Malti Patel

By MALTI PATEL [email protected] Q: My neighbor, who is retired, told me that the income he receives from a part-time job at the local nursery gives him an increase in his Social Security benefits. Is that right?

A: People who return to work after they start receiving benefits may be able to receive a higher benefit based on those earnings. This is because Social Security automatically recomputes the benefit amount after the additional earnings are credited to the individual's earnings record.

Q: Will I receive more benefits if I delay my retirement?

A: Some people decide to continue working full time beyond retirement age. In that case, one can increase their Social Security benefit in two ways:

Each additional year a person works adds another year of earnings to their Social Security record. Higher lifetime earnings may result in higher benefits when one retires. In addition, a person's benefit will be increased by a certain percentage if he/she delays retirement. These increases, called delayed retirement credits, will be added in automatically from the time one reaches full retirement age until that individual starts taking benefits or reaches age 70.

Q. How much will delayed retirement benefits increase my benefit?

A:

Year of birth Yearly rate of increase Monthly rate of increase

1930 --- --- 4.5% --- 3/8 of 1%
1931-1932 --- 5.0% --- 5/12 of 1%
1933-1934 --- 5.5% --- 11/24 of 1%
1935-1936 --- 6.0% --- 1/2 of 1%
1937-1938 --- 6.5% --- 13/24 of 1%
1939-1940 --- 7.0% --- 7/12 of 1%
1941-1942 --- 7.5% --- 5/8 of 1%
1943 or later - 8.0% --- 2/3 of 1%

Q: Can I opt out of Social Security? Can I withdraw taxes that I have paid for Social Security coverage?

A: No. Social Security coverage is mandatory. But consider this, unlike your private plan, Social Security provides disability and survivors coverage in addition to retirement benefits. And Social Security generally offers greater protection for family members than private pensions. The law also does not permit a refund of Social Security taxes.

Q: I heard that the Social Security retirement age is increasing. Is this true and if so, why?

A: When Social Security was just getting started back in 1935, the average American's life expectancy was just under age 60. Today it's more than 25 percent longer at just over 76. That means workers have more time for retirement, and more time to collect Social Security. And that's why Social Security's retirement age is gradually changing ... to keep pace with increases in longevity. Workers born before Jan. 2, 1938 can collect full benefits at age 65. For those born after that date, the age to collect full benefits is gradually being raised to age 67.

These questions and answers are courtesy of Malti Patel, 1607 Wood Creek Lane, Allen, Texas-75002. She can be reached at (469) 675-0972.