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Liz Weston: The earnings test can ruin social security benefits



Dear Liz, My husband passed away 10 years ago at the age of 66. I called back then to see if I could get social security contributions because he received benefits when he died. Our daughter was still a minor, so she was able to receive survivor benefits up to the age of 18. I was told I could not receive benefits because I earned too much money. (I asked what was too much money and they said about $ 14,000 a year.)

I'm thinking about retiring at the age of 66 or 67. Disclaimer "will wipe out my social security benefits. I had my own business and worked before but was told that I could not get the social security benefits my husband earned and probably not much of the social security contributions I made. My friends tell me that this may not be right.

Answer: The information you received about social security was generally correct.

Let's start with the provision for eliminating gusts of wind. If you receive a pension from a job that has not been paid into social insurance, your social security benefit may be reduced but not eliminated. Visit the Social Security Administration website (www.ssa.gov) to learn more about how the Accident Control scheme works and why it was created.

A similar provision, the state pension adjustment, may extinguish any spouse's or survivor's pension may otherwise be obtained.

Before these provisions were issued, persons who received generous state pensions from workplaces that were not paid into social security could receive the same or greater benefits than those who had paid into their system all their lives. Critics of the regulations, however, claim that they could put some government employees on low wages worse off.

Another provision that can reduce or eliminate social security benefits is called a merit trial. Before reaching full retirement age (currently 66 years), each social security check you receive will be discounted by $ 1

for every $ 1 you earn over a certain amount ($ 17,640 in 2019). The amount was $ 14,100 from 2009 to 2011 and $ 14,640 in 2012, so you may be recalling $ 14,000.

Technically, you may have been eligible for a survivor's pension. Widows and widowers are entitled to a survivor's pension from the age of 60 or from the age of 50 if they are disabled, or at any age if they care for the child of the deceased person who is under 16 or disabled. However, it sounds as if a benefit you received would have been destroyed on the merit test.

Your situation is a perfect example of how complicated social security can become and how difficult it can be to navigate the system without the help of experts. But even people with simpler situations can get advice on how and when to apply for benefits. Two of the better do-it-yourself options are Maximize My Social Security ($ 40) and Social Security Solutions ($ 19.95 for a base version or $ 49.95 for one with which you can compare scenarios). You can also contact a paid financial planner who has access to similar software and can personally advise you.

Liz Weston, Certified Financial Planner, is a personal financial columnist for NerdWallet. Questions can be sent to them at 3940 Laurel Canyon, # 238, Studio City, CA 91604, or via the contact form at asklizweston.com.


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