Here's the earliest age to collect social security – Motley's Fool

For the vast majority of Americans, the minimum age to qualify for social security is 62 years old. However, there are some circumstances in which younger people, even children, can benefit from the program. These included:

• People who are unable to work due to an eligible disability.
• Eligible children whose parents receive benefits.
• Younger spouses caring for these children.
• Surviving spouses whose partners have died.

It is useful to remember from the outset the intention of social security: to provide support to Americans generally considered vulnerable, namely the elderly, the disabled, widowers and widows and children.

We will see who qualifies for these benefits, starting with the cases in which people can claim social security benefits before the age of 62, then we'll see why the social security benefit schedule is so crucial.

Disability benefits: social security disability insurance

Although retirement benefits are the most common form of social security, payroll taxes generated by workers' paychecks also fund disability insurance. As the Social Security Administration (SSA) points out, "the sobering fact for 20 year olds insured for disability benefits, is that more than one in four d & # 39; between them becomes disabled before reaching the age of retirement. "

However, not all Americans with disabilities qualify for Social Security Disability Insurance (SSDI). The first step in applying for disability benefits is to pass two basic tests:

• A test "recent work"
• A test of "working time"

First, the SSA will look at how long you have been working recently before becoming disabled. Here is what it takes to pass the test "recent work".

Data source: SSA.

If you pass this test, you go to the "working time" test. Although the SSA states that these requirements may not apply in all cases, those who are considering filing for Social Security disability insurance can use them as guidelines.

Data source: SSA.

However, the mere fact of passing these two tests will not guarantee coverage. SSA is aware that the requirements for SSDI benefits are strict.

You will need to send documentation about your disability and your family's income when you apply. Even in this case, your disability must be described as "severe", which usually means one of two things:

• You will not be able to work for at least a year.
• Invalidity will result in death.

It must also meet handicaps qualified SSDI.

In general, SSDI benefits are modest, with the average payment in July 2018 hovering at $ 1,200. That's $ 14,400 a year – which is not enough to support most individuals, let alone a family.

Disability benefits: additional security income

Since these payments are modest and not all unemployed Americans are eligible for disability status, another program provides social security benefits to individuals other than retirees: the additional security income ( SSI).

Three groups of people may be eligible for SSI:

• The over 65s
• Those who are legally blind
• Those with disabilities

Even if one of these three criteria is fulfilled, there are also strict rules income-based criteria (as opposed to work-based SSDI requirements), as well as resource-based ceilings on what you can receive.

A long list of public assistance programs does not count for income – including SNAP benefits (formerly called food stamps), home energy assistance and any services you may receive for your disability. The specific limits for losing eligibility to SSI vary, however, depending on the states and regions of a state. You can know the limits in your area by calling the Social Security Administration at 1-800-772-1213.

If your resources (your assets in general) exceed $ 2,000 ($ 3,000 for a couple), you will not be eligible for benefits. Resources include cash, stocks, bonds and all real estate other than your principal residence. Your home, car, burial land and life insurance policies with a face value of up to $ 1,500 are assets that do not count as resources.

SSI benefits are even more modest than SSDI benefits, with a maximum of $ 750 for an individual and $ 1,125 for a couple, for $ 9,000 and $ 13,500 respectively. These amounts may also increase in some areas where state agencies add additional payments to federal payments. In California, for example, a disabled person can receive up to 910 dollars a month. If you think you are eligible for SSI, here is more information about submitting an application.

Benefits for children

Adults who are struggling to support themselves will also struggle to support the households that depend on them for their income. As such, the SSA also provides benefits to children whose parents are disabled, already receiving Social Security pension benefits or who have died. To qualify, a child must be single and one of the following:

• Under 18 years old;
• Still in high school and 18 or 19 years old; or
• 18 years or older with a disability that began before the age of 22.

A child who fulfills these conditions and whose parent receives any type of Social Security benefits is eligible to receive 50% of that parent's benefit. In case of death of this parent, the child is entitled to 75% of the amount of the benefit, provided that it always fulfills the age criteria.

There are however limits to the amount that an entire household can receive from Social Security – which can come into play depending on the situation of each family. In general, these benefits reach 150% to 180% of the parent's benefits.

Benefits for spouses caring for these children

If you are one of the parents of any of the above-mentioned children, ie your spouse is receiving Social Security and your child is also receiving benefits, you are also entitled to benefits. This is true even if you do not have professional experience or if you have not reached the age of 62 yet.

These benefits do not exceed half of your spouse's benefits. If your child is not disabled, these benefits stop once the child is 16 years old, even though he may continue to receive this support for a few more years. If, however, the child is disabled, these benefits may continue as long as you are the primary caregiver for that child.

As mentioned above, the limits on family allowances could reduce the overall amount of this spouse's benefits.

Benefits for surviving spouses and former spouses

Sometimes there is a big age gap between the spouses. This can create a situation in which one partner benefits from Social Security, while the other is younger, works and only has a few years to qualify for his or her own benefits or those of the spouse.

If one of the spouses receives social security benefits and dies before his partner reaches the age of 62, the surviving spouse is entitled to benefits from the deceased. The value of these benefits, however, depends on the age at which the initial claim was made. If the surviving spouse applies for survivor benefits at the age of 60 – the earliest age possible to do so – they will represent 71.5% of the deceased's full benefits. The value of these benefits then increases over time until the surviving spouse reaches the age of retirement.

If the surviving spouse is disabled and this disability occurred less than seven years after the death of the deceased spouse, these reduced benefits may be claimed as early as age 50.

It is important to note that ex-spouses can also claim benefits according to the same guidelines as above, provided the couple has been married for at least 10 years and the surviving ex-spouse has not remarried. If the spouse remarries before the age of 60, he loses these survivor benefits.

A final caveat: if a divorced and surviving ex-spouse cares for an eligible child, the 10-year marriage rule is applied.

The moment to take social security

Now that we have covered all situations in which a person may be able to receive social security benefits before the age of 62, it is time to delve into all the questions regarding the best time to apply for benefits of retirement.

You can apply for retirement benefits as early as age 62, but the retirement age is currently between 66 and 67, depending on your year of birth. If you claim benefits sooner, the value of your monthly full benefit checks decreases. If you wait after your FRA, your monthly benefits will increase for each month you delay up to 70 years.

You can find out the total amount of your retirement benefits using this tool from the Social Security Administration. Once you have this, you can use the chart below to determine the amount of your monthly benefit based on when you decide to apply and the year of your birth.

Graphic by author. Data source: SSA

Knowing this, it is easy to assume that everyone could maximize the payment of their lifetime benefits by waiting until age 70 to apply for social security. But this ignores a crucial variable: how long will you spend collecting these benefits. Those who start collecting social security contributions at age 62 will receive close to 100 monthly checks before 70-year-old filers receive their first checks in the mail.

For example, suppose you were born in 1960 and your full pension is $ 2,000 a month. If you claim at age 62, your monthly check will be reduced to $ 1,400. If you wait until the age of 70, the amount will increase to $ 2,480 – or $ 1,080 more than you would be entitled to receive at age 62. However, if you apply for benefits at age 62, you will receive more than $ 134,000 ($ 1,400). 96 months) of the SSA by the time you turn 70, you would have a significant head start despite the lower monthly benefit.

In other words, if you claim benefits at the age of 70, it will take you several years to receive more benefits than you would have received by applying early. It is there that the points of balance come into play. The lifetime payment for a hypothetical retiree who declares at the age of 70 does not exceed that of the first applicant until the age of 70. end of his 70s and only surpasses the one who declares at the age of retirement to 80 years.

Therefore, it is useful to delay your benefits only if you think you will live long enough for the big checks to make up for all the checks you missed. When trying to decide when to claim Social Security pension benefits, you need to consider not only your financial needs and your financial situation, but also your health.

Traditional spousal benefits

As if all these variables were not sufficient to weigh, there is another important factor that we have not talked about: spousal benefits. As a partner often stays at home to help raise a family – and thus has a history of smaller earnings – he is entitled to benefits based on his spouse's earnings history.

The following is a general overview of the factors that may play a role in determining when each spouse applies for benefits:

• Everyone is entitled to a social security retirement benefit, provided they have accumulated sufficient working credits, which normally corresponds to 10 years of work.
• Spouses are entitled to benefits equal to half of their partner's full pension benefits.
• Spouses, however, are also eligible for benefits based on their own work history. Yes your spouse already receives benefits, then you file a return, then you automatically receive the higher amount between your own benefits or up to half of your spouse's benefits (at the age of retirement at 100 years).
• In the event of the death of the highest-paying partner, the surviving partner will continue to receive his / her own benefits or will assume the full benefits of the deceased, whichever is greater.

The number of different scenarios that can take place is vertiginous. For example, spousal benefits reach 50% of the highest employee's benefits at retirement age. In other words, it is not advantageous for the highest employee to wait until age 70 to qualify for benefits – for spousal benefits. However, wait beyond your FRA to drop will increase the survivor benefits your spouse is entitled to if you die first.

All this is part of the mental acrobatics that retirees must undergo to determine what will be their biggest priorities in retirement.

Compromises to claim immediately and wait

Despite what you may hear, your expenses will most likely decrease in retirement. While you will end up spending more on health care – especially long-term care or long-term care insurance – your expenses in just about every other category will go down.

Because you no longer need to go to work, for example, the costs associated with transportation generally drop. Instead of eating out because you do not have the time to make dinner, retirees often spend less on food because they prepare more meals at home.

Of course, every retiree will be different, and it's important to make an honest account of what you want to look like in your day-to-day life. A weighty argument can be made to delay your Social Security benefits because their value will increase each month you wait until age 70, thereby permanently increasing the monthly checks you receive from the program.

At the risk of oversimplifying things, however, I think most pensioners should be entitled to Social Security as soon as possible, provided that:

• The combination of Social Security income and other sources will allow you to meet your basic needs – using the 4% No Risk Withdrawal Rule.
• you have practiced your budget and trust that you can live within your means; and
• you have a clear goal for retirement, which includes at least three main activities.

The last point may seem strange, but there is a good reason for that. Wes Moss, Chief Strategist at Capital Investment Advisors and author of You can retire earlier than you think found that "happy" retirees had an average of 3.6 core activities when they retired, compared to less than two for unhappy retirees.

What is a main activity? It is any activity that gives you a purpose, a meaning and the feeling of intrinsic rewards. Gardening, training, spending time with their grandchildren, and investing would all be considered "core activities," to name a few.

But there is an even more powerful reason why many of us should be asking for social security as soon as possible: the control of our time that we are retiring gives us a powerful and lasting impact on our overall satisfaction at regard to life. If the extra income provided by Social Security helps you reach this state, I suggest taking it as soon as your basic needs are met.

You can not put a price tag on it. What is the point of money, if not to help us enjoy our time on Earth? Whenever you decide to claim it, use Social Security wisely to make the most of your remaining years.