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Social Security Benefits Review | Receiving Retirement Benefits

Social Security:

In an earlier post we went over a little history of how Social Security is set up and how money is paid into the trusts in order to establish money to pay out once you start receiving your benefits.

The purpose of this post is to help you understand what happens when you already started to receive your benefits and hopefully understand some of the commonly asked questions we get on Social Security benefits.  Our hope is that we can try to summarize all the information here for you so you don’t have to poke around a bunch of other websites and taking a lot of time doing so.

In this blog on Social Security Benefits, we are going to discuss:

  • What you need to report to the Socials Security Office
  • Working while receiving benefits
  • Taxes and your benefits
  • Living outside the US
  • What to do when someone dies
  • Schedule of payments
  • What you need to know when you get survivor benefits


What you need to report to the Social Security Office:

Social Security Benefits

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

You do have some responsibilities to report information to the Social Security agency.  It is important to understand that you need to ensure all your reportings are true and accurate so that you don’t have any over payments as a result, or even make a false claim where you could lose your benefits altogether. There are a number of other circumstances that you will need to report information to the Social Security office so that you can ensure you receive your payments.  Failure to do so with some of these circumstances can prolong payments, reduce your earnings, or eliminate them if not properly disclosed.

These would include:

  • Estimated Earnings Change
  • Moving
  • If you change direct deposit accounts
  • If a person is not able to manage funds
  • If you receive pension from non-covered work
  • If you get married or divorced
  • If you change your name
  • If you get benefits because you are caring for a child
  • If someone adopts a child who is receiving benefits
  • If you become a parent after you begin to receive benefits
  • If you have an outstanding warrant for your arrest
  • If you are convicted of a criminal offense
  • If you have committed a crime and are confined to an institution
  • If you violate a condition of parole or probation
  • If you leave the United States
  • If your citizen status changes
  • If a beneficiary dies
  • If you are receiving Social Security and Railroad Retirement benefits

Working While Receiving Benefits:

You may continue to work and still get Social Security retirement benefits.  Your earnings will not affect your Social Security beneifts if you have reached full retirement age.  However there can be a reduction if you exceed certain limits for the months before you reach full retirement age (see our last post to see the retirement age chart). If you are younger than full retirement age, $1 in benefits will be deducted for each $2 in earnings you have above the annual limit ($15,480 in 2014) In the year you reach full retirement age, benefits will be reduced $1 for every $3 you earn over a different limit ($41,400 in 2014) until the month you reach your full retirement age.  Then you get the full amount with no income limits.

Taxes and your benefits:

When you have other income such as self-employment earnings, wages, interest, dividends and other taxable income that would be included on your tax return, you may have to pay some federal income taxes on your Social Security.

You do not have to pay federal income tax on more than 85% of your Social Security benefits if:

  • file a federal tax return as an “individual” and yourcombined income is
    • between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
    • more than $34,000, up to 85 percent of your benefits may be taxable.
  • file a joint return, and you and your spouse have a combined income that is
    • between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
    • more than $44,000, up to 85 percent of your benefits may be taxable.
  • are married and file a separate tax return, you probably will pay taxes on your benefits.

Living outside of the US:

Living outside of the US means that you are not in any of the 50 states, District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands or American Somoa for over 30 days in a row.  You will remain in this status until you have stayed in the United States for at least 30 consecutive days.

As a U.S. Citizen you may receive your Social Security benefits for as long as you are eligible.  There are some countries to which the U.S. cannot send payments (click here for the complete guide to living outside of the U.S. with the list of countries that cannot receive payments).

If you are not a U.S. citizen or on the countries listed in the guide, payments will stop after you have been outside of the U.S. for six full calendar months unless you meet some exceptions:

  • You were eligible for monthly Social Security benefits for Dec. 1956
  • You are in the active military or naval service of the U.S.
  • The worker on whose record your benefits are based had railroad work treated as covered employment by the Social Security program
  • The worker on whose record your benefits are based died while in the U.S. military service or as a result of a service-connected disability and was not dishonorably discharged
  • You are a resident of a country with which the U.S. has a social security agreement.

If you work or own a business outside of the U.S. you should contact your nearest embassy office immediately.  Failure to do so could prolong or cut benefits that would otherwise be available to you.

What to do when someone dies:

In many cases the funeral director will report the death to Social Security.  However you will need to furnish the funeral director with the deceased’s Social Security number so that they can make the report.  Some of the deceased’s family members may be able to receive Social Security benefits if the deceased person worked long enough under Social Security to qualify.  You should get in touch with Social Security as soon as possible to make sure the family receives all the entitled benefits.

Benefits that may be available are including:

  • A one-time payment of $255 can be paid to the surviving spouse if he or she was living with the deceased; or, if living apart, was receiving certain Social Security benefits on the deceased’s record.  If there is no surviving spouse, the payment is made to a child who is eligible for benefits on the deceased’s record in the month of death.

Certain Family members may be eligible to receive monthly benefits, including:

  • A widow or widower age 60 or older (50 or older if disabled);
  • A Widow or widower at any age who is caring for the deceased’s child under age 16 or disabled;
  • An unmarried child of the deceased who is: Younger than age 18 (up to age 19 if he/she is a full time student in elementary or secondary school); or age 18 or older with a disability that began before age 22
  • A Stepchild, grandchild, stepgrandchild or adopted child under certain circumstances;
  • Parents, age 62 or older, who were the dependent on the deceased for at least half of their support; and
  • A surviving divorced spouse, under certain circumstances.

If the deceased was receiving Social Security benefits you must return the benefits received for the month of death or any later payments.

Schedule of payments:

Social Security benefits are paid each month following the month in which they are due.  You would receive your January benefit in February, with February’s in March and so on.  The day of the month you receive you benefit also depends on your birth date.

Date of birth Benefits paid each month on
  • 1st – 10th Second Wednesday
  • 11th – 20th Third Wednesday
  • 21st – 31st Fourth Wednesday


Social Security Benefits should be taken with careful consideration of an overall retirement plan.  There are many factors to consider and we will try to continue to educate you through a series of blogs dedicated to specific Social Security Benefit and other information.  You should seek out the help of a financial professional so that you can see how these benefits fits into your specialized plan, and chart a course of action for yourself, spouse or any other love ones you may have in your life.

Reference guide: http://www.socialsecurity.gov/
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