RetEst Lecture 10-6-14

RetEst Lecture 10-6-14 - 1 QUALIFYING FOR SOCIAL SECURITY...

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1 QUALIFYING FOR SOCIAL SECURITY BENEFITS: To qualify for benefits a worker must be “ fully insured” . Worker must have earned a certain number of “quarters” to qualify. A designated amount of earnings earned during a year will qualify the worker for one quarter of credit towards requirements for qualification. Worker can earn up to 4 quarter per year. For 2014, the dollar amount is $1,200 to earn one “quarter”. If worker has SS earnings subject to FICA of $1,200 in 2013 he/she gets credit for one quarter. If worker has SS earnings of $2,400 in 2013, he/she earns two quarters of credit. If worker has SS earnings of $3,600 in 2013, gets credit for 3 quarters. A worker who has SS earnings of at least $4,800 in 2013 gets credit for 4 quarters. NOTE: How many “calendar” quarters the worker actually works is irrelevant to determining the number of quarters of credit earned.
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2 Fully insured” 1. A worker is fully insured for life if he has earned at least 40 quarters of credit. In essence, 10 years of employment where income subject to SS taxes. 2. Otherwise, a worker is “fully insured” at death, disability or retirement if he/she has earned at least one quarter of credit for each calendar year since he/she attained 21 years of age. (Any year during which worker was established as being “disabled” is not counted). “C urrently insured ” -- A worker must have earned at least 6 quarters of credit during the previous 13 calendar quarters to be considered “currently insured”. Eligibility for benefits : 1. A worker must by “fully insured” to receive retirement benefits. 2. Benefits for a surviving spouse age 60 or older or for a “dependent” parent are payable only if the worker was “fully insured” at death. 3. Child’s benefits, mother’s or father’s benefits, and the lump sum death benefit are payable if the worker is “currently insured” at death. (Note, deceased need not have been “fully insured”) 4. A worker is eligible for disability benefits if “fully insured” and that worker has at least 20 quarters of credit during the 40 quarter period ending with the quarter in which he/she is determined to be disabled. Retirement Benefits: To receive retirement benefits , a worker must: 1. be fully insured 2. be at least 62 years of age at the beginning of the first month of benefits 3. have filed the application for SS retirement benefits.
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3 Age at which worker can retire with full benefits: Depends on year of birth Year of birth Age of “Full Retirement” 1937 or earlier 65 1938 65 + 2 mos 1939 65 + 4 mos 1940 65 + 6 mos 1941 65 + 8 mos 1942 65 + 10 mos 1943-1954 66 1955 66 + 2 mos 1956 66 + 4 mos 1957 66 + 6 mos 1958 66 + 8 mos 1959 66 + 10 mos 1960 or later 67 Basic Retirement Benefit Calculation: 1. SS Administration calculates “average indexed monthly earnings” (AIME) for worker.
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