Marquette Benefits and Social Welfare Law Review Subscription
Equally an American worker, the style you lot fund your lifestyle during retirement or during a time when you become disabled and can't piece of work will likely include Social Security benefit payments. The money yous paid into Social Security as taxes from your paychecks throughout your working life acts every bit replacement income for retirees, disabled workers and their families.
If you lot've been working in the The states for over 10 years, chances are you've been earning employment credits that'll make you eligible to receive Social Security payments if or when yous need them. When y'all're fix to exit the workforce — or need to because of a health condition — this program is fix up to pay you a class of income based on what you've earned over the years.
But when do you apply, and how much coin will you lot receive? To meliorate navigate the process, it'south important to learn the basics about Social Security payments. From understanding the ways the plan works to the qualifications that applicants demand to meet in gild to be approved, we've rounded up the foundational details you need to know about applying for Social Security benefits.
What Are Social Security Benefits?
Social Security is a program run by the Social Security Administration (SSA) to provide retirement or survivor benefits and inability income to millions of Americans. These benefits are given to qualifying United States citizens every bit retirement income for themselves, their spouses or their surviving children. People with qualifying disabilities may also receive benefits as income if they go unable to work due to their wellness, simply, according to the SSA, 49 million of the 65 million people who receive monthly Social Security benefits are retirees.
While Social Security benefits are a form of income meant to help you live more comfortably, the SSA notes that these payments were "never meant to be the only source of income for people when they retire." Instead, they're meant to supplement other sources of income, such as a alimony or withdrawals from a retirement account. In addition, according to the SSA, fiscal experts agree that about people need about 70% of their pre-retirement income to live comfortably in retirement, but Social Security payments just replace around 40% of pre-retirement income. It'southward always a wise thought to outset planning other ways to save for retirement, no matter your historic period, to avoid relying solely on Social Security if possible.
To qualify to receive Social Security retirement benefits, you must be age 62 or older and take worked for at to the lowest degree 10 years, which equates to 40 of the credits the SSA uses to make up one's mind eligibility. It'south important to note that, if you choose to receive your benefits at age 62, your payment won't exist as much as it would be if you waited until you reached full retirement age — the age at which you're entitled to receive 100% of your Social Security benefits.
Your full retirement age could range from 65 to 67, depending on when you were born. If you delay taking payments until you're lxx, you tin earn delayed retirement credits that increase the amount of your payment to more than than 100%. Spouses and previous spouses are besides eligible for benefits based on whether their partner worked long enough to become eligible for Social Security payments.
How Does Social Security Piece of work?
Social Security acts as an insurance program for people who are retired, elderly or disabled and their family members. When you work in the United states of america, a portion of your earnings from each paycheck is withheld for the Social Security program. Your employer withholds this coin and pays information technology, plus a matching amount, to the federal government. These payments fund the checks of people who are currently receiving Social Security benefits.
The money withheld from your paychecks goes into two different Social Security trusts. 1 is called the OASI Trust Fund, which is designated for retirees; "OASI" stands for One-time-Age and Survivors Insurance. The other is called the Inability Insurance (DI) Trust Fund for beneficiaries who have disabilities. This money is so disbursed to eligible recipients in the programme. In 2021, Social Security benefits payments increased by one.3%. Each yr, the corporeality of your payment will likely get upward due to toll-of-living adjustments.
Every twelvemonth you piece of work, you tin can earn up to 4 credits that count toward your eventual eligibility for Social Security. As mentioned, you need to earn at least forty credits — x years' worth of work — for eligibility. These credits are based on earnings. In 2021, you'll need to make $1,470 to earn one Social Security credit. That rose $60 from 2020'southward $1,410 limit.
How to Apply for Social Security
To begin your application process, showtime by reviewing the Social Security website. It has a handy tool you tin use to calculate your benefits, and information technology's a adept idea to practice a comparison if y'all oasis't yet decided when you'll retire. If you'd like to run across how much you'll earn at 62 compared to 68 or seventy, examination out the computer to go an thought. These projections tin can help you plan for retirement.
On the SSA website, you'll see a prominent button that reads "Apply Online for Retirement Benefits." Clicking on this link takes yous directly to the Social Security application. To use for disability benefits, use the application link on this page. More data about applying for spousal benefits is available here. If you're unable to employ for your benefits online, you can practise so over the telephone past calling the SSA at 1-800-772-1213 or in person past visiting your local SSA part. Use this SSA tool to find the nearest office based on your Null code.
As with the process of filling out any awarding, it can help to gather upwardly some pertinent details and paperwork before yous get started. First, you'll demand to know your Social Security number, your date of birth and your birthplace. You'll also need basic information about your spouse and children. If you served in the war machine, y'all'll want to have on hand your DD-214 or other paperwork that shows information virtually your service dates.
Lastly, you lot'll also need your tape of earnings, or Social Security Statement. This is available from the SSA hither; note that you'll need to create an account in club to admission information technology. This is a statement showing you how much you've earned that qualifies for Social Security benefits. Yous can also access the full checklist of everything you lot'll need for your awarding on this page.
Receiving Your Social Security Benefits
Your benefits will either be paid by cheque or through an automatic payment sent to your bank account — you lot tin can designate your choice on your awarding before you submit it. To have your payments sent electronically to your bank account as a direct deposit, you'll need your checking account number and the banking company'south routing number.
To receive your benefits, you'll also need to designate your first payment date, which you'll also practise during the application procedure. Depending on your age, the system may only permit you select certain dates due to eligibility limitations.
If you aren't sure when you lot should outset challenge your benefits in retirement, refer back to the payment calculator. The longer you wait — and the closer yous become to age 70 — the more you'll receive each month. The reckoner gives y'all a close prediction of what your payment will exist, and it's an platonic tool to use for retirement-planning purposes.
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Source: https://www.reference.com/business-finance/apply-social-security-benefits-c340f07e719a233f?utm_content=params%3Ao%3D740005%26ad%3DdirN%26qo%3DserpIndex
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