The Social Security Administration can provide benefits in three different categories, including; when you retire, if you become disabled, and finally when you die. You can find information about Social Security benefits on the Social Security Administration website. The age to receive full retirement benefits has been 65 for many years, however, for people born after 1938, it is gradually increasing to age 67 for people born after 1959. A person can begin receive retirement benefits starting at age 62. however, if a person elects to receive benefits at age 62 or older, his or her benefits are reduced by a fraction of a percentage for each month before his or her full retirement age. To find out how much a person would lose if they retire at age 62, you can visit the Social Security website. A person has the option to retire between age 62 and full retirement age. A person qualifies for Social Security benefits by earning Social Security credits when they have a job and pay Social Security taxes.
The credits are based on the amount of a person’s earnings and their work history is what determines their eligibility for retirement, disability and survivor benefits when a person dies. For the year 2007 an individual receives a credit for $1,000 of earnings, up to a maximum of four credits per year. Each year, the amount of income needed to receive credits increases slightly as the average income level increases. Credits earned remain on a person’s Social Security record even if they change jobs or have no income for a while. There are special rules that apply to Social Security coverage for certain types of work.
If a person is self-employed, they earn the same number of credits as employees, however, special rules apply if they have net earnings of less than $400. People in the military earn credits in the same way as civilians, however there is an opportunity to earn additional credits under certain conditions. There are also special rules that apply to people who have jobs that include; housework, farm work, or people who work for church or church-controlled organizations who do not pay Social Security taxes.
There are also types of work that don’t count for Social Security. Most federal employees were hired before 1984, because since January 1, 1983, all federal employees have paid the Medicare hospital insurance portion of the Social Security tax. Others affected by this are rail workers who have more than 10 years of service. Employees of some state and local governments who have opted out of Social Security also do not qualify, and lastly, children under 21 who perform housework for a parent. A person may also choose to delay retirement benefits. If so, their benefits will be increased by a certain percentage depending on the year they were born and the increase will be added automatically from the time they reach full retirement age until the moment they decide to retire or until they reach age 70, whichever is come first. One last thing to consider about retirement benefits is whether a person works and receives benefits. A person’s earnings in or after the month they reach full retirement age will not reduce their Social Security benefits; however, your benefits will be reduced if your earnings exceed certain limits during the months prior to full retirement age.
If a person works and begins receiving benefits before full retirement age, $1 in benefits will be deducted for every $2 in earnings over the annual limit. In 2007 the limit is $12,960. In the year the person reaches full retirement age then their benefits will be reduced by $1 for every $3 they earn above a different annual limit, for 2007 it is $34,440, until the month they reach full retirement age. Once a person reaches full retirement age, he will be able to continue working and his Social Security benefits will not be reduced no matter how much he earns.
Another helpful benefit offered by the Social Security Administration is disability benefits. The Social Security Administration pays disability benefits in two different ways, one through the Social Security disability insurance program and the second through the Supplemental Security Income (SSI) program. To find information about the SSI disability program, click on the link provided. Social Security pays benefits to people who are unable to work because they have a medical condition that is expected to last at least a year or result in death. Federal law requires such a strict definition of disability, while some other programs provide benefits to people who are partially disabled or short-term disabled, Social Security does not. A person must meet certain income requirements to be eligible for benefits. People must meet two different income tests to be eligible for disability benefits. The first test is a “recent work” test that is based on the individual’s age at the time they became disabled, and the second test is a “length of work” test to show that they worked long enough under Social Security. A person should apply for disability benefits as soon as they become disabled because it can take a long time to process an application for disability benefits. It usually takes about 3 to 5 months. After you submit your application, the Social Security Administration will review your application and make sure you meet some basic requirements for benefits, such as whether you worked long enough to qualify and review any current work activity. If these requirements are met, they will send your application to the Disability Determination Services office in your state. This agency makes the decision for the SSA, they use their doctors and disability specialists to ask your doctor for information about your condition, all the facts in your case will be considered. They will also use evidence from any hospital, doctor’s office, clinic or institution that the person has been treated to get all the other information.
Finally, another option offered by the Social Security Administration is survivor benefits. People typically only think of Social Security as paying for retirement benefits; however, some of the Social Security taxes people pay go toward providing survivor insurance for workers and their families. The value of the individual’s survivor insurance under Social Security is probably more than the value of her individual life insurance. As a person works and pays Social Security taxes, he earns credits toward his Social Security benefits. The number of years and the individual needs to work depends on the individual’s age at death. The younger a person is, the fewer years they need to have worked, but no one needs to work more than 10 years to be eligible for Social Security benefits. Under a special rule, if a person has only worked for a year and a half in the three years immediately preceding death, benefits may be paid to individuals and their spouses who care for children. Those who are eligible for survivor benefits include; the person’s widow/widower at age 65 if she was born before January 1, 1940 or at age 67. Reduced widow’s benefits can be obtained starting at age 60. The person’s widow or widower can receive benefits at any age if she takes care of her child who is eligible for a child’s benefit and is 16 or younger or disabled. A person’s unmarried children who are under the age of 18 or 19 if they attend primary or secondary education full time. Your children can get benefits at any age if they became disabled before age 22 and are still disabled. Under certain circumstances, benefits may also be paid to stepchildren, grandchildren, or adopted children. Dependent parents can also receive benefits if they are age 62 or older. If a person is divorced, her former spouse is eligible if she is 60 or older and her marriage lasted more than 10 years. If a person’s ex-spouse does not meet the age or length of marriage requirements but is caring for their child under the age of 16, they may still be eligible.