Social Security Insurance Benefits

In the United States almost all workers are required to pay social security taxes. The taxes go into Social Security funds that are maintained by the federal government. Social security benefits are then paid to older working Americans who reach the retirement age of 62 or older. You must have worked and paid in at least 40 credit quarters in your lifetime to qualify for social security benefits unless you are applying for survivor benefits when you have underage children and a spouse has died. Monthly social security benefits are available for surviving minor children and spouses who are left to care for them when a spouse dies. Once the children are no longer underage these benefits stop and they are no longer eligible for survivor benefits. The widow or widower ceases to be eligible for survivor benefits. However, once they reach the age of 62 they can be eligible for spousal social security insurance benefits. Nearly 1/5 of all Social Security benefits go for spousal or survivor benefits. Social Security disability insurance benefits are available too for disabled workers under Social Security Disability Insurance Act. Certain qualifications must be met to qualify for social security disability insurance.

When you pay social security taxes during your working career it makes you eligible for social security benefits when you reach retirement age, or as otherwise state above. So these benefits are actually earned benefits. You can apply for these benefits when you reach the age of 62. If you wait until you are older than 62 your benefit amount will be more than when you start receiving benefits at the younger age though. The majority of Americans are over the age of 65 who are claiming Social Security insurance benefits. For most people these benefits count for 50% or more of their retirement income.

To apply for social security benefits you have to fill out special forms you get from your local Social Security Office. You can also apply for these benefits online now. You will need to supply several documents when filling out the application, such as your social security number, birth certificate, driver’s license or other proof of citizenship if you were born out of the country.

The amount that your monthly social security benefit amount will be is calculated by your yearly income amount at the time of retirement and other factors. If you wait until full retirement age, which is now 67, you will receive a larger monthly benefit amount. You can also continue to work and still receive social security benefits but your benefit amount can be reduced if you earn over the current earned income amount.

Some people opt to receive their social security benefits in one lump sum for various reasons. If you receive your benefits amounts in one lump some you may have to pay taxes on up to 85% of that amount. Section 86(e) of the Internal Revenue Code can help to minimize the income tax on the lump-sum Social Security benefits amount. A taxpayer with a very low adjusted gross income amount may not have to pay taxes on their benefits amount at all. Someone who has a moderate income can be required to pay taxes on 50% of their benefits amount and if you earn a large income you will have to pay taxes on 85%. In other words, the higher your income is the more social security income taxes you will have to pay when receiving social security benefits.

A widow or widower can also receive spousal social security insurance benefits if their spouse dies. In these cases your own benefit amount will be calculated first and if it is less than your spouse’s benefit amount then you can receive ½ of what their primary benefit would be. Spouses should apply for spousal social security benefits as soon as they reach full retirement age as waiting longer will not increase the benefits amount.

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