Social Security

Below are some commonly asked questions and  answers about Social Security.

  1. What are Delayed Retirement Credits and how do Delayed Retirement Credits affect my retirement benefit?

    They are additions to benefits if retirement is delayed beyond full retirement age. Delayed credits may accrue up to age 70. The Delayed Retirement Credit provisions allow for any month for which a worker was at least full retirement age, was insured for retirement benefits, and did not receive retirement benefits. The amount of the delayed retirement credit depends on when you where born, currently anyone born after 1-1-1943, receive a monthly credit of 2/3% or .0066667. That's equates to a yearly credit of 8%.

  2. What is the deeming provision? Are there any exceptions?

    If you file for benefits prior to full retirement age, you are deemed to have filed for all benefits for which you are eligible. A Claimant who is entitled to reduced retirement benefit and a reduced spouse's benefits must file for both benefits if eligibility for both benefits exists in the first month of entitlement.

    The deemed filing rule applies to:

    1. All reduced spouse's benefits, including independently-entitled divorced spouse's benefits, on all Social Security Numbers.
    2. Certificate of Election for Reduced Spouse's Benefits.

    Exceptions include child in care, if you are between the age of 62 and full retirement age and have a child under the age 16 in your care or a disabled adult child.

  3. Am I able to work while receiving Social Security Retirement benefits?

    Yes, you can work while receiving retirement benefits. However, Social Security Retirement benefits are meant to replace, in part, earnings lost to an individual due to retirement. So, under the law, those benefits could be reduced if earnings exceed certain amounts. These amounts are listed on the Social Security website.

    For beneficiaries who are younger than FRA, deduct $1 from benefits for each $2 earned over the annual exempt amount (2011 - $14,160). In the year in which full retirement age is attained, deduct $1 from benefits for each $3 earned over the full annual exempt amount in the months prior to FRA (2011 – $37,680). This is referred to as the earnings test.

  4. How much will my Social Security Retirement be reduced if I elect benefits early?

    If you elect your retirement benefits early they will be reduced by 5/9 of 1% for the first 36 months prior to full retirement age. Any month in excess of 36 months will be reduced by 20%, which is the total reduction for the first 36, plus 5/12 of 1% for each month in excess. For example, if full retirement age is 66 and you elect benefits at 62 then your benefits will be reduced by 20% for the first 36 months and 5% for the 12 month after, for a 25% reduction for electing early. Once you elect reduced benefits you will receive a reduced benefit for the entire time you collect Social Security.

  5. Are retirement benefits guaranteed to keep up with the cost of inflation?

    Yes, Congress enacted the cost of living adjustment or COLA provision in 1972. This provision provided for automatic cost of living adjustments if there was an increase in the Consumer Price Index for Workers of at least 3%. In 1986, Congress eliminated the three percent requirement due to waning inflation. Currently there is a cost of living adjustment if there is an increase in the average consumer price index for workers. If however, the increase is by less than .05 percent or there is a decrease there will not be an adjustment for that year.

  6. I'm getting divorced, how will this affect my retirement benefits? What if I did not work?

    In the event of a divorce, the lower earning spouse will be eligible for spousal benefits under the higher earning spouse's record if they have been married for more than 10 years. This does apply to a spouse that has insufficient work credits or no work credits. However, this benefit can be terminated under multiple situations:

    • If the lower earning spouse is eligible for benefits on their own earnings record of more than or equal to half of the higher earning spouse's benefit,
    • at the death of the spouse receiving the spousal benefit,
    • marriage to someone other than the beneficiary they are claiming under,
    • the beneficiary dies,
    • if the workers entitlement to disability insurance benefits terminates and they do not become entitled to retirement benefits.
  7. Are my retirement benefits taxable?

    Yes, Social security retirement benefits are taxable in certain situations. Taxpayers must include benefits in the gross income in an amount equal to the lesser of:

    • One-half of the net benefits received during the taxable year, or
    • One-half of the sum derived by subtracting a base amount from the taxpayers modified adjusted gross income plus one-half of the social security benefit received.

    This applies to any earnings in excess of income limits determined by the IRS.

      Up to 50% Taxed Up to 85% Taxed
    Individual 25,000-34,000 34,001+
    Joint 32,000-44,000 44,000+
  8. Why would I use the Social Security Timing Calculator opposed to the Social Security Administrations benefit calculator?

    There is simply not another Social Security tool on the market that includes spousal and survivor benefits and allows the user to find the best election period for all scenarios. These two benefits dramatically change the outlook on lifetime benefits for couples. Other tools either neglect to incorporate all of the married couples’s benefits or are unable to solve for all available scenarios.

  9. Does a spouse still qualify for survivor benefits if the worker passes on before electing Social Security benefits?

    Yes, a spouse will qualify for widow's benefits assuming that the deceased spouse is fully insured and the widow qualifies for benefits. The spouse must have been married to the worker not less than 9 months immediately prior to the day of death, has attained age 60, or is in the care of a child under the age of 16. (There are many exceptions to these basic requirements.)

    The surviving spouse's age will determine the benefit amount. If the widow is of full retirement age, 100% of the deceased spouse’s benefit will be available to the surviving spouse. Any age less than full retirement age will reduce the benefit based on the age or situation.

  10. Can the higher earning spouse receive spousal benefits on the lower earning spouse's record?

    Yes, assuming that the lower earning spouse qualifies and has filed for benefits. If the higher earner files a standard application, he will not qualify for spousal benefits because his benefit would be higher than his spousal benefit. However, if he files a "restricted application" he can access a spousal benefit while still accumulating delayed retirement credits on his own record.

  11. What if I do not have enough work credits, can I still qualify for retirement benefits?

    No, if you do not have enough work credits you are not fully insured and therefore do not qualify to receive retirement benefits based on your own earnings. However, if you are married, widowed, or divorced in certain situations you may qualify for spousal or survivors benefits which would be based on a qualifying spouse.

  12. How do I qualify for Retirement benefits?

    There are two basic requirements that make an individual eligible: attaining age 62 and being fully insured. Being fully insured means having 40 work credits. A work credit is earned for a certain dollar amount earned each year by the worker. For instance, in 2009 a worker earned a work credit for every $1090 earned up to a maximum of four credits per year. This means that you would need a minimum of 10 years of work to qualify for benefits.

  13. What strategies are included in the Social Security Timing Software?

    There are nine different strategies used to determine the best possible election periods for a married couple. These strategies are based on three distinct benefits for married people: retired worker benefit, spousal benefit, and survivor benefits. Clients are able to use two techniques; "restricted applications" and "file and suspend", to switch between these benefits to maximize their lifetime Social Security benefits.

  14. What are spousal benefits?

    Spousal benefits are benefits that a workers' spouse may be eligible for based on the workers' record. In order to qualify for spousal benefits the spouse must be at least age 62 or have a qualifying child and has been married to the worker for at least one year prior to filing for benefits. Under these circumstances the spouse can receive as much as half of the workers primary insurance amount depending on the age in which they file for benefits or if they have a qualified child in their care. The spouse is not eligible for spousal benefits if they are entitled to a retirement benefit that meets or exceeds one-half of the primary insurance amount of the worker.

  15. What are Survivor Benefits?

    Survivor benefits are benefits that are payable to a spouse of a deceased worker. The spouse is eligible for survivor benefits after reaching age 62 and they are not entitled to a retirement benefit that meets or exceeds the survivor benefit. These benefits can be received as early as age 60 unless disabled then as early as age 50. Taking survivors benefits before full retirement age will result in a reduction of benefits. A divorced spouse is also able to file for these benefits if they were married to the worker for more than 10 years.

  16. Can I still change my mind if I elected early and want to pay back my benefits to receive higher benefits?

    Yes, but it has to be done in the first 12 months. This practice was commonly known as double dipping or the reset strategy was originally designed to help retirees who were forced back into the workforce. It was being used as an interest free loan allowing beneficiaries take early benefits and repay any amount given to them and take a larger benefit sometime in the future. This would allow them to invest the money and keep any proceeds from the investment. Starting on 12/8/2010 the Social Security Administration is establishing a 12 month time limit for the withdrawal of old-age benefits applications and allowing only one per lifetime.

    Components authorized to release tax return information

    Field office (FO) releases of tax return information

    FOs may disclose tax return information only in the following situations:

    In response to access requests (requests in which the subject of the tax return information is seeking his or her own information) or requests with written consent WHEN the person states that he or she has an urgent need for the information. Follow the instructions in GN 03320.001E.1. There is no fee for providing an SEQY to the wage earner, his or her legal representative or survivor, or the legal representative of the wage earner’s estate as these disclosures are required under section 205(c)(2)(A) of the Social Security Act and are, therefore, program related.

    For addtitional information, please read the highlighted portions of POMS Section: GN 03320.001.

  17. What assumptions are made when calculating my benefits?

    The Social Security Timing Calculator makes some assumptions, which are listed in the disclosure page of every report generated. Please refer to the complete disclosure statement. The assumptions are as follows:

    • Excludes rules for the Government Pension Offset or Windfall Elimination Provision.
    • Assumes that you will not elect benefits while you are still working.
    • Assumes that the younger spouse will begin receiving the higher of his or her own benefit or the deceased spouse's benefit at the time of the first death.
    • Does not assume the election of widows benefits at age 60 or 61.
    • Does not treat railroad or military earnings separately.
    • Assumes fully insured status.
  18. Are same sex marriages recognized by the Social Security Administration?

    "An individual whose claim for benefits is based on a state-recognized same-sex marriage or having the same status as spouse for state inheritance purposed cannot meet the statutory gender-based definition of husband, wife, widow, widower of the worker, including one who is divorced. Under the Defense of Marriage Act, the word "marriage" means only a legal union between one man and one woman as husband and wife, and the word "spouse" refers only to a person of the opposite sex who is a husband or a wife. Therefore, for benefit purposes, Social Security Administration does not recognize such individuals as the spouse of the worker."

    - Social Security Administration

  19. Can I receive retirement benefits for myself and a benefit under my spouse?

    No, when you receive a spousal benefits you will receive half of the primary insurance amount of your spouse. What this means is that if you have a primary insurance amount of $500 and your spouse has a primary insurance amount of $2000, you are entitled to $1000 worth of benefits. You will receive the $500 under your own benefit and $500 under your spouse's benefit which is equal one half of your spouse's benefit. If your benefit is equal to or greater than the spousal benefit you do not qualify for spousal benefits. You will not receive your own benefits and half of your spouses benefit. (Example assumes full retirement age.)

  20. How are spousal benefits calculated in the event of early election?

    Social Security benefits are reduced by a certain percentage for every month they are elected early. Spousal benefit reductions work the same way--though the factor by which the benefits are reduced is different. Below are the percentages used to calculate spousal benefit and retirement benefit reductions.

      First 36 Months Months in Excess of 36
    Spousal Benefit 25/36 of 1% per month 5/12 of 1% per month
    Retirement Benefit 5/9 of 1% per month 5/12 of 1% per month

    Two Spousal Benefit Scenarios

    1. First let's look at a case where the spouse does not have a retirement benefit of his or her own and the primary worker qualifies for $2,000 in retirement benefits. If the spouse waited until 66, he or she would be eligible for 50% of the primary worker's benefit, so in this case $1,000. However, if the spouse elects at 62 instead of 66, the spousal benefit would be reduced by 30%, making it only $700 instead of $1,000. Here’s how it works:
    Spousal Benefit at age 66 No. of reduction months Percent reduction* Spousal benefit at 62
    $1,000 48 30% $700
    *$1,000 is reduced by 25/36 of 1% per month for the first 36 months and 5/12 of 1% for each additional month.
    1. Now let's look at a case where the spouse is eligible for his or her own retirement benefit of $500 if taken at age 66. Assuming the primary worker still qualifies for $2,000, the spouse would be eligible to receive his or her own benefit, plus a $500 spousal excess, which is the difference between the spouse's retirement benefit and 50% of the primary worker’s benefit. ($2,000 x 50%) - $500 = $500 spousal excess.

    But what happens if the spouse elects at 62? The spouse's $500 retirement benefit would be reduced by approximately 25% and the $500 spousal excess would be reduced by approximately 30%. Here's how it works:

    Retirement Benefit at age 66 No. of reduction months Percent reduction* Retirement benefit at 62
    $500 48 25% $375
    *$500 is reduced by 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month.



    Spousal Benefit at age 66 No. of reduction months Percent reduction* Spousal benefit at 62
    $500 48 30% $350
    *$500 is reduced by 25/36 of 1% per month for the first 36 months and 5/12 of 1% for each additional month.