You may already know that if you’re under full retirement age and file for Social Security benefits, there’s a limit to the amount of income you can make before your benefit is reduced — or shut off completely.

But there’s one big question that keeps coming up when I talk to people about this topic: What counts as income?

With a system as complex as Social Security, it’s inevitable that misinformation (or simply a misunderstanding of the facts) will spread. It’s hard to understand what’s true and what’s not, and often, our brains prefer the version of events that feel intuitively more simple to understand.

And of course, Social Security is anything but simple to understand.

If you’re retiring early for health reasons, do you know what benefit to file for when you claim Social Security?

Most people don’t, and simply assume they just need to file for retirement benefits. But if you could receive disability benefits instead, choosing to file normally could cause you to miss out on a lot of money.

Let me tell you this story to explain how.

The Social Security Administration will not be the same in 10 years. They have a plan that is rapidly unfolding and some of this is detailed in their “Vision 2025” strategic plan.

You might have heard a little about this already. The Administration has a webpage devoted to it — but to really get into the meat of what the Social Security Administration plans to do next, you have to dive into the supporting studies.

Let’s take a look together in this article. I’ll help you cover the entire spectrum of what the Social Security Administration (or SSA) has in the works… and what I see as the biggest challenge to getting this off the ground.

Most of us spend a lot of time figuring out how to maximize the benefits we can receive from Social Security. After all, when we’re talking about retirement, every extra income stream and every dollar makes a difference.

So it might sound strange at first to talk about how to stop your Social Security benefits from coming in. But in some situations, there are a number of reasons why stopping your Social Security benefit is the right thing to do.

There’s a right way to do this, and a wrong way — and you need to know the difference so you can understand when it makes sense to turn off Social Security benefits, and how to do it correctly so that action doesn’t come back to bite you down the road.

There are a few mistakes you can make with your Medicare benefits that seem small, but actually carry some big, nasty consequences.

I’m talking about the kind of consequences that can cost you thousands of dollars. That’s a lot of money that you could have on the line — and the confusing Medicare system doesn’t make it any easier to avoid big mistakes.

Medicare is full of confusing language, plans that seem awfully similar, a lot of different deadlines, and more than a few hidden costs that can take you (and your budget) by surprise.

I’ve seen more than a few people make these specific Medicare mistakes, and I want to help you avoid becoming just another one of many. Here’s what I see most often — and how you can avoid making these same errors.

Are you an educator or public servant who currently works — and will eventually be subject to Social Security’s Windfall Elimination Provision or the Government Pension Offset? Tired of waiting on your elected officials to keep their promises and repeal the WEP and GPO that punish workers like you?

If so, I have some good news: you have the power to get these rules changed. You just need to know what actions to take, and that’s what I want to share with you in this article.

It’s one of the most popular questions asked about claiming benefits for your retirement: What’s the right age to collect Social Security? Should you file early — or late?

This is not an easy decision to make, or one to take lightly.  No matter what your financial situation, you’ve likely wondered about the best strategy for you.

So today, take a look at the 10 factors you need to consider when you’re thinking about filing for your benefits.

It’s no secret that Social Security is not the easiest system to understand. A maze of complex and complicated rules make it very hard to understand what is and isn’t allowed, and there are a number of hoops everyone has to jump through to ensure they get their benefits in the right amount.

Another not-so-secret fact about the system? It’s plagued with problems, the biggest of which may be the fact that the Social Security Administration’s trust funds will run out of money around 2035 unless someone finds a fix — and quick.

Considering this, it’s little wonder that people are quick to take issue with anything about Social Security that seems to indicate that someone is getting more benefits than they should. After all, anyone receiving income from Social Security is pulling from a very finite pool of resources.

The more money that goes to people who shouldn’t be receiving it means less for people who truly need it.

So when it comes to people with felony convictions who receive Social Security checks, it’s little wonder people get very fired up about this topic. But there’s also a lot of misinformation floating around about this topic, so let’s set the record straight about whether felons have a right to Social Security or not.

A Felony Conviction Does Not Automatically Disqualify Someone for Social Security

Not long ago, someone commented that the Social Security system wouldn’t be in such trouble if we didn’t have prisons full of people collecting disability and retirement benefits.

While I have a lot of content, in the form of both blog posts and videos on my YouTube channel, dedicated to breaking down and explaining the complex rules around Social Security, that comment made me realize that I’ve never gone into detail on whether or not someone with a felony conviction can receive benefits.

Here’s how this works: a felony conviction alone does not turn off your Social Security benefits. But an individual cannot receive benefits while imprisoned for more than 30 days for that conviction.

That detail is important! It means that if someone is arrested for a crime, and spends 90 days in county jail waiting on their trial, their benefits will continue. In order for the benefits to be suspended, they must be convicted and imprisoned for more than 30 days.

The Rules Around Medicare and Other Benefits for Imprisoned Individuals

While we’re clearing up the misinformation around whether or not convicted felons serving their sentences for their crimes are eligible for benefits, let’s look at a few other important points that most people don’t have the facts on.

If someone is on Medicare when they go to prison, their Social Security benefits will stop. The automated payments to Medicare Part B stop, as well — but those premiums are still due and payable.

If an individual does not pay their Part B premiums, then their Medicare Part B coverage will discontinue. That person would then have to reapply for benefits during an open enrollment period. The result for that person would most likely be a much higher Part B premium.

The other interesting note is with regards to spousal and childrens’ benefits. The rules are fairly clear that if a spouse or child is receiving benefits from the work of an individual who is incarcerated, that benefit will continue.

Keep in mind that before a spouse or child can receive a benefit from another work record, the individual who owns that record has to file first. If someone is in prison when they first become eligible to file, then they can’t actually take that action — and if they can’t file, then their spouses and children can’t receive their benefit.

What’s Your Take on This Topic?

It’s easy to hear rumors like the one that a bunch of felons are sitting around collecting Social Security, and feel worried or concerned over whether that’s completely true. After all, Social Security is in some degree of trouble because funds will run out unless new rules or regulations go into effect soon.

But I ask that you really think this one through. Some people believe that if an individual is being provided housing and food by the government at taxpayer expense, they shouldn’t be able to get any kind of Social Security benefit on top of that.

But you can consider this from another perspective, too. Some people say that if a prisoner worked for their entire life and contributed to the system, the government shouldn’t be able to seize any portion of that earned benefit.

Questions?
If you still have questions, you could leave a comment below, but what may be an even greater help is to join my FREE Facebook members group. It’s very active and has some really smart people who love to answer any questions you may have about Social Security. From time to time I’ll even drop in to add my thoughts, too. Also…if you haven’t already, you should join the 100,000+ subscribers on my YouTube channel!

Worries and rumors and complaints about a broken system on the verge of collapsing have been the norm when it comes to talking about Social Security since as far back as the 1980s — and that shows no signs of slowing down today.

With current projections showing the Administration’s trust funds run out in 2035, it makes sense that people are still concerned and clamoring for a solution. Wouldn’t it be nice if we could just fix Social Security once and for all?

It sure would be — and it might be easier than most people currently think. In fact, I believe there is a solution to fix Social Security. Not only would it repair a broken system, but it wouldn’t even require extensive legislation and the infrastructure is already in place to start administering this today.

Sound too good to be true? Keep reading and I’ll give you all the details on the most obvious fix for Social Security’s current woes.

We CAN Avoiding Cutting Social Security Benefits

It’s no secret that Social Security is facing financial challenges ahead. Again, we know that within the next 15 or so years, there will not be enough money coming in to pay out benefits.

Something has to change, and fast, or we can expect benefits to be cut by around 25% across the board. Maybe that’s not a big deal for some people… but for many others, losing a full quarter of your benefit payment could be devastating.

This would be a good place to pause before I share my solution, and give a quick warning to politicians who would like to stay in office:

There are nearly 50 million individuals in the United States over the age of 65. 25 million households get half of their family income from Social Security. More than 12 million get 90% of their income from Social Security.

That’s a lot of people — and this many people can easily swing election outcomes one way or another. Since 1900, the average popular vote difference between the winner and loser of a presidential election has been 5.8 million votes.

Clearly, there are more than enough voters here — voters who have the majority of their income at stake — to easily swing an election to the side of someone who can fix this system before benefit cuts happen.

My idea would not be difficult for politicians or the government to implement, because the systems are already in place to put this plan into action. So what is this great fix?

It’s very simple: it’s an extension of the Social Security earnings limit to all ages.

Here’s how it would work.

Extending the Social Security Earnings Limit to All Ages Could Fix the System

Under the current rules, if you’re younger than the full retirement age then you can only make a certain amount of income before your benefits are withheld. If you make over a certain amount in income, you don’t get benefits at all.

But once you reach full retirement age, there is no limit on the amount of earnings you can have outside of your Social Security benefit.

My fix would simply extend this current rule around the earnings limit to apply that limit to all ages. If your earnings exceed a certain amount — which would mean you don’t actually need Social Security in order to get by or afford your lifestyle — you would not be eligible to receive benefits.

This would actually realign the system with the original guidelines. It would also free up funds to go to those who truly rely on their Social Security benefits to survive in retirement and have little or no other sources of income to use.

Shouldn’t Social Security Go to Those Who Need It Most?

When Social Security first began, the earnings limit applied to all ages. In 1950, the earnings limit was eliminated at age 75.

In 1954, this was changed to age 72. Another change happened in 1983 when the age was dropped to 70. Finally, in 2000, the rules changed for a final time to make the earnings limit drop off at your full retirement age.

I’m certainly not the first to suggest this specific fix to Social Security — although my simplified method of extending the earnings limit may be new.

On the campaign trail in 2015, now-President Donald Trump said, “I would be willing to say I will not get Social Security. But the fact is that there are people that truly don’t need it, and there are many people that do need it very, very badly.”

In the same campaign season, then-Governor Chris Christie said, “We need to save this program for people who have paid into the system and need it. This government doesn’t need more money to make Social Security solvent. We need to be not paying benefits to people who don’t really need it.”

A Word on Fixing Social Security with Means Testing

Although a means test has been suggested before, I haven’t seen the research on the impact of such a change.  One of my big questions about this is, where would the earnings limit be set under this solution?

Ultimately, there is an earnings amount where cutting benefits to individuals above the line would completely fix the system. Is that number $15,000 in income? $25,000? Who knows?

To my knowledge this topic hasn’t been researched enough to have a complete answer, which is where the means test seems most problematic to me. It’s a big puzzle piece that’s missing and really needs to be known before this proposal can get serious.

I know some people will say that even my proposed solution of making the earnings limit something that applies to everyone regardless of age is a form of means testing — and that it unfairly punishes success.

As much as I agree with that, the entire Social Security system is already built on means testing. My fix doesn’t present a huge change due to the progressive Social Security benefits formula.

Under that formula, lower-earning individuals receive a benefit that is a higher replacement of pre-retirement earnings than higher earning individuals. And once benefits begin to be paid, lower earning individuals usually don’t have to pay any taxes while those with higher incomes have to give some of it back through taxes.

Adding a “means test” like the earnings limit applying to all ages wouldn’t really represent a monumental policy shift. 

The fact is, any solution we can use now will likely impact anyone under 50 with a higher than average income. Even I don’t love my solution, as it impacts me, too!

This is probably something we need to get used to — and I think a solution like the earnings limit applying to everyone is preferable to a convoluted fix that only fixes part of the problem through half measures and complex law. Let’s keep it simple so we can rip the bandaid off and get it over with!

As this and other policies develop, I’ll be here to give you the details.

Questions?
If you still have questions, you could leave a comment below, but what may be an even greater help is to join my FREE Facebook members group. It’s very active and has some really smart people who love to answer any questions you may have about Social Security. From time to time I’ll even drop in to add my thoughts, too. Also…if you haven’t already, you should join the 100,000+ subscribers on my YouTube channel!