10 Social Security Rules Everyone Should Know

My Comments: Call me a Socialist if you must, but know that my Social Security check every month, along with my wife’s, is critical if we expect to sustain our standard of living. Where we are today is largely a function of how we arrived at this point over the past 50 years.

When you look around and see the houses people like to live in, the cars they like to drive, the restaurants they like to frequent, the way they choose to be entertained, the vacations they take, they all imply a level of consumption that would not exist without Social Security.

“Hey”, you say, “I’m not nearly old enough to take Social Security. How come you’re referencing me in that paragraph above?”

We’re a nation of about 250 million people. Collectively, we determine what gets built, what gets sold, what demands our attention when we live our lives as we do. There are now about 60 million people receiving Social Security checks every month, ranging in age from 62 to over 100. More people are being added to this total than are dying. if you take that away, or shrink it, the amount of money flowing from one pocket to another in this country will shrink.

That in turn means smaller profits everywhere which in turn means fewer choices across the board, which in turn means a lower standard of living for everyone.

To the extent you want to maintain your standard of living, have not yet reached age 62, but expect to survive until the day you do, these Social Security rules/facts need to be understood by everyone.

by Emily Brandon \ March 20, 2019 \ https://tinyurl.com/y3ueosmc

How to boost your Social Security payments

How much you earn and your age when you sign up play a big role in how much you will receive from Social Security. Workers who familiarize themselves with the Social Security rules will be better able to maximize their payments. Pay close attention to these aspects of the program when making Social Security decisions.

6.2 percent payroll tax

Most workers pay 6.2 percent of their earnings into the Social Security system, and employers match this amount. Self-employed workers contribute 12.4 percent of their income to Social Security. You can see how much you have paid in and check that your earnings have been recorded correctly with a my Social Security account.

$132,900 tax cap

This is the Social Security maximum taxable amount of earnings in 2019. Earnings above the tax cap aren’t taxed by Social Security or used to calculate retirement benefits. Workers who earn more than $132,900 in 2019 will notice a bump in their paycheck when Social Security taxes stop being withheld.

35 years of earnings

Your Social Security payments are calculated using the 35 years in which you earn the most. If you don’t work for at least 35 years, zeros are averaged in and will reduce your retirement payments. Working for more than 35 years can improve your payments because your lowest earning years could be dropped from the calculation.

$1,461 average payment

Retired workers will receive an average Social Security payment of $1,461 per month in 2019. Retired couples bring in an average of $2,448 monthly. Payments are adjusted each year to keep up with inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. Cost-of-living adjustments have ranged from zero in 2010, 2011 and 2016 to 14.3 percent in 1980.

Initial eligibility at age 62

Workers first become eligible to start retirement benefits at age 62. However, monthly payments are reduced by 25 or 30 percent if you claim them at this age, depending on your birth year. For example, a baby boomer who qualifies for $1,000 per month from Social Security at age 66 would get a reduced payment of $750 per month if he elects to sign up for Social Security at age 62.

The baby boomer full retirement age is 66

People born between 1943 and 1954 are eligible to claim unreduced Social Security benefits at age 66. The full retirement age then gradually increases from 66 and two months for people born in 1955 to 66 and 10 months for those with a birth year of 1959.

The full retirement age will increase to 67

People born in 1960 or later become eligible for the full retirement benefit they have earned at age 67. Millennials and members of generation X need to wait a year longer than the baby boomers and two years longer than their grandparents to claim their full retirement benefit.

Maximize your monthly payments at age 70

Social Security payments increase each month you delay starting your payments up until age 70. After age 70 there is typically no additional benefit to waiting to sign up for your benefit. Retirees can boost their monthly payments by 24 to 32 percent, depending on their birth year, by claiming Social Security at age 70.

$17,640 earnings limit

If you work and collect Social Security at the same time before your full retirement age, part of your Social Security payments could be temporarily withheld if you earn more than $17,640 in 2019. Beneficiaries who exceed the earnings limit will have $1 in benefits withheld for every $2 in income above the limit. Those who reach full retirement age in 2019 have a higher earnings limit of $46,920, and the penalty declines to $1 withheld for every $3 in excess of the earnings limit. However, once you turn your full retirement age, there’s no benefit reduction for working and claiming benefits at the same time, and your payments will be increased to give you credit for payments that were withheld in the past.

$25,000 in retirement income

If the sum of your adjusted gross income, nontaxable interest and half of your Social Security benefits exceeds $25,000 ($32,000 for couples), half of your Social Security benefit becomes subject to income tax. And if these income sources top $34,000 ($44,000 for couples), income tax could be due on 85 percent of your Social Security payments.