When we speak about the retirement income, we actually get to realize the importance of Social Security. However, many of us don’t know the exact facts about Social Security. As a result, the Social Security has always remained a mystery to many of us. It should be noted here that Social Security is a kind of insurance which is paid for by workers and employers. But it is only the workers and their families who benefit from it. It insures against loss of your work income due to retirement or age issues, disability or death.
Let's take a small step to resolve the top 8 mysteries associated with Social Security:
1. Social security - Will it be considered a good deal?
Social security can be considered as a good deal as it is a complete package of worker benefits such as retirement, disability and life insurance. Also, the best part is that the Social Security payments are at least 15% tax-free.
2. How is the payment for Social Security calculated?
There are mainly three steps to calculate Social Security income. In order to be eligible for retirement, you will have to show at least 10 years of part-time work. Once you become eligible, the payment of Social Security will be based on the average of 35 highest-paid work years. You get a "100%” payment if you first draw your Social Security at your Full Retirement Age (FRA). Presently, the Full Retirement Age is 66 years.
3. Will Social Security be there for me when I retire?
Well, Social Security will be able to pay 100% of all the promised benefits till the year 2033. Henceforth, it may be able to pay about 75% of the promised benefits.
4. How will I be able to plan for my Social Security in a better way?
You can use some good Social Security planning tools to plan better. You can sign up for - ”My Social Security” account at www.ssa.gov/myaccount/.
5. How can I qualify for most of the lifetime payments?
It will be your individual as well as financial planning decision. Normally, it is best to apply later if you have an average life expectancy. However, keeping in mind the present inflation and taxation, it will be better to apply early.
6. Can my family members receive my Social Security after my death?
Yes, it is true that payments to your survivors will be made after your death whether or not you achieved your Social Security eligibility age. Your widow(er) or your surviving ex-spouse may be paid 100% of your payment if they attain the FRA. Your widow(er) may be paid 75% of it at any age, if he/she is caring for your child under the age of 16 years. Your disabled child, at any age can be paid 75% of your Social Security income.
7. Will I be able to work and get Social Security?
Yes, it is true that you will be able to work and still get Social Security benefits. If you are over FRA, you will be able to earn as much as you can and still get full Social Security payments. Before FRA, some of your Social Security is withheld if your earnings exceed the annual earnings threshold. However, if you get Social Security disability, different work rules apply.
8. How will I be able to file for Social Security?
You can file for Social Security by visiting an office or by calling (800) SSA-1213, or online at www.ssa.gov. You may be able to file up to 3 months before you want payments to begin.