Social Security Rules: Social Security is undergoing changes, but some rules remain constant. Here are 8 important rules to remember as of 2024.
Social Security Rules All Details
1. Early Claims Mean Lower Payments
Claiming Social Security benefits at 62 instead of your full retirement age (66-67) reduces payments by up to 30%.
2. Earnings Impact Benefits Before Full Retirement Age
If you’re under full retirement age in 2024 and claim benefits, there’s an annual earning limit of $21,240. If you reach full retirement age this year, the limit is $56,520. Earnings above these limits result in reduced benefits.
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3. Changes When a Spouse Passes Away
Upon your spouse’s death, spousal benefits are replaced by survivor benefits. Spousal benefits are up to 50% of the worker’s benefit, while survivor benefits equal 100%.
4. Delayed Retirement Credits Apply Only to Your Benefits
Postponing claiming benefits beyond full retirement age increases your Social Security retirement benefits. This increase stops at age 70.
5. Taxation of Social Security Benefits
You may owe federal income taxes on Social Security benefits if you have substantial additional income, like wages, interest, or dividends. Generally, 85% of benefits may be taxable under certain conditions.
6. Ex-Spousal Benefits Requirements
If you’re at least 62, unmarried, and divorced from someone receiving Social Security benefits, you can get ex-spousal benefits. A marriage of at least 10 years is necessary. Remarriage since then might affect eligibility.
7. Spousal Benefits vs. Your Own
You can claim benefits based on your work history or your spouse’s, but not both. If the spousal benefit is larger, you’ll receive it. Spousal benefits are capped at half of your spouse’s benefit at full retirement age.
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8. Claiming Benefits Past 70 Doesn’t Increase Payout
Claiming benefits after 70 doesn’t lead to higher payments. If you’re 70 and haven’t claimed, it’s recommended to do so to receive your owed benefits.
Stay informed about these timeless Social Security rules amidst changing times to make the best choices for your financial future.
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