When Should You Start Collecting Social Security Benefits
Collecting Social Security Benefits For Retirees –
The age at which an individual should begin collecting Social Security depends on his or her unique circumstances. The longer an individual can delay collecting, the higher the monthly benefit will be. Ultimately, however, the total amount collected will probably be about the same. Those who start collecting at the minimum age will collect less per month but it will be for a longer period than those who delay the onset of benefit collection.
Many seniors opt for delaying the onset of benefits in order to increase their monthly payment but there is a limit to the monthly payment, regardless of the wage base. For 2018, the maximum benefit payable is $2,788 per month. Sometimes, seniors find themselves in a situation where it’s necessary to collect benefits at the minimum age, which is 62. Unforeseen circumstances, such as divorce or loss of employment, can make the early collection a necessity. Those who find themselves in this situation might want to talk to their financial advisor or their tax professional for more information.
Criteria For Collecting SSA Retirement Benefits –
The monthly benefit amount for SSA retirement is based on earnings and will vary by individual. The employer and the employee contribute equal amounts from each paycheck through payroll taxes until retirement; the current rate is 7.65 percent each. Self-employed individuals pay these taxes at the end of the year on their income tax return. The current rate for self-employed individuals is 15.3 percent. These amounts include the contribution for Medicare.
There’s no income limit or resource limit while the employee is working. After full retiring age, there’s no cap on other income, no strictures for marital status or dependents.
Supplemental Security Income –
SSI stands for Supplemental Security Income and it’s a need-based program administered by the Social Security Administration. Although there’s often confusion about the difference between these two programs, they are entirely different and have different criteria for collecting benefits. Whereas SSA is based on taxes contributed and is available to anyone who has contributed sufficiently, SSI is based on need and is available to those of any age who are disabled, those who are at least 65 years old, or those who are blind. The program is financed through allocations from the general revenues and is available only to those who have limited income and resources.
No previous employment is required and the benefit is determined by applicable state and federal laws. Benefit payments can be affected by the family size and other income, so recipients are required to report any changes in their living situation.
Opting To Collect –
Those who are physically unable to support themselves due to health reasons may want to apply for supplemental security income. The application process may take several months to complete and be approved, so the sooner the application is submitted, the better.
It’s possible to collect both SSI and SSA –
Those who need to begin collecting SSA at the minimum age should certainly do so. Although the monthly payment will be reduced, it will be collected for a longer time, which will offset the reduced amount. Those who are able to work can continue to do so and all SSA payroll taxes will be added to the wage base used to calculate benefit amounts.
Retirement is a life goal to be appreciated and not to be feared. For many people, thinking about retirement can seem overwhelming. Am I saving enough money? At what age can I afford to stop working? How long will my money last me? For specific questions based on individual circumstances, seek the advice of a financial professional. If you haven’t already, it’s a good idea to start planning now for your retirement to see the best results from your hard work and efforts.