The Social Security
Administration System exists to provide a consistent base for people when
they retire. It is not designed to be the sole source of income for retirees.
Personal savings should make up the majority of retirement savings.
Features
Pay - As - You - Go System
Current payroll taxes
are used to give benefits to current retirees.
As of 1983, an increase
in payroll taxes is set aside for baby-boomers entering into the
retirement system.
Based on 35 years of highest
taxable earnings
Higher percentage is
given to lower income individuals.
Social security is adjusted
annually to account for inflation and paid as long as the recipient
lives.
Who Qualifies?
Earliest benefits can be
received at the age of 62.
Earliest age for full benefits
is 65.
A married person is entitled
to 100% of their benefits or 50% of their spouse's benefits whichever
is larger.
Widow(er)s are entitled
to 100% of their spouses benefit if it is larger then their own.
A divorced person who was
married for at least ten years is entitled to 50% of their retired former
spouse's benefit if it is greater than 100% of their own.
Credits
As a person works and pays
benefits, he/she earns credits. The most a person can earn in a year
is four credits. Most people need 40 credits to be eligible for benefits
(10 years).
Social Security Benefits
Retirement - Not meant to
be the sole funds for a person's retirement. The current age for full
benefits is 65 years, but that will be increased to 67 years in 2022.
Disability - Benefits go
to those who have enough credits and have a severe physical or mental
impairment. The number of credits a person needs depends upon age and
when the person became disabled.
Family Benefits - If you
are eligible for retirement or disability benefits, other members of
your family may receive benefits too.
Survivors - When a person
dies, certain members of his/her family may be eligible for his/her
benefits.
Widow(er) who is 60
or older, 50 or older if disabled, any age if caring for a child
under 16 years old.
Unmarried children
under that age of 18 or under 19 if still in school.
Older children if they
are disabled.
Parents, if the person
was their primary means of support.
Medicare - Generally, people
over 65 and receiving Social Security benefits automatically qualify,
as do people who have been getting disability for at least two years.
Others must file an application. Medicare works differently with many
other types of insurance and can be confusing. Consult your insurance
provider with any questions about existing insurance and Medicare. There
are two main parts to Medicare.
Hospital insurance (part
A)
Paid for by a portion
of the Social Security tax of people who are still working.
Helps to pay for inpatient
hospital care, skilled nursing, and other services.
Medical insurance (part
B)
Paid for by monthly
premiums of those enrolled and from general revenues.
Helps to pay for doctors'
fees, outpatient visits, supplies, and other medical services.
Supplemental Security Income
Benefits
Supplemental Security Income (SSI) makes monthly payments to people who
have low income and few assets. You must be 65 or older or be disabled.
Children as well as adults qualify for SSI. Supplements are based on income
level, depending upon where you live.
The federal government pays a basic rate and some states add money to
that amount. Generally, people who get SSI also qualify for Medicaid,
food stamps, and other assistance. SSI is financed by general tax revenues.
It assures a minimum monthly income for the elderly and the disabled.
