What Is A Social Security Card
Your Social Security card is an important piece of identification. You’ll need one to get a job, collect Social Security, or receive other government benefits.
When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.
Eligibility Based On A Spouses Work History
A married person who has not worked at all or has not worked enough to earn credits towards free Medicare might gain premium-free Part A through their spouses employment.
To qualify based on a spouses employment, an individual must be aged at least 65, and their spouse must be aged 62 or older and have earned enough Medicare credits to qualify for free Medicare Part A for themselves.
How To Stop Social Security Check Payments
The SSA can not pay benefits for the month of a recipients death. That means if the person died in July, the check received in August must be returned. Find out how to return a check to the SSA.
If the payment is by direct deposit, notify the financial institution as soon as possible so it can return any payments received after death. For more about the requirement to return benefits for the month of a beneficiarys death, see the top of page 11 of this SSA publication.
Family members may be eligible for Social Security survivors benefits when a person getting benefits dies. Visit the SSA’s Survivors Benefits page to learn more.
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How Does A Social Security Cola Work
The purpose of the Cost-of-Living Adjustments, COLA, is to ensure that the purchasing power of Social Security and Supplemental Security Income benefits is not eroded by inflation. Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were only increased when Congress enacted special legislation. So how are they calculated? How do they work? What if the COLA is not large enough to preserve my purchasing power? Kat Tretina and Benjamin Curry explain how COLA works, how you get your COLA increase, and what to do if it is not large enough in their article for Forbes Advisor. Read Ms. Tretina and Mr. Currys article here
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Medicare Eligibility For End
If you have Lou Gehrigs disease orESRD, you dont have to wait through the 24-month period before youre eligiblefor Medicare. If you have ALS, your Medicare coverage starts when you begin collectingdisability benefits.
If youre beingtreated for ESRD, youll become eligible for Medicare 3 months after dialysisbegins, or after you receive a kidney transplant. You wont be automaticallyenrolled, so you need to contact Social Security or the Railroad RetirementBoard to start the process.
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What Happens When Youre Self
When you’re self-employed, you’re considered both the employee and the employer. This means it’s your responsibility to withhold Social Security from your earnings, contributing the employer’s matching portion of Social Security and the individual’s portion.
Instead of withholding Social Security taxes from each paycheckmany self-employed people don’t get regular paychecksyou pay all the Social Security taxes on your earnings when you file your annual federal income tax return. This amounts to both your contribution and your business’s contribution.
IRS Schedule SE: Self-Employment Tax is where you report your business’s net profit or loss as calculated on Schedule C. The federal government uses this information to calculate the Social Security benefits you’ll be entitled to later on down the road. Self-employment tax consists of both the employee and employer portion of Social Security and the employee and employer portion of Medicare , which makes the total self-employment tax rate 15.3%.
It may seem like you’re getting the short end of the stick because you have to pay both the employee and the employer portion of the tax, but that isn’t necessarily true.
If you are self-employed and earned $400 or less, you wont owe Social Security taxes.
How To Remedy These Problems
Many factors will decide whether these predictions come true. More people in the workforce and a stronger economy could lessen the problem. Possible solutions to the Social Security problem include privatizing Social Security, raising payroll taxes, increasing the retirement age, changing the 35-year earnings average to 38 years, and allowing Social Security trust funds to be invested in the stock market.
A summary of the Social Security trustee report can be found here.
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Social Security Benefits Explained
Social Security benefits are payments given to qualified beneficiaries of the Social Security program. Though retirees make up the majority of the beneficiaries, others may also receive these benefits if theyre:
- A spouse or children of someone eligible for Social Security benefits.
- A spouse or children of a deceased worker.
- A divorced spouse of a deceased worker who has yet to remarry.
- A dependent parent of a deceased worker.
Getting A Social Security Number For A New Baby
The easiest way to get a Social Security number for your child is at the hospital after they are born when you apply for your childs birth certificate. If you wait to apply for a number at a Social Security office, there may be delays while SSA verifies your childs birth certificate.
Your child will need their own Social Security number so you can:
- Claim your child as a dependent on your income tax return
- Open a bank account in their name
- Get medical coverage for them
- Apply for government services for them
Keep your Social Security card in a safe place to protect yourself from identity theft.
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Is It True That Social Security Is Going Broke
Whats really going on is that Social Security is at a tipping point. Midway through 2021, the program began taking in less money than it pays out, thanks mostly to longer life expectancies and people having fewer children which means fewer workers paying into the system. The economic shock of the coronavirus pandemic accelerated that pace by about a year.
While Social Security has a $2.9 trillion trust fund it can dip into, the funds are expected to be depleted by 2034. But that doesnt mean the program is doomed. Social Security is funded on a pay-as-you-go basis.
Even as it starts depleting its trust fund, it will still be collecting payroll taxes from workers and employers. If the trust were to run dry in 2034, payroll taxes would still generate enough to pay for about 79% of the programs obligations if Congress does nothing.
But there are plenty of actions Congress could take to avoid Social Security cuts. For example, it could increase the tax rate, eliminate the wage cap or raise the full retirement age, as it did in 1983.
Its pretty unlikely that Congress wont take action. A 2019 Pew Research Center poll found that 74% of Americans oppose cutting benefits. Lawmakers on both sides of the aisle are keenly aware of the programs popularity among voters.
How Much Do I Have To Pay Every Month
The Social Security Administration levies a 12.4% tax on earnings to fund Social Security benefits. Social Security benefits for workers who pay into the system are worked out based on their average indexed monthly earnings during their 35 highest-earning years.
The amount of an individuals average wages that Social Security retirement benefits replace varies depending on their earnings and the time they have been paying into the program. Higher lifetime earnings result in higher benefits.
So, the amount you will pay into Social Security every month will, therefore, vary depending on your age, your salary and, and how long you have been paying into the system. If you have earned well during your working years, you would have paid a higher percentage into the system. You will also be eligible for greater benefits when you eventually retire.
Can You Work And Claim Social Security Benefits
If youve already reached full retirement age, feel free to work away if you choose. Your benefits wont be affected no matter how much you earn.
But if you take Social Security early, your benefits will be reduced by $1 for every $2 you earn above $18,960 in 2021. You get more leeway during the year you reach full retirement age: Youll have $1 withheld for every $3 you earn above $50,520, and then once you actually hit that age, your benefits will no longer be reduced.
How Does Social Security Work For Married Couples
When most people reach their 60s, they start thinking about their retirement benefits from Social Security. For married couples, there are advantages to making decisions about retirement as a couple, rather than as individuals. Taking into consideration joint life expectancy, future plans, and your household budget, you can make some decisions about retirement together.
Are you eligible to receive benefits as a spouse?It is likely that both you and your spouse have earned enough Social Security credits to be eligible for your own benefits after retirement. Anyone who is married can apply for Social Security benefits on their own, or they can take the option to get up to 50 percent of their spouses benefit amount at full retirement age.
If you decide to opt for the spousal benefit but have not yet reached full retirement age yourself, that benefit will be less than 50 percent. This may still be a good option if you have not been working much through the years. You should look into how much your estimated benefits would be at full retirement age so you can make a comparison.
Do you qualify for your own Social Security benefits as well as spousal benefits?
Social Security pays your benefits first, but if the benefits you would receive through your spouse are higher than yours, you can receive a combination of these benefits to reach the amount you would receive as a spouse.
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What Is The Difference Between Medicare And Social Security
|Government-run income benefits program.|
|Who is it for?||Anyone who is 65 years and older who have worked and paid taxes for at least 10 years .||Retirees who have worked and paid taxes for at least 10 years, widowers, and other family members with certain circumstances.|
|How does it work?||Once eligible, people enroll in the Medicare program and pay the government a set amount each month for their Medicare program.||Each month, the Social Security Administration gives money to people who are eligible for these benefits.|
Social Security Disability And Medicare
If you are under the age of 65 and have a medical condition for which you are receiving Social Security disability benefits, you will likely be eligible for Medicare after a 2-year qualifying period, beginning the first month after you become eligible for disability.
Not every person approved for disability benefits has to wait the full 24 months to receive Medicare coverage there are a couple of conditions that qualify you sooner: Amyotrophic Lateral Sclerosis or End-Stage Renal Disease . This can help to provide relief for those with high healthcare costs due to their disability or medical condition.
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Who Is Eligible For Social Security Retirement Benefits
As mentioned, youll need to meet a few requirements to be eligible for Social Security retirement benefits. Just like with Medicare, youll need to be a United States citizen or permanent resident. You might also need to have worked and earned credits. The amount of credits you need depends on your circumstances and the type of benefit youre applying for.
Youll need at least 40 credits in order to apply for retirement benefits. Since you can earn up to four credits a year, youll earn 40 credits after 10 years of work. This rule applies to anyone born after 1929.
The amount youll receive per month will depend on your income throughout your working life. You can use the calculator on the Social Security website to estimate your retirement benefits.
How Do Social Security And Medicare Work Together
Social Security and Medicare are distinct programs serving older and disabled Americans, but they have an important commonality: Social Security handles enrollment for Medicare Part A and Part B .
In this role, the Social Security Administration works with the Centers for Medicare & Medicaid Services to inform older Americans about their Medicare sign-up options, process their applications and collect premiums.
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How Minimizing Taxes Minimizes Benefits
Besides the Social Security tax deductions you can take when you’re self-employed, many business expenses can reduce your tax liability.
“Business expenses reduce your overall tax, which ultimately lowers your Social Security taxes. Business tax deductions are a way of minimizing self-employment tax and Social Security taxes,” says Carlos Dias Jr., founder and managing partner of Dias Wealth LLC in Lake Mary, FL.
But keep in mind that this can work against you regarding Social Security benefit calculations, which are based in part on your taxable earnings. Here’s why. The more deductions you have, the lower your Schedule C income. Lowering your Schedule C income is a good way to reduce how much federal, state, and local income tax you owe. However, this lower amount becomes part of your Social Security earnings history and means you may receive lower benefits in retirement than if you didn’t take those deductions.
Who Is Eligible For Ssdi
The rules are different when youre applying for SSDI. Youll need 40 work credits if youre applying at age 62 or older.
To qualify for SSDI, you must:
- be unable to work because of a medical condition that will last at least 12 months, or is terminal
- not currently have a partial or short-term disability
- meet SSAs definition of a disability
- be younger than full retirement age
You must be able to prove you meet these criteria, and this process can be difficult. Once you qualify for SSDI, the amount of disability youll receive may be based on your age and the amount of time youve worked and paid into Social Security.
This table explains what benefits are offered based on your age and number of years worked:
How Does Social Security Work 12 Questions Answered
Social Security isnt just a retirement program. It also provides for people who are disabled, the survivors of workers who have died, and the dependents of recipients.
However, because retirees are by far the largest group of people to receive benefits, were focusing on Social Security retirement benefits in this article.
Social Security Prototype Bill
AMACs founder, Dan Weber, has been in the forefront of the fight to address the problems facing Americas Social Security program. Put simply, the program is paying out more than its taking in, causing a gradual depletion of the Social Security Trust Fund. If left unchecked, projections are that this depletion will cause the Trust Fund balance to be exhausted by 2034, with the result being a scale-down of paymentsas much as 25%to Social Security recipients. As an action-oriented association, AMAC is resolved to do its part to call for action on this very serious problem.Most recently, AMAC has developed a bipartisan compromise bill, titled Social Security Guarantee Act,” taking selected portions of bills introduced by Rep. Sam Johnson and Rep. John Larson and merging them with the Associations original legislative framework to create the new Act.AMAC representatives have been resolute in their mission to get the attention of lawmakers in Washington, meeting with many, many congressional offices and their legislative staffs over the past several years. The Association is gaining ground every day, and you can help–support AMAC in this fight by contacting your congressional representative to add your voice! Visit the Associations website at www.AMAC.us to learn more about AMACs proposed solution and to obtain a copy of a document outlining the steps that AMAC advocates to resolve this very serious problem.
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Is Social Security Enough To Retire On
Social Security will replace about 40% of pre-retirement income for an average earner and financial planners usually recommend replacing about 70% to 80% of pre-retirement income. That means its essential to save for retirement by contributing to a 401 plan or funding a Roth IRA or traditional IRA.
While Social Security isnt meant to be the only source of income in retirement, thats the reality for many older Americans. About half of seniors rely on Social Security for at least 50% of their income and roughly a quarter depend on it for 90% or more, according to the Center on Budget and Policy Priorities.
How Do Benefits Work And How Can I Qualify
While you work, you pay Social Security taxes. This tax money goes into a trust fund that pays benefits to:
Those who are currently retired
To people with disabilities
To the surviving spouses and children of workers who have died
Each year you work, youll get credits to help you become eligible for benefits when its time for you to retire. Find all the benefits Social Security Administration offers.
There are four main types of benefits that the SSA offers:
Learn about earning limits if you plan to work while receiving Social Security benefits
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