social security: 10035

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Retirement Benefts



Contacting Social Security

Visit our websiteOur website, www.scialscuriy.gv , is a valuable

resource or inormation about all o Social Security’sprograms. At our website, you also can:

• Apply or certain kinds o benefts;

• Find the address o your local Social Security ofce;

• Request a replacement Medicare card or a SocialSecurity Statement; and

• Find copies o our publications.

Call our toll-ree numberIn addition to using our website, you can call us

toll-ree at 1-800-772-1213. We can answer specifcquestions rom 7 a.m. to 7 p.m., Monday throughFriday. We can provide inormation by automated

phone service 24 hours a day. I you are dea orhard o hearing, you may call our TTY number,1-800-325-0778.

We treat all calls confdentially. We also want tomake sure you receive accurate and courteous service.That is why we have a second Social Security repre-sentative monitor some telephone calls.

http://www.socialsecurity.gov/




What’s inside

Social Security and your retirement plans 2

Your retirement benefts 2

Family benefts 7

What you need to know when you

are eligible or retirement benefts 10A word about Medicare 14



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Social Security and your retirement plansSocial Security is part o the retirement plan o

almost every American worker. I you are among the96 percent o workers who are covered under SocialSecurity, you should know how the system works andwhat you should receive rom Social Security whenyou retire. This booklet explains how you qualiy orSocial Security beneits, how your earnings and age canaect your beneits, what you should think about indeciding when to retire and why you should not countonly on Social Security or your retirement income.

This booklet provides basic inormation on SocialSecurity retirement benefts and is not intended toanswer all questions. For specifc inormation aboutyour situation, you should talk with a Social Securityrepresentative.

Your retirement benefts

How do you qualiy or retirement benefts?When you work and pay Social Security taxes, you

earn “credits” toward Social Security benefts.

The number o credits you need to get retirementbenefts depends on when you were born. I you were

born in 1929 or later, you need 40 credits (10 yearso work).

I you stop working beore you have enough creditsto qualiy or benefts, the credits will remain onyour Social Security record. I you return to worklater on, you can add more credits so that you qualiy.No retirement benefts can be paid until you have the

required number o credits.

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How much will your retirement beneft be?Your beneft payment is based on how much you

earned during your working career. Higher lietimeearnings result in higher benefts. I there were someyears when you did not work or had low earnings,your beneft amount may be lower than i you hadworked steadily.

Your beneft payment also is aected by the age atwhich you decide to retire. I you retire at age 62 (theearliest possible retirement age or Social Security),your beneft will be lower than i you wait until later toretire. This is explained in more detail on pages 4 and 5.

Note: Each year, about three months beore yourbirthday, you receive a Social Security Statement. Itcan be a valuable tool to help you plan a secure fnan-cial uture. It provides you with a record o your earn-

ings and gives estimates o what your Social Security

benefts would be at dierent retirement ages. It also gives an estimate o the disability benefts you could receive i you become severely disabled beore retire-ment, as well as estimates o the survivors beneftsSocial Security would provide your spouse and eli-

gible amily members when you die.

Full retirement ageThe “ull retirement age” is 65 or people who were

born beore 1938. But because o longer lie expectan-cies, the Social Security law was changed to graduallyincrease the ull retirement age until it reaches age 67.This change aects people born in 1938 and later. Checkthe ollowing table to fnd your ull retirement age.

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Age to receive ull Social Security benefts

Yar f birh Full rirmn ag

1937 or earlier 65

1938 65 and 2 months





1943-1954 661955 66 and 2 months





1960 and later 67

Note: People who were born on January 1 o any yearshould reer to the previous year.

Early retirementYou can get Social Security retirement benefts as

early as age 62, but i you retire beore your ull retire-ment age, your benefts will be permanently reduced,based on your age. For example, i you retire at age62, your beneft would be about 25 percent lower thanwhat it would be i you waited until you reach ullretirement age.

Some people stop working beore age 62. But i they

do, the years with no earnings will probably mean alower Social Security beneft when they retire.

Note: Sometimes health problems orce peopleto retire early. I you cannot work because o health





problems, you should consider applying or SocialSecurity disability benefts. The amount o the dis-ability beneft is the same as a ull, unreduced retire-ment beneft. I you are receiving Social Security dis-

ability benefts when you reach ull retirement age,those benefts will be converted to retirement ben-efts. For more inormation, ask or Disability Benefts (Publication No. 05-10029).

Delayed retirementYou may choose to keep working even beyond your

ull retirement age. I you do, you can increase youruture Social Security benefts in two ways.

Each additional year you work adds another year oearnings to your Social Security record. Higher lietimeearnings may mean higher benefts when you retire.

Also, your beneft will increase automatically by acertain percentage rom the time you reach your ullretirement age until you start receiving your beneftsor until you reach age 70. The percentage variesdepending on your year o birth. For example, i youwere born in 1943 or later, we will add 8 percent peryear to your beneft or each year that you delay signingup or Social Security beyond your ull retirement age.

Note: I you decide to delay your retirement, bsur sign up fr Mdicar a ag 65. In somecircumstances, medical insurance costs more i

you delay applying or it. Other inormation aboutMedicare is on pages 15-16.

Deciding when to retireChoosing when to retire is an important but person-

al decision. Regardless o the age you choose to retire,it is a good idea to contact Social Security in advance



http://www.socialsecurity.gov/pubs/10029.html









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to see which month is best to claim benefts. In somecases, your choice o a retirement month could meanhigher beneft payments or you and your amily.

In deciding when to retire, it is important to

remember that fnancial experts say you will need70-80 percent o your preretirement income to have acomortable retirement. Since Social Security replacesonly about 40 percent o preretirement income or theaverage worker, it is important to have pensions, sav-ings and investments.

It may be to your advantage to have your Social

Security benefts start in January, even i you donot plan to retire until later in the year. Dependingon your earnings and your beneft amount, it maybe possible or you to start collecting benefts eventhough you continue to work. Under current rules,many people can receive the most benefts possiblewith an application that is eective in January.

In some cases, it may be to your advantage toapply or benefts three months beore the date youwant your benefts to start. Because the rules can becomplicated, we urge you to discuss your plans witha Social Security claims representative in the yearbeore the year you plan to retire.

“Working beyond ull retirementage can increase your benefts”

Retirement benefts or widows and widowersWidows and widowers can begin receiving Social

Security benefts at age 60, or at age 50 i they aredisabled. And they can take a reduced beneft on onerecord and later switch to a ull beneft on the otherrecord. For example, a woman could take a reducedwidow’s beneft at 60 or 62 and then switch to her ull(100 percent) retirement beneft when she reaches ull





retirement age. The rules vary depending on the situa-tion, so you should talk to a Social Security represen-tative about the options available to you.

Family benefts

Benefts or amily membersI you are getting Social Security retirement ben-

efts, some members o your amily also can receivebenefts. Those who can include:

• Spouses who are age 62 or older;• Spouses who are younger than 62, i they are taking

care o a child entitled on your record who is underage 16 or disabled;

• Former spouses, i they are age 62 or older (see“Benefts or a divorced spouse” on pages 9-10);

• Children up to age 18, or up to 19 i they are ull-time students who have not yet graduated rom highschool; and

• Disabled children, even i they are age 18 or older.

I you become the parent o a child (including anadopted child) ater you begin receiving benefts, let usknow about the child so we can decide i the child is

eligible or benefts. Note: Children’s benefts are available only to

unmarried children. However, in certain situations,benefts are payable to a disabled child who marriessomeone who is also eligible as a disabled child.

Spouse’s beneftsA spouse who has not worked or who has lowearnings can be entitled to as much as one-hal o theretired worker’s ull beneft. I you are eligible or bothyour own retirement benefts and or benefts as a







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spouse, we always pay your own benefts frst. I yourbenefts as a spouse are higher than your retirementbenefts, you will get a combination o benefts equal-ing the higher spouse beneft.

I you are receiving a pension based on work whereyou did not pay Social Security taxes, your spouse’sbeneft may be reduced. Additional inormation onpensions rom work not covered by Social Securitycan be ound on pages 13-14 o this publication.

I spouses want to get Social Security retirementbenefts beore they reach ull retirement age, the

amount o the beneft is reduced permanently. Theamount o reduction depends on when the personreaches ull retirement age.

For example:

• I ull retirement age is 65, a spouse can get 37.5percent o the worker’s unreduced beneft at age 62;

• I ull retirement age is 66, a spouse can get 35percent o the worker’s unreduced beneft at age 62;

• I ull retirement age is 67, a spouse can get 32.5percent o the worker’s unreduced beneft at age 62.

The amount o the beneft increases at later ages upto the maximum o 50 percent at ull retirement age.I ull retirement age is other than those shown here

the amount o the beneft will all between 32.5 per-cent and 37.5 percent at age 62.

However, i your spouse is taking care o a childwho is under age 16 or disabled and gets SocialSecurity benefts on your record, your spouse gets ullbenefts, regardless o age.

Here is an example:

Mary Ann qualifes or a retirement beneft o $250and a spouse’s beneft o $400. At her ull retirementage, she will receive her own $250 retirement beneft,




and we will add $150 rom her spouse’s beneft, or atotal o $400. I she takes her retirement beneft beoreher ull retirement age, both amounts will be reduced.

Note: Your current spouse cannot receive spouse’sbenefts until you fle or retirement benefts.

Maximum amily beneftsI you have children eligible or Social Security, each

will receive up to one-hal o your ull beneft. But thereis a limit to the amount o money that can be paid to

you and your amily—usually 150-180 percent o yourown beneft payment. I the total benefts due to yourspouse and children are more than this limit, their ben-efts will be reduced. Your beneft will not be aected.

Benefts or a divorced spouseYour divorced spouse can get benefts on your

Social Security record i the marriage lasted at least10 years. Your divorced spouse must be 62 or olderand unmarried.

The amount o benefts he or she gets has no eecton the amount o benefts you or your current spousecan get.

Also, i you and your ex-spouse have been divorcedor at least two years and you and your ex-spouse areat least 62, he or she can get benefts even i you arenot retired.






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What you need to know when youare eligible or retirement benefts

How do you sign up or Social Security?You can apply or retirement benefts online atwww.scialscuriy.gv or you can call our toll-ree number, 1-800-772-1213. Or you can make anappointment to visit any Social Security ofce toapply in person.

Depending on your circumstances, you will need

some or all o the documents listed below. But do notdelay applying or benefts because you do not have allthe inormation. I you do not have a document youneed, we can help you get it.

Inormation needed:

• Your Social Security number;

• Your birth certifcate;

• Your W-2 orms or sel-employment tax returnor last year;

• Your military discharge papers i you hadmilitary service;

• Your spouse’s birth certifcate and Social Securitynumber i he or she is applying or benefts;

• Children’s birth certifcates and Social Securitynumbers, i you are applying or children’s benefts;

• Proo o U.S. citizenship or lawul alien statusi you (or a spouse or child applying or benefts)were not born in the United States; and

• The name o your bank and your account numberso your benefts can be deposited directly into

your account.






You will need to submit original documents or copiescertifed by the issuing ofce. You can mail or bringthem to Social Security. We will make photocopies andreturn your documents.

Right to appealI you disagree with a decision made on your claim,

you can appeal it. For an explaination o the steps youcan take, ask or The Appeals Process (Publication No. 05-10041).

You have the right to be represented by an attorneyor other qualifed person o your choice. For moreinormation, ask or Your Right To Representation (Publication No. 05-10075).

I you work and get benefts at the same timeYou can continue to work and still receive retire-

ment benefts. Your earnings in (or ater) the monthyou reach your ull retirement age will not reduce yourSocial Security benefts. However, your benefts will bereduced i your earnings exceed certain limits or themonths beore you reach your ull retirement age. (Seechart, page 4, to fnd your ull retirement age.)

Here is how it works:

I you are younger than ull retirement age, $1 inbenefts will be deducted or each $2 in earnings youhave above the annual limit.

In the year you reach your ull retirement age, yourbenefts will be reduced $1 or every $3 you earn overan annual limit until the month you reach ull retire-ment age. Once you reach ull retirement age, you can

keep working, and your Social Security beneft willnot be reduced no matter how much you earn.

I, during the year, your earnings are higher or lowerthan you estimated, let us know as soon as possible sowe can adjust your benefts.

















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I you want more inormation on how earnings aectyour retirement beneft, ask or How Work Aects YourBenefts (Publication No. 05-10069), which has currentannual and monthly earnings limits.

A special monthly ruleA special rule applies to your earnings or one year,

usually your frst year o retirement. Under this rule,you can receive a ull Social Security check or anymonth you earn under a certain limit, regardless oyour yearly earnings. I you are sel-employed, the

work you do in your business is taken into consider-ation as well.

I you want more inormation on how earnings aectyour retirement beneft, ask or How Work Aects YourBenefts (Publication No. 05-10069), which has currentannual and monthly earnings limits.

Your benefts may be taxableAbout one-third o people who get Social Security

have to pay income taxes on their benefts.

• I you fle a ederal tax return as an “individual,”and your combined income* is between $25,000 and$34,000, you may have to pay taxes on 50 percento your Social Security benefts. I your combinedincome* is more than $34,000, up to 85 percent oyour Social Security benefts is subject to income tax.

• I you fle a joint return, you may have to pay taxeson 50 percent o your benefts i you and yourspouse have a combined income* that is between$32,000 and $44,000. I your combined income* ismore than $44,000, up to 85 percent o your SocialSecurity benefts is subject to income tax.

• I you are married and fle a separate return, youprobably will pay taxes on your benefts.














At the end o each year, we will mail you a SocialSecurity Beneft Statement (Form SSA-1099) showingthe amount o benefts you received. You can use thisstatement when you complete your ederal income

tax return to fnd out i you have to pay taxes on yourbenefts.

Although you are not required to have ederal taxeswithheld, you may fnd it easier than paying quarterlyestimated tax payments.

For more inormation, call the Internal RevenueService’s toll-ree telephone number, 1-800-829-3676,

to ask or Publication 554, Tax Inormation For Older Americans, and Publication 915, Social Security Benefts And Equivalent Railroad Retirement Benefts.

*On the 1040 tax return, your “combined income” isthe sum o your adjusted gross income plus nontaxable

interest plus one-hal o your Social Security benefts.

Pensions rom work not coveredby Social Security

I you get a pension rom work where you paidSocial Security taxes, that pension will not aect yourSocial Security benefts. However, i you get a pensionrom work that was not covered by Social Security orexample, the ederal civil service, some state or localgovernment employment or work in a oreign coun-try—your Social Security beneft may be reduced.

For more inormation, ask or Government PensionOset (Publication No. 05-10007), or governmentworkers who may be eligible or Social Security ben-efts on the earnings record o a spouse; and WindallElimination Provision (Publication No. 05-10045), orpeople who worked in another country or governmentworkers who also are eligible or their own SocialSecurity benefts.

















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Leaving the United StatesI you are a U.S. citizen, you can travel to or live in

most oreign countries without aecting your SocialSecurity benefts. There are, however, a ew coun-tries where we cannot send Social Security payments.These countries are Cambodia, Cuba, North Korea,Vietnam and areas that were in the ormer SovietUnion (other than Armenia, Estonia, Latvia, Lithuaniaand Russia). However, exceptions can be made orcertain eligible benefciaries in countries other thanCuba and North Korea. For more inormation about

these exceptions, please contact your local SocialSecurity ofce.

I you work outside the United States, dierent rulesapply in determining i you can get benefts.

For more inormation, ask or Your Payments WhileYou Are Outside The United States (Publication No.05-10137).

A word about Medicare

Medicare is a health insurance plan or people whoare age 65 or older. People who are disabled or havepermanent kidney ailure or have amyotrophic lateral

sclerosis (Lou Gehrig’s disease) can get Medicare atany age.

Medicare has our parts• Hospital insurance (Part A) helps pay or inpatient

hospital care and certain ollow-up services.

• Medical insurance (Part B) helps pay or doctors’

services, outpatient hospital care and other medicalservices.

• Medicare Advantage plans (Part C) are available inmany areas. People with Medicare Parts A and B












can choose to receive all o their health care servic-es through a provider organization under Part C.

• Prescription drug coverage (Part D) helps pay ormedications doctors prescribe or medical treatment.

I you are already getting Social Security ben-eits when you turn 65, yourMedicare starts automatically.I you are not getting SocialSecurity, you should signup or Medicare beore your65th birthday, even i you are

not ready to retire. For moreinormation, ask or Medicare

(Publication No. 05-10043).

Help with Medicare expensesor people with low income

I you have a low income and ew resources, yourstate may pay your Medicare premiums and, in somecases, other “out-o-pocket” medical expenses, such asdeductibles and coinsurance.

Only your state can decide whether you qualiyor help under this program. I you think you qualiy,contact your state or local medical assistance

(Medicaid) agency, social services or welare ofce.You can get more inormation about this programrom the publication, You could save in Medicareexpenses (Publication CMS-10126). To get a copy,call the Medicare toll-ree number, 1-800-MEDICARE(1-800-633-4227). I you are dea or hard o hearing,you may call TTY 1-877-486-2048

“Extra help” with Medicare prescription costsI you have limited income and resources, you

may qualiy or extra help to pay or your prescriptiondrugs under Medicare Part D. Social Security’s role








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is to help you understand how you may qualiy andto process your application or extra help. To seei you qualiy or to apply, call Social Security’stoll-ree number or visit our website.




Social Security AdministrationSSA Publication No. 05-10035ICN 457500Unit o Issue - HD (one hundred)January 2007 (Destroy prior editions)

social security: 10035

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