Sunday, September 28, 2014

Know how to calculate your social security benefits from scratch

When you retire and get social security benefits be prepared for the government to recalculate your retirement income out of the blue and cut off your ss check if they made a mistake such as counting your income the year you retire before you retire as income you earned after your actually retire.

You will get a notice telling you that you owe the government money because your ss was overpayed for the months you received any ss checks the first year you retired.

Example:

You retire Jun 30, 2013. You get a ss check in jul,aug,sep,oct,nov,dec of 2013 the first year of your retirement.

The government will require you to pay back jul-dec 2013 if your income was above $15,120 in 2013.

This is even if you did NOT earn any income AFTER you retired in JUN 2013!!!

So if you made more than $15,120 BEFORE you retired the government will cut off your checks until jul-dec benefits are paid back to them!

This is because the ss administration counted your income BEFORE your retired as your income AFTER you retired and you went over the limit that should only be counted AFTER you retired. I know it sounds so STUPID its funny.

They will tell you they over paid you because of your income.
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Special rule for the first year you retire:

Sometimes people who retire in mid-year already have earned more than the
annual earnings limit. That is why there is a special rule that applies to earnings
for one year, usually the first year of retirement. Under this rule, you can
get a full Social Security check for any whole month you are retired, regardless
of your yearly earnings.

How Work Affects
Your Benefits

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The ss administration should read their own pubs but you know how that goes.

I have heard that some people have run into this problem with the ss.

Lois learner and the irs scandal should make you aware of what the current regime in office is doing.

I am saying the ss administration could be used just as the irs is being used to intimidate US citizens. Especially when it it such an obvious rule violation that causes a check to be cut off because of an obvious ss blunder!
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Know how to calculate your own ss benefits before you retire to double check the social security administration. The links below will guide you on your journey.

Step 1:

You need to calculate your average indexed monthly ss earnings for the last 35 years.

SS doesn't count the income the last 2 years you worked, only the 35 years before.

If you didn't work 35 years but are qualified because you have earned your 40 quarters of working just calculate the number of years you did work.

You need to know how much you have paid into ss over the years to calculate this, then use the link below to calculate the indexing factors for each year you worked.

Indexing Factors for Earnings

Examples of indexed earnings

Benefit Calculation Examples for Workers Retiring in 2014

Hey don't panic read the link below to understand it all Bubba.

How Are Social Security Benefits Calculated?
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Benefit at full retirement age (the age at which you can take full benefits): Your benefit is based on a three-tiered percentage of your average indexed monthly earnings. For 2014, the benefit is calculated as follows:

(90% of your first $816 of AIME) + (32% of AIME above $816 and through $4,917) + (15% of AIME above $4,917)

The sum is your estimated monthly retirement benefit at your full retirement age (2011 calculations).

Example:

If your AIME is $5,000, your benefit is calculated as follows:

90% x $816 = $734.40

+ 32% x ($4,917 - $816) = $1,312.32

+ 15% x ($5,000 AIME - $4,917) = $12.45

Total monthly benefit = $2,059.17

Full retirement age ranges from 65 to 67 and depends on the year in which you were born. If you were born between 1943 and 1954, your full retirement age is 66.

Benefit if you retire early: If you want to retire early and take Social Security benefits before full retirement age, your monthly benefit is reduced.

Compute the effect of early or delayed retirement (Don't forget to use this if you are retiring at age 62, its important.)
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Ya know its really strange how the government can use this complicated formula to figure you retirement check and yet can't follow their own rule that says it doesn't count your income regardless of your yearly income, ie the INCOME YOU MADE BEFORE YOU RETIRED THE FIRST YEAR OF YOUR RETIREMENT!

Know how to calculate your social security benefits from scratch because the government may make a "mistake" on purpose.

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