Social Security Benefits in 2016 – Some Facts to Remember

by | Published on Jan 18, 2016 | Social Security Disability

The SSA (Social Security Administration), which is a major resource for many disabled Americans strive to adapt and meet the constantly changing needs of its beneficiaries. The Administration makes excellent use of technology to provide superior customer service. Now, the SSA has developed the My Social Security Account, where people can enroll for a free account. Through this account, Social Security can help people calculate their future disability or retirement benefits, or manage them if they are already receiving benefits. Disability lawyers also offer free consultation for disability applicants to determine whether they are eligible for the federal benefits. Busy lawyers would find the services provided by a medical record review company very useful in this regard. The main advantage is that since the review is performed by professionals well-versed in the disability criteria of the SSA, the entire medical record review process is quick and efficient, and lawyers can easily determine whether their client meets the SSA’s disability definition.

It is important to know how Social Security works since it is an important part of most Americans’ planning. Social security attorneys advise their clients on aspects such as eligibility for disability benefits, full retirement age, and how filing before or after that time would affect the monthly benefits.

Eligibility for Social Security

Applicants need to earn 40 “credits” during their working lifetime. In 2016, each $1260 (this amount changes every year) a person earns will give him or her one credit, up to a maximum of 4 credits per year. If a person earns enough to get the four-credit maximum in each of 10 years, he/she will be eligible for SS benefits.

Calculation of SS benefits

When calculating benefits, Social Security takes into account a person’s 35 highest earning years. The income each year, up to the maximum taxable Social Security wages is indexed for inflation and averaged together. Once the average indexed monthly earnings are calculated and the first year of eligibility is 2016, one’s benefit is calculated as:

  • 90% of the first $856 in monthly earnings
  • 32% of the amount between $856 and $5157
  • 15% of the amount above $5157

When to File for SS Benefits

A person can file for these benefits at the age of 62 or choose to delay filing until age 70. Filing early will result in reduced benefits. The benefits due will be reduced by 6.7% for each year before full retirement age (up to 3 years), and 5% for each year beyond that. On the other hand, if a person chooses to delay benefits, the monthly checks will increase by 8% for each year a person decides to wait.

Estimating Benefits before Retirement

Applicants can obtain their Social Security Statement by creating an account at the Social Security website. This statement will give information such as:

  • Eligibility for benefits
  • Estimated benefits at full retirement age
  • History of earnings for each year
  • Estimates of disability and survivors’ benefits

Benefits Are Protected from Inflation

Social Security is designed for inflation, or a beneficiary’s purchasing power will remain the same over time. The system is designed in such a way that if products and services cost more than they do today, a beneficiary will receive double the SS benefits at that time.

Working and Receiving SS Benefits in 2016

  • For those who will not reach full retirement age in the 2016 calendar year, the first $15720 in earnings is exempt. Beyond that, every 2 dollars in earnings will reduce Social Security benefits by$1.
  • For those recipients who reach full retirement age in 2016, the first $41,880 is exempt, and the reduction is only $1 for every $3 in earnings beyond that. In addition, only the months before one’s birthday count toward the total.
  • Social security beneficiaries who work after full retirement age will not experience any benefit reduction, despite how much they earn.

Despite many concerns regarding Social Security going bankrupt, it is estimated that the Administration will be able to cover 100% of benefits until 2033. The taxes coming in will be sufficient to cover more than three fourths of all benefits.

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