While most people know that Social Security benefits exist, and that when they choose to retire, or if they become disabled, they will able to claim benefits, few people understand exactly what types of benefits are available or how to maximize a benefit amount. At Harvest Social Security QA, we strongly believe that the more you know about your benefits, the greater your ability to make the most out of your benefit award. Consider the following things that you need to know about your Social Security benefits:
Social Security is much more than just a program for retirees. As reported by the Center on Budget and Policy Priorities, there were about 60 million people collecting SS benefits in a given month in 2016. While four out of five of SS recipients were older Americans, one-fifth of recipients were collecting disability insurance benefits, or were the children or young survivors of deceased workers. Social Security doesn’t just provide retirement benefits, though; it provides life insurance and disability benefits, too.
The majority of Social Security benefits that are paid are paid to those who are claiming retirement benefits. In order to claim retirement benefits, you must have earned “credits” during your working years. If you have not earned at least 40 credits, then you are not eligible to receive retirement benefits, and must continuing working until you have reached the 40 credit requirement. If you have earned 40 credits, you may start collecting retirement benefits at any point from age 62 up until age 70.
One of the most important things to understand about Social Security benefits is that the longer you wait to collect your benefits, the greater your benefit amount will be. This is because if you start receiving benefits early, your benefit amount is reduced to account for the longer amount of time that you will be receiving benefits. For example, consider a retiree who has a full retirement age of 66 and two months with a benefit of $1,300/mo. If the retiree starts receiving those benefits early–at age 62–the monthly benefit amount will be reduced to $964. On the other hand, if the retiree waits until they are age 70 to begin claiming benefits, the benefit amount increases to $1,698/mo.
Disability benefits refer to another type of Social Security benefit that is very important to understand. As the term implies, disability benefits are paid when a person becomes severely disabled, and as a result, cannot work and earn an income. There are two types of disability programs that are offered through the Social Security Administration: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). The latter is only available to those who have worked under SS long enough to have earned work credits; the former is for those who are disabled, blind, or aged and are of limited income and resources.
Finally, survivors’ benefits are paid to family members when a person who has earned such benefits–again, by virtue of working under SS–dies. The older you are when you die, the more credits that you will need to provide for your loved ones. Benefits can be paid to children, a widow, or a widower.
It is extremely important that you understand each of the benefit types above, as well as Medicare, which provides health insurance coverage for those who are ages 65 and older. Married couples, those who want to work longer or retire earlier, those with disabilities, or those who want to keep working while in partial retirement all have additional issues to consider.
At Harvest Social Security QA, our mission is to provide you with the information about your benefits that you are looking for and need in order to make smart decisions about your future. To learn more about your options, attend one of our Social Security workshops.
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