Each month, the Social Security Administration (SSA) disburses benefits to around 70 million recipients.
Although the federal government program is most well-known for its retirement benefits program, it also offers monthly benefits to survivors, people with low or no income, and people with disabilities.
Understanding the retirement benefits system can be challenging because the amount you receive is solely determined by how long you have been contributing to the program while you were employed and how old you were when you first began receiving benefits.
Knowing how the various SSA programs operate
Nearly every American worker receives benefits from the Social Security Administration’s retirement program. You receive what are known as “credits” from paying Social Security taxes, and these credits are used to your retirement benefits.
As of right now, you must have earned 40 credits in order to be eligible for Social Security retirement payments. This is equal to ten years of labor.
The amount of benefits you receive after you achieve this minimum threshold will be solely determined by how long you continue to work and, later, when you decide to claim your benefits.
In contrast, disability and Supplementary Security Income (SSI) are determined by qualifying requirements.
You must have accrued a work history prior to becoming disabled in order to be eligible for disability benefits, even if retirement income is solely determined by your work history.
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Your income also affects your eligibility for SSI. The SSA encourages you to earn extra money outside of your retirement benefits, but once you start making more than a specific amount of money, you are no longer eligible to receive SSI.
What is the amount of your retirement benefits?
You can begin receiving retirement benefits as early as age 62 if you have accrued the necessary working history credits. Your benefits will be significantly greater, though, if you wait until you reach the full retirement age of 67.
Since your benefits will keep rising until you are 70, you can then postpone receiving them even longer. You don’t get any further benefits from waiting to make a claim after this age.
The largest amount you may currently receive if you are 70 and wait until this year to claim your benefit is $5,108 per month. The average retirement beneficiary, by contrast, gets somewhat less than $2,000 a month.
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Your monthly benefits would have been 30% less if you had begun receiving them this year at age 62 than if you had waited until you reached full retirement age of 67.
When can you anticipate receiving your benefits?
Benefits from Social Security are distributed based on your birthday:
- Date of birth between 1 and 10: The second Wednesday of each month
- Date of birth: the third Wednesday of each month between November and December
- Date of birth between 21 and 31: the fourth Wednesday of each month
Social Security retirement payments are paid on the third, while SSI benefits are paid on the first, if you claimed your benefits prior to May 1997 or if you are receiving both benefits.
When making retirement plans, it’s critical to keep in mind that you shouldn’t depend solely on your retirement income to sustain you once you leave the workforce.
To be financially secure, you need to make sure that your sources of income are varied. To maintain your financial independence in retirement, you must also ensure that you can efficiently manage your spending.
Investing is one strategy to guarantee financial independence in your later years. When it comes to creating a retirement fund, low-risk investment accounts can be very successful.
To get assistance with your future financial planning, see a financial counselor. Even if you are getting close to your golden years, it is never too late to begin investing.
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