Rumors spread like wildfire, that’s why we’re here with the 10 most important facts about Social Security. Approximately 61 million Americans collect Social Security benefits.
If you’re receiving or anticipating benefits, then understanding Social Security benefits and facts are paramount. Below we’re discussing the most common Social Security rumors.
1. You Can Change your Mind about Collecting Social Security
Changing your mind about collecting Social Security is a one-time option. Social Security will let you withdraw your application for retirement, giving you the option to repay the benefits.
This must be within your first year of eligibility.
You may request the program to stop your payments, although, you must be over full retirement age.
If you decide to stop your retirement benefits temporarily, between full retirement age and the age of 70 – you’ll receive a larger monthly payment once you start collecting benefits again.
2. Collect ‘Survivor Benefits’ at Age 62
If you are eligible for your own retirement benefit and survivor benefits, you have the option to collect one of the benefits early.
At the age of 60 years old you may collect a survivor benefit on your deceased spouse’s record. You may also wait until you are 70 to switch and start collecting your own benefits.
3. Receive SS Benefits & Stop Working Before Age 62
It doesn’t matter how old you were at the peak of your earnings; your SS program benefits are based on your 35 highest years of earnings.
If you need to adjust your estimate you can always contact, you Social Security’s Retirement Estimator at ssa.gov or by calling the Social Security Administration at (800) 772-1213 between the hours of 7 a.m and 7 p.m.
4. Social Security Benefits Can be Taxed
You may be required to pay federal taxes on your benefits if you have additional income aside from Social Security.
If you file single and your combined annual income is more than $34,000 you might have to pay income tax on as much as 85% of your SS benefits.
5. Social Security isn’t Going bankrupt
Contrary to popular assumption, Social Security trust funds are in their prime – more popular than ever.
However, the more baby boomers that are beginning to retire, the number of workers compared to the number of people who receive Social Security is quickly changing.
This means the SS program will have to use the money from its reserves to be able to fully pay benefits from this moment on.
It’s expected the funds will run out by the year 2034, but even then, Social Security won’t be bankrupt. The program will change their rates to be able to continue to pay SS benefits.
6. Social Security isn’t Meant to Replace a Retiree’s Income
The SS program benefits will only replace roughly 40% of your pre-retirement wages if you have average earnings.
- 26% of people 65 and older who get monthly Social Security benefits today live with loved ones who are dependent on almost all their retirement income to survive
- 50% say their families rely on SS benefits for at least half of their earnings
Having a personal savings account or retirement fund can help you supplement your income after retirement.
7. The Purchasing Power of Social Security is Dwindling Away
Typically, American’s 55 and older will spend about 27% more throughout the year on health care than the rest of the population – According to the Bureau of Labor Statistics.
The SSA issues a “cost-of-living adjustment” also known as COLA every year; this adjustment is to help beneficiaries receive their checks monthly.
The costs have been getting higher, and at a much faster rate than other goods and services.
8. Social Security has Gone Digital
That’s right Social Security has a paperless option!
The U.S. Treasury Department is taking advantage of the option for electronic payments. SSA has created an online portal called ‘My Social Security’ so you can keep track of your benefits online.
Having an account will help keep scammers from creating an account in your name and compromising your benefits.
9. You Can Work and Still Get Social Security Benefits
If you choose to work and receive your SS benefits, they’ll temporarily take some of your benefits if you’re below the full retirement age and/or if you earned wages more than a certain amount.
As of 2019, the amount you can make on your earnings is $17,640, anything higher than that amount the government will withhold $1 from your benefit for every $2 that is earned over that number.
Don’t worry, you’ll see this money in a higher benefit when you hit your full retirement age.
Postponing SS benefits means you can work as much as you want, without benefits being affected.
10. Social Security is More Than a Retirement Program
It is possible for some people to qualify for more than one type of SS benefit program but typically Social Security is only paying for one benefit at a time to a single person.
This is a misconception so let’s clear this up — Social Security benefits have 4 main types which are:
What You Should Know About Social Security
Remember, when filing for benefits you must inquire about your eligibility for benefits.
If your spouse should pass away, it’s important to notify SSA and inquire about survivor benefits.
Planning for retirement by having a retirement or savings account can help you enjoy your later years more comfortably.
Creating an account for yourself on the Social Security website will put all the tools you need in the palm of your hand.
Knowing the facts about Social Security gives you confidence in retirement.