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Social Security
Social Security
Sister site on Social Security
Other benefits beyond retirement benefits that Social Security provides
Qualifying for retirement benefits
Current Social Security retirement benefits
Should you begin to collect Social Security at age 62 or 65?
Social Security's non-existent "Trust Fund"
Income taxes on Social Security benefits
Other benefits beyond retirement benefits that Social Security provides
Social Security provides some disability and death benefits to qualifying workers
Supplemental Security Income (SSI) provides benefits to very poor elderly or disabled people regardless of wether or not they qualify for Social Security retirement benefits
SSI is funded through general revenues and not through payroll taxes
Qualifying for retirement benefits
Need 40 credits of work
- A credit is somewhat like a calendar quarter
- You get one credit for each $700 (approximately) in wages you earn
- You can earn a maximum of 4 credits per year
Nearly every worker (including self-employed, federal government workers and non-profit organization workers) must pay Social Security taxes
Over 90 percent of Americans receive Social Security retirement benefits
Current Social Security retirement benefits
Benefits depend on your past income and marital status
Estimated benefit table below for single workers
Average annual income
while workingExpected annual
Social Security benefit$10,000 $6,000 20,000 9,000 30,000 12,000 40,000 13,000 Note that benefits are skewed to favor lower-income people
Increase the above benefits by 100 percent if both spouses qualify for full benefits
Increase above benefits by 50 percent if married but one spouse does not qualify for full retirement benefits
Future benefits indexed with inflation
This is very valuable protection that most employer retirement plans don't offer
The size of the index adjustment (COLA) probably will be reduced in the future
Should you collect Social Security at age 62 or 65?
Depends on future expected income, life expectancy
If you begin at age 62, you receive only 80 percent of full benefits
Beginning at 62 may be best for those who are already retired and healthy
Social Security's non-existent "Trust Fund"
Social Security currently running a surplus due to large number of working baby boomers
Surplus funds financing current federal government deficit
Social Security is a pay-as-you-go communal system without true property rights
It's a program where benefits are based on politics, not on return on investment concepts
Income taxes on Social Security benefits
Very complicated calculation
Amount of benefits subject to taxation may range from 0 to 85 percent
Part of Clinton tax increase of 1993