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Social Security 2022: Know Details About The Lump-Sum Payments

Social Security beneficiaries can delay their payment to increase their monthly benefits. The recipients receive a monthly amount after retirement to cover the daily expenses. In addition to the monthly payments, the Social Security Administration also issues lump sum payments in specific circumstances.

Social Security: Know Details About The Lump-Sum Payments

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The retirees can claim their Social Security benefits at 62, but they need not receive their total monthly amount until they reach 66. As.com reports that the threshold retirement age for individuals born in 1960 or later is 67. After attaining the Full Retirement Age, the individuals who apply for the payments will receive more significant benefits.

The SSA uses the income information of the individuals to decide upon their eligibility and the Social Security amount. The retirees can delay their benefits till 70; after that, they will not increase the payments. The individuals who don’t apply for the payments at the retirement age can claim back payments for up to six months. The SSA issues payments based on the difference between the Full Retirement Age and the actual age when the individual receives the benefits. However, this approach will reduce the overall retirement benefits of the beneficiaries.

SSA Provides Lump Sum For Six Months Of The Benefits

Individuals with FRA benefits of $2,000 per month can receive $12,000 lump-sum payments. The lump-sum payments are subject to higher taxes than other benefits. As.com reports that the government taxes up to half of the Social Security amount if it exceeds $25,000 and up to 85% of its more than $34,000. The rules are under the federal income tax. The lump-sum payments will force the individual into a higher tax category; this will impact the beneficiary financially.

Higher Payments Bring Higher Expenses

The Social Security recipients who earn more than $85,000 per year will pay higher Medicare premiums. Retirees can also claim the retroactive payments through the Retroactive Supplemental Security Income. The individuals need to visit SSA’s official home page for more details regarding different retirement schemes and the eligible amounts for other age groups. Retirees should consider their circumstances before applying for retirement benefits, they can also seek expert advice to maximize their benefits.

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