Social Security Benefits: The Basics You Need to Know
Social Security is a crucial aspect of American society, serving as a safety net for millions of retired and disabled citizens. According to the Social Security Administration (SSA), over 70 million recipients received Social Security benefits in 2020 alone.
If you’re planning on retiring soon or need to take advantage of Social Security benefits due to a disability, it’s critical to understand the basics. In this article, we’ll provide you with everything you need to know about Social Security benefits.
What Are Social Security Benefits?
Social Security benefits are payments made by the SSA to eligible individuals. The funds come from payroll taxes, meaning that workers pay Social Security contributions throughout their career. The program serves as an earned benefit, meaning it’s not a handout.
The primary types of Social Security benefits are retirement, disability, and survivor benefits. Retirement benefits are paid to eligible individuals who reach retirement age, while disability benefits are paid to workers who can no longer work due to a disability. Survivor benefits are paid to eligible family members when an insured person passes away.
Retirement Benefits
Retirement benefits are the most common type of Social Security benefit, that’s accessed by most people. To receive retirement benefits, you must have earned enough eligible credits, which are based on your income and work history.
The earliest you can file for Social Security retirement benefits is at age 62, but your benefits will be reduced before you reach your full retirement age (FRA). The FRA is between 65-67, depending on your birth year. The longer you wait to claim Social Security retirement benefits, the larger your monthly benefit will be.
Disability Benefits
Disability benefits are for individuals who can no longer work due to disabilities that are expected to last at least 12 months or result on death. The SSA has a strict definition of “disabled,” so not everyone who applies will qualify. The amount of disability benefits you receive is based on your average lifetime earnings.
Survivor Benefits
Survivor benefits are payments made to the surviving family members of a deceased individual. To qualify for survivor benefits, the deceased must have earned enough credits to be eligible for Social Security benefits. The amount of the benefit depends on several factors, including the deceased’s average lifetime earnings.
Conclusion
Getting a thorough understanding of Social Security benefits can seem daunting, but it’s important to plan for your retirement and any disability or survivor needs. By taking advantage of Social Security benefits, you may be able to finance your daily living expenses, medical bills, and other expenses. Don’t forget to review your earnings record regularly and stay up-to-date on any changes in Social Security policies that may impact your benefits.
