Social Security

The Importace of Understanding Social Security

Understanding Social Security is important for people of all ages because even though it started out as a simple retirement program in 1935, Social Security has become an important part of our economy today.

The list of people who benefit from Social Security includes retirees and their spouses, workers who become disabled, and the spouses and dependant children of workers who die or become disabled. When you become eligible for Social Security retirement benefits, your children, whether adopted, biological or even stepchildren, may be eligible, too. To receive benefits, children must be unmarried and under 18, or a full-time high school student. In the case of high school students who are over 18, they stop receiving benefits upon graduation or 2 months after their 19th birthday, whichever comes first.

People who are over the age of 18, but become disabled before the age of 22 may also receive Social Security benefits based on their parent's earnings.

You can apply for full Social Security benefits at the age of 65 if you were born before 1938. For those born after 1938, retirement age with full benefits gets a little older for each year. The age you are eligible to retire with full benefits is referred to as your "full retirement age."

There are many reasons that people choose an earlier retirement, and you can begin receiving a reduced payment as early as age 62. If you choose this, you should know that your total Social Security benefit will be about the same over your lifetime. The smaller payment is to compensate for the earlier starting time.

There are, of course, pros and cons to this. On the good side, you would begin taking the benefits earlier. On the down side, once the pay out is reduced, that lower amount becomes permanent. It is a good idea to contact the Social Security office prior to filing for your benefits so that you can ask questions and make the best decision for your situation.

An interesting fact about Social Security that you may not know is that if you were married for at least 10 years, and then got divorced, you might be eligible to collect retirement benefits on your former spouse's work record. This is something that is certainly worth checking into, if you think you may qualify.

With the economy we have today, Social Security benefits may not be enough to cover all of your expenses. Many older people have returned to the workforce after retirement, to supplement their incomes. You need to know that as long as you wait until your full retirement age, there isn't a limit on the amount of money you can earn while collecting Social Security benefits.