Social Security Benefits

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For many people, social security remains a significant part of their overall financial plan.  To be eligible for benefits, a person must have worked and paid into the Social Security Administration (SSA) system for at least 10 years (40 quarters) and have earned more than $4,640 per year (in today's dollars).   The amount you are eligible to receive can be determined from your SSA statement which is available online at www.ssa.gov.

To access your Social Security information online, you will need set up a SSA online account.  To verify your identity, the SSA website will ask you some personal questions.  The SSA system is  linked to the Experian credit reporting system.  Questions it might ask you include where do you work, what is your address, when was your current home built, and/or when did you last open an AMEX credit card.  If you answer any of the questions wrong it bars you out of the SSA system for 24 hours.

If you were born in 1960 or after, full retirement age is currently 67 ("FRA").  Some people may retire before they reach their FRA.  Others may want to wait until after they reach their FRA.  The earliest possible Social Security retirement age is 62.  Retiring at 62 causes a reduction to the benefit that would otherwise be paid if the person retired at FRA.   For each year up to age 70 that a person waits after FRA to retire, the social security benefit increases 8%.

There is no limit on the amount of money a person can earn after they reach their FRA.  If a person wants to collect Social Security before they reach their FRA, then the social security benefit is reduced if the person earns more than a threshold amount.  The threshold amount for 2013 is $15,150.

Planning for your retirement can be complicated.  Social Security is just one component.  You need to consider all of your assets, liabilities, income and expenses from all sources.  You also need to consider life style choices and family commitments.  Please contact me or one of our estate planning attorneys at 937-223-1130 or Jsenney@pselaw.com.

AND ONE MORE THING.  In previous blogs we talked about the importance of properly classifying workers as employees or independent contractors.  If you misclassify a worker as an employee, you perhaps will pay more in the way of payroll taxes and workers compensation premiums than would otherwise be required.  On the other hand, if you misclassify a worker as an independent contractor, you face the risk of being subject to significant payroll taxes, income tax withholding, penalties and interest.  A recent news release shows that US workers are filing a record number of federal lawsuits against employers alleging violations of wage and hour laws including misclassification of their status as independent contractors.  If you would like to discuss worker classification further, please contact me or Matt Stokely at 937-223-1130 or Jsenney@pselaw.com.