Social Security Facts You Need to Know (Part 1 of 2)

Social Security can be daunting. The Social Security Handbook has over 2,500 rules defining the benefits you may be entitled to under the program. At Composed Financial, we continually try to simplify the process for you. That is why we are proud to say we are now utilizing ‘Maximize My SocialMaxSocialSecurity Security’ – a paid online service that we are providing to all our clients for free. It incorporates your personal details and lays out the best filing plan so you and your family can be sure to get the highest benefit available.

In the 1st of our 2 part Social Security series, we are laying out the most common types of benefits available. Part 2 will lay out some strategies that are soon expiring – as well as some that are not expiring – that you can use to maximize your benefit. We will show some details of our new tool ‘Maximize My Social Security’ as well.

Common Types of Benefits
Retired worker – 40 quarters of coverage is the maximum needed to become fully insured under Social Security; the retired worker receives a reduced amount if benefits started at age 62 to before normal retirement age, a full amount at normal retirement age, and an increased amount if the worker delays benefits until age 70. Normal retirement age is 67 for those born in 1960 and later.

Spouse of retired worker – receives up to half of the worker’s benefit as calculated at worker’s normal retirement age. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Divorced spouse of retired worker – same benefits as ‘spouse of retired worker’ if all of the following 4 conditions apply:
1) Your marriage lasted 10 years or longer
2) You are unmarried
3) Your ex-spouse is entitled to Social Security retirement or disability benefits
4) The benefit you are entitled to receive on your own record is less than the benefit based on your ex-
spouse’s work.

Note: it does not matter if your ex-spouse remarried

Child of retired worker – receives up to half of the worker’s benefit as calculated at worker’s normal retirement age. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit. A child is defined as either:
1) Under age 18, or
2) Adult disabled before the age of 22, or
3) High school student under age 19

Surviving child – receives up to 75% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Surviving aged widower – if at full retirement age, receives 100% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Surviving young widower – if age 60 to full retirement age, receives 71.5% to 99% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Surviving disabled widower – if age 50 to 59, receives 71.5% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Surviving widower caring for child under the age of 16 – receives 75% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Surviving parent of deceased worker – if age 62 or older, parent may receive 75% to 82.5% of the worker’s benefit as calculated as if the worker had reached full retirement age at the time of death. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Disabled worker – must have a medical condition that meets Social Security’s definition of disability. In general, benefits are paid if you are unable to work for a year or more because of a disability. The benefit is based on your lifetime average earnings covered by Social Security and may be reduced by other payments you receive such as worker’s compensation.

Spouse of disabled worker – must either (1) have a child under age 16 or a disabled child in his or her care, or (2) be at least 62 years old. Also applicable to a divorced spouse if the marriage lasted at least 10 years. The benefit is up to 50% of the disabled worker’s benefit. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit.

Child of disabled worker – receives up to 50% of the disabled worker’s benefit. The benefit is limited by maximum family amount – which is generally 150% to 180% of the worker’s benefit. Child is defined by the same rules previously mentioned in ‘child of retired worker’.

Sources:

1 – “Types of Benefits.” Social Security Official Website. www.ssa.gov/oact/progdata/types.html.

Disclosures:

None of the information or data presented herein constitutes a recommendation by Composed Financial Management, LLC (“the Firm”) or a solicitation of any offer to buy or sell any securities. None of the information presented here should be construed as legal, tax or other professional advice. Information presented is general information that does not take into account your individual circumstances, situations or needs, nor does it present a personalized recommendation to you. Although information has been obtained from and is based upon sources the Firm believes to be reliable, we do not guarantee its accuracy and the information may be incomplete or condensed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Past performance is no guarantee of future results.

Facebooktwittergoogle_plusredditpinterestlinkedinmailFacebooktwittergoogle_plusredditpinterestlinkedinmail