Consumer Boomer

How To Get Social Security Maximum Benefits

Posted: 08 Feb 2011 07:54 AM PST

Social Security, also known as OASDI (Old Age, Survivors, and Disability Insurance) or RSDI (Retirement, Survivors, and Disability Insurance) is, put simply, a social welfare program that provides the following assistance to citizens of the United States:

Disability Benefits
Retirement Benefits
Survivors/Death Benefits

This program is financed through the Federal Insurance Contributions Act (FICA), also known as payroll taxes. America’s Social Security Program is the largest federal government program worldwide and also the largest expense in the federal budget. Social Security currently keeps approximately twenty million Americans out of poverty. Social Security helps many many individuals and families. But, as with an social program, it can only help so much. Let’s look at the maximum benefits that can be received for each of the three primary benefits:

Disability Benefits

Disabled workers who meet specific medical stipulations are eligible to receive benefits from Social Security. Such workers must undergo the following tests to determine eligibility: A recent work test that takes into account your age at the time you because disabled, and a work duration test that proves you worked long enough to be eligible.

The maximum monthly disability benefit depends on the worker’s average earnings over his or her lifetime. Last year the average funds received per month by a disabled worker was $1,064. A typical worker with dependents received $1,803. Benefits paid out to wage-earners and families may be decreased if other benefits are being received (such as Workers’ Compensation).

Retirement Benefits

Insured workers can also receive retirement benefits through the Social Security Administration once they reach the age of 62. The amount of possible retirement benefits depend on the worker’s AIME, or Average Indexed Monthly Earnings, and his or her FRA, Full Retirement Age. Basically, the Social Security Administration takes the average amount of money that you earned during your most lucrative working years and then adjusts it to account for the cost of living. The government then looks at the year in which you retired. If you retired earlier than is typical, you will receive fewer benefits. If you retired later than is normal, you receive more.

The maximum amount a retired worker can receive per month depends primarily on his or her age at retirement. An individual retiring this year at the Full Retirement Age can earn a maximum of $2,346 each month.

Survivors (or Death) Benefits

Social Security provides death benefits to surviving spouses and dependents of wage-earners who have made sufficient contributions into Social Security during their lifetimes. All American citizens in the workforce must pay Social Security taxes and a portion of those funds translate into benefits for survivors.

The more a worker contributes to the Social Security System, the greater his or her family’s benefits will be. Typically, the following guidelines apply:

The spouse of the deceased at Full Retirement Age or above receives 100% of the deceased worker’s basic benefit amount.
The spouse of the deceased over 60 but under the FRA is eligible for 71-99%.
The spouse of the deceased of any age caring for a child under 16 receives 75%.
Children of the deceased worker get 75% of the total benefit amount.

There is also a limit imposed upon a family – generally 150-180% of the deceased worker’s benefit amount.

photo credit: Looking&Learning