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Social Security: Readers weigh in with questions

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Social Security: Readers weigh in with questions
Americans understand when they can start receiving Social Security benefits but are less sure of their own benefit levels, according to a new <a data-i13n="cpos:1;pos:1" href="https://www.nirsonline.org/wp-content/uploads/2024/07/FINAL-Views-on-SS-July-2024.pdf" rel="nofollow noopener" target="_blank" data-ylk="slk:research brief;cpos:1;pos:1;elm:context_link;itc:0;sec:content-canvas" class="link "></div></div></div><div class=

However, if someone is younger than full retirement age and still working while receiving Social Security benefits, it could push them above the yearly earnings limit and their monthly benefits would be temporarily reduced. This is not permanent.

Here’s how the Social Security Administration runs the math: If you are receiving a Social Security benefit and are under full retirement age for the entire year, $1 is deducted from your benefit payments for every $2 you earn above the annual earnings limit. For 2024, that limit is $22,320.

In the year you reach full retirement age, $1 in benefits is deducted from your monthly benefit for every $3 you earn, but only earnings before the month you reach your full retirement age are counted. If you reach full retirement age in 2024, the limit on your earnings for the months before your birthday is $59,520.

What counts as earnings are the wages you make from your job or your net earnings if you’re self-employed. The calculation also includes bonuses, commissions, and vacation pay. What’s not counted: pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.

But you will get any deductions back. Once you reach FRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.

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Close-up portrait of a beautiful senior woman against blue backgroundClose-up portrait of a beautiful senior woman against blue background

Continuing to work for pay past 70 will not increase your Social Security benefit. But keep on working by all means — you can receive benefits even if you still work. (Getty Creative) (Flashpop via Getty Images)

One additional caveat to keep in mind: Premiums for Medicare Part B, which covers doctors’ visits and outpatient services, and Part D, which covers prescription drugs, could increase if you earn significantly more money. If you earn more than $103,000 as an individual or more than $206,000 if you’re a joint filer, you’ll pay an extra amount. Those premiums are typically pulled from your monthly Social Security check.

Dear Kerry, I am 62, working and receiving a spouse’s survival benefits. If I retire and file for Social Security benefits, do I have to choose one or can I get two? Silvia V.

Thanks for this great question, Silvia.

You can only choose one benefit; the larger of the two will typically become your sole benefit.

As a surviving spouse, you can receive 100% of a deceased spouse’s benefit if you had waited until your own FRA, 67, when you claimed the survivors benefit. The benefit amount, however, is reduced for ages less than FRA. The closer you are to your FRA, the greater the benefit.

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The upside for you, though, is that it’s possible to claim a widow’s benefit, as you have, while letting your own retirement benefit grow. For example, you may claim a widow’s benefit at 60, and then shift to your own retirement benefit at age 70, if it’s a larger amount.

Meantime, while this doesn’t apply in your case, it’s important to mention for other surviving spouses that if you and your late spouse were both claiming Social Security benefits at the time of their death, then the larger of the two benefits becomes your survivors benefit.

Then too, for a surviving spouse, if you applied for your own Social Security benefit less than 12 months prior to the death of your spouse, you have the option to withdraw this application and apply for survivors benefits if it is a larger amount.

Bottom line: A surviving spouse, surviving divorced spouse, unmarried child, or dependent parent may be eligible for monthly survivor benefits based on the deceased worker’s earnings. There are myriad variables to consider, so I advise reaching out to Social Security directly.

Have a question about about retirement? Personal finances? Anything career-related? Drop Kerry Hannon a note.

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Is it possible to will my Social Security balance to my children? — Edwin S

No. Once you start Social Security retirement benefits, you’re generally guaranteed to receive monthly checks for the rest of your life. But, Edwin, that comes to a hard stop when you die.

Lovely little girl raising her arms, looking up to the sky joyfully while her dad carrying her on shoulders in promenade.Lovely little girl raising her arms, looking up to the sky joyfully while her dad carrying her on shoulders in promenade.

When a parent, for example, receives Social Security retirement or disability benefits, and dies, their child may also receive benefits. (Getty Creative) (Images By Tang Ming Tung via Getty Images)

There are exceptions for family members who may be eligible to receive survivor benefits based on the deceased beneficiary’s earnings record starting as soon as the month they died.

When a parent, for example, receives Social Security retirement or disability benefits and dies, their child may also receive benefits. Under certain circumstances, a stepchild, adopted child, or dependent grandchild or step-grandchild may also qualify.

To receive benefits, the child must be unmarried and younger than age 18, or between ages 18 and 19 and a full-time student at an elementary or secondary school (grade 12 or below), or age 18 or older with a disability that began before age 22.

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Thanks to my Yahoo Finance readers who felt comfortable sending along your questions. My advice for all of you trying to make sense of your Social Security benefits: Create a My Social Security account. This is a customized portal that lets you check the status of a benefits application, estimate future benefits, or manage the benefits you already receive. You can set up an account even if you don’t currently receive benefits. Do it.

Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old To Get Rich.” Follow her on X @kerryhannon.

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

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Las Cruces finance director gets national honor for ‘exceptional contributions’

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Las Cruces finance director gets national honor for ‘exceptional contributions’

EL PASO, Texas (KTSM) — The City of Las Cruces’ finance director has received a national honor recognizing “exceptional contributions to public finance and local government service,” the City said.

Finance Director Lesley Doyle was selected by the Government Finance Officers Association (GFOA) to receive the organization’s “Recognition for Outstanding Public Service.”

The award recognizes Doyle’s leadership during a critical financial period for the City.

She stepped into the role of finance director as the City’s FY25 audit identified a projected beginning balance shortfall of more than $10 million in a community of nearly 120,000 residents, the City said.

Doyle led a coordinated effort to communicate the financial situation clearly to City departments, executive leadership, and the City Council, while working with the budget team to close the gap without reducing essential services.

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Josie Trevino, assistant finance director, credited Doyle with building a culture of trust and collaboration between the Finance Department and other City departments from the beginning of her tenure.

Doyle came to municipal government after a career in public education, transitioning from a school district into City finance leadership.

“In her first year, she met the challenge with confidence, emphasizing open communication, transparency, and proactive problem-solving. Her leadership has helped strengthen relationships across the organization while fostering a positive and supportive workplace culture within the Finance Department,” the City of Las Cruces said.

“The balance of technical skill and genuine care for people is what makes Lesley’s leadership unique,” Trevino said.

The GFOA has published Doyle’s recognition on its website, and her story will also be highlighted during the upcoming GFOA newsletter and highlighted at the annual GFOA conference.

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Former top Treasury adviser warns that HMRC plans to track personal finances with AI

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Former top Treasury adviser warns that HMRC plans to track personal finances with AI
HMRC could follow Spain’s lead on tracking personal finances (Reuters)

A former senior Treasury adviser to Gordon Brown has warned that HMRC is on the cusp of using artificial intelligence to track people’s and businesses income and expenditure without them knowing.

Dr Chris Wales, who was a member of Mr Brown’s Council of Economic Advisers for more than six years, has sounded the alarm while launching a chilling book on the conduct of the Spanish tax authority, Agencia Tributaria.

He is set to join former Labour Treasury minister Baroness Dawn Primarolo at an event next week flagging up how the Spanish model of dealing with tax evasion is about to arrive in the UK suggesting that the door is opening for a “surveillance state.”

HMRC could follow Spain's lead on tracking personal finances (Reuters)
HMRC could follow Spain’s lead on tracking personal finances (Reuters)

In a preview of the future, Dr Wales has claimed that confidentiality in personal life – not just finances – “will simply go out of the window” and asks whether there are adequate safeguards in the UK to prevent HMRC from emulating its Spanish counterpart.

He said: “From 1 January, every single invoice will go through the tax agency in Spain. The Inspector can already obtain all your utility bills and will soon find out which clinic and pharmacy you use and what you buy there, which restaurants you eat at, where you purchase wine and groceries, what kind of car you have, how far you drive and where you park, what flights you take and which hotels you use. Information security? A thing of the past.”

He went on: “I am far from being a libertarian, but I see great danger in the direction in which tax authority powers are going, particularly because the process doesn’t seem to involve our active consent. There is little parliamentary debate about it. In Spain it is simply out of control. In the UK, let’s see.”

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Highlighting the CONNECT AI program already used by HMRC in the UK, Dr Wales claimed that the UK is now close to following Spain’s lead.

He said: “HMRC has been using sophisticated information technology for years including an AI system called CONNECT which, as early as 2023, was said to contain more than 55 billion taxpayer-related data items.

“It will be much bigger today with these billions of pieces of information about taxpayers capable of being sorted quickly by AI.”

Dr Wales, who is now senior research adviser at International Centre for Tax and Development, added that HMRC also declines to say what algorithms it uses, under the pretext that if you publish them people will “game the system”, a claim that he suggests does not stand up to scrutiny.

“The system is understood to be used to target evasion. For tax authorities, everyone is a potential tax evader. This means that they believe they have a legitimate reason to collect data about all of us,” he said.

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Dr Wales and Baroness Primarolo will be urging parliamentarians in the UK to make more of a stand and apply greater scrutiny than has happened in Spain.

He noted that the Spanish government is trying to introduce a new law, making it an official secret, how the data is used, what algorithms are employed in the selection of taxpayers for investigation and whether there is any review by an official, in apparent defiance of the EU AI Act, GDPR and its own Constitution. “This is obviously a matter of deep concern. When the reasons why decisions are made are unknowable, legal challenge becomes almost impossible.”

In Spain the system is already being used against British expats and others by the authorities.

An HMRC spokesperson said: “Our data and collection powers are set by Parliament and subject to strict legal safeguards, oversight and data protection laws. They exist so we can collect the right tax to fund vital public services, and target error and fraud in a way which minimises intrusion on the honest majority.

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“Artificial intelligence supports some of our processes but never replaces human decision-making and oversight. We remain committed to the safe use of these technologies, underpinned by strict data protection, security and ethical standards.”

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Boyle Heights warehouse fire: Where neighbors, victims can seek financial assistance

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Boyle Heights warehouse fire: Where neighbors, victims can seek financial assistance

More than two weeks after a fire broke out inside the Lineage warehouse in Boyle Heights, many neighbors have received N95 masks and air purified while mobile health clinics are set up in their area.

But some neighbors said the massive fire that sent toxic fume into the air and created a horrendous stench of rotting food has cost them out of pocket.

Neighbors said they missed days of work while spending extra money on property cleanup. One woman said she spent hundreds of dollars on air purified before they became more widely distributed.

Lineage, the company that operates the burned warehouse, donated $2 million to the California Community Foundation (CCF) so the money can be distributed to the community. The organization said it’s split the money between different organizations.

At least 10 of them are listed as providing financial assistance.

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The Boyle Heights Chamber of Commerce said it’s offering small business grants funded, in part, by the group, Inclusive Action for the City.

“We’re hoping that for brick and mortars: it would be up to $3,000. And then for our vendors, it would be up to $1,000,” Miriam Rodriguez with the Boyle Heights Chamber of Commerce said, adding the application is “very straightforward.” “It’s intentionally made that way so that there’s not a lot of requirements. We’re not asking for legal status. We’re not asking for pages of documentation.”

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