Your Guide to Understanding Social Security

Social security benefits provide monthly income for many retired and disabled Americans. Find out more about Social Security, and how to apply and qualify.
Infographic of a social security guide

Social security is a program provided by the government that dispurses monthly payments to qualified Americans. Currently, over 65 million people receive social security benefits. Many recipients rely on their monthly payments to provide at least half of their income.

Who Can Get Social Security?

There is more than one way to qualify for social security. Anyone who meets at least one of these criteria is eligible to apply for benefits:

  • Retirees
  • Spouses, ex-spouses, and children of eligible retirees
  • Survivors of deceased beneficiaries, such as spouses, ex-spouses, and children
  • Disabled workers

If you believe that you are eligible to receive social security benefits under one of these criteria, you can submit an application. Make sure to provide proof of your claim.

Eligibility Requirements

Before you can sign up for social security, you need to meet several eligibility requirements:

Age

Retirees can start collecting their social security benefits at age 62. However, the full retirement age ranges from 66 years and 4 months to 67 years, depending on your date of birth. You receive a reduced benefit if you choose to retire before your full retirement age. At age 62, you can expect to receive 70% of your total benefit amount.

Individuals who are eligible to receive Social Security Disability Insurance (SSDI) or survivor benefits can begin collecting their benefits earlier.

Work History

You must work for at least ten years to qualify for retirement benefits. The social security system uses credits to calculate your work history. Workers collect up to four credits annually through employment and paying Social Security taxes. By this system, you must earn a total of 40 or more credits before you are eligible. Disabled individuals may have different credit requirements.

Employment Status

It’s a common belief that you need to stop working altogether to receive social security benefits, but that is not the case. It is possible to begin collecting while you are still employed. If you have yet to reach your full retirement age and have earnings that exceed a certain threshold, your benefit amount is reduced. The reduction in monthly benefits only applies to this early collection time period.

Spousal Benefits

Individuals who claim social security benefits through a spouse need to meet the following criteria:

  • Married 10 years or longer
  • Age 62 or older
  • Have not remarried

If you fulfill these requirements, you can get up to 50% of the full benefit amount that your ex-spouse is entitled to. This only applies when this figure is higher than your own benefit. If your calculated benefit is higher, you receive that instead.

Keep in mind that you are only eligible to receive one monthly payment, not both.

Death Benefits

Individuals who believe they are eligible for social security benefits from a deceased beneficiary should report the death to the Social Security Administration at 800-772-1213. It is possible that the SSA receives word of the death from another agency, but you should do it yourself, just in case.

Spouses are either over 60 or over 50 and are disabled to collect benefits. Spouses with disabled children or children under 16 can also qualify. Children are eligible for survivor benefits while under the age of 18 or disabled. In some cases, it’s possible for stepchildren or stepgrandchildren to collect benefits.

Disability Benefits

Disabled individuals that are unable to work because of mental or physical limitations can apply for disability benefits. The disability requires confirmation to last for at least a year by a qualified professional. The average benefit amount for SSDI is about $1,228.87 and $1,361.88 for disabled workers. Spouses received an average of $377.02, and children about $430.36 on average per month.

Maximum Social Security Benefit

Infographic of people looking at a social security card

The amount of your monthly benefit depends on several factors. One of the biggest is your taxable earnings throughout your lifetime. Social security pulls your 35 highest years of earnings to calculate an average amount. This number is then placed in a formula that adjusts for inflation and provides your baseline benefit. Another thing that determines your monthly benefit amount when you begin to collect social security is your age.

For the year 2022, the maximum monthly benefit for a retiree at full retirement age is $3,345. However, most beneficiaries receive about half of this amount. You can use an online calculator to estimate your benefit by plugging in your information or looking at the income table to get an idea of the benefits you can expect.

If you want to receive the highest amount possible, wait to collect until your full retirement age. Once you reach this milestone, you are entitled to 100% of your benefits. You can increase the amount by 8% per year if you delay retirement. This increase only applies until you reach the age of 70. After that, there is no additional benefit increase for delaying retirement.

Signing Up for Social Security Benefits

Individuals who are applying for social security benefits as a retiree, spouse, or disabled individual can apply for social security benefits in three ways:

  • Online
  • By calling 800-772-1213
  • In person at a Social Security office

You can apply for survivor benefits either in person or by phone. If you choose to submit an application in person, it’s best to call ahead to your local office and schedule an appointment. This will ensure that there is someone available to help you.

You might also be interested in: Saving For Your Retirement – What Is The Best Amount To Set Aside?

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