What Is Social Security Age For Retirement – Many of us have dreamed about retirement for years, but Social Security can be something we only think about at the last minute. But understanding your benefits, from the best age to claim Social Security to how much you’ll save, is key to getting the most out of your retirement savings.
Social Security contributions are a nearly universal part of retirement, with about nine out of 10 retired Americans age 65 and older receiving these benefits. For many older Americans, this is a large portion of the income they depend on. Among senior citizens, 50 percent of married people and 70 percent of single people receive at least half of their income from Social Security. However, misunderstandings about the program often lead to people losing money they owe.
What Is Social Security Age For Retirement
We’ll explain what Social Security is, who’s eligible for Social Security benefits, how the amount you’ll get is determined, and the best ways to maximize your benefits.
Why Does Age Matter So Much For Social Security?
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When the Social Security Act was signed into law in 1935, American workers suddenly had a more secure financial future. While for many people retirement means poverty or complete dependence on family for support, this law created a process that allows workers to pay into the system during their working years and receive these benefits in retirement. The system later added disability insurance, survivor benefits, and survivor benefits.
In 2020, more than 65 million Americans received Social Security benefits. In fact, the Social Security Act helps keep more Americans out of poverty than any other program.
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The current tax rate for Sodra’s employee is 6.2 percent and another 6.2 percent for the employer. The Social Security Administration uses these funds to pay benefits to current retirees, the disabled, survivors of deceased employees, and dependents of beneficiaries. All extra money goes back to the Social Insurance Fund.
The Social Security Administration uses your Social Security number to track how much money you’ve earned over your lifetime. Your retirement benefits depend on how much you worked. More revenue means more profit. At least 10 years of service is required to receive a pension.
As you approach retirement, you can decide when to start paying benefits. You must be at least 62, but the longer you wait, the higher your benefits will be.
Full pension age is the age at which you are entitled to 100% pension and depends on your year of birth. If you were born before 1960, the full retirement age is 65; if you were born in 1960 or later, the full retirement age is 67. (See the chart for your full retirement age to see how your Social Security benefits are calculated.)
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You will receive your monthly Social Security benefits electronically, usually by direct deposit into your bank account. In 2020, the average retiree received Social Security benefits of $1,503 per month. Payments continue for life.
When people think of Social Security, benefits usually come to mind. This is a benefit you get personally while working. However, Social Security also provides benefits for spouses, ex-spouses and children in some cases.
If you have paid Social Security taxes for 10 years or more during your lifetime, you can start receiving these benefits starting at age 62.
If you meet certain conditions, you may be entitled to spousal benefits based on your spouse’s income. To be eligible: 1) your spouse must already be receiving Social Security benefits; 2) you must be married for at least one year; and 3) you must be at least 62 years old. Spousal benefits may count in addition to earned benefits, but at most you can receive half of your spouse’s PHI. If your benefit is more than half of your spouse’s benefit, you are unlikely to receive spousal benefits. (Of course, you still get your benefits). If you have the same income as your partner, you will not receive spousal benefits, but you will still receive your own benefits.
What Happens When I Reach Social Security Retirement Age?
Keep in mind that even if you are divorced, you can still receive spousal benefits based on your ex’s income. You must be: 1) divorced, married for at least 10 years; 2) age 62 or older (and your spouse must also be age 62 or older); and 3) you are no longer married (your ex-spouse may have remarried). However, if your benefits are more than half of your ex-spouse’s benefits, you are unlikely to receive spousal benefits. (Of course, you still get your benefits). If you are divorced more than once, your benefits may be based on the highest earning spouse.
If your spouse or ex-spouse has died and received more benefits than you, you may be entitled to a survivor’s benefit. You must meet certain criteria to qualify for survivor benefits. This includes caring for a disabled child who is at least 60 years old (50 if disabled) or under 16 or who has died. A big difference between survivor benefits is that the full retirement age is different from other Social Security benefits.
If you are a U.S. citizen or legal resident who has paid Social Security taxes for at least 10 years of your working life, you are eligible to receive earned income benefits starting at age 62. Specifically, you get one credit for every $1,360 you spend in a year. As of 2019, a maximum of four loans per year. You need 40 credits to retire. This means that even part-time workers often have enough credit to qualify.
In addition, three groups of people can receive benefits even if they haven’t worked enough to pay social security taxes or paid no social security taxes at all: spouses, ex-spouses, and the beneficiary’s eligible children.
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Of course, not all workers pay into Social Security, and some retirees are not eligible for Social Security benefits. These include some teachers; some state and local government employees; Most federal employees hired before 1984; and railway employees with more than 10 years of service. Such workers often receive a pension from their employer.
It’s important to note that even if you retire abroad, you can still receive Social Security benefits. If you have worked abroad for part of your life and do not have the required 40 credits, you may still be able to collect benefits under “aggregation agreements” that the United States has with other countries. This position requires you to have at least six work credits in the United States, while the remaining 34 can be from another country. See the Swedish National Insurance Agency website for specific countries and more information.
The Social Security pension is calculated based on information about your or your spouse’s, ex’s or, in some cases, your parents’ or children’s income. We will break down how the Swedish National Insurance Agency sets up benefits for employees, spouses and survivors.
The National Insurance Institute adds to your inflation-adjusted income for the 35 highest-earning years of your career. If you have less than 35 years of service, all your years of service are used. The maximum amount of income you can use for Social Security changes each year, but is $137,700 in 2020.
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This 35-year figure is divided by 12 to arrive at the average indexed monthly income. This number is then used in the formula. To calculate benefits in 2020, multiply the first $960 of average indexed monthly earnings by 90% and the remaining earnings up to $5,785 by 32%.
All earnings over $5,785 are multiplied by 15%. These amounts are added together to determine your Primary Insurance (PIA). If you started collecting Social Security at full retirement age, your PIA will be your monthly benefit.
You can receive benefits from age 62, but if you apply before full retirement age, your monthly payments will be lower. If you apply later than the full retirement age, the benefits will be higher. Every year you wait until retirement increases your pension credits by 8%.
The Social Security Administration first pays benefits based on your earnings record (see “Calculation of Earned Benefits” above).
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Half of your spouse’s consumer price is then calculated and adjusted for when you claimed benefits. (If you choose to claim before full retirement age, you’ll get less than your spouse’s full benefits, just like earned benefits. But unlike earned benefits, you won’t get more money if you wait until your spouse reaches full retirement age. In fact, you’ll save a little more by waiting longer and you lose ) Note that spousal benefits are only based on your spouse’s PIA and the age you claim.
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