Social Security - Facts You Must Know - Part2
Last week in Part1 of this article we covered five out of ten questions on this topic. This week we will discuss the remaining five.
- Who is eligible to receive social security?
- When can one start receiving social security?
- What is the maximum social security one can receive?
- How can I check my social security projections?
- Can I receive benefits if I live outside the United States?
- What happens to Social Security benefits if someone die? will their family get them?
- Will the Social Security benefits get taxed?
- Can someone collect benefits if they are still working?
- Can the benefits be stopped and restarted?
- Will the social security benefits disappear in future?
What happens to Social Security benefits if someone die? will their family get them?
If a person who paid into Social Security passes away, their family may still receive support through survivor benefits. The spouse, children, and even dependent parents may qualify, depending on the situation.
If the spouse is caring for children under age 16, they may receive monthly benefits. Each child under 18 (or 19 if still in high school) may also receive a monthly benefit. For example, if the deceased’s full benefit was 2,500 dollars, each eligible family member might receive about 75 percent of that amount. But there is a cap. Social Security limits the total amount paid to the family, usually between 150 to 180 percent of the original benefit. If the total goes beyond the cap, Social Security adjusts each person’s share.
Once the youngest child turns 16, the spouse’s benefit as a caregiver stops, but the children can continue receiving benefits until they reach the age limit.
If the deceased supported elderly parents, they may also qualify for benefits. A parent must be at least 62 years old and have relied on the deceased for at least half of their support. If no spouse or children are receiving benefits, one parent may receive up to 82.5 percent, or both parents may share up to 75 percent each.
These benefits are not automatic. The family must apply with the Social Security office.
Will the Social Security benefits get taxed?
Social Security benefits may be subject to federal income tax depending on your provisional income. Provisional income is calculated by adding your adjusted gross income, any tax-exempt interest(from municipal bonds), and half of your Social Security benefits. If you file as an individual and your provisional income is between 25,000 and 34,000 dollars, up to 50 percent of your benefits may be taxable. If it exceeds 34,000 dollars, up to 85 percent may be taxable. For couples filing jointly, the range for 50 percent taxation is between 32,000 and 44,000 dollars, and anything above 44,000 dollars may be taxed up to 85 percent. In addition to federal tax, some states may also tax Social Security benefits.
Can someone collect benefits if they are still working?
It is possible to collect Social Security benefits while still working. However, if you start receiving benefits before your full retirement age and earn above a certain limit, a portion of your benefits may be temporarily withheld. In 2025, if you are under full retirement age for the entire year, Social Security will deduct 1 dollar from your benefits for every 2 dollars you earn above $22,320. In the year you reach full retirement age, the limit is $59,520 and the deduction is 1 dollar for every 3 dollars earned above that. Once you reach full retirement age, there is no earnings limit, and you can work and collect your full Social Security benefits with no reduction. Any benefits that were withheld earlier due to work income will be recalculated and added back over time once you reach full retirement age.
Can the benefits be stopped and restarted?
Social Security benefits can be stopped and restarted, but there are specific rules. If you start receiving benefits before full retirement age and later decide you want to wait and get a higher monthly amount, you can withdraw your application within the first 12 months of claiming. This is allowed only once, and you must repay all the benefits you received. After full retirement age, you can also voluntarily suspend your benefits. During the suspension, your benefits will grow through delayed retirement credits. When you restart them later any time up to age 70 you will receive a higher monthly amount. This option is useful for people who return to work or decide they want to maximize their future benefits.
Will the social security benefits disappear in future?
Social Security benefits are not expected to disappear, but the program faces funding challenges. Current projections show that the trust fund may run out around 2035. If no changes are made, benefits may be reduced by about 20 to 25 percent after that. However, Congress can act to fix the shortfall and protect full benefits for the future.
That's a wrap this week. Happy Learning!
