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Does the Inheritance of an Annuity Affect Social Security Payments?

Original post by Amanda Layman Low of Demand Media

Keep a file for all documents pertaining to your income, inheritances and annuities.

Sometimes, your ability to obtain Social Security benefits relies on your income and resources. However, "income" and "resources" are just blanket terms for a variety of items in your financial life. An annuity, which falls under the list of items that the Social Security Administration considers to be income, can affect certain Social Security benefits -- especially need-based ones.

Contents

What Counts as Income

The Social Security Administration considers income to be much more than just wages you earn from a job. Your income includes annuities, pensions from both government and private sources, worker's compensation, unemployment benefits and other Social Security benefits. It also includes gifts, inheritances in cash or property, and other sources of funds that may be used for food or shelter.

Retirement Benefits

If you are receiving retirement benefits at full retirement age or older, an annuity has no impact on your monthly payments. To receive retirement benefits before full retirement age, your income must be under $14,160. To receive benefits in the year in which you will reach full retirement age, your income must be under $37,680. If an annuity pushes your income over the limit, your benefit will be reduced.

Income-Based Social Security Benefits

For income-based benefits like Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI) and Medicaid, a change in your income may mean a change in your eligibility for the benefits. If receiving an annuity means you'll be over the income limit for any of these benefits (with SSDI, for example, you may earn no more than $1,000 a month), the Social Security Administration may reduce or stop your benefit payments.

When Your Situation Changes

If you are receiving income-based benefits like SSDI or SSI, you must notify the Social Security Administration within 10 days after you begin receiving your annuity. If you continue accepting benefits when you are no longer qualified for them, you may have to pay them back in part or full. Report changes by calling 800-772-1213, and have your Social Security number ready.


                   

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About the Author

Amanda Layman Low began writing professionally in 2005. Her fiction and artwork has appeared in the Drury publication "Currents" and she was the 2006 fiction recipient of the Chapin-Tague Juanita Jones Award. She has written internet articles specializing in finance, business, health, beauty and fashion. Low has a Bachelor of Arts in writing from Drury University and has worked as a freelance artist since 2008.

Photo Credits

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