You would be hard pressed to find someone who doesn’t know at least some basic facts about Social Security. Most of us know that we pay taxes into the system from each paycheck, and that someday our benefits will be available to us when we retire.
Beyond that, Social Security can be a web of confusing facts and data. Unless you’re an expert on the topic, it would be difficult to learn everything there is to know about the program… but the following five facts should prove helpful as you prepare for retirement.
Timing is everything. You can claim benefits at any time between ages 62 and 70. You might know that waiting until a later age can help you reap a larger check. But did you know that waiting until age 70 to claim your benefits will mean that your monthly check is 76 percent higher than it would have been at age 62?
Thirty-five is the magic number. Your Social Security benefits checks will be calculated using your 35 highest-earning years. If you worked less than 35 years throughout your lifetime, the Administration will average in a bunch of zeros. It’s not hard to see how that can dramatically lower your average annual earnings, so working at long as you can is often a good idea.
Your divorce could cost you. The majority of divorces are filed by women, who also happen to earn less money than men. Someday both of these factors could adversely affect a woman’s retirement income. You can’t claim Social Security spousal benefits unless you were married for at least 10 years, so hold off on filing that divorce if you can.
You can receive spousal benefits even if your former spouse passes away. As long as you were married for at least ten years, you can file for benefits just as a widow or widower would.
You can hire representation at the beginning of the SSDI process. If you become disabled and unable to work prior to age 62, you might be able to access your Social Security benefits through the SSDI program (Social Security Disability Insurance). However, most applications are initially denied, leaving applicants to hire a lawyer and go through the appeals process. Most went this route because they didn’t know they were entitled to representation from Day One, which can speed up the process considerably.
Do you feel like you know a bit more about Social Security now? There is still a lot to learn about the program, and about retirement planning in general. Remember to call us with any questions, and keep scheduling regular appointments with us. We’ll help you stay on top of all issues that might impact your financial future.