Tuesday, June 14, 2011

Social security retirement benefits

Social security retirement benefits

I don’t know much about social security retirement benefits. In order to understand it, I am gathering a lot of information form social security website ( and writing it so that I can understand it better.

Contact Number: One can reach social security via 1-800-772-1213. Specific questions can be answered from 7 a.m. to 7 p.m., Monday through Friday. Information is provided by automatic phone service 24 hours a day. Their TTY number is 1-800-325-0778.

Qualification for social security retirement benefit:
  • When someone works and pay social security taxes, he/she earn credits.
  • If someone was born 1929 and later, he/she needs 40 credits to get retirement benefits
  • 40 credits are 10 years of work in total.

How much?
  • It is based earning history (lifetime earning).
  • Higher the earnings, higher the benefits
  • Breaks in between earnings or low earning during some years before retirements, benefits may be lower compare to steady working history.
  • Retire earlier, lower the benefits. For example, retiring 4 years earlier to full retirement age might reduce benefits around 25%.
  • Social security statement contains record of earnings. It includes estimated social security benefits at different ages.
  • Social security website provides online retirement estimator (
Following is the table for full retirement age:

Year of Birth:   Full retirement age
1943-1954:        66 years
1955:                66 years and 2 months
1956:                66 years and 4 months
1957:                66 years and 6 months
1958:                66 years and 8 months
1959:                66 years and 10 months
1960:                67 years

Earliest retirement age is 62

It is possible to delayed retirement beyond full retirement age. By doing so, it is possible that he/she will get increase benefits.
By working longer, lifetime earning increases, so benefits increases.
Benefit increases by certain percentage from full retirement age till age of 70 in the case of delayed retirement. Percentage increase is based on one’s year of birth. For people born in 1943 or later, this percentage is 8%.

For widows and widowers:
It is possible to get benefits at 60. it is possible to take reduce benefits at one record and switch later on.

For family members:
If one is getting social security retirement benefits, his/her family members may be eligible for benefits as well. Family members can be:
Spouses: 62 or older
Spouses: younger than 62 who is taking care of a child under the age of 16 or disable
Former spouses: older than 62
Children: upto age 18, or upto age 19 if they are full time students and are still in high school
Disabled children

For spouses:
  • Spouses who never worked, or had lower income can be eligible upto half of retiree’s full benefits. If spouse is eligible for his/her own benefits as well as spouse’s benefits, they are paid combination of benefits.
  • At full retirement age, it is possible to defer own benefits and take spouse’s benefits only. Later this differed benefits can be claimed which are higher because they were deferred.
  • If one is getting pension and didn’t pay social security taxes, one’s spouse’s benefits may be reduced.
  • If spouses elect to take benefits before reaching full retirement age, benefit amount reduced.
  • If spouse is taking care of children 16 or under or disabled child, retirement benefits are full regardless age.

Maximum family benefits:
Each receive is eligible for upto half of one’s full benefits, but total benefits is 150-180 % of one benefits. If there are more receives than this, receives benefits would be decreased, but not one’s.

For divorced spouses:
One divorced spouse is eligible for one’s benefits if
  • Marriage lasted for at least 10 years
  • Divorced spouse is 62 yrs and older and unmarried.

Working and getting benefits at the same time:
One can work and still eligible for full retirement benefits at full retirement age.

Benefits may be taxable:
For combined income between $25,000 and $34,000 and filing jointly, one may has to pay tax on 50% of benefits. For filing jointly, this range is $32,000 and $44,000
If combined income is more than $34,000, one may has to pay tax on 85% of benefits.

Living outside United States:
For a US citizen living outside United States won’t affect social security benefits. Payment can’t be sent to few countries (Cambodia, Cuba, North Korea, Vietnam and areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania and Russia). However certain exceptions can be made for eligible countries.