Unlike children of parents who received disability benefits through the Supplemental Security Income (SSI) program, children of Social Security Disability Insurance (SSDI) benefits’ recipients may be able to receive survivors’ benefits. Although the U.S. Social Security Administration administers both programs, the SSDI program allows some surviving family members to receive survivors’ benefits.

According to federal law, the Social Security Administration may pay SSDI benefits to dependent family members of SSDI recipients. Generally, survivors’ benefits are available to children and surviving spouses caring for a recipient’s children if the recipient worked for at least 1.5 years before death. Furthermore, in addition to dependency benefits for survivors of SSDI recipients, widows and widowers, unmarried children and dependent parents of recipients may qualify for survivors’ benefits based on the deceased recipient’s work history. The federal SSDI survivorship benefit rules vary by degree of kinship, age and marital status. For instance, surviving dependent parents of SSDI recipients may receive survivors’ benefits if they are at least 62 years old and are qualified dependents. Qualified dependent-parents must prove they relied on a recipient’s support for at least 50 percent of their daily living expenses.

The amount of benefits that qualified survivors may receive will depend on a recipient’s lifetime earnings. Generally, the more a recipient earned, the larger the survivorship payment. The Social Security Administration also provides one-time payouts of $255 in some cases to survivors of SSDI recipients.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

If you’re among the dwindling minority of Americans who can rely on a pension when you retire, you might wonder whether you’ll be able to collect your full social security retirement benefit, too. For most people, the answer to this question is “yes”, but it depends on whether you’ve always worked for an employer that participates in the social security system.

There are certain government agencies, nonprofits, and foreign employers that don’t pay Social Security tax on behalf of their employees. If you’re entitled to a pension from one of these employers, but you also spent part of your career working for an employer that does pay into the social security system,  then you stand to have your social security retirement benefits reduced, courtesy of the Windfall Elimination Provision.

The provision was enacted in 1983 as a cost-cutting measure for the Social Security Administration. Before the Windfall Elimination Provision was enacted, some retirees got the maximum social security benefit allowed, plus their full pension benefit, even though their employers had not paid as much into the social security system as did other recipients’ employers.

So, if you’ve worked for a combination of employers, how do you know if – and how much – your social security benefit will be reduced? Unfortunately, the answer is not on the annual statement you receive from the Social Security Administration letting you know what benefits you’re entitled to. The reason for this is that the Administration does not have relevant information for the years you worked for a non-participating employer, so the true amount of your benefit won’t be reflected in your statement.

Instead, to find out whether your social security benefits will be affected by the Windfall Elimination Provision, you can use the Social Security Administration’s online calculator.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

You can choose to start receiving Social Security retirement benefits at any time between ages 62 and 70. So, how do you know when the time is right? Here’s a short overview of how your benefits are affected by the age at which you begin receiving them.

Social security benefits are calculated based on two elements. The first is your earnings history, and the second is the difference between your “normal retirement age” and the age at which you begin receiving benefits.

Normal Retirement Age

Your normal retirement age is based on the year in which you were born.  For those born in 1937 or earlier, normal retirement age is 65. For those born between the years 1938 and 1959, normal retirement age ranges between 65 and 2 months and 66 and 10 months. And, for those born in 1960 or later, normal retirement age is 70.

If you choose to start taking Social Security benefits at your normal retirement age, then you’ll get your full benefit. However, you don’t have to wait until full retirement age to start receiving benefits, nor do you have to start taking Social Security at the moment you reach full retirement age.

Early Benefits

You have the option of taking Social Security retirement benefits beginning when you reach age 62. However, this choice is not without consequences. For each month younger than full retirement age you are when your benefits start, the amount of your benefits will be permanently reduced by a certain percentage.

Delayed Benefits

On the other hand, waiting until you’re older than full retirement age to start collecting Social Security carries privileges. For each month past full retirement age you wait to start taking benefits, your benefits are permanently increased by a certain percentage. Everyone’s benefits are capped when they reach age 70.

To calculate your benefits at different potential retirement ages, you can use the Social Security Administration’s benefits calculator.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Social Security does not only provide benefits for primary recipients, it also provides benefits for surviving spouses. These benefits are called “widow’s” benefits, although they’re payable to either a surviving husband or a surviving wife. How do they work? Here’s a brief overview:

Generally, the widow’s benefit is equal to the deceased spouse’s Social Security benefit. However, if your spouse has passed away and he or she had a lower Social Security benefit than you, your benefit will not be reduced by virtue of your spouse’s death.

What happens when your spouse dies, and you have not yet reached full retirement age? The amount of your widow’s benefit will depend on the age at which you decide to collect it. The youngest age at which you can opt to collect the benefit (with a few exceptions) is 60. However, if you decide to collect early instead of waiting until your full retirement age, your widow’s benefit will be permanently reduced. What is your full retirement age? It’s between 65 and 67, depending on your year of birth.

If you are disabled or you have a dependent child under the age of 19 – or a child who is 19 and a full-time student – then the age threshold at which you’re permitted to begin collecting widow’s benefits is reduced.

You might be eligible for widow’s benefits even if you’re not technically a widow. If you’re divorced, your were married to your former spouse for ten or more years, and he or she passes away, you are still eligible for widow’s benefits as if you were still married at the time of your former spouse’s death.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

What is normal retirement age for purposes of Social Security? The answer to this question depends on your date of birth. Normal retirement age, as defined by the Social Security Administration, operates on a sliding scale system. For example:

• If you were born in 1937 or before, then your normal retirement age is 65.
• For those born after 1960, normal retirement age is 67.
• If you were born in between 1937 and 1960, your normal retirement age is somewhere between age 65 and age 67. You can find out what age applies to you at www.socialsecurity.gov.

Do You Have to Retire at Normal Retirement Age?

The Social Security Administration uses normal retirement age as a baseline for establishing the amount of your monthly benefit. But you don’t have to wait until you reach normal retirement age to start receiving benefits. You can choose to start Social Security benefits beginning at age 62. If you make this choice, though, your monthly benefit amount will be permanently reduced.

On the other hand, you can choose to wait for your Social Security benefits. For each month past normal retirement age that you delay benefits, an additional percentage will be added to your monthly benefit. The amount of Social Security benefits you can receive reaches a cap when you turn 70.

What About Working and Drawing Benefits?

Normal retirement age also comes into play when determining how much income you can earn while collecting benefits. Before you reach normal retirement age, if you earn more than $14,600 per year, then your monthly benefit is reduced by $1 for each $2 that your income exceeds the limit. In the year you reach retirement age, the penalty is reduced, and you’ll only lose $1 in benefits for each $3 you earn over the limit. When you actually reach full retirement age, the penalty is eliminated, and you can earn as much as you want while collecting your full benefit.

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Did you know that you’re allowed to work while collecting Social Security retirement benefits? Whether or not your paycheck affects the amount of your Social Security depends on your age. When it comes to determining whether your benefits are affected, the government takes a three-tiered approach:

• Before You Reach Full Retirement Age. If you haven’t yet reached full retirement age (the range is from 65 to 67, depending on your year of birth), then earning too much money will result in a reduction of benefits. For 2010, you’re allowed to earn $14,260 before you’ll see a reduction in your social security check. For every $2 you earn over this limit, the social security administration will subtract $1 from your retirement benefits.
• The Year You Reach Full Retirement Age. In the year you reach full retirement age, the income limit still applies, but exceeding it has less of an effect on your retirement benefits. For every $3 you earn over the annual limit, the social security administration will subtract $1 from your benefits.
• After You Reach Full Retirement Age. After you’ve reached full retirement age, you can earn as you want, with no reduction in benefits.

To determine your full retirement age, you can visit www.ssa.gov.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

If there is one thing that you can count on when it comes to retirement, that is that the cost of living will increase by then, and will continue to increase during your retirement years. This is why the Cost of Living Adjustment, also known as COLA, is one of the most important elements of your Social Security Benefits. COLA is a method of which your monthly benefits are adjusted for the expected cost of living increases.

The Cost of Living increase adjustments that you get with your Social Security benefits are important to help you meet your living expenses. This adjustment is not something that you will likely get with your pension, which will usually remain at a fixed payment amount.

Of course when you look at inflation over a two or three year period, this adjustment may not seem all that significant, but if you look at inflation over a couple of decades, the value of this adjustment becomes obvious.

The Purpose of COLA

These income adjustments are not to help retirees better their living standard; instead it is intended to help them maintain their current standard of living. If there were 3% inflation each year, you would probably need about 30% more money after 20 years just to maintain your current standard of living. With just 4% increase, you would need twice the amount of your current income to be able to meet your current living expenses.

Due to laws that have been in place since 1973, Social Security benefits are automatically increased to meet inflation. The amount that those benefits increase is determined by a formula that measures the rate of inflation each year. The increase in benefits takes affect in December each year; during years where there was high inflation this increase can be significant, but if inflation is not high, the increase can be very low.

Although it is never a good idea to rely exclusively on Social Security benefits to meet your living expenses after you retire, it is nice to know that those benefits are available to you. It is also comforting to know that these benefits will increase to cover the increased amount it costs you to meet your living expenses.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.

Applying for Social Security isn’t as hard as you might think. While there are plenty of rules and regulations you must follow, simply understanding the process is a big step in navigation your Social Security application.

To get started, gather all your necessary documents, including your Social Security card, a certified copy of your birth certificate, your previous year’s W-2 or tax return and your proof of residency or legal alien status. If you were discharged from the military before 1968, you must have a certified copy of your discharge papers.

In addition to qualifying based on your own work history, you may also qualify on your spouse’s work record as well. This is true even if your spouse is deceased, has not yet claimed Social Security benefits or is an ex-spouse. If you qualify under both yours and your spouse’s records, you will receive only one benefit but it will be the higher of the two.

Qualifying on your spouse’s record does not affect his or her ability to claim Social Security benefits later.

A pension on the other hand, may affect your benefits and your annual Social Security statement may not currently reflect this adjustment. If you are receiving a pension from a job where you did not pay Social Security, you should contact the Social Security Administration office to find out how it will affect your benefits.

You can apply for Social Security as early as age 62 but keep in mind that the earlier you apply, the less you’ll receive. Likewise, postponing your application for a few more years can mean a considerable difference in your monthly benefits.

The Mendel Law Firm, L.P. is a member of the American Academy of Estate Planning Attorneys.