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Understanding How Social Security Benefits Are Calculated

As seniors age retirement, understanding how social security benefits are calculated becomes increasingly important. Many individuals are unsure about the process and the factors influencing their benefits. In this blog post, we'll delve into the intricacies of social security calculation and how Preferred Senior Benefits, with our team of experts, including Registered Social Security Analyst Reese Phillips, can assist you in navigating this complex system.

Key Components of Social Security Calculation Navigating the Social Security Administration (SSA) website or dealing with paperwork can be overwhelming. Here are the key components involved in calculating your social security benefits:

  • Average Indexed Monthly Earnings (AIME): This is the average of your highest 35 years of earnings, adjusted for inflation. The SSA indexes your past earnings to account for wage-level changes over time.

  • Primary Insurance Amount (PIA): The PIA is the basic benefit amount you're entitled to at your full retirement age, based on your AIME. It's calculated using a formula that's adjusted annually.

  • Full Retirement Age (FRA): This is the age at which you're entitled to receive your full social security benefits. It varies depending on your birth year.

Understanding Social Security Benefits and Taxes Social Security benefits are subject to federal income tax, but the amount you owe depends on your total income. Here are some important points to consider:

  • Taxation Thresholds: If your combined income exceeds certain thresholds, some of your social security benefits may be taxable. Understanding these thresholds can help you plan for taxes in retirement.

  • State Taxes: Some states also tax social security benefits, while others don't. It's essential to know the tax laws in your state to avoid any surprises.

How Preferred Senior Benefits Can Help You Navigate Social Security At Preferred Senior Benefits, we understand that navigating social security can be daunting. That's why we offer personalized assistance to help you make informed decisions about your benefits. Here's how we can help:

  • Personal Consultations: Schedule a one-on-one consultation with our experts, including Registered Social Security Analyst, Reese Phillips. We'll review your earnings history, explain your benefit options, and answer any questions you have.

  • Phone Support: Can't make it to our office? No problem! We offer phone consultations to accommodate your schedule and provide the same level of personalized assistance.

  • Virtual Meetings: Prefer to meet virtually? We're happy to conduct consultations via Zoom, making it convenient for you to get the help you need from the comfort of your home.

Understanding how social security benefits are calculated is crucial for seniors planning for retirement. At Preferred Senior Benefits, we're here to help you navigate the complexities of the social security system. Whether you prefer an in-person consultation, a phone call, or a virtual meeting, our team of experts, including Registered Social Security Analyst, Reese Phillips, is dedicated to providing personalized assistance tailored to your needs.

About Preferred Senior Benefits in Meridian, IdahoMedicare is a federal program that provides healthcare coverage to individuals 65 years or older. Original Medicare coverage is broken into two parts—Part A and Part B—and is accepted by nearly every doctor and hospital in the country. Medicare Part A covers inpatient or hospital stays, while Part B covers outpatient or medical care. Together, Part A and B cover about 80% of the typical healthcare costs seniors face. This leaves a few significant gaps in coverage. Medicare Supplement (Medigap) and Medicare Advantage plans are policies designed to help extend coverage, lessen costs, and ultimately give beneficiaries peace of mind. If you or someone you know would like more information about how to enroll in Original Medicare or one of the Medicare Advantage plans, call now to speak with a licensed agent (208) 818-2523. We can’t wait to help you learn about your options.

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