What Are The Factors That Impact The Ability To Maximize Social Security Benefits?

What Are The Factors That Impact The Ability To Maximize Social Security Benefits?

Here is a look at some factors that can impact your social security benefits. Medical record analysis is a vital step when determining disability benefits.

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Social security retirement and disability insurance programs ensure the wellbeing of retired and disabled Americans. Disability benefits are awarded only after a comprehensive medical record analysis to obtain medical evidence that can substantiate the injury. SSDI (Social Security Disability Benefits) are calculated on the basis of the amount of income on which you have paid social security taxes. Using a person’s AIME (Average Indexed Monthly Earnings), the Social Security Administration (SSA) will calculate his/her PIA (Primary Insurance Amount). From the year 2014 onwards, the PIA is calculated by taking 90% of AIME under $816, 32% of AIME between $816 and $4917, and 15% of AIME that is greater than $4917. The final PIA amount is the maximum amount of disability benefits an applicant is entitled to.

What about retirement income? The maximum social security retirement benefit for the year 2019 is $3,370 per month. However, most retirees do not earn as much. Before going into that, let us consider what an applicant has to do to earn maximum retirement benefit. 

Must work at least 35 years and paid taxes to Social Security.

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Earn at least the maximum wage base, on the basis of which Social Security collects taxes for the 35 years you have worked.

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Wait to claim benefits until the age of 70.

If the above requirements are met, you can expect to get maximum benefits from the SSA. It is important to understand timing with regard to collecting benefits.

The starting point is your earnings history. However, to ensure that the early years in your career are considered more or less equally with later years, the SSA uses an indexing method to arrive at the current dollar value of earnings early in your career. A person turning 62 this year may have earned $30,000 in 1999, and in their calculation, the SSA would increase that $30,000 by just over 65% to account for inflation over that period of time. Consequently, this person will be credited with almost $50,000 in adjusted earnings. Another important thing to understand is that the SSA does not index all of your earnings. The indexing stops 2 years before the person first reaches eligibility, typically age 60. If a person claims benefits at age 70, any earnings he/she has between 60 and 69 are not adjusted for inflation. Since the wage-base limit increases over a period of time, your average indexed monthly earnings may fall below the theoretical maximum if you don’t work those final years. As a result, your benefits may also be slightly reduced. Even

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if a person doesn’t earn the absolute maximum, they may not experience a huge cut in their benefits – they may lose $15 in monthly benefits for every $100 in average indexed monthly earnings you have below the theoretical maximum.

The SSA provides tools that will help you estimate retirement and other benefits. These include the SSA’s Retirement Estimator, Online Calculator, Windfall Elimination Provision Calculator, Detailed Calculator, and Online Social Security Statement. Seeking legal counsel could prove advantageous and help with the application process. Legal assistance is especially supportive when applying for disability benefits because the attorney will at an early stage itself utilize medical review services to estimate the merit of the case. With the right medical evidence, disability attorneys can prepare and argue the case better so that their clients receive the due benefits.

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