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Is Social Security a Safety Net for Retired Americans?

How does Social Security work? How does it meet your needs?

Social Security can act as a financial safety net for retired Americans and the disabled. Social Security is a term used to describe the Old-Age, Survivors and Disability Insurance federal program.  currently estimated to keep 40% of the people it serves out of poverty. Roughly 19% of all beneficiaries were disabled workers and their dependents and 11% were survivors such as the widowed and children. The remaining 81% are retirees. Social Security works on contributions each worker makes into the program. While employed, an individual pays and contribute into Social Security. They later receive benefits when they choose to retire. Contributions are withheld as taxes from paychecks under the Federal Insurance Contributions Act (FICA).

Disability and survivor benefits are included in the Social Security program. Contributions can provide a form of insurance in the event that a worker becomes disabled. Social Security may also cover disabled children if the disability developed before their 22nd birthday. Also, a surviving spouse and/or children may receive survivor benefits if the worker dies or dies before retirement.

Eligibility for Retirement Benefits

Individuals do not automatically qualify for retirement benefits from Social Security. Instead, you must work and pay a minimum level of  taxes for a minimum of 40 quarters (10 years) during our lives. Those 40 quarters do not need to be consecutive. Once we have worked and paid taxes for the required 10 years, we qualify to receive retirement benefits.

Even if an individual has accumulated his or her required 40 credits, they may not start getting payouts until age 62 or older. The longer you wait to start collecting after we become eligible, the higher the amount we will receive. For each year you delay your retirement, benefits increase between 7% and 8% up to age 70.

Working While on Social Security

Drawing on Social Security benefits when still working full-time is typically not a wise choice. If a worker decides to start collecting benefits before retirement, the government will cut the payouts according to an earnings-based formula.

After the beneficiary reaches full retirement age, there is no offset for working full time. In other words, you can receive full benefits as well as any amount of earned income.

Death and Survivor Benefits

Benefits can be received by a surviving spouse based on the earnings of their former spouse. The marriage must have been deemed valid for 10 years and the surviving spouse cannot have remarried. If the widowed remarries, the individual is eligible to claim  benefits under the ex-spouse’s earnings if they turn out to be higher than their own.

When a person dies, the Social Security Administration receives reports of beneficiary deaths from family members, funeral homes and other Government agencies. It is highly recommended that you inform the Administration as soon as possible when a person dies.


In closing, be sure to plan for the long-term. There is no best age to start receiving benefits. Each person should make an informed decision about when to apply for benefits based on their individual and family circumstances. We hope the above information will help you understand how Social Security can fit into your retirement decisions.

Contact us today to learn more!

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