What are the advantages and disadvantages of having a trust instead of a will? How can a person change a will? Is there any way a will would not be given effect after the testator's death? What is a community property state and how does it affect estate planning? What are some common issues connected with nursing home care? What is probate and how does it work? What are some of the tax consequences of estate planning? How does a grantor choose a trustee?

How much can I expect to get in Social Security benefits?

How much can I expect to get in Social Security benefits?

The amount of benefits to which you are entitled under any Social Security program (except SSI -- Supplemental Security Income) is not related to need, but is based on the income you have earned through years of working (through jobs and self-employment). Social Security keeps a record of these earnings over your working lifetime, and pays benefits based on the average amount earned.

Who is eligible to collect Social Security benefits?

The specific requirements vary depending on the type of benefits, the age of the person filing the claim, and, if you are claiming as a dependent or survivor, the age of the worker.

There is one general requirement, however: The worker on whose earnings record the benefit is to be paid must have worked in "covered employment" for a sufficient number of years -- that is, earned enough of what Social Security calls work credits -- by the time he or she claims retirement benefits, becomes disabled, or dies. This usually means a total of at least ten years of work.

To check on your eligibility, see Checking Your Social Security Earnings and Benefits or call the Social Security Administration at 800-772-1213.

Note that Social Security has separate eligibility rules for some specific types of workers, including:

• federal, state, and local government workers
• workers for nonprofit organizations
• members of the military
• household workers, and
• farm workers.

If you have been employed for some time as one of these types of workers, check with the Social Security Administration for the rules that may affect your eligibility.

How are my Social Security benefit amounts calculated?

The calculations are complicated. The amount of any benefit is determined by a formula based on the average of your yearly reported earnings since you began working.

But to complicate matters, Social Security computes your average earnings differently depending on your age. If you reached age 62 or became disabled on or before December 31, 1978, Social Security averages the actual dollar value of your total past earnings -- and bases the amount of your monthly benefits on that amount.

If you turn 62 or become disabled on or after January 1, 1979, Social Security divides your earnings into two categories: Earnings from before 1951 are credited with their actual dollar amount, up to a maximum of $3,000 per year; and from 1951 on, yearly limits are placed on earnings credits, no matter how much you actually earned in those years.

Copyright © 2005 Nolo

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

View Previous Months' Selections