subject: Social Security: What You Need To Know [print this page] You have probably been getting salary deductions for Social Security since you have started your first real job, and must have a tidy sum as a balance now. The problem with Social Security is that a lot of people take it for granted despite the relative fortunes they have continuously invested in it. Have many people thought about how high their net income would be if contributions were not required? Do a lot of people know what the money is used for and how it grows?
There are many things that participants do not know about the retirement savings program, that is the knowledge that could help them get bigger retirement benefits and affect their overall nest egg significantly. Here are a few facts you should know:
1.You can start receiving benefits from Social Security much earlier than expected. After ten years as a contributing employee, you will be eligible for benefits if you have made $1,000 every three months. Keep in mind that you will get more money from the program if you hold out on distributions, and you can maximize how much you receive in monthly payments by delaying retirement up until you reach the age of 65 (up to the maximum age of 70) and keeping your money in the program coffers longer.
2.A married participant can offset the lower future benefits of both the husband and the wife. If you earn much more than your partner, he or she can receive spousal benefits, which are not based on the lower-earning salary average of the spouse. If you are divorced, you can even get spousal benefits based on your ex-wife or the earnings of the husband if you had a marriage that lasted at least 10 years and your partner has not remarried.
3.The payroll deductions of all Social Security participants are received, held, and invested by the federal government. Contributions are not simply placed in savings accounts and left to stagnate; the collective funds are circulated to pay current beneficiaries, after which the extra cash is used to purchase US Treasury bonds for additional income.
Younger workers may need to find additional and more stable sources of retirement income because it is more than likely for the Social Security budget deficit to bring the entire program down, and the benefits along with it. However, it is projected that retirees today are not likely to feel the financial backlash through lower-than-expected payouts anytime soon, even for seniors who have above-average life expectancies and expect to live more than a couple of decades after quitting the workforce.
