Social Security payments are one of the three parts of the Federal Employees Retirement System (FERS), together with the Thrift Savings Plan (TSP) and the FERS pension. Social Security monthly benefits are essential to a federal employee’s retirement.
Here are six things to think about when it comes to your retirement income.
1. What Determines Your Monthly Benefit Amount?
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As of June 2022, the typical Social Security benefit (except survivor and disability benefits) was $1,592 gross per month. Remember that a portion of your Social Security may be subject to taxation if your annual income exceeds a specific threshold ($32,000 for a married couple and $25,000 for an individual).
The following factors determine your Social Security amount:
- Working experience
- Age
- Start of benefits
- Marital situation
Although it is not factored into the calculation, it is sometimes thought that the IRS life expectancy factor affects one’s Social Security payment.
2. What is Full Retirement Age?
It’s crucial to think carefully before withdrawing your benefits. You become eligible for benefits for the first time at age 62 and a half. Still, if you continue to work, your benefits will be subject to the dreaded earnings test, which results in cutbacks if your earned income exceeds a specific threshold – $19, 560 in 2022. Knowing your full retirement age (FRA), at which point you can still receive your entire pension while working, is a good idea. Depending on when you were born, your FRA will be between the ages of 65 and 67. For instance, your FRA is 67 if you were born in 1960 or after.
3. Medicare and Living Wage Adjustments (COLAs)
Direct Medicare B premium deductions are made from your Social Security check. When hearing about impending COLAs, which are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and come once a year, it is crucial to keep this in mind. Your monthly benefit remains the same if neither inflation nor deflation occurs. If so, your Social Security pension will rise by the same amount as the CPI-W. The COLA for 2022, for instance, was 5.9%. According to estimates, the COLA for the following year will be the highest in about 40 years.
Nevertheless, even though COLAs raise Social Security income, healthcare costs – and hence Medicare premiums – often increase along with inflation, generally offsetting any COLA increase. However, a decrease of 8.6% beats a reduction of nearly 14%. The 2022 Medicare B premium rise was 14.5%, eliminating the 5.9% adjustment.
4. Survivor Benefits
Any surviving children or spouse can be qualified for Social Security survivor payments in the event of your passing. Many government employees may be unaware of this. Even if they are, they may not be aware that the survivor benefits are not the entire amount the original beneficiary would have received.
5. Benefits for ex-spouse
If all five of the following facts about an ex-spouse or ex-husband are accurate, they may be eligible to receive a share of your Social Security benefits:
1. They are 62 years old or older.
2. Neither of them has remarried.
3. At least ten years were spent in the marriage.
4. The benefit they are entitled to is lower than the benefit awarded to them if you were their ex-partner.
5. You must also qualify for Social Security through retirement or disability benefits.
6. What are the maximum benefits one can get per month?
The highest monthly benefit is $3,345 for a worker filing for Social Security at full retirement age in 2022. That’s roughly double the average retirement pension ($1,666 in April 2022). Your earnings must have surpassed Social Security’s maximum taxable income, or the annual adjusted cap on the percentage of your income subject to Social Security taxes, for at least 35 years of your working life to be eligible for the top benefit.
Contact Information:
Email: [email protected]
Phone: 6122163911
Bio:
Mickey Elfenbein specializes in working with Federal Employees relative to their retirement benefit plans, FEGLI, TSP, Social Security and Medicare, issues and solutions. Mr. Elfenbein’s mission is to help federal employees to understand their benefits, and to maximize their financial retirements while minimizing risk. Many of the federal benefit programs in place are complicated to understand and go through numerous revisions. It is Mr. Elfenbein’s job to be an expert on the various programs and to stay on top of changes.
Mickey enjoys in providing an individualized and complimentary retirement analysis for federal employees.
He has over 30 years of senior level experience in a variety of public and private enterprises, understands the needs of federal employees, and has expertise built on many years of high-level experience.
