Whether you’re ready to collect benefits this year or are just preparing for the future, it is important to understand how Social Security benefits work and how they are determined. Here is a Social Security Benefits Guide 2017 guide to help you understand the current state of your Social Security Benefits.

Do you know if you are eligible and for what?

There are 5 types of Social Security Benefits offered:

  1. Social Security Retirement Benefits: To be eligible for these benefits you must meet these two requirements:
    1. Be between the ages of 62 and 70. This is your eligible age, but not your “full retirement age.”
    2. Have earned at least 40 SSA “Credits.” While this amount changes year to year, in 2017, one credit is equivalent to $1,300 of income. The fine print is that you can only earn a maximum of four credits per year. That means you will have had to work at least 10 years in which you earned at least $5,200 per year.
  2. Spousal Benefits: If both spouses file for their retirement benefits at full retirement age then each spouse is eligible for half of the other spouse’s benefits.
  3. Survivors Benefits: If a worker becomes deceased, dependents (typically a widow(er) and children) are generally eligible for benefits.
  4. Disability Benefits: If you become disabled, you could be entitled to income through your Social Security Disability Insurance.
  5. Supplemental Security Income (SSI): This need based program provides supplemental income to disabled adults and children who have limited income or resources.  

How do you know your full retirement age?

Determining this can be difficult and confusing at times because there is a difference between the age at which you are eligible for benefits and your full retirement age. It becomes even more complicated, because full retirement age is not a standard number; it changes slightly based on the year in which you were born. Here is a breakdown:

  • If you were born between 1943 and 1954 your full retirement age is 66 years old
  • If you were born in 1960 or later, your full retirement age is 67
  • Those born in 1955 reach normal retirement age at 66 years and 2 months
  • If you were born in 1956, your full retirement age is 66 years and 4 months
  • Those born in 1957 are at full age at 66 years and 6 month
  • If you were born in 1958 your full retirement age is 66 years and 8 months
  • Those born in 1959 are at full age at 66 years and 10 months

How will your benefits will be calculated?

Social Security benefits are calculated with consideration of your entire work history, also called your lifetime earnings. The expected amount is stated with the assumption that you begin collecting at your full retirement age, as explained above. If you collect before your full retirement age, the amount you receive could be permanently decreased.

In the same vain, if you collect after your full retirement age, your payment amount could be increased permanently. To calculate your payment, your lifetime earnings are indexed for inflation and then the 35 highest earning years are added together and divided by twelve. This calculation produces your Average Indexed Monthly Earnings (AIME). This is then used in a percentage breakdown (which can change each year) which are then added together to calculate your full benefit (also known as you Primary Insurance Amount of PIA) at your retirement age.

My Social Security Statement

There is, unfortunately, no fool proof way to know exactly what you will be getting, especially if you are currently still working. However, the best estimate is found on your Social Security statement. To see your latest statement, which is updated each year, make an account on the Social Security Administration’s website. This account will allow you to see things like: Your estimated benefit, a record of your yearly earnings, and estimates of benefits such as disability or survivor, if ever needed.

So now you know all about your benefits, but how do you claim them?

There are three ways to apply to receive your benefits.

  1. You can apply online with a short and easy application. Here there are no additional signatures and, usually, no additional documents needed.
  2. You can apply by phone at 1-800-772-1213. (TTY 1-800-325-0778)
  3. You can apply in person at your nearest SSA office. We suggest you make an appointment first!

For additional information about Social Security or Disability Benefits, or for information regarding your specific case contact the experienced attorneys at Disability Associates.