4 Unexpected Ways You Can Lose Your Social Security Benefits
- Working too few years. Most people know their wages throughout their working life determine how much they'll receive from Social Security.
- Claiming benefits at the wrong time. Retirees can choose to claim Social Security benefits any time between 62 and 70, with those who claim earlier getting more (but smaller) ...
- Living in the wrong place. ...
- If you claim benefits too early. ...
- If you earn too much after taking benefits early. ...
- If you take a spousal benefit too soon. ...
- If your identity is stolen. ...
- If you fall victim to other scammers. ...
- If your income triggers taxes on your benefits.
How much can I earn without losing Social Security benefits?
- If you work and earn $6,000 throughout the year, you have not hit the $17,640 annual earnings that would trigger withholding of some of your Social Security benefits. ...
- If you work and earn $35,000, you have exceeded the $17,640 limit by $17,360. ...
- If you work and earn $80,000, you have exceeded the $17,640 limit by $62,360. ...
How to get the most out of your Social Security benefits?
7 Ways to Maximize Your Social Security Benefits
- Work at least 35 years. You typically need the equivalent of 10 years of full-time work to qualify for Social Security. ...
- Earn more money. We get it: If only you could snap your fingers and suddenly make more money. But we’re just explaining the rules here.
- Report all your earnings. If you’re a regular W-2 employee, you don’t have to worry about reporting your earnings to Social Security because your employer handles that and also ...
- Wait as long as you can to take benefits. If your retirement funds are lacking, delaying Social Security payments for as long as possible is one of the best ...
- Avoid taking benefits early if you’re still working. Once you reach full retirement age, your earnings won’t affect your benefits.
- Marry someone who qualifies for a bigger benefit. If you don’t qualify for much Social Security based on your own record, you may be eligible for more based on ...
- Stop your benefits if you claimed them too soon. If you claim your benefits and then regret it, you need to act fast. ...
Is it possible to live off of SSI?
Traditional retirement advice just isn’t feasible for a lot of Americans, but living off Social Security alone really is possible. It’s all in how you approach it. The overarching themes are cutting expenses and living modestly.
How to decide when to take Social Security retirement benefits?
- If you were born on January 1 st, you should refer to the previous year.
- If you were born on the 1 st of the month, we figure your benefit (and your full retirement age) as if your birthday was in the previous month. ...
- You must be at least 62 for the entire month to receive benefits.
- Percentages are approximate due to rounding.
What are the three ways you can lose your Social Security?
3 Ways You Can Lose Your Social Security BenefitsClaiming your benefits too soon. The Social Security checks in your future are not fixed. ... By falling victim to a scammer. Another way to lose Social Security benefits is to fall for a scam or have your identity stolen. ... If Social Security isn't bolstered.
What things reduce Social Security benefits?
Here's why you might get a reduced Social Security benefit in retirement:Early claiming.Your earnings changed.Medicare Part B premiums withheld.Medicare Part D premium increase.Tax withholding.Working after starting benefits.
Why did I lose my Social Security benefits?
The most common reason for someone to lose SSI benefits is having too much income, either through working or receiving it in some other way.
What is deducted from Social Security?
Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $147,000 (in 2022), while the self-employed pay 12.4 percent.
Why did my monthly Social Security go down?
Increase in withholding tax This is a simple one: If you made a change to the withholding tax on your Social Security benefits, this can result in an overall reduction in your benefit check.
Can Social Security cut you off?
Social Security disability benefits are rarely terminated due to medical improvement, but SSI recipients can lose their benefits if they have too much income or assets. Although it is rare, there are circumstances under which the Social Security Administration (SSA) can end a person's disability benefits.
Can you get kicked off SSI?
Your medical condition has improved (SSD and SSI) If you have been suffering from a medical or psychiatric condition that caused your disability, but your condition improves, the SSA may remove you from the category of “disabled” and stop your benefit payments. This is true for both SSD and SSI benefits.
How long do SS benefits last?
Social Security retirement benefits start as early as age 62, but the benefits are permanently reduced unless you wait until your full retirement age. Payments are for life. Social Security spousal benefits pay about half of what your spouse gets if that's more than you would get on your own. Payments are for life.
What happens to your retirement benefits if you lose your earnings test?
Once you reach full retirement age, your benefit will be permanently increased as a result of these withholdings .
When will Social Security increase?
Current law says that a retirement benefit will increase by 8% per year beyond full retirement age, until as late as age 70.
What is combined income for Social Security?
So if you have $30,000 in other income and a $20,000 annual Social Security benefit, your combined income is $40,000.
How many states tax Social Security?
There are currently 13 states that tax Social Security benefits, and most of them don't have the same guidelines as the IRS. However, if you live in one of these states and have significant non-Social-Security income, taxes could take a significant bite out of your retirement benefits. The Motley Fool has a disclosure policy.
Can Social Security be withheld?
To name a few, the Social Security earnings test can cause some or all of your benefits to be withheld, not understanding the rules for spousal benefits could be costly, and taxes could eat up more of your retirement benefits than you're anticipating.
Can you delay your spouse's retirement?
Because there's no such thing as delayed retirement credit for spousal benefits, it's generally not a good idea for a primary-earning spouse to delay his or her own retirement benefit past the spouse's full retirement age, if a spousal benefit is expected.
What to know before withdrawing your retirement?
There are a few things to know before deciding to withdraw your application. Anyone else who receives benefits based on your application must consent in writing to the withdrawal. You must repay all the benefits you and your family received from your retirement application. This includes:
What do you do if you are entitled to railroad benefits?
If you are also entitled to railroad or veterans benefits, you should check with the Railroad Retirement Board (RRB) and the Department of Veterans Affairs (VA) about how your withdrawal affects those benefits. The RRB and the VA make their own determinations and are responsible for their own programs.
What happens if you withdraw from tricare?
Information for TRICARE Beneficiaries. If you have TRICARE and your withdrawal includes your Medicare Part A coverage, you may lose your TRICARE coverage. If you do not withdraw your Medicare Part A coverage, you may need to stay enrolled in Medicare Part B to keep your TRICARE coverage.
How many withdrawals can you make per lifetime?
You are limited to one withdrawal per lifetime. If you cannot withdraw your application and you have reached full retirement age but are not yet 70, you can ask us to suspend benefit payments. Learn more about: What Happens When You Withdraw Your Application.
Does Medicare Part A or B affect Medicare Advantage?
Withdrawing from Medicare Part A or Medicare Part B can also affect your coverage under a Medicare Advantage plan (previously known as Part C) and Medicare Part D (Medicare prescription drug coverage). Your Medicare Advantage enrollment will automatically end if you withdraw from Medicare Part A, Part B, or both.
Does Medicare Advantage end?
Your Medicare Advantage enrollment will automatically end if you withdraw from Medicare Part A, Part B, or both. You will no longer be eligible for Medicare Part D if you withdraw from Medicare Part A and Part B. You will pay a penalty if you enroll in Medicare Part D in the future.
Do you pay a penalty if you enroll in Medicare Part D?
You will pay a penalty if you enroll in Medicare Part D in the future. If you keep Part A or Part B, you are still eligible for Medicare Part D. The Centers for Medicare & Medicaid Services (CMS) will handle your future bills for Part B premiums if you decide to keep that coverage.
Why do seniors lose Social Security?
Around 50% of seniors lose some of their benefits to the IRS . Losing out on Social Security benefits because of taxes or poor timing on claiming benefits is a big problem if you need them to help make ends meet. Understand how benefits work to make an informed choice about when to claim them.
How much of Social Security benefits are taxed?
Up to 85% of your benefits could potentially be taxed at the federal level. Combined income includes half your Social Security benefits, some nontaxable income, and all taxable income including distributions from traditional 401 (k) and IRA accounts. Around 50% of seniors lose some of their benefits to the IRS .
How many years do you have to work to get Social Security?
1. Working too few years. Most people know their wages throughout their working life determine how much they'll receive from Social Security. What may come as a surprise is that the Social Security Administration (SSA) always considers the same number of working years when determining your benefits. Whether you worked for 25 years ...
What does it mean to stop working during prime earning years?
2. Claiming benefits at the wrong time.
What happens if you live in a state and are subject to the IRS?
If you live in one of them and are subject to the tax, you'll lose some of your retirement money to your local government. If you're struggling to get by, it may make sense to relocate to a state that won't take a cut -- especially if it's a state with a lower cost of living as well. 4. Having income above IRS limits.
Is Social Security a source of retirement?
Passionate advocate of smart money moves to achieve financial success. Social Security benefits are a major source of retirement money for most American s. But they aren' t enough to live on without outside funds even under the best of circumstances.
When do child benefits stop?
Those spousal benefits come irrespective of the spouse's age. However, when the child is older than the age limit, then those child benefits stop. Moreover, a child's reaching age 16 will typically halt the parent's ability to receive benefits.
When do children get Social Security?
When a child reaches a certain age. Certain children and those parents who care for them receive family benefits from Social Security, but those benefits hinge on the age of the child in question.
How much is disability in 2017?
For 2017, those amounts are $1,170 per month for most people, and $1,950 per month for those who are blind. Typically, you can work for a trial period of up to nine months without losing benefits, but after that, the test can disqualify you. The other way to lose disability benefits is through improving medical condition.
Can Social Security take away my monthly check?
Tens of millions of Americans rely on their Social Security benefits, and many are in a position in which they can't really afford to lose their monthly checks. Yet there are a few situations in which the Social Security Administration can and will take away benefits for certain recipients.
Does the SSA review your Social Security?
Typically, the SSA does a review at a certain time interval that varies according to the expectation that your condition will or can improve. Social Security benefits are vital for many people's financial security, but there are ways that you can lose the monthly checks you've already started to receive.
Save yourself hassles and regrets by learning more about the program
There may be 50 ways to lose your lover -- and when it comes to Social Security, there are quite a few ways to lose your benefits, too. Maybe not 50, but they're still problematic, since Social Security income is crucial for many retirees, and any decrease in benefits can really hurt.
1. Claiming your benefits too soon
The Social Security checks in your future are not fixed. Not only will they be adjusted for inflation, but there are also actions you can take to make them bigger or smaller. A key decision for most retirees is when to start collecting benefits -- because delaying can make your checks plumper.
2. By falling victim to a scammer
Another way to lose Social Security benefits is to fall for a scam or have your identity stolen. Scams related to Social Security are on the rise. According to one report, Social Security numbers are compromised more often than credit card numbers.
3. If Social Security isn't bolstered
Finally, as the media likes to remind us, we may lose Social Security benefits if the program becomes insolvent. But that may not happen -- and if it does, it may not be quite as terrible as you think.
There's little sense getting less from Social Security than what you're entitled to -- so learn about the ways that could happen to you and how you might get the most out of the program
Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter... Follow @SelenaMaranjian
No. 1: Taxes
You might think that working while collecting Social Security benefits will offer you the best of both worlds -- a little extra money from a part-time job in the early years of your retirement plus some benefits that you earned through decades of work in the past. Think again, though.
No. 2: Withholding
Here's another issue -- and one that can shrink your benefit checks: If you're working while receiving Social Security benefits, you may also have some of your benefit dollars withheld.
No. 3: Poor planning
Finally, one of the worst ways to lose out on Social Security benefits is when you end up receiving less from the program overall than you would if you had made different decisions along the way. Savvy Social Security strategies and benefit-boosting moves can make a big difference.
How to stop Social Security payments?
Make an oral or written request to the SSA to stop Social Security benefits. You must contact the SSA orally or in writing if you want to restart payments before age 70. In the month you turn 70, however, your suspended benefits will be automatically reinstated. 6
What happens if you delay your Social Security payment?
If you delay your retirement until past your FRA but before you turn 70, you become eligible for delayed retirement credits, which incrementally boost your monthly payout. For example, if you were born in 1943 or after, you get an 8% annual increase in the principal insurance amount of your Social Security benefit, which results in a payout increase of two-thirds of 1% every month. 2 So, you may want to stop Social Security payments and restart them after some years.
What happens if you withdraw your Medicare application?
If you withdraw your application, you must repay what you received so far. Be aware that this also includes benefits that your spouse or children received, federal tax that was voluntarily withheld from your benefit, and money withheld from your benefit for Medicare Part B, C, and D premiums.
How much tax do you pay on Social Security?
If your combined income is between $25,000 and $34,000 as an individual or between $32,000 and $44,000 as joint filers , you may pay tax on up to 50% of your Social Security benefits. If you earn above the upper limit of these ranges, you may pay tax on up to 85% of your benefits. 4
Does the balance provide tax advice?
The Balance does not provide tax, investment, or financial services and advice.
Does Social Security withdrawal affect veterans?
Changes in Other Government Benefits. If you are entitled to railroad or veteran's benefits, your withdrawal may affect those benefits. Check with the relevant authority, either the Railroad Retirement Board or the Department of Veterans Affairs, to determine whether stopping Social Security would negatively impact your finances.
Do you have to reach full retirement age to receive Social Security?
You Have not yet Reached Your Full Retirement Age (FRA) You are entitled to your full Social Security benefit amount at your FRA, which is based on your birth year. If, for example, you were born in 1957 and started benefits at 62, you would have received a lower benefit then at your FRA of 66 years and 6 months.
