Questions About Social Security You Need to Ask

Social security income is a widely used income source and public pension system President Franklin D. Roosevelt created in 1935. The Social Security Administration provides sustained benefits to the retired and the disabled every month.

The Social Security Administration, SSA, currently employs 60,000 Americans. This makes it one of the largest federal agencies in the nation and has been operating for more than 85 years.

Fun Social Security Facts:

• The first-ever social security check was cashed in 1940 for $22.54. Now the average retired individual makes ~$1,500 a month.
• The Social Security Administration conceived social security numbers, and now those nine digits track us from the day we are born until our last.
•  In 2020, 65 million Americans were paid social security benefits.

In 2020, 9 out of 10 people aged 65 and older received social security benefits; 57% of retirees claim that social security accounts as a significant source of income. The money you put into social security will be there for when you lose a spouse, become disabled, or retire.

Americans rely on social security payments every month. Meanwhile, many questions are floating around the topic because social security is more complex than federal income tax.

In this article, we’ll explore a few pressing questions about social security so that you can better understand the purpose of the agency and how their work affects you.

When am I eligible for social security benefits?

People wonder if they should claim social security benefits at age 62, 66, or 70 or assume that everyone retires at age 65. However, with at least ten years of work history, everyone is eligible for benefits at age 62; that doesn’t mean you should retire and claim benefits the moment you turn that age. There are many factors that you must consider when deciding when to retire.

First, you will want to keep track of your social security statement, which you can find here. Because everyone makes mistakes, you can avoid miscalculations if you track your payment history with your statement.

The SSA is not in the business of giving out advice; therefore, it is the responsibility of the public to understand and consider the benefits that the government offers its citizens. You can learn all about your social security benefits from a local social security specialist with The Best Senior Services.

Factors that must be considered:

1. Age
2. Marital Status
3. Marital History
4. Health
5. Spousal Considerations
6. Retirement Assets
7. Employment Status
8. Years Spent Working
9. Tax Situation
10. Home Equity
11. Survivor Needs
12. Children
13. Disabilities
14. Need for Income

Terms that you should know:

Full Retirement Age: FRA – this is the age that the SSA considers the age at which you receive your full benefit, based on your birthday. Here is the birth year breakdown:

Average Indexed Monthly Earnings: AIME – monthly pay for the most profitable 35 years of your work history.                                                  

What Benefits Can I Receive from Social Security?

Your benefits are calculated using a formula that averages your top-earning 35 years, taking cost of living adjustments into consideration, and divides that by 420. The result is then adjusted for inflation, and that number is your AIME. Your AIME is then run through a series of calculations called bend points to determine your benefits finally.

The average American salary is around $50,000; at that income, a retiree could expect $1,890 at full retirement age.

When Should I Start Claiming Benefits?

There is a positive correlation between the number of years waiting to retire and the percentage of eligible funds. When you postpone retirement, you can earn considerably more in benefits.

If your full retirement age is 66 and you wait till you are 70 to retire, you will make 32% more in benefits.

On the other side of that coin, there is a negative correlation if you retire early. If your full retirement age is 66 and you retire at 63, you will lose 20% of your full benefits.

74% of Americans today have chosen to retire early and assume reduced benefits. Retirement benefits were being paid out to 65 million people in 2020. Keep in mind that the cost of living adjustment is around 2.6% a year; this increases each year.

How much do I pay for Social Security?

Everyone pays 6.2% of their salary each year into social security. Your employer matches what you pay into Social Security. The Social Security Administration then distributes these taxes to beneficiaries across America.

Are there spousal benefits?

Yes, you do not have to have any earning history to qualify for spousal benefits, as long as your husband or wife has at least ten years of earning record.

The Best Senior Service is here to ensure you get the most benefits out of your retirement.