Nearly every worker (and their employer) in the United States pays into Social Security. According to an article by Emily Brandon of U.S. News, workers pay 6.2% into the Social Security system and employers match that amount with an additional 6.2% for each worker.
In this article, we’ll talk about who can receive benefits, some often overlooked ways to make the most out of these benefits, as well as how to access the information needed to best make those decisions.
Not Just for Retirees
When it was first implemented, Social Security only paid benefits to retired workers. Disability benefits were added later; according to law firm Gilbert & Bourke, as were payments to a beneficiary’s spouse and children. Social Security Administration (SSA) mailings go out to all workers aged 25 or older once each year and contain an estimate of what one would be paid if they became disabled as well as how much their spouse and children would receive if they passed away.
Delay Your Claim and Increase Payments
Age 62 is the earliest workers can start receiving Social Security Benefits. But, there’s a monetary benefit to waiting. Up until age 70, payouts increase by around 7% for each year you delay. Those who sign up earlier receive smaller checks for a greater number of years. Those who wait receive larger payments for the remainder of their lives. Those who are in good health and anticipate a long life should speak with a financial advisor who can help them plan for payment delay.
Extra Options for Couples
Spouses can receive benefits of up to 50 percent of the higher earners payment if that amount is higher than payments based on the receiving spouse’s record of work. A widow or widower is entitled to the higher earner’s full payout.
Dual-earner couples at retirement age are able to claim benefits twice. First, they would sign up for a spousal payment. Later, they can submit another claim based on their own working record. An added benefit is that their claim will be higher due to the delay in claiming.
Ex-spouses can also receive benefits. If the marriage lasted ten years or more, they are eligible. Contact an attorney who specializes in social security benefits to confirm eligibility.
Get Paid Electronically
Future Social Security payments aren’t likely to show up in your mailbox. Since 2011, new recipients must receive payments electronically. Approximately 93 percent of Social Security and Supplemental Security Income payments are direct deposited into bank accounts or onto prepaid debit cards. According to the Social Security Administration, this saves them nearly a dollar per payment.
View SSA Information Online
As mentioned, the SSA has halted mailed Social Security statements in order to cut costs. However, people can still access their complete earnings history, taxes paid into the system, and an estimate of payments online. Once on the website, individuals can create an account and log in to view this information. They can also sign up for benefits, change any banking information (for direct deposit of funds) and access important paperwork and forms online.