Retirees, Say Goodbye to Social Security Checks if You Do This – 4 Ways to Lose Your Payments

Social Security benefits serve as a financial lifeline for millions of retirees, with around 68 million individuals set to receive payments in 2024. For many, these payments are their primary source of income, so understanding how to protect them is essential.

While the average monthly payment for retired workers is $1,918, various factors can reduce or even terminate these benefits. Let’s look into four key situations where you could potentially lose some or all of your Social Security benefits.

Income Limits

One of the most common reasons for a reduction in Social Security benefits is exceeding income limits while still working. If you have not yet reached your full retirement age and continue to earn an income, exceeding a specific threshold can result in a reduction of your benefits.

For 2024, the annual exempt amount is set at $22,320 for those under full retirement age. If you earn more than this amount, the Social Security Administration (SSA) will withhold $1 of your benefits for every $2 you earn over the threshold. If you will reach full retirement age during 2024, the exempt amount increases to $59,520, with $1 withheld for every $3 earned above this limit.

It’s important to note that these benefits aren’t lost forever. Once you reach your full retirement age, the SSA recalculates your benefits to account for the months when they were reduced, resulting in an increased monthly benefit.

SSI Resource Limits

Supplemental Security Income (SSI) is a needs-based program that provides benefits to individuals with limited income and resources. To qualify, you must meet strict resource limits set by the SSA.

As of 2024, the resource limit for an individual is $2,000, and $3,000 for a couple. Resources include cash, bank accounts, and other personal property, but certain assets, such as your primary residence, one vehicle, and household goods, are excluded. If your countable resources exceed the limit at the beginning of any month, you won’t receive SSI payments for that month and could lose eligibility altogether.

Maintaining an awareness of your resources and managing them carefully is crucial to ensure continued eligibility for SSI benefits.

Divorce

Divorce can significantly impact your Social Security benefits, especially if you were counting on your ex-spouse’s work record to qualify for benefits. To receive benefits based on an ex-spouse’s earnings, you must have been married for at least ten years. Remarrying generally disqualifies you from collecting these benefits.

However, if you are eligible for benefits on your own work record and they exceed what you would receive based on your ex-spouse’s record, you’ll receive the higher amount. It’s important to review your eligibility options with the SSA to ensure you’re receiving the maximum benefit available to you.

Incarceration

Legal troubles, particularly incarceration, can also lead to a suspension of Social Security benefits. If you are incarcerated for more than 30 days, your Social Security and SSI benefits are likely to be suspended. This suspension remains in place until you are released, although dependents, such as your spouse and children, may continue to receive payments.

Upon release, you can request to have your Social Security benefits resumed starting the month after your release. For SSI recipients, payments are typically resumed automatically, although they may be prorated depending on the release date. However, if incarceration lasts for 12 consecutive months or more, SSI benefits are terminated entirely.

Social Security benefits are a crucial part of financial stability for millions of Americans. However, various circumstances, including exceeding income limits, mismanaging resources, experiencing divorce, or facing legal troubles, can lead to a reduction or loss of these benefits. By staying informed and proactive, you can protect your benefits and ensure they continue to support you throughout retirement.

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