Social Security is a complex and often misunderstood system that affects 67 million retired Americans every month and up to 10,000 new retirees each day. It is a program that everyone has contributed to since they first began working. But according to a survey done by Mass Mutual in 2015, most of us do not actually know the rules and how to maximize our benefit potential. Given this lack of knowledge on this important program, we have provided 5 essential fast facts as of 2018 that everyone should know regarding their Social Security.
Social Security Has Gone Digital
As of 2017, the Social Security Administration stopped mailing paper statements detailing yearly earnings and retirement benefit estimates. You can still set up an account online, over the phone or in person. To access account information you will need to set up your account online, which you can do using this link: https://www.ssa.gov/myaccount/
If You Take Social Security Too Early You Can Correct It
Many people are unsure of when they should file for their benefits in order to maximize return. If you think you may have filed too early there is an option to change your mind. Once you start receiving benefits, you have a year to withdraw your application and halt the payments. This can help if you made a timing mistake but it's important to note you’ll have to repay all the money you received. Then your retirement clock restarts. Your potential monthly benefit amount will rise until you begin claiming again. Important Note: You can do this do-over only one time.
‘Full Retirement Age’ Has Increased
‘Full retirement’ age is the age when a recipient can receive full benefits from Social Security. If you were born in 1956, the full retirement age increases to age 66 and 4 months. This is up from age 66 and 2 months for those born in 1955. Full retirement will increase two months every year until it reaches age 67 for everyone born in 1960 or later. It’s important to know what age is the best time to begin your retirement benefits.
Maximum Benefits Have Been Increased
If you are retiring at full retirement age, the maximum payout increases 3.7 percent to $2,788 a month, or $33,456 a year. This is up from $2,687 a month, or $32,244 a year. Payouts vary per person and depend on your income over your working career and the age at which you take benefits - AIME (Average Index Monthly Earnings) how much you earned and when you begin to take retirement payments between 62 to 70.
Eligibility Requires 10 Years of Work
In order to qualify for Social Security benefits at retirement, you need to have collected 40 lifetime work credits. You can earn a maximum of four credits per year, meaning you'll have had to have worked at least 10 years during your lifetime to qualify based on your own work and earnings history.
Social Security preparation can vary a great deal year over year. It’s important to arm yourself with as much knowledge as you can about your benefits to maximize your return. You’ve earned it.
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