Social Security: Readers weigh in with questions
Social Security is complicated. Here are some answers to your questions about benefits and working.
Here’s one thing that’s certain about Social Security: Many folks are confused about the rules.
Americans understand, for instance, when they can start receiving Social Security benefits but are less sure of their own benefit levels, according to a new research brief from the National Institute on Retirement Security (NIRS).
That doesn’t surprise me, nor did the slew of pressing questions about Social Security benefits dozens of you sent in response to my recent column about the major change in how you access your Social Security account information.
The following is an edited sampler of your queries.
Dear Kerry, I turn 70 this year. I am still working full time. I have not signed up to receive Social Security benefits. What happens if I just keep working beyond 70? — Bob H.
Bob, when you turn 70, you should apply for your Social Security benefits.
Waiting past 70 will not increase your benefit. But keep on working by all means — you can receive benefits even if you still work.
Once you reach your full retirement age, or FRA, which is 66 for you, you can work and collect your full Social Security benefits at the same time.
However, for folks who are younger than their full retirement age, part of their Social Security payments may be temporarily withheld depending on their total annual earnings. More on this below.
The good news is if you turn on your checks when you turn 70 this year, you will reap the financial payback of patience. Big time, congrats! Only a sliver of people hold off that long.
By pushing back tapping your benefits from your FRA until age 70, you will earn delayed retirement credits. Those come to roughly an 8% annual increase in your benefit for each year until you hit 70, when the credits stop accruing.
Each year, your earnings record until you reach age 70 is reviewed. If you are under that age, and the latest year of earnings turns out to be one of your highest 35 years, your benefit amount is automatically recalculated and your check can potentially get a bump up.
However, if someone is younger than full retirement age and still working while receiving Social Security benefits, it could push them above the yearly earnings limit and their monthly benefits would be temporarily reduced. This is not permanent.
Here’s how the Social Security Administration runs the math: If you are receiving a Social Security benefit and are under full retirement age for the entire year, $1 is deducted from your benefit payments for every $2 you earn above the annual earnings limit. For 2024, that limit is $22,320.
In the year you reach full retirement age, $1 in benefits is deducted from your monthly benefit for every $3 you earn, but only earnings before the month you reach your full retirement age are counted. If you reach full retirement age in 2024, the limit on your earnings for the months before your birthday is $59,520.
What counts as earnings are the wages you make from your job or your net earnings if you're self-employed. The calculation also includes bonuses, commissions, and vacation pay. What’s not counted: pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.
But you will get any deductions back. Once you reach FRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.
One additional caveat to keep in mind: Premiums for Medicare Part B, which covers doctors’ visits and outpatient services, and Part D, which covers prescription drugs, could increase if you earn significantly more money. If you earn more than $103,000 as an individual or more than $206,000 if you’re a joint filer, you’ll pay an extra amount. Those premiums are typically pulled from your monthly Social Security check.
Dear Kerry, I am 62, working and receiving a spouse’s survival benefits. If I retire and file for Social Security benefits, do I have to choose one or can I get two? — Silvia V.
Thanks for this great question, Silvia.
You can only choose one benefit; the larger of the two will typically become your sole benefit.
As a surviving spouse, you can receive 100% of a deceased spouse's benefit if you had waited until your own FRA, 67, when you claimed the survivors benefit. The benefit amount, however, is reduced for ages less than FRA. The closer you are to your FRA, the greater the benefit.
The upside for you, though, is that it’s possible to claim a widow’s benefit, as you have, while letting your own retirement benefit grow. For example, you may claim a widow’s benefit at 60, and then shift to your own retirement benefit at age 70, if it’s a larger amount.
Meantime, while this doesn’t apply in your case, it’s important to mention for other surviving spouses that if you and your late spouse were both claiming Social Security benefits at the time of their death, then the larger of the two benefits becomes your survivors benefit.
Then too, for a surviving spouse, if you applied for your own Social Security benefit less than 12 months prior to the death of your spouse, you have the option to withdraw this application and apply for survivors benefits if it is a larger amount.
Bottom line: A surviving spouse, surviving divorced spouse, unmarried child, or dependent parent may be eligible for monthly survivor benefits based on the deceased worker's earnings. There are myriad variables to consider, so I advise reaching out to Social Security directly.
Is it possible to will my Social Security balance to my children? — Edwin S
No. Once you start Social Security retirement benefits, you’re generally guaranteed to receive monthly checks for the rest of your life. But, Edwin, that comes to a hard stop when you die.
There are exceptions for family members who may be eligible to receive survivor benefits based on the deceased beneficiary’s earnings record starting as soon as the month they died.
When a parent, for example, receives Social Security retirement or disability benefits and dies, their child may also receive benefits. Under certain circumstances, a stepchild, adopted child, or dependent grandchild or step-grandchild may also qualify.
To receive benefits, the child must be unmarried and younger than age 18, or between ages 18 and 19 and a full-time student at an elementary or secondary school (grade 12 or below), or age 18 or older with a disability that began before age 22.
Thanks to my Yahoo Finance readers who felt comfortable sending along your questions. My advice for all of you trying to make sense of your Social Security benefits: Create a My Social Security account. This is a customized portal that lets you check the status of a benefits application, estimate future benefits, or manage the benefits you already receive. You can set up an account even if you don't currently receive benefits. Do it.
Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist, and the author of 14 books, including "In Control at 50+: How to Succeed in The New World of Work" and "Never Too Old To Get Rich." Follow her on X @kerryhannon.
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