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Social Security Benefits And Retirement

June 26, 2024

elder law lawyer Knoxville, TN

Social Security benefits are a cornerstone of retirement planning for many Americans, providing financial support during their later years. As retirement approaches, understanding how Social Security works and how it fits into your overall financial strategy is crucial.

Retirement planning is a key part of the legal services that a Knoxville elder law lawyer provides and a vital part of estate planning that many people often overlook. Our legal team explains how an attorney can help you maximize your Social Security benefits without sacrificing everything you’ve worked so hard for all your life.

What Are Social Security Benefits?

Social Security benefits are payments made to individuals who have worked and paid Social Security taxes. They are designed to provide income during retirement, disability, or, in certain cases, to eligible family members of retired, disabled, or deceased workers.

Eligibility For Social Security Retirement Benefits

To qualify for Social Security retirement benefits, you typically need to have accumulated enough “credits” by working and paying Social Security taxes. Credits are earned based on your earnings, with a maximum of four credits per year. The number of credits required to receive benefits depends on your age at retirement.

The Social Security Administration (SSA) breaks down benefits available by age-at-retirement like so:

Full Retirement Age: Full Retirement Age (FRA) is the age at which you can receive full Social Security retirement benefits. It varies depending on the year you were born. For example, for those born in 1960 or later, the FRA is 67. You can choose to receive reduced benefits as early as age 62, but your monthly benefit amount will be permanently reduced if you start receiving benefits before your FRA.

Calculating Benefits

The amount of your Social Security retirement benefit is based on your lifetime earnings. The Social Security Administration calculates your average indexed monthly earnings (AIME) and applies a formula to determine your primary insurance amount (PIA), which is the base amount you are entitled to receive at your FRA.

Planning For Retirement

Effective retirement planning involves considering Social Security benefits alongside other sources of retirement income, such as pensions, savings, and investments. Factors to consider include:

  • Timing of Benefits: Deciding when to start receiving benefits affects the amount you receive each month.
  • Tax Implications: Social Security benefits may be subject to federal income tax, depending on your total income.
  • Spousal Benefits: Married individuals may be eligible for spousal benefits based on their spouse’s work record.
  • Survivor Benefits: Social Security provides benefits to surviving spouses and dependent children of deceased workers.

Legal Considerations

There are other considerations for collecting SS benefits, such as:

  • Disability Benefits: If you become disabled before reaching retirement age, you may qualify for Social Security Disability Insurance (SSDI) benefits.
  • Appeals and Denials: If your Social Security claim is denied, you have the right to appeal the decision.
  • Maximizing Benefits: Strategies exist to maximize your Social Security benefits, such as delaying benefits past your FRA to increase monthly payments.

Social Security benefits play a significant role in retirement planning for millions of Americans. An elder law lawyer can help you understand how benefits are calculated, when to claim them, and how they integrate with other retirement income sources, so you can make informed decisions that enhance your financial security during retirement. Contact Carpenter & Lewis PLLC, today for a personalized retirement assessment.