Social Security Retirement Benefits
NOTE: The information in this section is subject to change. For the most up-to-date information check the Social Security website at www.ssa.gov or call your local Social Security office.
1. What factors should I consider when deciding when to retire?
There will be several factors involved in your decision about retiring. A company pension, for instance, may influence your decision. Your ability to keep on working and your own financial situation will also influence your decision. Finally, the rules of the Social Security program may affect your decision regarding when you should retire.
2. How will retirement affect my benefits?
The normal retirement age had been 65. However, to cope with the demographics of an aging population and the longer life span of the individual worker, the normal retirement age was increased gradually beginning in 1999. When the change is fully phased in 2022, the normal retirement age will be 67, as is evidenced by the table on the following page.
Even if you don’t plan to retire at your full retirement age, it is important for you to contact Social Security two or three months before you or your spouse reach your full retirement age to arrange for your Medicare health insurance protection. If you wait until the month you reach full retirement age or later, you will lose one or more months of Medicare medical insurance protection. This is important because many private and non profit health insurance plans adjust their coverage when a person reaches retirement age to take account of Medicare coverage. You may want to get in touch with your insurance agent or the office where you pay health insurance premiums to discuss your health insurance needs in relation to Medicare protection.
3. What effect will early retirement have on the benefits I receive?
A person who starts retirement benefits before full retirement age will receive a permanently reduced benefit. If a non-disabled worker retires after age 62 but before normal retirement age, the Social Security check is reduced by 5/9th of one percent for each month between the age of actual retirement and the then prevailing normal retirement age. Benefits can be paid only for months you are eligible throughout the entire month. This means that unless your birthday is the first or second day of a month, you cannot receive a check for the month you reach 62. In general, if you apply for early retirement benefits, your checks can start no earlier than the month you apply. If you wait until full retirement age to apply, you generally get back payments up to six months, but not before the month you reach full retirement age.
4. How will work affect my retirement benefits?
You can work after you become eligible for Social Security checks. The real question is: How much can you earn and still get retirement checks? The answer depends on your age.
In 2003, if you have reached full retirement age (currently 65 years and 6 months), you are entitled to receive all of your Social Security benefits regardless of the amount of your earnings. If you have not reached retirement age, you can receive all of your expected Social Security benefits as long as your annual earnings do not exceed $12,000. If you are under age 65 and you earn more than $12,000, your Social Security benefits will be reduced by $1 for every $2 of earnings over the limit. If you are under age 65 and receiving Social Security retirement benefits, you must report your earnings annually before April 15 on special forms that can be obtained from your local Social Security office.
NOTE: It is important to notify Social Security promptly about changes that could affect your checks. Failure to report changes can result in Social Security making an overpayment to you. If you are overpaid, Social Security will take action to recover any benefits not due you. Also, if you fail to report changes or you make a false statement, you can be penalized with a fine or imprisonment.
5. What if I delay my retirement?
If you choose to defer retirement, each month of delay after attainment of full retirement age leads to an increase in the eventual benefit. If retirement is delayed until 70, you will receive increases. After you start receiving full retirement benefits, you are permitted to continue working without jeopardizing benefits. In many cases, working longer will result in a higher salary and will cause your Social Security check to increase because of the higher earnings. This is really apparent with some private pension plans, where benefit amounts are based on the income earned in the three or five years just prior to retirement rather than on average compensation throughout a career.
Eligibility for Medicare is dependent on your having attained age 65 or having been disabled for two years, not on employment status. Delaying your retirement does not impair your eligibility for Medicare, although you will have to make an application for a Medicare card, unlike retirees who are automatically enrolled in Medicare Part A. In many situations the employer’s group health insurance plan (EGHP) will have primary responsibility for insuring the over-65 worker (and the spouse of the older worker), with Medicare taking only a secondary role.
6. How do I apply for Social Security?
When you apply for retirement benefits, Social Security will check your Social Security record, which shows all of your earnings covered by Social Security. Social Security will then figure your exact benefit rate. Your rate will depend on your age and the amount of earnings reported for you. Wage credits are available for World War II and post-World War II service, unless you are eligible for another federal benefit based on such service. If you are eligible for certain Railroad Retirement benefits, you may be barred from receiving Social Security. If you were employed in a foreign country, which has a totalization agreement with the United States, you may receive wage credits for Social Security benefits. Once you are on the Social Security benefit rolls, your checks will increase automatically to keep up with increases in the cost of living.
7. When do my checks start?
If you apply two or three months before your retirement month, your checks start for the month you retire. If you apply closer to the month in which you are retiring, your checks will usually start six to eight weeks after you apply and have submitted to Social Security all the required evidence. Historically, payments are made on the third of each month for the previous month, and may be directly deposited into your bank account. In order to stagger the workload, Social Security has developed a new system. If your birthday falls between the first and the 10th of the month, payments are made on the second Wednesday of the month, between the 11th and the 20th, payments are made on the third Wednesday of the month and between the 21st and the 31st, payments are made on the fourth Wednesday of the month. The benefits are not prorated for the month you die. Even if you die on the last day of the month, the check received the next month must be returned to the Social Security Administration.
8. Why do I need to notify Social Security of any changes that may affect my benefits?
It is important to notify Social Security promptly about changes that could affect your checks. Failure to report changes can result in Social Security making an overpayment toyou. If you are overpaid, Social Security will take action to recover any benefits not due you. Also, if you fail to report changes or you make a false statement, you can be penalized with a fine or imprisonment.
9. What can be done if Social Security benefits are stopped?
You do not get a hearing before benefits are stopped, but you do have the right to appeal the matter. To appeal, go to your local office and the staff will assist you in filling out the correct forms. Your termination letter will set out the time limits for appeal.
10. Are Social Security benefits taxed?
Beginning in 1984, a part of your Social Security benefit can be included in your taxable income depending on your adjusted gross income, and the amount of your benefits.
11. What can be done if I am turned down for Social Security?
An attorney can be extremely helpful in assisting with Social Security appeals. If you are virtually without funds, you may be eligible for free legal assistance from your local Legal Services office. If you are not eligible for free help from the Legal Services office, you should seek guidance from your county office on aging or from a private attorney. If the attorney wins the case for you, his or her fee will be taken from the Social Security award. The lawyer’s fee will be set by the Social Security Administration and will be paid directly from the amount awarded.
The first step in the appeals process is a request for reconsideration, which must be filed within 60 days of receiving the notice of the denial. During the reconsideration stage, the applicant has the right to present new evidence. If the application is again denied, the applicant has 60 days in which to request a hearing before an administrative law judge. At the hearing, the person appealing can have an attorney represent him or her. Evidence can be presented, witnesses can testify (the judge can order witnesses to appear and testify), and Social Security Administration experts can be challenged by means of cross-examination.
The third stage involves a review by the appeals council that must be filed within 60 days of the decision by the administrative law judge. The last step in the appeals process involves a lawsuit in federal court. Missing any of the time limits (without good cause) for filing an appeal means that the right to appeal may be lost. However, a new application for benefits can often be made and the whole process will start over again.
12. What happens if the Social Security Administration says I received more benefits than I was entitled to?
As soon as the notice of the over-payment is received, write to the Social Security Administration, filing a petition for reconsideration and a waiver. Ask for a detailed month-by-month accounting of how and why the over-payment was figured. Keep asking questions until the matter is understood. At the reconsideration stage, you can contest the claim that you were overpaid. For example, if the Social Security Administration thinks veteran’s benefits were received in January, February and March, and they actually didn’t come until April, the matter can be resolved at this stage.
If the overpayment was figured correctly, then only file a petition for waiver, in which you ask the government not to collect the money. A person qualifies for a waiver if he or she was not at fault in causing the overpayment and repayment would cause a hardship. If the waiver is denied, ask for a reconsideration of waiver. Asking for this reconsideration within 10 days of receiving notice of the waiver denial will prevent a check from being cut off. If this reconsideration is denied, the Social Security Administration will withhold money or cut off the check, but you still will have all your rights to a hearing and to use the rest of the appeals process. You can also ask the Social Security Administration to withhold a smaller amount from each check rather than to have an entire check stopped. An attorney can be extremely helpful in appealing over payment cases.
