Do you know how much in benefits your family is entitled to if you become disabled, die or retire? There are different rules for each type of benefit. Check out this video for an easy to understand description of who gets what and how much.
Did you know that there are Social Security benefits available to your eligible family members if you die, become disabled, or retire? There are some limitations though. Generally speaking, no more than 150% – 175% of your full retirement age benefit can be paid out.
Check out this video for more information.
This video walks you through the individual steps to calculate your Social Security family benefit maximum. The numbers in the formula change on an annual basis so please note that this video is made with 2018 numbers. You can find the formula for the current family benefit maximum calculation at this link.
Here are the most important Social Security changes for 2018. This is not all that’s changing, just what I think is most important.
Maximum Taxable Earnings
6.2% of your paycheck goes to Social Security tax (unless you’re self employed and then it’s 12.4%). However, there is a maximum amount of income that you pay this tax on. In 2017 this cap was $127,200. In 2018 the cap increases to $128,400.
Quarter of Coverage
Most of the Social Security programs require 40 ‘credits’ to qualify for benefits. So what does it take to get a ‘credit?’ It changes every year but for 2018 it will be $1,320. This is up from the $1,300 in 2017.
The amount you can earn before the SSA starts to withhold your benefits has increased from $16,920 to $17,040. Keep in mind that this only applies to benefits paid prior to full retirement age.
Cost of Living Adjustment
In most years the Social Security Administration increases benefits to keep up with inflation. It doesn’t always happen though. In fact, in the past 10 years there have been 3 years with a 0% increase. However, in 2018 benefits will increase by 2%.
The effective reduction to your Social Security benefits from the Windfall Elimination Provision changes based on your filing age. This is despite the well publicized ‘Maximum WEP penalty of $448 (for 2018).’
Check out this video where we walk step by step through the calculation process.
Summary of video:
In this video we discuss how the WEP penalty is subtracted from your benefit amount before reductions or increases for your filing age. This changes the effective penalty to an amount that is larger, or smaller, than the well-published $448 (for 2018). Simply put, the effective penalty is the amount of reduction or increase that an individual who is subject to the WEP would receive vs. an individual who is not subject to the WEP.
If you have a pension from work where you did not pay Social Security taxes, but qualified for SS benefits from other work, your SS benefits formula is NOT THE SAME AS IT IS FOR EVERYONE ELSE! Here’s how it is different…
Here's How To Calculate Your REAL Social Security Benefit
Social Security retirement benefits often make up a large portion of an individual’s retirement income. Throughout your lifetime, you can keep an eye on your projected retirement benefits on your annual Social Security statement or by looking at your online mySocialSecurity account (mySSA). It’s a great tool for making educated retirement planning decisions.
But what if your Social Security benefit’s estimate is incorrect by several hundred dollars per month? For some people, it is wrong. Even worse, they probably don’t know it is wrong. What an awful retirement surprise!
If you’re looking for an online Social Security calculator, you’ll find plenty of options. For example, the Social Security website has 11 different options for calculating your benefit! Additionally, there are plenty of private companies who’ll gladly take your money for their version of a SS calculator. Most of us don’t need all of those options. In most cases, there’s only one Social Security calculator you need to figure out your benefit.
If you work for an employer who does not participate in Social Security but has their own pension instead, you probably know that your Social Security options can be complicated with tricky rules that only apply to teachers and other public servants. These rules include the Windfall Elimination Provision (WEP) and the Government Pension Offset.
Individuals often look for a way to soften the impact of these rules. Time and again I hear individuals wondering if they can sidestep these rules by simply taking their pension in a lump sum. After all, in just about every reference to these rules, the Social Security Administration (SSA) says that the rules apply to individuals with a pension from work where no Social Security taxes were paid.
So…if there’s no a ‘pension’ being paid, do the rules still apply?
They do, but with a few exceptions. For certain individuals, taking a pension out in a lump sum can be a valid method of sidestepping these rules. If this interests you, read on. The rules for when and how are complicated, and you don’t want to mess this up.
In several states, most school districts do not participate in Social Security. Instead, they have their own pension plan to which they contribute. But over time, a few school districts in these states have adopted agreements with the Social Security Administration which allows them to participate in both Social Security AND their own pension plan.