Understanding Social Security
Social Security provides retirement, disability, and survivor benefits to eligible workers and their families. Understanding the basics helps with planning for retirement income, preparing for disability risk, and knowing what happens to household income after a death.
Work Credits and Eligibility
Workers earn Social Security credits through covered employment. Generally, 40 credits are needed for retirement benefits. Credits are earned by working and paying Social Security taxes. Checking your earnings record helps ensure your work history is recorded correctly.
Retirement Claiming Age
Benefits can be claimed as early as age 62 but at a permanently reduced amount. Full retirement age depends on birth year. Delaying beyond full retirement age can increase benefits up to age 70. The claiming decision affects monthly income for the rest of your life.
Spousal and Survivor Benefits
Spouses, ex-spouses who were married at least 10 years, and survivors may be eligible for benefits based on a worker's record. These benefits can be significant, especially for households that depend on the higher earner's income. Understanding these options helps with household financial planning.
Disability Benefits
Social Security Disability Insurance provides benefits to workers who cannot work due to a qualifying disability. The application process can be lengthy. SSI provides benefits based on financial need regardless of work history. Understanding the difference helps people apply for the right program.
Social Security and Cash Flow
Social Security is monthly income that should be planned like any other income source. Balance On Hand helps users model benefit income alongside bills, other income, and expenses to see whether their planned retirement income covers their real costs.