Retirement Benefits For Someone Who Has Not Worked For Three Years

maximum social security benefit

In deciding how much to contribute for Social Security benefits, potential retirees need to determine their future earnings and compare it with the maximum benefits they are entitled to. For someone retired at full retirement age ( 66 or 67 years old for future retirees depending on your year of birth) the maximum Social Security benefit amount is $3,041 per month. But actual yearly income is only a function of your age at retirement. Workers over the age of 22 may start collecting Social Security benefits after the year they turn twenty two, but they usually don’t start drawing benefits until the following year.

Retirement Benefits

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So, now we know when potential retirees should begin collecting their monthly benefits. How do they determine their future incomes? The answer is simple: They use the maximum social security benefit formula. The maximum wage cap is the maximum monthly benefit level that an employee may receive under the Social Security Act. So, if an employee’s maximum social security benefit is $elight eighty thousand dollars a year, that person may retire knowing that he or she will receive that much money monthly. If a worker is eligible to receive a monthly benefit equal to the maximum wage cap, that person’s annual income would be capped at that amount.

To determine the amount of benefits that an employee could potentially receive under the maximum social security family benefit formula, one must consider two factors. One is how long a person will live after the date of retirement. The second factor is how much an individual will earn during the course of his or her lifetime. Once these two factors are figured, a number ranging from five hundred to eight hundred percent of the maximum social security benefit amount is assigned to each dependent.

Let’s look at how this works in a real life example. Bob is a sixty-year old retired worker who lives alone in Florida. He has always worked alone and, because of this, never receives a full retirement pay. His pension is paid for him and his dependents when they are alive, and then when they have reached their own retirement ages. At Bob’s death, he is not able to receive any of his retirement benefits because he is living alone. Bob starts receiving benefits in 2021, five years after he starts working.

If Bob lives to age sixty five years, he will reach the required age and start receiving his full retirement pay. However, he has to work until he is seven years older to claim his social security retirement benefits. Bob’s social security death benefit does not exceed the maximum benefit that is assigned to him because he works only ten years. To receive a full retirement pay, Bob would have to work for the minimum of ten years and the maximum social security benefit would not exceed the maximum award of forty work credits.

Bob can not do this trick with only one spouse earning benefits. Bob’s spouse must be working with him in the last five years before he can receive his benefit. One spouse is always working, and the other is not allowed to claim the benefit. Bob has to claim both. Otherwise, the maximum SSA has to pay for him for one spouse and the other one receives nothing at all.

This trick only works if you are retired and have no dependent children at home. If you have more than one dependent child, it will not affect your retirement benefit. Bob is retired at the age of 70. His dependent children are still young at age 7. If Bob has not worked for three years, he cannot receive any benefit the maximum SSA allows for that year. So, he will be eligible to get his maximum benefit if he has not worked for three years.

Final Words

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What if Bob stops working? He has three years to restart working or he has to wait until he is eligible for the maximum benefit. In order to calculate his benefit year, Bob subtracts his regular monthly salary from his total regular income. Then he divides this number by forty two to find his regular monthly income. This number tells him how much money he gets per month as retirement benefits.

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