The WORST Social Security Benefit vs The BEST - What Makes The Difference?

While most people 65 and older are receiving some sort of monthly Social Security benefits, the amount received can vary widely. Find out why and how some receive $50 per month while others collect nearly $5,000 from their monthly Social Security benefits.
Join Marvin Musick, Chief Educator at Medicare School as he covers common social security terminology, which formulas are used to calculate your social security benefits, and how to maximize your social security benefits when you approach retirement.
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Video Chapters
00:00 Social Security Terminology
12:43 Formulas to Calculate Social Security Benefits
19:55 Monthly Benefit Calculation Example
24:29 "Special Minimum" Benefit Formula
28:32 2024 Maximum Social Security Benefits (Break Even)
#medicare #socialsecurity #socialsecuritybenefits #medicareschool

[@sarawilliam696]

Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.

[@Justinmeyer1000]

True, It has never been easier to understand how to build your money after retirement than it is right now with the inflation, when you may study and experience a completely variegated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investments, in my opinion, are complex.

[@Retiredtraveler1961]

I retired 60 and my wife did too. Both of us are collecting Social Security at 62. I’m taking home 2300. She’s taken home the same. I have a condo in Florida a house in Maryland, if I need equity, I can sell those to be put in an assisted living. We use our Social Security plus VA , pension, plus Navy retirement, plus a small VA disability to travel the world and enjoy life debt-free.

[@radhikasuresh9273]

Mr. Musick has a strong command over social security fundamentals- very simply and clearly explained. Great job!

[@MedicareSchool]

Thank you!

[@user-tw3kr9if1f]

It's not intended to be a welfare benefit you get what you are entitled to.

[@mabelparker6924]

If you look at the Bottom of your social security statement,in a small box,you can see the EXACT amount of money, you and your employer paid,over your ENTIRE working career.That is what determines your Medicare eligibility. The Top portion is money you earned/spent and filed W2 State and IRS taxes on. What else did you pay your bills with? That is what is used to determine your monthly check.

[@shushu7574]

Please do a video on collecting early SS and working 1099 income for someone else’s business that you don’t own.

[@b.a.8753]

Great job explaining this

[@larryrogers6224]

You do a great job in explaining things

[@chefboy6123]

Always great info thats straight forward!!

[@kennethreynolds8]

Thanks again sir and have a great day.

[@MikeD_]

Very well explained. Thanks. The one element often not discussed is how are retirees between 62-70 yet to take Social Security funding their retirements during those years. If they're heavily withdrawing from 401Ks, then they need to balance the loss in funds that would grow if they remained fully invested. That's a problem because just as we don't know how long we'll live, we don't know how future markets will perform. I suspect most Americans don't have the luxury to wait until they're 70.

[@ANotSoHotRodGarage]

Sadly my dad passed away at 54 in 1994, the government got to keep his S.S money. He paid in and got nothing back.

[@butopiatoo]

Nice summary. Most eyes glazed over halfway through. But still a great summary to study and understand how the system works.

[@laurieyoung8776]

Thanks for doing your awesome videos- just wondering about your figures compared at the end- difference between collecting SS at FRA of 67 vs 70- would you have to live 12 years from 78, or until age 90 to “break even”?

[@evansdolyna7]

The break even point was explained well. My FRA is in October 2024 and i am still working and in pretty good shape. The only thing i wonder is should i wait till April to start and get the retro back 6 months pay in one lump sum since ibam still working till then. 🤔

[@todddunn945]

My social security is low because I got hit by the Windfall Elimination Provision (WEP) because I worked for my professional career outside the US (part time work in school). The years I worked in the US were low income years. I did work enough years to qualify for a benefit but WEP reduced my benefit by almost 55%.

[@dmulvany]

By law, WEP cannot reduce your SSA at your Full Retirement age by more than half of your pension. However, I do think that the WEP ought to be changed so that the SSA can evaluate if your Social Security is already low income before any WEP reduction is applied. If the Social Security formula doesn’t actually provide Social Security retirement benefits that are enough income to sustain you, and if your pension is also low, I believe it doesn’t make sense to reduce your earned retirement benefits further. Social Security was created during the Depression and was meant to help working people avoid poverty.

[@todddunn945]

@@dmulvany Half of my non-covered pensions is more than the maximum FRA benefit from social security. Personally, for people in my situation the WEP makes no sense at all. I was hit by the WEP because I worked outside the US. I also had several years when I worked in the US with no social security withheld, but did not earn any pension for that work. I earned social security benefits for work before and after my time outside the US. Consequently I resent the WEP reduction in my social security rather a lot.

[@dmulvany]

Sounds like you're overall getting retirement income that's only a small amount larger than your pension. For me, I received a very small pension for over five years of noncovered employment, but I put 25% of my earnings into a tax deferred account and also bought savings bonds. Hope you were able to save some money separately, too.

[@todddunn945]

@@dmulvany I have a modest pension from non-covered foreign work. I never worked at a place that offered any kind of savings other than the pension. I do have a small amount (

[@dmulvany]

@@todddunn945, at least we are getting Medicare. That's valuable in itself. I had wound up paying over $1100 a month for health insurance previously (up from $170 a month in 2005), so Medicare is saving me a great deal. Part A is free to us, too.

[@prairiemark4084]

I am an old guy. I gained 32% improvement on my PIA at age 70 vs 66. Sweet! Can darn near live on my Social Security alone. But I have to live a while to gain back what I lost.

[@thomascabral8443]

cool info..

[@saafewolf69]

Is there a way for Disable people on Soc Sec and tradional TX Medicare/Medicaid to get State covered Dental coverage.

[@georgeeighmy7660]

life time earning up to the capped wage amount, not anything over that, correct?

[@tsparky9196]

Another factor besides your life expectancy, is your spouse's. If I go first, I want to make sure my wife won't have any money issues.

[@DKLGalactus5]

Whats the sense of not taking SSI at 62, unless you really love to work, but those that have very physical jobs and have been exposed to chemicals should have sometime to enjoy the freedom of not working yourself to death. You should be able to take SSI and continue to generate income it helps the economy and the state. Whats the downside, none.

[@dennistyler9852]

More good information. Until we reach our desired retirement age, all the best.

[@haryantoly516]

Thank you for the show. Always enjoy your clear calculation. If I delay my benefit until age 70, and stop working from age 67, will my benefit still increase 8% a year for 3 years when I collect it at age 70?

[@todddunn945]

Yes it will.

[@haryantoly516]

Thank you.

[@jennagle5554]

No way Im waiting till 67 or 70 to retire. But why dont professionals like you stress that EACH YEAR past 62 your benefit goes up. I just learned this, will probably work till 63 to get the bump in money.

[@Index-o1234]

Okay I'm 57 my retirement age doesn't go into effect until December 2034 when social security is schedualed to be reduced or have run-out supposedly ( get that money printer ready!) it's payouts to social security participants any idea how much my monthly social security check will be at 67 at the end of 2034?

[@grandmaspocketbook]

I have questions. I’m currently 69. Up until October of last year, I qualified for Medicaid through one of the Medicare Savings Program. Then in October I was told I no longer qualified and, as a matter of fact, I became unqualified a couple months earlier. So in October, about $490 was deducted from my SS check to pay back Part B premiums. I have paid for Part B since then. In January, I signed up for a Kaiser Advantage Plan. A couple of weeks ago, I received a letter from DHS stating that I DID qualify for Medicaid and payment of my Part B and it was backdated to last October. A new Medicaid card was sent to me. In July, my Part B should be paid for. So these are my questions: 1) Should I be getting paid back for the Part B premiums I paid from October - June since I’m told I qualified all during that time? 2) If so, would they do that as a direct deposit? 3) Now that I have Medicaid coverage back, should I not go to see any Kaiser doctors? 4) Finally, should I contact Kaiser about this and have them deactivate my coverage with them? Thank you. Signed: Confused Grandma.

[@MedicareSchool]

You will surely want to contact Medicaid about that. They will be able to determine how you'll be reimbursed. I'd imagine it would come from Medicare or Medicaid. But unclear if it would be direct deposit or a check.

[@jeannovacco5136]

Why & WHEN did they cut the amount that people and their employers pay in? Or does it just look that way because they did not used to break out the Medicare part from the Social Security part? We've been hearing for years that the money available to pay out was insufficient

[@user-bg9em7ch6k]

They haven’t reduced it. He’s just showing us the percentages as they are paid.

[@icilahmb]

I do the math with your numbers and it seems that My SS Id has more money for my retirement than after I do the math with the numbers you use, 35 years of earnings divided by 420, etc... Could the My SS ID website be in error or is it just an estimate that is usually overstated?

[@kauntroap6339]

Hi does social security count your pension too when you retire and want to work part time? or just social security only?

[@threeftr3349]

No, if you retire early (before your FRA) they only count earned wage income.

[@kauntroap6339]

@@threeftr3349 ok thank you

[@richardbudzic6289]

Worst SS benefit is zero dollars per month! You work for many years at 2 jobs. One of them is pension job and the other one is regular job where you contribute towards SS. Because of windfall elimination provision and because your SS job did not earn enough to qualify as 'substantial' income you get no social security. $0.00 per month from Social security.

[@dmulvany]

By law, WEP cannot reduce your social security benefit by more than half of the pension. If you never earned more than SGA, WEP was not a factor.

[@suziejohnson2690]

@@dmulvany…why should a person be penalized for having worked in two different sectors for the economy? The majority, if not all, of the people impacted by WEP worked in a public sector job, ie police, firefighter, teachers, civil employees. It’s not like they make a fantastic salary in that situation and often work second jobs, jobs that withhold SS to make ends meet. Then when they retire, they are hit with a penalty and cannot receive the full benefit earned. In addition, most hit with WEP are not eligible for survivor benefits, so when their spouse dies, they will not receive any benefits. This is known as the triple whammy effect. Lower pay while working, second job needed to survive, then reduced benefits when retired and loss of benefits when spouse dies. The exemption to the WEP for public sector employees is members of Congress. They can receive full SS, full retirement from public sector, and cash out their campaign funds if there is anything left in that chest.

[@lolalucky6373]

People who never work get a lot help is that Fair😮😮😮

[@laurac56]

People who never work don’t get Social Security unless they qualify through a spouse or former spouse or are disabled. Or do you mean benefits outside of SS? This video is about SS.

[@bradcooke5383]

What if in 8-10 years SS becomes insolvent? Better take it early.

[@threeftr3349]

Yes, the break even point is important to know. What is more important, is if you have a younger spouse, who earned less than you, making you the higher wage earner. So as the higher earner if you wait until age 70, that would give your lower wage spouse the maximum benefit amount if that spouse waited for their FRA.

[@todddunn945]

Spousal benefit only applies if the lower earning spouse's own benefit was less than half of your benefit. Where it really matters is when the lower earning spouse gets a survivor's benefit. The higher your benefit the higher the survivor benefit will be.

[@threeftr3349]

@@todddunn945 thanks, that's what I really was typing about, survivors benefits

[@threeftr3349]

@@todddunn945 thank you, I should have been more specific, the higher income spouse can make sure the lower income spouse will be able to get the highest benefits, if its planned properly.

[@marlahunnee]

My husband is retired at 62. I want to retire at 65 which is February of next year 2025. Do I have to keep working if I want to wait for FRA to collect SSA benifits? Or can I have a wage earning gap between age 65 and 67 and then collect. I have covered him on my insurance and will do so until age 65 when I quit my job. so we will go on Medicare him at age 68 because because my medical insurance will end Do I have to collect Social Security when I get on Medicare?

[@Meadowlark57]

We retired some years ago and still do not take social security yet. (But we do have traditional Medicare plus supplemental or medigap insurance for each of us.) Your SS amount will continue to grow until the time you apply (up to age 70). If one of you takes SS at FRA and one waits until age 70, that can also be done. Medicare is taken at age 65 unless both of you have good insurance through an employer of one of you. You can waive it until you are no longer employed (if you notify Medicare of the reason so you do not get charged a penalty for signing up late).

[@MedicareSchool]

You don't have to be on Medicare to collect SS. If you want to hold off longer you certainly can.

[@2dodger2]

I am 72 still working full time- next year my promotion will make me more money than I’ve ever earned. Because I only worked 30 years not 35 , social security is still filling in my years. Am I right?

[@arthurshingler2025]

I'd say yes.... but I'm not the expert here! I'm just watching this like you!

[@lostinmyspace4910]

Yes, as long as your earnings contribute to social security deductions and your employer matches what your W-2 deduction shows, you are still contributing towards your 35 years max. But, if you calculate your current social security benefit with the last 4 or 5 years as 0 (zero) you may want to consider takng social security benefits now. Afterall, you still get the 8% a year increase in social security for deferring till FE 70, yet you are two years past that, and it stops increasing the 8% increase. If I were you, stop by the SS Administration office and see what they calculate, vs what your next 4 or 5 years earnings contributions to be. Might not be worth delaying anymore.

[@dmulvany]

2dodger2, keep in mind that you’ll need to take RMDs next year if you have a tax deferred retirement account or you’ll have to pay a penalty of 25% (though it can be reduced to a 10% penalty if you do pay it the following year). At any rate, you may have more income than you know what to do with!

[@josebotello8566]

I’m collecting SS can I be enrolled in plan G plus dentist now if my birthday is 12-23-56?

[@MedicareSchool]

If you have already started Medicare Part A and B you can get a supplement plan. It's a lot to determine if you can do that at this time. Please contact our office so we can better assist at 1-800-864-8890

[@michaelbreeland8823]

My wife and I are the same age. She doesn't work now, but I'm self employed with a LLC. Is my wife's SSI subject to the earnings test?

[@penelope5500]

No, of course not. HER SS is not affected if SHE is not working.

[@michaelbreeland8823]

@penelope5500 I read that since it's pass through income and we file jointly, it's considered household income, and her SSI would be subject to the earnings test.

[@penelope5500]

@@michaelbreeland8823 Well, I guess SS will have the final say on that. Never heard of such a thing, but I don't think her benefits will be affected (but I am not trying to present myself as some kind of a SS expert).

[@MedicareSchool]

No, it wouldn't conflict with her earnings test. They are only considering her income at that time.

[@philstone5195]

Do the 35 years in the Benefit Formula only include years if substantial earnings?

[@FiestaIsland]

It's the top 35 years of indexed income.

[@threeftr3349]

@@FiestaIsland It's the top 35 years of earnings. Earnings are only indexed through age 59, then at age 60 they are not. It is possible to work from age 60 and beyond and replace your indexed earning years if they are higher. You should check your earning hx on Your Social Security Statement to make sure it is correct.

[@rickca217]

NOT COMPLETELY TRUE,,,,,,,, ONE MIGHT WAIT TILL 70 FOR THE LARGER AMOUNT SO ONE CAN COVER THEEIR BILLS , EVEN IF U DIE EARLY U WERE ABLE TO LIVE BETTER,, AND BETTER IS WHAT ITS ALL ABOUT

[@1bullsprig]

Another important stat that is rarely discussed is for every year that you wait to draw SS after you are eligible could be another year that you are in the ground not receiving anything while other people are living it up on your contributions.

[@MrEdwardCollins]

Rarely discussed? That's discussed all the time, in every single KZbin video or article about Social Security. In fact, that's often the only thing discussed... the break-even point, and when one should file and the pros and cons of filing early vs filing late, since filing late might result in "leaving money on the table" if you are no longer around to collect it. Note that filing early, for the _average_ 62-year-old male, will also result in leaving money on the table. That average 62-year-old male will live to be 81 years old, according to the Actuarial Life Tables. (By comparison, the average 62-year-old female has a lifespan of 84 years.) Thus, since the break-even age from 62 vs 67 is only age 78 and 8 months, the average person collecting at 62 will live past the break-even point and also be leaving money on the table.