Annuities

What Social Security Retirement Benefits Are Available?

Presented by David Corwin Almost everyone in the United States who is employed or self-employed is covered by Social Security, which pays benefits to or on behalf of covered workers who retire, become disabled or die, assuming that eligibility requirements are met. Retirement Benefits Eligibility: To qualify for monthly Social Security retirement benefits, you must be fully insured which, for most workers, means that you must have 40 quarters of coverage at retirement. Benefits: Social Security retirement benefits are based on your Primary Insurance Amount (PIA), which, in turn, is based on your earnings history (your “Average Indexed Monthly Earnings”). When you retire and begin receiving Social Security benefits, your spouse is entitled to a benefit equal to 50% of your PIA beginning at his/her normal retirement age. A spouse eligible for retirement benefits based on his/her own work record will receive the higher of those benefits or spouse benefits based on your work record. In addition, any of your children under age 18 (19 if in high school), or of any age if disabled before age 22, are also entitled to a benefit equal to 50% of your PIA. The total benefits that all members of your family can receive based on your earnings record, however, is limited to a Maximum Family Benefit. Normal Retirement Age: The normal retirement age for full Social Security benefits is age 65 for people born before 1938. For those born between 1943 and 1954, it is age 66. Full retirement age is gradually increasing to age 67 for those born after 1954. Early Retirement: A permanently reduced Social Security benefit can be taken at any time between age 62 and your normal retirement age. Your spouse can also elect to receive permanently reduced benefits as early as age 62, unless caring for your eligible child. In this case, no reduction is made based on the spouse’s age. Late Retirement: If you delay receiving Social Security benefits beyond your normal retirement age, your benefit will be increased by a percentage factor for each year you wait, up to age 70.
Annuities

Retirement and Social Security

Presented by David Corwin The Social Security Administration estimates that 96% of American workers are covered by Social Security. Many Americans, however, don’t have a full understanding of Social Security and the benefits it provides. For example, many people are not aware that:
  • Social Security is currently the largest social insurance program in the U.S., funded through dedicated payroll taxes called Federal Insurance Contributions Act (FICA).
  • If they are injured or become ill and cannot work, they may qualify for Social Security disability benefits.
  • If they die prior to retirement, certain family members may be eligible for Social Security survivor benefits based on their work and earnings record.
  • The Social Security retirement benefit is designed to replace a percentage of earnings at retirement and the amount received will depend primarily on two factors…lifetime earnings history and retirement age.
  • Depending on year of birth, taking Social Security retirement benefits early can result in as much as a 30% reduction in the retirement benefit that would be payable at full retirement age.
  • On the other hand, deferring Social Security retirement benefits to age 70 can result in as much as a 32% higher retirement benefit as compared to the benefit available at full retirement age.
  • A portion of the Social Security retirement benefit may be subject to income tax.
  • There are a variety of strategies that can be used to enhance the value of Social Security retirement benefits.

For most people, their monthly Social Security check will form an important part of their retirement income.