Social Security Retirement Benefits: Knowing the Basics

The “Social Security Act” was passed by Congress and signed into law by President Franklin D. Roosevelt in 1935. The law was later amended to also provide disability benefits to those who are unable to work and as a result can’t earn enough to live off of. Social Security retirement benefits shouldn’t be an individual’s only means of income after they reach old age, especially the workers with higher-earnings because benefit payouts are structured to keep seniors out of poverty and higher-earners don’t receive substantially larger benefits (there is a maximum monthly amount awarded regardless of earnings as well).

Social Security is funded through payroll taxes, and over the years only a dwindling number of people remain exempt from paying into or receiving Social Security. Employees have a percentage of their earnings deducted via FICA (Federal Insurance Contributions Act) taxes in order to pay into Social Security and Medicare. SECA (Self-Employment Contributions Act) tax amounts are equal to FICA and are utilized for the same programs, but it’s required to be paid by those who are self-employed instead. In a perfect world, the taxes collected for Social Security would just be held in trust by the government and sit in an account waiting for us to retire, but that’s not what happens. Surplus money after beneficiaries have been paid is used to buy bonds from the U.S. Treasury and at this point Congress could use it for any purpose.

Experts say that without higher payroll taxes, benefit cuts to future or existing claimants, or a combination of these things; projected trust fund shortfalls will cause issues down the road, namely not being able to pay beneficiaries the full amount they’re entitled to. With this said, Social Security is only one of three possible methods available in planning for retirement and it would be wise to know your options when it comes to pensions and personal savings as well. Pensions are increasingly rare nowadays, so paying into a 401(k), IRA, investment or savings account would be ideal in securing your future.

Just about anyone who has worked for more than 10 years is eligible to receive Social Security retirement benefits, all you need is 40 “work credits” which can be acquired through earning a minimum amount of money each quarter (1 credit per quarter, 4 credits annually) and this minimum requirement is so low you could meet it simply through seasonal work. Retiring at an earlier age and receiving reduced Social Security retirement benefits is an option as well, but for each month you work after reaching full retirement age will increase your monthly benefit. Your spouse is also eligible to receive up to 50% of whoever’s earnings record is greater, but this option isn’t available until the higher-earner begins receiving benefits. If you were married for more than 10 years (and haven’t remarried), then you’re eligible to receive retirement benefits based on your divorced spouse’s earnings record.

Acquiring benefits can be an arduous, time-consuming and confusing process, but it doesn’t have to be. There are expert Social Security attorneys, like the ones found at, who specialize in ensuring you get the benefits you’re entitled to and are able to answer the many difficult questions which can arise throughout any point in the process. Consulting a professional will always be the right decision. You can also visit their Facebook page for more information.



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