Social Security Retirement Benefits Agnes S. Wladyka, LLC Attorneys Newark New Jersey

There will be several factors involved in your decision about retiring. A company pension, for instance, may influence your decision. Your ability to keep on working and your own financial situation will also influence your decision. Finally, the rules of the Social Security program may affect your decision as to when you should retire.

The normal retirement age had been 65. However, to cope with the demographics of an aging population and the longer lifespan of the individual worker, the normal retirement age was increased gradually beginning in 1999. When the change is fully phased in 2022, the normal retirement age will be 67, as is evidenced by the following table.

Year of Birth	Full Retirement Age
Before 1938	65
1938	65 and 2 months
1939	65 and 4 months
1940	65 and 6 months
1941	65 and 8 months
1942	65 and 10 months
1943-54	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 and After	67

Even if you don't plan to retire at your full retirement age, it is important for you to contact Social Security two or three months before you or your spouse reach your full retirement age to arrange for your Medicare health insurance protection. If you wait until the month your reach full retirement age or later, you will lose one or more months of Medicare medical insurance protection.

This is important because many private and non-profit health insurance plans adjust their coverage when a person reaches retirement age to take account of Medicare coverage. You may want to get in touch with your insurance agent or the office where you pay health insurance premiums to discuss your health insurance needs in relation to Medicare protection.

A person who starts retirement benefits before full retirement age will receive a permanently reduced benefit. If a non-disabled worker retires after age 62 but before normal retirement age, the Social Security check is reduced by 5/9 of 1% for each month between the age of actual retirement and the then-prevailing normal retirement age.

Benefits can be paid only for months you are eligible throughout the entire month. This means that unless your birthday is the first or second day of a month, you cannot receive a check for the month you reach 62. In general, if you apply for early retirement benefits, your checks can start no earlier than the month you apply. If you wait until full retirement age to apply, you generally get back payments up to six months, but not before the month you reach full retirement age.

If you are an early retiree, earnings after commencement of your benefits but before your full retirement age will result in a loss of $1 in benefits for each $2 of excess earnings. For 2001, and for persons retiring before the full retirement age, earnings over $890 a month, or $10,680.00 per year, will be considered excess. Separate monthly and annual figures are required to account if you retire partway through a year. There is also one "grace year," normally the year of retirement, in which benefits will be paid without reduction in any month in which your wages are lower than the monthly exempt amount and you did not perform substantial services in self-employment.

If you choose to defer retirement, each month of delay after attainment of full retirement age leads to an increase in the eventual benefit. If retirement is delayed until 70, you will receive increases as follows:

Born	Increase per Year
1917-24	3%
1925-26	3 1/2%
1927-28	4%
1929-30	4 1/2%
1931-32	5%
1933-34	5 1/2%
1935-36	6%
1937-38	6 1/2%
1939-40	7%
1941-42	7 1/2%
After 1942	8%

After you start to receive full retirement benefits, you are permitted to continue working without jeopardizing benefits. In many cases, working longer will result in a higher salary and will cause your Social Security check to increase because of the higher earnings. This is really apparent with some private pension plans, where benefit amounts are based on the income earned in the three or five years just prior to retirement rather than on average compensation throughout a career.

Eligibility for Medicare is dependent on your having attained age 65 or having been disabled for two years, not on employment status. Delaying your retirement does not impair your eligibility for Medicare, although you will have to make an application for a Medicare card, unlike retirees who are automatically enrolled in Medicare Part A. In many situationsthe employer's group health insurance plan ("EGHP") will have primary responsibility for insuring the over-65 worker (and the spouse of the older worker), with Medicare taking only a secondary role.

When you apply for retirement benefits, Social Security will check your Social Security record, which shows all of your earnings covered by Social Security. Social Security will then figure your exact benefit rate. Your rate will depend on your age and the amount of earnings reported for you. Wage credits are available for World War II and post-World War II service, unless you are eligible for another federal benefit based on such service. If you are eligible for certain Railroad Retirement benefits, you may be barred from receiving Social Security. If you were employed in a foreign country, which has a totalization agreement with the United States, you may receive wage credits for Social Security benefits. Once you are on the Social Security benefit rolls, your checks will increase automatically to keep up with increases in the cost of living.

If you apply two or three months before your retirement month, your checks start for the month you retire. If you apply closer to the month in which you are retiring, your checks will usually start six to eight weeks after you apply and have submitted to Social Security all the required evidence.

Historically, payments are made on the third of each month for the previous month and may be directly deposited into your bank account. In order to stagger the workload, Social Security has developed a new system. If your birthday is from the first to the tenth of the month, payments are made on the second Wednesday of the month, from the 11^th to the 20^th , payments are made on the third Wednesday of the month and from the 21^st to the 31^st , payments are made on the fourth Wednesday of the month. The benefits are not prorated for the month you die. Even if you die on the last day of the month, the check received the next month must be returned to the Social Security Administration.

Why do I need to notify Social Security of any changes that may affect my benefits?

It is important to notify Social Security promptly about changes that could affect your checks. Failure to report changes can result in Social Security making an overpayment to you. If you are overpaid, Social Security will take action to recover any benefits not due you. Also, if you fail to report changes or you make a false statement, you an be penalized by a fine or imprisonment.

You do not get a hearing before benefits are stopped, but you do have the right to appeal the matter. To appeal, go to your local office and the staff will assist you in filling out the correct forms. Your termination letter will set out the time limits for appeal.

Beginning in 1984, a part of your Social Security benefit can be included in your taxable income depending on your adjusted gross income, and the amount of your benefits.