who are 66 or younger right now have a full retirement age between 66 and four months and 67, but benefits can be claimed any time from age 62 to 70. A retiree who claims benefits at full retirement age gets their standard benefit based on their highest-35-earning years. A retiree who claims before FRA gets a benefit made smaller by early filing penalties, and a retiree who claims after FRA earns delayed retirement credits until age 70 that raise their monthly income.

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So the upper limit for someone who claims benefits at age 62 is much smaller than the maximum for someone who claims checks at 70 because a person who was entitled to the biggest possible standard benefit based on maxing out their income would have had that benefit reduced by claiming at 62, while someone who waited until 70 would have seen it increased.

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Myth #: You Can Claim Early Then Get A Bump Up Once You Reach Full Retirement Age

Many believe there is a “bump up” or “added income” once they reach their FRA. They’ve heard they can claim early at 62, then when they reach 66 or older, their checks will increase to the amount that corresponds to their FRA benefit. That’s a big misperception.

There’s no bumping up of income once you’ve claimed your Social Security retirement benefit. However, anyone receiving a benefit can voluntarily “suspend” that benefit after they reach FRA and resume it as late as age 70. If they do, the annual benefit will increase by 8% per year of delay up until age 70. After that, you get an annual cost of living adjustment, but no increase in your base benefit, which will start automatically the month you reach age 70 unless you specify otherwise.

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In general, you can cancel your Social Security claim if you do so within the first 12 months of receiving benefits.2 You must repay the full amount you’ve received, and the full amount a current spouse or family member received based on your benefit. Then, you’re eligible to claim again at a later date and will receive a larger monthly payment. Each individual can only cancel a claim once in their lifetime.

When Can Va Reduce A Disability Rating

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Veterans under the five-year mark with service-connected conditions not deemed stabilized or permanent by VA may be scheduled for a C& P exam to determine if a rating reduction is necessary.

If VA anticipates that a veterans condition may improve over time, the veteran will be reevaluated to ensure they are being compensated for their current level of disability. VA uses C& P exams to reevaluate service-connected conditions based on the severity of symptoms and their impact on daily life.

Following a scheduled C& P reevaluation, VA may reduce a veterans rating if their condition has improved. VA outlines the criteria for reducing ratings in 38 CFR § 3.105, which states that a reduction may only take place if:

  • VA has reviewed the veterans entire medical history
  • The veteran undergoes a thorough C& P examination and
  • VA finds sustained improvement in the veterans ability to function in daily life.

It is important to note that sustained improvement cannot be circumstantial or related to mitigating factors .

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How Will An Increase In Retirement Contribution Rates Affect Me

If you are under the Employee/Employer Contribution Plan, the retirement deduction from your paycheck will increase. If you are under the Employer-Pay Contribution Plan, your portion of the increase will either be paid through salary reduction or in lieu of a pay increase depending on the employer for whom you work.

What Are Required Minimum Distributions

Required Minimum Distributions generally are minimum amounts that a retirement plan account owner must withdraw annually starting with the year that he or she reaches 72 , if later, the year in which he or she retires. However, if the retirement plan account is an IRA or the account owner is a 5% owner of the business sponsoring the retirement plan, the RMDs must begin once the account holder is age 72 , regardless of whether he or she is retired.

Retirement plan participants and IRA owners, including owners of SEP IRAs and SIMPLE IRAs, are responsible for taking the correct amount of RMDs on time every year from their accounts, and they face stiff penalties for failure to take RMDs.

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How Is Social Security Financed

In order to understand why Social Security is facing a long-term financing issue, it’s important to know how Social Security works. First off, Social Security is funded through payroll tax deductions. These payroll taxes are taken directly out of an employee’s paycheck and are paid by both employees and employers. In 2022, payroll taxes apply to up to $147,000 of an individual’s annual income.

The payroll tax rate for Social Security is 6.2%. This means that employees pay 6.2% and employers pay 6.2%. Self-employed people will pay the entire payroll tax rate of 12.4%.

When a worker pays their Social Security payroll tax, that money doesn’t go to a specific Social Security fund allocated just for them. Current workers are paying into a system that pays for the benefits of all current retirees.

In 2022, for every dollar you pay in Social Security payroll tax, 85 cents goes towards the Social Security trust fund that pays monthly benefits to current retirees and their families , according to the Social Security Administration. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families

In recent years, there has been an excess of reserves in the Social Security Trust Fund: the amount of money that the Social Security administration collects through payroll taxes exceeds the amount of money the administration pays out in benefits.

What Happens If A Person Does Not Take A Rmd By The Required Deadline

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If an account owner fails to withdraw a RMD, fails to withdraw the full amount of the RMD, or fails to withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%. The account owner should file Form 5329, Additional Taxes on Qualified Plans and Other Tax-Favored AccountsPDF, with his or her federal tax return for the year in which the full amount of the RMD was not taken.

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What Is Average Compensation

The average of a member’s 36 highest consecutive months of compensation as certified by the public employer.

For members newly enrolled in PERS on or after January 1, 2010, the average compensation shall be based on the average of the 36 highest consecutive months of compensation subject to a 10% salary cap.

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