Granted, the essence of The 55 Lifestyle is geared to men 50 and over who want an active life regardless of the half-century milestone! But retirement is something that is inevitable and, in all honesty, just around the corner. Knowing that you’re getting a Social Security check in the mail each month is a huge plus and something you should account for in your retirement planning. With that, however, the amount of information available on what the program is, how much of it you get, or how to use it can be a little daunting. Keep reading to dissect some of your most pressing questions and know exactly what you need to before you hit retirement.
What is Social Security?
Your conception (or maybe misconception) of Social Security is that it’s a retirement fund. However, it is a government program established in 1935 and headed under the Social Security Administration. The SSA heads various other social welfare organizations such as Medicare/Medicaid, Temporary Assistance for Needy Families, and children’s health insurance among others. In fact, dependent children are the largest benefactors of the overall program.
Its original intention though was to provide supplemental income in times of need to a variety of populations including the elderly, disabled, and survivors of lost loved ones. And to that extent that concept hasn’t changed. Your benefits, the money you gain from your Social Security check during retirement is only supposed to add to your existing retirement savings.
How much do I get with Social Security’s retirement benefits?
For our purposes, we’re talking about the benefits as intended for your retirement supplement, but it’s not something you automatically qualify for. The first step to knowing how much you’ll get from Social Security is checking whether you meet the criteria. There are two ways that you can qualify: first, through your own work record and second is through your spouse’s.
If you’re looking at your own work record, you must have earned 40 Social Security “credits” throughout your career to have qualified. A credit, as of 2018, is equal to $1,320 in earnings subject to payroll tax. That said, you can only earn four Social Security credits per year, so you must earn these credits across a total of 10 different years.
If you find that you don’t qualify on your own, you may qualify via a spousal benefit. Since some households have one spouse who works and the other who acts as a stay-at-home parent, this benefit provides a means for a spouse who did not earn their 40 credits to have access to social security.
Determining how much you’ll get is a multi-step process, but we’ve included a link to this SSA Quick Calculator to help you. All you have to do is plug in your information to see your payout!
When can I start Social Security?
Since Social Security aids different age populations, it doesn’t start at the same time for everyone. Thus, you’re probably wondering when you can start using it towards retirement. When you use social security’s retirement benefits, you can cash those checks in at age 62.
Whenever you decide to start using your benefits, the Social Security Administration recommends applying for benefits up to four months in advance of when you hope to receive them. It’s best to give yourself ample time in this transition to ensure that you’ll have your supplemental income when you need it.
How to use Social Security in retirement
If you’re interested in applying for benefits to use in your retired life, you can easily apply online here at the SSA website. The checks are electronically administered, which is an easier and safer process than mailing out physical checks. When you receive your Social Security check, the amount you receive will depend on a variety of factors. (You can find find out more from the SSA calculator above.) If you elect to use your benefits earlier, then your total amount will spread out over a longer period of time.
The percentages will vary but you can expect a difference of anywhere of 20 to 30 percent less money every month because you started receiving your money earlier. If you wait until beyond the average retirement age (currently age 67), then you may receive delay retirement credits that increase your potential monthly benefits.
An additional factor you need to remember; your benefits may be impacted if you receive a public or private pension. The latter not subjected to penalties as how or if social security taxes were paid.
And don’t feel the need to stop working completely if that’s not in your plans. If you’d like to continue to do so while receiving your Social Security benefits, there are still ways to work and receive Social Security to supplement income if you aren’t doing it full time. However, be sure to research your situation to ensure that it falls under the rules and regulations that the Social Security Administrative Office has put in place.
Where to find additional information on Social Security
Looking for more information about Social Security? It’s natural to have questions as you head into this season of your life. Visit the Social Security Administration website here for more information, so that you can understand everything you need to know in the coming years. For the support you need both today and tomorrow, Social Security is there to help. You can also read up on our blog: Top 5 Tips in Preparing for Retirement for more information on this important topic.
Conclusion
We hope that you’ve found the information here useful and can use it in your research to retirement planning. Understand we’re not endorsing any single approach here, but trying to give an overall picture of topics you need to consider in preparation for entering this next and long awaited chapter of our lives. You should (and we fully recommend) consult a financial expert if you have any questions on your retirement planning.
Is there anything you want to see or have us follow up on? Please reach out to me directly through our Contact page or leave a comment here. All the best ~ Glen.
The 55 Lifestyle is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.
