Social Security 101: All You Need to Know About Benefits

Are you almost at retirement age and starting to think about your social security benefits?

If the answer is yes, you’re probably feeling overwhelmed by the process and all the information that’s out there. The first step is trying to relax and not let the process seem too scary. There are currently about 61 million adults in America that collect social security benefits every month, so you can (and will) figure things out.

The best thing you can do is get an early start so you can make a plan that works for you. If you’re not sure how to get started, keep reading. We’ll break down everything you need to know about social security from how to apply to how to get the most out of your benefits.

Your Guide To Getting Social Security Benefits

Planning for your future is stressful, and there’s no way around that. There’s a lot of pressure because you want to make sure that you’ll have enough to maintain the lifestyle that you wish to have, and afford the healthcare that you’ll need.

Again, the best thing you can do is start planning early and do a lot of research. Everyone’s financial situation is different, so your planning shouldn’t stop here. Meet with a professional financial advisor if you can, or check out this guide to keep learning more.

If you’re approaching retirement age and know nothing about social security, we’re here to help. Here are six simplified steps to applying for social security and getting the most out of your benefits:

1. Learn More About Social Security

The best way to get started is to learn what social security is and where it began. Americans started receiving social security benefits after the Social Security Act passed in 1935. Since then, social security is now one of the most significant sources of income for Americans in retirement.

Social security isn’t a gift from the government. When you’re working and paying taxes, just over six percent of your wages is taken and put aside. This money then goes to retired seniors, who also paid into the social security pot when they were working. This system keeps works to give seniors a comfortable retirement.

Like we mentioned earlier, a lot of them depend on this money to help them afford healthcare and other necessities. People are living longer than ever, and many aren’t saving enough for their long lives. Social security can help give them a safety net.

2. Calculate Your Full Retirement Age

Your “full retirement age” is the age when you’ll be eligible to start receiving your full social security benefits. This age used to be 65 for everyone, but now (for most people) it will be around 66 or 67.

This number depends on the year you were born. You can find out more information on this number on the Social Security Administration’s (SSA) official website. This piece of information is one of the most important things you’ll need to know to move forward applying for your benefits.

3. Find Out How Much Money You Can Expect From Your Benefits

Another crucial piece of information is how much money you can expect to get from your social security benefits.

This number is good to have in mind no matter how old you are. Even if you’re in your mid-30’s, knowing this number will help you make sure you have enough saved to be comfortable in retirement.

The formula that the SSA uses to determine your number is complicated, but they offer a tool on their website to help you out. You can start by creating a My Social Security account. The average social security benefit was $1,461 per month (or $17,532 per year) in January 2019, to give you an idea of what to expect. Your payment would be higher if you had a higher income.

4. Create a Strategy to Increase Your Benefits

Once you have an idea of what you’re on track to receive in retirement benefits, it’s time to learn more about how you can maximize your benefits. One of the easiest ways to do this is to delay getting your payments. You can start to receive your payments as late as age 70.

Every year that you delay your payments (after your full retirement age and before age 70), you’ll increase your payments by eight percent.

5. Decide Whether Or Not You’ll Be Working During Retirement

Since many Americans are living longer and have access to excellent healthcare, some seniors are choosing to keep working part-time during their retirement. Before you take a job, however, you should do some math to make sure your benefits won’t be taxed.

Once you pass a certain income level, your benefits could be taxed up to 85 percent. But if your benefits still make up the majority of your income, then you won’t be taxed at all. So make sure you calculate if keeping a job will be worth it for you or not.

6. Apply for Social Security Benefits

Once you’ve taken the time to learn about social security and plan your retirement, it’s time to apply to start receiving your benefits. The SSA recommends that you apply at least three months before you want to receive your first check. This time frame gives time for processing and any errors to be corrected, so you’re not left without your money.

After you’ve decided when to apply, there are three ways to do so: online, over the phone and in-person. To apply online, you can go to the SSA’s website. If you’d like to apply in-person, you can call your local SSA office.

No matter how you apply, you’ll need to provide some relevant documents. These documents include a birth certificate, social security card, tax returns and more. A full list is available on their website.

Even if you don’t have all of the required information, you can still apply. The social security office can help you track down some of the data if you’re not sure where or how to find it on your own.

Learn More About Planning for Retirement

Social security benefits are just one small part of the retirement planning process, and retirement planning shouldn’t start as you’re nearing retirement age. Even if you just started working, you should be planning well in advance.

Like we mentioned earlier, your financial strategy for retirement is unique to you and requires a lot of research and education. If there is room in your budget, make sure you meet with a professional. Financial advisors are the best way to make sure you’re getting the most out of your social security benefits.

If you can’t meet with a professional, there are plenty of resources online that can help you out. Check out the rest of our website for more financial and retirement planning advice.

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