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Social Security Benefits
What Can You Expect?
Social Security programs are funded by trusts established with extra monies collected, but not required, for current expenses of the Social Security system. Money in these trust funds is invested in Treasury bonds.
The Old Age and Survivors’ Insurance Trust Fund provides monthly checks to retired individuals, their families, and to families of deceased workers.
The Disability Insurance Trust Fund pays benefits to disabled workers and their families.
The Hospital Insurance Trust Fund pays Medicare claims.
In order to qualify for Social Security retirement benefits, you must work long enough and earn enough to accrue a specified number of credits or quarters of Social Security coverage. You receive one credit each time your earnings reach a minimum level, adjusted annually for inflation, and you may earn a maximum of four credits per year.
The earliest you can receive retirement benefits is the month after you turn age 62, but when you begin retirement earlier than age 65, you will permanently reduce the size of your monthly benefit. When calculating benefits taken at an age earlier than full retirement, always bear in mind that you will be receiving benefits for a longer period of time, and will probably see no net difference in total benefits received. On the other hand, delaying retirement beyond age 65 will result in an increase in benefits.
(Delaying retirement does not mean you should delay Medicare beyond age 65, and it could cost you more for your coverage if you begin after age 65.)
You may work and still receive Social Security benefits, subject to earnings limitations which rise annually with wage inflation. If family benefits are also based on your earnings record, they will be reduced as well, based on your current yearly earned income. These provisions do not affect your benefits during your first year of retirement, but thereafter you must file an Annual Report of Earnings until you reach age 70, or be subject to a substantial penalty.
If you’d like to know more about your Social Security benefits, or get an estimate of future benefits, you can call toll-free, 1-800-772-1213 and ask for a Request for Earnings and Benefit Estimate Statement. Once you submit this form, you will receive a reply including your complete earnings history along with estimates of your benefits for retirement at age 62, full retirement age, or age 70, plus estimates of disability or survivor benefits. Discussing your retirement plans in the year before you plan to retire will help you determine which month is best to begin claiming benefits.