How Do I Change My Direct Deposit Instructions For My Retirement Check
Print and complete the Electronic Funds Transfer Authorization form and return it to one of our offices. Forms received by the 14th of the month take effect the same month. You may also make this change yourself through your PERS secure, on-line account. Due to our pre-notification process, you may receive your monthly check by mail for that month only, and then the following month, we will direct deposit your benefit into the new bank account.
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How Much Can I Earn
The annual Social Security earnings limit for those starting benefits before reaching full retirement age in 2021 is $18,960. In 2022, the limit is $19,560. Full retirement age is based on your year of birth.
If you earn over the limit, there are rules that determine how much your Social Security benefits will be reduced. There are three different earnings limit rules that apply, depending on whether you earn the income before, during, or after the year your reach full retirement age.
Each option is covered below.
What Is The Difference Between The Employee/employer Pay Plan And The Employer Pay Plan How Does The Choice Of Plan Affect My Retirement Benefit
Under the Employee/Employer Pay Plan the member pays 50% of the retirement contributions through a payroll deduction and the employer pays the other 50% of the contributions. If you terminate employment, you may elect to refund the employee contributions you personally paid into the system, which will cancel your membership in PERS. Under the Employer Pay Plan , the employee pays for their portion of the contribution through a salary reduction or in lieu of pay increase and the employer pays 100% of the retirement contributions to PERS. Under this plan, the member does not accrue refundable contributions and will retain their service credit in the event of termination. In addition, your average compensation is adjusted at the time of retirement if you are under the ER Paid plan.
Whether or not you will have the choice between the two contribution plans when you are newly hired depends upon the public employer in which you work. Some public employers require mandatory participation under the ER Paid plan for their employees and others, like the State, allow for a choice.
Regardless of which plan you are under, you share equally in the PERS contribution rate and there is no difference in how your monthly benefit will be calculated.
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Your Social Security Benefits Could Be Reducedtemporarily
Your age matters here, as we’ll see below, but any reductions that do occur are temporary. The IRS will eventually recalculate your benefit and give you credit for months when you didn’t receive a benefit, thereby boosting your future benefit. So, don’t let a temporary reduction in payments keep you from returning to work. Here’s how the age rules work:
If you haven’t yet reached your full retirement age between 66 and 67 for people born in 1943 or laterworking could mean temporarily giving up $1 in benefits for every $2 you earn above the annual limit .
Here’s an example of how that might look:
Check In On Your Pension
Although pensions arent as common as they used to be, retirees who have them should keep in mind how returning to the workforce might impact them.
It would be important to look at how this would affect their current or future pension benefit, Bickmore says. Every pension is different, be it a union or state pension, so it would be recommended to look specifically at the pension plans details.
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Medicare Coverage For High
Lets say you return to work after age 65 and keep your Medicare coverage.
If you land a lucrative second career or consulting position, you may enter a higher income bracket and face Medicare surcharges.
Thats because, by law, high-income earners pay more for Medicare Part B and Part D.
If youre single and earn more than $91,000 but less than or equal to $114,000 a year, you must pay an additional $68.00 a month for your Part B premium in 2022.
For a married couple filing jointly, extra charges start at incomes above $182,000.
A similar, smaller surcharge applies to Part D premiums.
In 2022, an individual who makes between $91,000 and $114,000 a year will owe a $12.40 income-related monthly adjustment amount in addition to their standard Part D premium.
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How Do I Change My Mailing Address
Retirees may change their mailing address in writing or changed by the retiree on the PERS website through their secure account. If you choose to submit a written request, you may do so by printing and completing the Change of Address for Benefit Recipients form , or submit a written statement that includes your signature. Forms received by the 14th of the month take effect the same month.
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Next Steps To Consider
This information is intended to be educational and is not tailored to the investment needs of any specific investor.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Investing involves risk, including risk of loss.
Past performance is no guarantee of future results.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
What Counts As Income For Social Security Benefits
Only certain kinds of income are included when calculating your Social Security income limit. This includes only earned income meaning wages from a place you are employed or contracted, or income from self-employment. Income from annuities, interest or dividends from a savings or investment account, and pensions do not count as earnings towards Social Security income limits.
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How Benefits Are Calculated
Social Security benefits are calculated based on your 35 highest-earning working years. Therefore, if you keep working and earn a higher salary in your 60s than you did earlier in your career, you could boost your Social Security payments even more.
If you don’t need the money as soon as you reach full retirement age and are in good health, it’s probably wise to wait until you turn 70 to apply. “When you think of Social Security the right way, as insurance against outliving your money, then it makes sense to wait until age 70 for the highest payout available,” says Robert R. Schulz, CFP®, president of Schulz Wealth in Mansfield, TX.
What Does The Term Spouse Mean
For the purposes of accessing an account online, spouse is the description used in two different scenarios. 1) The husband, wife, or registered domestic partner of a member who passes away prior to retirement. Due to the members passing away, you are currently receiving a lifetime benefit under this account. 2) The owner retired from the Police and Firefighters retirement fund, selected the Unmodified Retirement Option 1 benefit and you were the spouse or registered domestic partner of the owner at the time of retirement.
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Change Is Always Possible
It’s not hard to understand why the solvency of Social Security has been the center of a growing national debate over the past few years. It’s simple economics.
More people are retiring than entering the workforce, which will eventually reduce the ratio of workers to retirees to 2-to-1 . In addition, people are living much longer in retirement, sometimes decades longer.
Under the pressure of possible insolvency, Congress has debated several Social Security reform measures in recent years. While no new legislation has been passed, the possibility continues to exist for dramatic revisions to this social insurance system to come about in the future, changing how Social Security factors into your retirement planning.
To learn more about your benefits, visit the Social Security website at www.ssa.gov.
How Much Can You Earn And Still Receive Social Security
When you take benefits while youre still working, Social Security may withhold part of your benefit depending on your income if you havent reached full retirement age. Your full retirement age is between 66 and 67 if you were born from 1943 to 1959 its 67 if you were born in 1960 or later.
Social Security will withhold benefits at the following rates in 2021:
- $1 for every $2 of earned income above $18,960 until the year you reach full retirement age. Lets say youre 64 and earn $20,000 from working, and youre already getting benefits. Youve earned $1,040 above the earnings limit, so Social Security would withhold $520 from your benefit.
- $1 for every $3 of earned income above $50,520 the year you reach full retirement age until the month before youre eligible for your full benefit. Suppose you reach full retirement age in October. Social Security would only reduce your benefits if you earned more than $50,520 between January and September.
These rules apply whether youre an older worker taking benefits based on your own work record or youre getting a spousal benefit or a survivor benefit.
The key to understanding Social Securitys rules about working and benefits is that everything changes when you reach the date when you can fully retire. After that point, you can earn as much as you want and still keep all your benefits. Earlier, though, you can give up some of your benefits.
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What Happens When Both Spouses Collect Social Security And One Dies
If you are already receiving a spousal benefit when your husband or wife dies, Social Security will in most cases convert it automatically to a survivor benefit once the death is reported. Otherwise, you will need to apply for survivor benefits by phone at 800-772-1213 or in person at your local Social Security office.
Continuing To Work May Reduce Your Benefits
Another consideration when determining whether to take Social Security benefits before your full retirement age is that your work activity during this time may decrease your benefit payments.
After you reach your full retirement age, you can earn as much as you like and still receive your full Social Security benefits. However, the rules for how work affects your benefits are complicated if you would like to work while receiving benefits, you should contact the Social Security Administration before making any decisions.
Note: You should apply for Medicare at age 65, even if you decide to continue working. If youre still working, you might need just Part A of Medicare your local Social Security office can tell you whether taking Part B is a good idea. In some cases, waiting to apply will result in higher premiums.
Generally, Social Security recipients who have not yet reached full retirement age will see their benefits reduced by $1 for every $2 they earn over an annual limit. Once recipients reach the year in which they attain their full retirement age, the reduction changes to $1 for every $3 they earn over a different limit. Once recipients reach the month and year of full retirement age, there is no limit on work activity.
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You Can Pay Back Benefits You’ve Already Receivedand Boost Your Future Benefit
If you’ve taken Social Security benefits early at a reduced rate, you have the option of paying back to the government what you’ve already received and restarting benefits at a later date with a higher payout. Keep in mind that you will need to repay the gross amount of your benefitwhich includes any withholdings for Medicare premiums and/or income tax.
For example, say you chose to receive benefits at 62 and nine months later decided you wanted to return to work. You could stop receiving Social Security by withdrawing your application for benefits, pay back the benefits received, return to work, and then defer your benefit up to age 70, when you could restart your benefits at a higher level. The option to pay back Social Security is limited to the first 11 months’ worth of benefits, and the SSA allows repayment only in the first year after you start to receive benefits.
Once you reach full retirement age, another option is to voluntarily stop benefits at any point in time before age 70 to receive delayed retirement credits . Benefits will automatically restart at age 70 at a higher amount, unless you choose an earlier date.
Take note that when you withdraw your application or stop your benefits after full retirement age, you must specify if your Medicare coverageif you have itshould be included in the withdrawal.
How Will My Pers Benefit Be Affected When I Draw Social Security
Your PERS benefit is not affected by Social Security. However, your Social Security benefit may be affected because you receive a PERS pension. The Government Pension Offset and the Windfall Elimination Provision are the two Federal Government regulations that may reduce your Social Security benefit. We suggest you contact the Social Security Administration using their toll-free number 800-772-1213 or visit their website at www.ssa.gov to find out more information.
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Your Monthly Social Security Benefits Increase The Longer You Wait To Claim
You can collect Social Security benefits as soon as you turn 62, but taking benefits before your full retirement age means a permanent reduction in your payments of as much as 25% to 30%, depending on your full retirement age.
If you wait until you hit full retirement age to claim Social Security benefits, youll receive 100% of your earned benefits. But you can also get a big bonus by waiting to claim your Social Security benefits at age 70 your monthly Social Security benefit will grow by 8% a year until then. Any cost-of-living adjustments will be included, too, so you dont forgo those by waiting.
Waiting to claim your Social Security benefits can help your heirs as well. By waiting to take her benefit, a high-earning wife, for example, can ensure that her low-earning husband will receive a much higher survivor benefit in the event she dies before him. That extra income of up to 32% could make a big difference.
When Do I Begin Receiving Post
Once you have been drawing a benefit for three full years you are entitled to post-retirement increases. The increases begin at 2% in each of the fourth, fifth, and sixth years increase to 3% in years seven, eight, and nine 3.5% in years ten, eleven, and twelve 4% for years thirteen and fourteen and 5% in year fifteen and each year thereafter. Members newly enrolled in PERS on or after January 1, 2010 are not entitled to receive the 5% increase. Post-retirement increases are paid in the month following the month in which you retired.
Occasionally, post-retirement increases are lower than the percentages listed above. If your benefit outpaces inflation for any year during the period since your retirement date, your increase may be capped for that year, by a rolling three year average of the Consumer Price Index .
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How To Get A Social Security Card
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Theres An Annual Social Security Cost
One of the best features of Social Security benefits is that the government adjusts the benefits each year based on inflation. This is called a cost-of-living adjustment, or COLA, and helps your payments keep up with increasing living expenses. The Social Security COLA is quite valuable its the equivalent of buying inflation protection on a private annuity, which can get expensive.
Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. In 2021, Social Security beneficiaries saw a 1.3% COLA in their monthly Social Security benefits.
The Kiplinger Letter predicted in September that the COLA for 2022 could be 6%, which would be the largest adjustment since 1982. The final COLA for 2022 will be announced on Oct. 13.
Heres what COLAs have been in other recent years:
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Three Things To Keep In Mind
For most people, Social Security benefits will represent a portion of their income during retirement yearsnot their sole source of income. It’s important to be aware of three important factors that will affect the amount of Social Security benefits you will eventually receive:
- When you choose to begin taking benefits
- Whether or not your benefits are taxed
- Whether or not you continue working
