Can I See Some Example Calculations Of Getting Social Security Benefits While Working
Here are a few example calculations:
- You are under full retirement age all year, and you are entitled to $800 a month in benefits .
You work and earn $28,960 during the year. Your Social Security benefits would be reduced by $5,000 . You would receive $4,600 of your $9,600 in benefits for the year.
- You Reach full retirement age in August 2021 and you are entitled to $800 per month in benefits.
You work and earn $63,000 during the year, with $52,638 of it in the 7 months from January through July .
Your Social Security benefits would be reduced through July by $706 . You would still receive $4,894 out of your $5,600 benefits for the first 7 months .
Beginning in August 2021, when you reach full retirement age, you would receive your full benefit , no matter how much you earn.
- Remember that Social Security does not count pensions, annuities, investment income, interest, veterans, or other government or military retirement benefits against your deductible income.
Yes, its confusing, and the more assets are involved, the worse it can be. By consulting with a knowledgeable social securities lawyer, all the details can be gone through and explained. You worked hard for your Social Security benefits, and they will be sure you get what you deserve.
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Floridas Tourists Can Slow You Down
Ever since you were a munchkin, you knew Florida as a tourist destination. If you visited Walt Disney World when you were a kid , you marveled at the crowds. As a resident, youll probably only be annoyed by them.
Approximately 87 million tourists visited Florida in 2020, according to Visit Florida, the lowest number since 2010. But that was during the pandemic, when tourism was down everywhere. In 2019, Florida had 131.42 million tourists, and the state has had more than 100 million visitors a year from 2010 to 2019 converging on the states famous theme parks, beaches and destination spots such as the Keys and Everglades National Park.
The high season, when the snowbirds, holiday travelers and spring-breakers all converge on Florida, lasts roughly from mid December to mid April. Theres also summer season, lasting from mid June to mid August, when the kids are out of school and summer vacationers hit Florida. That makes for a lot of people on the road, an annoyance to the locals when they need to run errands.
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What Is The Average Retirement Age
The average retirement age is 64 for men and 62 for women, but before you start counting the number of years you have left in the workforce, you may want to know some crucial factors.
About half of workers intend to continue working past age 65, and many retirees return to work. Some cut their workload to part-time, and others choose to change careers. Some retirees even return to working full-time and retire again later. In other words, the average retirement age isnt very clear-cut.
Additionally, if you base your decision on the average retirement age of 61, you wont be able to collect your Social Security benefit and you wont be eligible for Medicare.
Taking Early Retirement May Cost You In The Long
Its no secret that American workers face a major and very real retirement crisis. Wealth inequality and workplace changes have all but kicked-out two of the legs of the traditional retirement stool: pensions and private savings both of which are at historic lows.
More and more retirees have come to rely on the third leg of the stool, Social Security, for most of their income. The average monthly Social Security benefit in Florida is about $1,400 or some $17,000 per year, only a few thousand dollars above the federal poverty line.
Even with Social Security, nearly 10% of Florida seniors live in poverty. The good news is that workers can increase the size of their future Social Security checks by delaying retirement.
Delayed claiming past the early retirement age of 62 results in bigger monthly benefit checks for life.
Waiting until after the current full retirement age of 66 yields even greater gains up to 44% more than early claiming. But too few Floridians are taking advantage of this delay-and-gain strategy.
The average retirement age in Florida is 63 resulting in reduced benefits for those workers. Claimants permanent benefits are cut by roughly 6% for every year before the full retirement age that they file for Social Security.
People are living longer, meaning seniors must survive on their fixed incomes even longer. Floridas future retirees will likely need the extra cash that delayed claiming can provide.
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How Does Full Retirement Age Affect Your Social Security Benefits
If you claim your benefits at full retirement age, you will receive your standard Social Security benefit amount. If you claim prior to FRA, you will be subject to early filing penalties that reduce your benefit by the following amounts:
- 5/9 of 1% for each of the first 36 months before FRA
- 5/12 of 1% for each subsequent month before FRA
This amounts to a 6.7% annual reduction for each of the first three years and an additional 5% reduction for each following year before FRA. If you claim benefits at 62 with an FRA of 67, you will face a full 30% reduction in benefits.
By contrast, if you claim benefits after FRA, you receive delayed retirement credits valued at 2/3 of 1% per month. This results in an 8% annual increase to your monthly benefit. Delayed retirement credits can be earned until age 70, after which time there is no financial benefit to delaying your claim. Delayed retirement credits cannot be earned if you are claiming either spousal or survivor benefits.
Circumstances Determine Your Retirement Age
The age when you can retire varies according to your circumstances. In states with a higher cost of living, such as Hawaii, California, or New York, you might not be able to retire early or at the age you want, because you need to save more money to continue living in those areas.
People with college degrees generally have higher-paying jobs, which means that they are more likely to be able to retire at the average age if they plan well. A person’s retirement age also depends upon their standard of living.
If two neighbors make the same amount of money in a year, but one saves and invests while the other spends, the saver might be able to retire earlier than the spender.
The map below shows a breakdown of the mean retirement age by state.
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our reporters and editors focus on the points consumers care about most how to save for retirement, understanding the types of accounts, how to choose investments and more so you can feel confident when planning for your future.
No One Else Is Relying On Your Benefits
In the event of your death, a surviving spouse, minor or disabled child can receive money from the Social Security Administration based on the amount of your benefits. For example, a surviving spouse can receive between 71.5% and 100% of your benefit amount, depending on the surviving spouses age. A disabled child can receive 75% of your benefits each month even after youre gone.
If no one else can qualify for benefits based on your record, you might want to retire early because no one is depending on that money. If everything else falls into place and you meet the minimum Social Security retirement age, consider collecting your benefits early and enjoying life.
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Taking Social Security: How To Benefit By Waiting
For those who are able to do so, it may make sense to wait even longer, because youll receive a larger monthly benefit even more than your full benefit. Every month past your full retirement that you delay, Social Security will increase your check by about 0.7 percent per month.
If your full retirement age is 66, then heres how much your check would increase:
| Retirement age | New benefit | A $1,000 check becomes |
|---|---|---|
| $1,320 |
So if your full retirement age is 66, then if you can wait two more years and claim benefits at age 68, youll increase your monthly check by 16 percent. In this case, if your full benefit were $1,000 a month, your new benefit would become $1,160 per month. And youll still receive cost of living adjustments on top of this amount, typically raising your payout a little each year.
Workers have other ways to grow their Social Security benefits, too, but its important to start early.
What Age Is Full Retirement Age
If you were born in 1960 or thereafter, your full retirement age is 67. If you were born before 1960, your full retirement age is two months for every year before 1960, all the way back to 1937, when the full retirement age was 65. So, if you were born in 1957, your full retirement age is 66 and 6 months. More about benefits by birth year.
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What Is A Good Monthly Retirement Income
Median retirement income for seniors is around $24,000 however, average income can be much higher. On average, seniors earn between $2000 and $6000 per month. Older retirees tend to earn less than younger retirees. Its recommended that you save enough to replace 70% of your pre-retirement monthly income.
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Women: Plan To Live Longer
The downside to early retirement is greater for married women than men. Ideally, women should be retiring at older ages than men, rather than earlier, according to the NBER research. If youre a woman and your career was cut short or interrupted, youre more likely than a man to be leaving the workforce just as your earnings potential is peaking.
However, if you work until youre 70, the research finds, youre much closer to erasing the gender gap in Social Security benefits earned.
In the U.S., if you were born in 1937 or earlier, you may begin receiving full benefits at 65, according to the Social Security Administration. The full-benefits retirement age progressively moves higher for younger peopleup to 67 for people born after 1960. You may begin drawing as early as 62 but at a reduced amount.
If youre a married woman expecting to combine your wealth with your husband during retirement, outliving your savings may be less concerning.
But keep in mind that women tend to live two to three years longer. And its not uncommon for women to be widows for 15 years or more. Its generally wise to plan for living until age 85 or 90 to reduce the odds of outliving your savings.
At 65, the average life expectancy is 21.5 years if youre a woman and 19 years if youre a man, according to the SSAs life expectancy calculator. Half of the population will live longer than life expectancy.
You Have A Shorter Life Expectancy
The government incentivizes waiting to collect your Social Security benefits by giving you a larger monthly amount the longer you delay. For example, if you start collecting benefits at age 62 when your full retirement age is 66, your monthly benefit will be about 75% of your full-age benefit. So if you expected your monthly benefit to be $1,000 per month at 66, you would only receive around $750 at 62.
Although a larger monthly benefit might sound great, keep in mind that youd have to wait four years to get that extra $250 per month. You would receive $36,000 during those four years at the reduced amount of $750 per month.
When you start collecting $1,000 at age 66, that extra $250 per month wont let you break even for 12 years compared to collecting early. If your health is declining and you dont expect to live until youre 78, youll receive more in benefits during your lifetime if you start claiming as soon as possible.
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How Much Money Should You Have Saved For Retirement By Age
The amount of money you need to retire and have saved by age depends on your income, lifestyle, and other factors. Fidelity recommends having the equivalent of your salary saved by 30, three times your salary by 40, six times your salary by 50, eight times your salary by 60, and 10 times your salary by 67. You may want to be more aggressive with saving if you want to retire sooner or makeup ground if you’re getting a later start.
You Need To Pay Down Debt
There are some debts you need to tackle before you retire. If you have high-interest debt, claiming Social Security early can help you pay the debt down. Depending on the interest rate youre paying, the 8% yearly boost to your benefits that you receive for each year you wait past full retirement age might not be worth the increased monthly benefit. Using the early benefits to reduce or eliminate your debt earlier could mean youll be able to keep more of your benefits in the future.
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When You Turn 62
That is when you can first claim Social Security benefits, unless you have a health factor that would allow you to receive SS benefits at an earlier age. NOTE: You do not need to be retired to receive SS benefits, but your monthly benefit amount can be reduced if you are making more than $1,580 a month from work. More details on working and collecting Social Security benefits.
When Should You Start Collecting Social Security Benefits
To determine when you should start taking your benefits, its important to understand how much your check is affected by when you claim your benefit. As mentioned before, you can claim your benefit as early as age 62, but reaching full retirement age can secure your full benefit.
So when exactly is full retirement age? That depends on when you were born.
| Year of birth | |
|---|---|
| 65 + 2 months for each year past 1937 | |
| 1943-1954 | |
| 66 + 2 months for each year past 1954 | |
| 1960 and later | 67 |
While the full retirement age used to be 65, changes to the program have increased that age. For example, those born in 1955 now have to wait an extra two months beyond age 66 to claim their full benefit. Someone born in 1959, for example, would have to wait until age 66 and 10 months to get the full benefit. Anyone born in 1960 or later, receives their full benefit at 67.
But some retirees choose to wait even longer. You may wait until as late as age 70 to claim your benefit, but then you must take it. Youll receive a bigger check for doing so.
So what is the upside to delaying your Social Security benefit after age 62? Your check wont get hit by a serious benefit reduction. Heres how much a $1,000 monthly check will become if you claim your benefit as soon as youre eligible at age 62.
| Year of birth | If you file at 62, benefit reduced by: | A $1,000 check becomes |
|---|---|---|
| $700 |
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You Expect Your Investments To Grow Faster Than The Increased Benefit
If youre the next Warren Buffet, its possible you could do better taking Social Security early and investing the money than you could by waiting to take a larger benefit later. When weighing the best decision, consider the inflation rate, the rate your benefits increase and how much you can expect to earn in your portfolio. Given that benefits increase by 8 percent per year for each year you wait after full retirement age, however, its hard to outperform that rate of increase in the market. These safe investments do have high returns.
