Almost every working American pays into the Social Security program, but many people do not understand how these benefits work. Because Social Security provides benefits to over 60 million Americans, here are 15 things everyone should know about Social Security benefits.
#1 – Social Security benefits are not just for retired workers.
Social Security is not just for retirees. Working-age people who become disabled and are unable to work can also qualify for Social Security disability benefits.
#2 – You can start collecting Social Security as early as age 62.
Workers can begin receiving Social Security benefits at age 62 even though the full retirement age for these benefits is age 66. If you choose to collect your Social Security before turning 66 the benefits you receive will be smaller. Your benefits will be greater if you wait to collect them until reaching the full retirement age.
#3 – You can still receive Social Security benefits while working.
Recipients of Social Security can still work while receiving benefits but they have to earn below a certain amount to prevent a reduction from being taken from their benefits.
#4 – Bringing in too much money while taking early benefits can be costly.
If you are younger than the retirement age, taking Social Security, and earning more than a certain amount of income, your monthly benefits will be temporarily reduced. Once you reach the age of 66, your benefits will increase.
#5 – You are eligible for Social Security benefits based on your “credits.
To be eligible for Social Security, you must earn at least 40 “credits.” Workers can earn up to four credits a year, so it takes time to earn your Social Security benefits.
#6 – Married couples have additional advantages.
Married couples are entitled to take Social Security benefits based on their own work record, or can take payments worth up to 50 percent of the higher earner’s benefit.
#7 – Social Security benefits are provided to your survivors.
When a worker dies, the surviving spouse can receive his or her remaining Social Security benefits. If the surviving spouse is at full retirement age, the benefits are worth 100% of what the deceased spouse was receiving at the time of his or her death. Though it is possible for a widow or widower to start taking survivor benefits at age 60, the benefit is reduced because the claimant has not yet reached retirement age.
#8 – You can divorce a spouse, but not the benefit.
Workers can still qualify to receive a benefit based on their ex-spouse’s earnings record, if you were married at least ten years, you are 62 or older, and single.
#9 – Your Social Security benefits were built by your contributions.
Workers pay 6.2 percent of their income into the Social Security system.
#10 – Your payments will be bigger if you delay in claiming your benefits.
Once you hit the full retirement age, you can still choose to wait to take your benefits. If you delay in claiming, your benefit will grow by 8 percent a year until you turn 70.
#11 – Your payments are adjusted for inflation.
The Social Security benefits you receive are adjusted for inflation so that you receive benefits you can live on in the present day.
#12 – You still have to pay tax on your Social Security benefits.
You have to pay taxes into the Social Security Trust Fund, but also have to pay taxes when you start receiving Social Security benefits.
#13 – You will likely receive your payments electronically.
Nowadays, your Social Security check probably will not come in the mail. Since 2011 new Social Security recipients have been required to select an electronic payment option. Almost all of Social Security payments are made through direct deposits into bank accounts or onto a prepaid debit card.
#14- You can apply for and view your Social Security benefits online.
New applicants can apply for Social Security benefits online and then view their statements online. Social Security website users simply create a Social Security online account and log in to the site to view their relevant information.
#15 – Social Security trust funds have a projected deficit.
According to the Social Security Board of Trustees’ most recent annual report, the Social Security trust fund assets are expected to be exhausted by 2033.
Do you have a disability or illness which renders you unable to work? If so you may be eligible to receive Social Security Disability benefits. Contact the law office of Neil H. Good online for a free case evaluation or call our office at #(847) 577-4476.