By Fiona Leung on Nov 23, 2019
As of December 2018, more than 43.7 million retired Americans collected Social Security, with more than 8 million disabled workers collecting benefits as well. But Social Security is much more than retirement income. Along with providing a small income to millions of seniors, Social Security also provides life insurance as well as survivor benefits.
If you’re nearing retirement age and still have a lot of questions about Social Security, here are a few facts for you to consider:
- Compared to countries such as Denmark, The Netherlands, Austria, and Italy, Social Security benefits are quite modest; encompassing only about 39 percent of past earnings, though it comes in ahead of the United Kingdom and Australia.
- The amount of Social Security you will ultimately receive is based on work credits that are accumulated throughout your life. In order to collect Social Security benefits, you will need to have 40 lifetime work credits, with a maximum of four credits earned per year, meaning you will need to work at least ten years in order to begin collecting benefits.
- Your own retirement age will vary, depending on your birth year. Those born in 1954 or earlier can collect Social Security at 66 years, while those born three years later in 1957 will need to wait an additional six months before they can begin to collect benefits. In case you’re wondering, if you were born in 1960 or later, your collection age begins at 67 years.
- Delaying collecting benefits for a few years can increase your monthly benefit substantially, particularly if you wait to age 70 to begin to collect benefits.
- it’s time to apply for Social Security and Medicare, you can complete an easy online application. You can also apply for either Social Security or Medicare separately if desired.
- The Social Security Administration offers a variety of calculators that can help with future benefit planning, including a Retirement Age Calculator, a Retirement Estimator, a Government Pension Offset (GPO) Calculator, an Earnings Test Calculator, a Life Expectancy Calculator, and an Early or Late Retirement Calculator.
- Up to 85% of your Social Security income may be taxable. For married couples filing jointly, you will pay taxes on up to 50% of your Social Security income, which is why finding a retiree friendly state to live in can be crucial. When you first apply for benefits, you can request that the Social Security Administration withhold federal taxes from your benefit payment.
a variety of questions you may have including how to qualify for Social Security. The planner, along with a variety of other resources, and the aforementioned calculators can all be accessed from the Social Security website.
Even if retirement is still a few years away, you can still benefit from the information and resources provided from the Social Security Administration, and knowing how much your benefit will likely be can also help you better plan your finances for when you do retire.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.