Complex Financing

If you have been saving for your retirement throughout your active working years, you have little to worry about your financial position during retirement. However, those who could not save enough for their retirement or had to empty their retirement funds for some reason, and have to struggle to make both ends meet, even in their ripe age. Social Security benefits come as a huge relief to all such people who do not have proper retirement planning of their finances. It is estimated that Social Security benefits form about 40% of the retirement income for average Americans, while 70 – 80% of those who come from lower income groups. If you wish to know about how to apply for Social Security benefits at age 62 or more, you should be aware of certain facts like the eligibility, calculations and the procedure of application.

Who is Eligible for Social Security Benefits

If you have been paying for the Social Security taxes during your working years, you can become eligible for Social Security benefits under certain terms and conditions. You go on collecting credit points as and when you pay the taxes. The minimum score for credit points required to become eligible for Social Security benefits is 40. This equivalents to about 10 years of active working. If you discontinue working before you gather 40 points you cannot avail the benefits no matter what your age is. You will have to start working again until you gather the requisite number of credit points. In short, you must have completed 62 years of age and have 40 points to your credit before you start getting the benefits.

Social Security Benefits Calculations

You ought to understand the calculations of Social Security benefits if you wish to avail maximum benefits. The simplest calculation is, if you work more and earn more during your working years, you get more benefits after you retire. Although, the minimum eligibility age for application of Social Security benefits is 62, you can avail full benefits only when you attain your full retirement age. Full retirement age is a variable factor and is dependent upon the year in which you were born. If you were born in or before 1937, your full retirement age is 65. You can view your full retirement age on the official website of Social Security Administration.

If you choose to apply for Social Security benefits as soon as you complete 62 years of age, you will get reduced benefits for the rest of your life. You lose about 25% of your benefits in case you retire before completing your full retirement age. However, considering that you will be receiving the benefits for a longer time, this calculation gets evened up at the end. In case your medical illness forces you to retire before attaining full retirement age, you can apply for Social Security Disability benefits. These benefits are almost equivalent to the full benefits. After you attain the full retirement age, you can convert your disability plan to regular full Social Security benefits.

In case you decide to keep working after you apply for Social Security benefits at age 62, you can continue to receive your benefits (albeit at reduced rate) along with your income. However, there is an upper limit for the permissible income that can be earned with Social Security benefits. If your income exceeds this limit, you get Social Security benefits at reduced rate. However, once you attain full retirement age, there is no such upper limit on your income. You can derive full benefits irrespective of your earnings from work. Another scenario that needs to be considered is the delaying of the Social Security benefits. If you choose to apply for Social Security benefits after some years of completing your full retirement age, your benefits increase by a certain percent for every year delayed. The exact percentage of increase is determined by the year in which you were born.

Application Procedure for Social Security Benefits

You can visit the local Social Security Administration office and complete the application procedure. Alternatively, you can call their toll free number and ask for assistance. This number is available on the official website of Social Security Administration. In case you are wondering about ‘can I apply for Social Security benefits online’, then there is a good news for you. You can now apply for these benefits through the official SSA website. It should not take you more than 20 minutes to complete the task. Moreover, you are relieved of the hassles that come with physical application procedure. The proofs that you need to have at the time of application are, your Social Security number, birth certificate, proof of U.S. Citizenship, W-2 forms or self-employment tax return (or both) for the last working year.

If you apply for Social Security benefits, you can get only up to 40% of your pre-retirement income. Experts believe that you should have at least 70 to 80% of your pre-retirement income for a comfortable living. Hence, do not rely solely upon Social Security benefits and plan your retirement wisely.

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