social-security

A Quick Guide to Social Security

Saturday, 15 August 2009 05:23 |

What is Social Security? Social Security is a government program established to provide economic assistance to individuals faced with disability or age.

History of Social Security. President Franklin D. Roosevelt established The Committee on Economic Security in 1934 to investigate the complex problem of economic security. The Social Security Act was signed into law on August 14, 1935. This Act provided for general welfare aid and an insurance program designed to provide aging, retired workers aged 65 or older a continuing income. Over the decades, the Act has been amended to provide stability of income for retirees and the disabled. Included in these additions and modifications was the development of Medicare, a health insurance program for seniors. Social Security and Medicare have become key aspects of modern life.

Who Gets Social Security? About one in six persons in the United States receives Social Security benefits. This number includes retirees, spouses and dependents of retirees, disabled workers and their dependents, and, finally, those disabled since childhood. Retirement is the most common reason for receiving Social Security.

When Can You Collect Social Security? Traditionally, 65 was considered the full-retirement age, with an early-retirement age of 62. (Note: Early retirement results in a benefit reduction up to 80% of full retirement benefits.) The full-retirement age has been gradually increased, depending upon when you were born. For those born in 1937 and earlier, full-retirement age is 65. For those born in 1943?1954, full retirement age is 66. It increases again so that those born in 1960 and later will reach full-retirement age at 67.

There are other personal factors to consider when thinking about retirement and when you should begin to collect your benefit: your physical health, your access to health care insurance, your family history of longevity, your eligibility based on your own record versus someone else’s record (your spouse’s or other family-members’ eligibility for benefits), and other income sources.

How Do I Qualify? Usually 10 years of employment provides workers with the necessary 40 credits needed for retirement. You cannot “buy” credits; they are earned only through working in a job in which social security taxes have been paid.

Applying for Social Security. Begin the application process approximately 4 months before you plan to receive benefits. If you live in the U.S. or its territories, you can:

Apply online using the Social Security Retirement Benefit Application at www.ssa.gov
Call 1-800-772-1213 (TTY 1-800-325-0778)
Visit your local Social Security office. (Please call first to make an appointment)

You will need to supply a birth certificate, a Social Security card, and bank information for direct deposit. Other documents may be required.

How Much Will You Get? Many factors are used to determine the amount of Social Security benefit you receive. As mentioned before, a minimum of 40 work credits are required. Your highest 35 years of earnings are averaged, and that number and your age are used to determine your benefit. Early retirement reduces the opportunity to accumulate credits and higher wages. Your benefit is permanently reduced. If you can delay your retirement past age 65, you can earn credits and average in higher earnings which will increase the amount you receive when you do retire.

The application process for Social Security benefits and its accompanying Medicare benefits can seem daunting, or even overwhelming. But careful financial and personal planning will ease the transition into retirement and help provide a secure future.

Last Updated (Wednesday, 28 October 2009 10:50)