Understanding your Social Security benefits

People have many Social Security benefits questions because its such a vast program we help simplify the information and answer your top questions.Its common to associate Social Security with retirement. However, there is much more to Social Security than retirement income. There are many people who can qualify for Social Security benefits including retirees, their spouses, disabled individuals, and survivors of the deceased. For many people in the U.S., Social Security is a valuable program.In this article:What is Social Security?Who can qualify for Social Security benefits?What are Social Security credits and how are they earned?Can I qualify for benefits based on my spouses income?When should I take my Social Security retirement benefits?How is my Social Security benefit amount calculated?When do I apply and how do I apply for Social Security benefits?How can an Ameriprise financial advisor help? What is Social Security?1Social Security is a U.S. federal program that provides enrolled individuals with a source of income when they become unable to work or earn sufficient wages on their own. There are three types of Social Security benefits: Retirement (spousal benefits available in some cases)DisabilitySurvivors Who can qualify for Social Security benefits?You are eligible to receive Social Security benefits in the United States once youve accumulated 40 work credits as long as you also pay Social Security taxes (this is applicable for certain government employees or those who are self-employed). Non-U.S. citizens who are living legally in the United States and have earned benefits can also qualify for Social Security.What if I live abroad?Most U.S. citizens who live in foreign countries after they retire can qualify for Social Security benefits. However, the U.S. government will not send Social Security payments to those living in Cuba or North Korea. Additionally, Americans living in Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan must qualify for an exception in order to receive benefits while living abroad.How do I qualify for Social Security?To qualify for Social Security retirement benefits, in most cases:You must be 62+ years old, or disabled/unable to work, andYou must have sufficient credits earned throughout your working life.To qualify for Social Security spousal retirement benefits:To qualify for Social Security disability benefits if you are under the age of 62:To qualify for Social Security survivors benefits: What are Social Security credits and how are they earned?Social Security credits determine eligibility and benefit amounts in retirement. In 2023, earning $1,640 in income qualifies as earning one Social Security work credit.2 You are eligible to earn up to four credits per year. Most people need 40 credits (10 years of work) to qualify for Social Security benefits though younger individuals require fewer credits for disability benefits or for their family members to receive survivors benefits. Can I qualify for Social Security benefits based on my spouses income?Short answer: in some cases.Retirement benefits are based on your own earnings record. However, spousal and survivors Social Security benefits are based on your spouses earnings, whether the spouse is deceased or divorced from you. Keep in mind that you can qualify for spousal or survivors Social Security benefits as well as your own retirement benefit but, Social Security wont let you add these amounts together. Instead, you will receive whichever benefit is larger. When should I take my Social Security retirement benefits?Waiting to collect Social Security benefits may be beneficial if youre able to do so. While the age to receive your full retirement benefit is 66-67 (depending on the year you were born), you can begin collecting Social Security benefits as early as age 62. But each month you wait to start collecting (up until age 70) increases your eligible benefits.4Once you reach full retirement age, youre entitled to 100% of the benefits calculated from your lifetime earnings. If you wait until age 70 to begin collecting Social Security, your retirement benefit will be 32% larger.3However, waiting may not be the right choice for everyone. Your financial advisor will help you determine an approach that reflects your options and your personal situation. For example, they may consider:Varying tax rates on Social Security incomeCapital gains and IRA withdrawalsHealth issues and life expectancy in your family historyWhether your current retirement accounts and additional sources of income (including Social Security or pensions) will cover your essential expenses before you reach full retirement ageView our Social Security Infographic for more information How is my Social Security benefit amount calculated? Another common Social Security benefits question is how payments are calculated based on your lifetime earnings. To account for changes in average wages each year, the Social Security Administration (SSA) indexes your income using the national average wage index. The SSA calculates your average indexed monthly earnings (AIME) based on the 35 years in which you earned the most. A formula generates your basic benefits, otherwise known as your primary insurance amount. This primary insurance amount (PIA) is what you would receive at your full retirement age. If you were born between 1955 and 1959, full retirement age is between age 66 and 67. For those born in 1960 or later, full retirement age is 67.5 When do I apply and how do I apply for Social Security benefits?The SSA recommends applying four months before you want your Social Security retirement benefits to begin.  There are two ways to apply:Online application: Find it on the Social Security Administrations website.Over the phone: Call 1-800-772-1213 (TTY 1-800-325-0778) from 8 a.m. to 7 p.m., Monday through Friday, to apply by phone. How can an Ameriprise financial advisor help?Your Ameriprise financial advisor can answer any Social Security benefits questions you may have, as well as evaluate your Social Security options and help you with your overall retirement income planning. They will review how scenarios (such as working longer or delaying benefit collection) can help optimize the benefits for you, a spouse or family members.

A newly proposed rule by the Social Security Administration (SSA) could ultimately change the way in-kind income is defined for recipients of Supplemental Security Income (SSI).What Is SSI?Supplemental Security Income (SSI) is a federal public benefits program that provides monthly payments to individuals with limited means, including people with disabilities and seniors. In many cases, recipients of this type of benefit automatically qualify for Medicaid as well.In 2023, the federal SSI payment standard is $914 per month for an individual ($1,371 per month for a couple).SSI Income GuidelinesIndividuals who receive SSI must meet very strict guidelines in order to continue qualifying for these public benefits.For people with disabilities, these guidelines include having an impairment that meets the SSAs narrow definition of disability as well as maintaining specific monthly limits on their assets and income.SSAs Definition of IncomeAs SSI support is intended for those with limited means, any additional income could potentially put an SSI recipients benefits in jeopardy.According to the SSA, income includes any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter.An SSI recipient whose income exceeds their monthly SSI award even if it is unintentionally can result in the individual losing their benefits or having them lowered by a certain amount.Historically, SSA has included free food in its definition of income. SSI recipients must provide the SSA with details about their food expenses. A recipient who accepts so-called in-kind support and maintenance (ISM) in the form of food, such as a supply of groceries brought to the recipient by a family member or friend, generally will have their benefits reduced by about one-third.Fortunately for SSI recipients, this is something to which the SSA is now proposing a shift.Proposed RuleIn February 2023, the SSA announced its proposal to omit food from its calculations of ISM. If put into effect, Supplemental Security Income recipients who receive this type of support may no longer see their benefits shrink as a result. In addition, they would no longer need to report their food expenses to the SSA.The complexities of our current food ISM policies may outweigh their utility, the SSA states in its proposed rule. The current requirements for reporting in-kind food receipts could discourage SSI applicants and recipients from receiving an often informal but important form of help.In addition to simplifying reporting requirements for SSI recipients as well as processing time for the SSA, the SSA says the new rule would provide increased financial security to impacted beneficiaries; provide consistent treatment of food support regardless of source; and facilitate improved food security among beneficiaries.The SSA will be seeking public comments on this proposed rule up until April 17, 2023.Additional ResourcesTo learn more about these benefits, refer to this introduction to SSI, or consider consulting with a qualified special needs planner in your area.Contact Sharek Law Office at 412-347-1731 or click here to schedule a complimentary 15-Minute Call to learn how we can help. This article is a service of Sharek Law Office, LLC. We dont just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life and Legacy Planning Session, during which you will get more financially organized than youve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $750 session at no charge. Please note this is educational content only and is not intended to act as legal advice.

If you are an individual with a disability who holds an ABLE account, your annual contributions to this type of account generally must not exceed $17,000 a year, as of 2023. However, ABLE account owners who are employed can contribute their work income to this type of account beyond the typical $17,000 annual threshold until the end of 2025.What Is an ABLE Account?ABLE accounts are a type of savings account designed for people with disabilities. They permit individuals with disabilities to save money, tax-free, without putting their means-tested public benefits at risk.As of 2023, up to $17,000 per year can be set aside into an ABLE account. The account holder is allowed to have a total of up to $100,000 in their ABLE account and remain eligible for such assistance programs as Medicaid and Supplemental Security Income (SSI). Under current law, individuals who became disabled before the age of 26 are eligible to open an ABLE account. Its funds can be used to cover the costs of education, assistive technology, transportation, and other items.ABLE accounts came into effect following the 2014 passage of the Achieving a Better Life Experience (ABLE) Act. Several years later, an ABLE to Work provision made it possible for ABLE account owners who work to start saving more. However, the ABLE to Work Act is currently slated to expire at the end of 2025.Who Can Benefit From the ABLE to Work Act?If you are living with a disability and hold an ABLE account, you may benefit from the ABLE to Work Act. There are a few rules of which you should be aware.First, if youre contributing to your ABLE account, you cannot also contribute to your employers defined contribution plan (for example, a 401(k) plan).