Social Security is a key source of income for seniors who want to continue their work force after retiring. But Social Security can also be a beneficial way to supplement your income while working at a later age. So it is important to budget for how Social Security will match up to your retirement savings plan. To do this, you will have to understand how Social Security works, what age you are able to begin receiving benefits and how your Social Security age relates to how much you get paid.
Inclusions Of Social Security
Social Security provides some basic Social Security income for the disabled, elderly and poor. It pays benefits to people over the retirement age that meet certain requirements. Some of these requirements include not being under the age of 65 and not receiving benefits from any other source. Social Security also pays benefits to non-residents alien individuals who are eligible to receive Social Security and meet some other requirements. The age at which you start receiving Social Security benefits depends on your birth date, if you were assigned a Social Security birth date and the year you became a citizen or legal resident of the United States.
There are two parts to Social Security income: Old-age and Full Retirement. Old-age benefits are paid to you once your dependents have reached the standard retirement age. Full Retirement benefits are paid once your dependents have reached the complete retirement age. Both Old-age and Full retirement ages are indexed for increases in the wage rates. If you have any partial coverage by IRA’s, the benefit amount increases for the remaining life expectancy periods of the coverage amounts.
The Social Security Administration has set forth a list of acceptable disability benefits. The disabling conditions that are most accepted are: blindness, deafness, loss of limbs, and suffering caused by a physical injury. Another disability benefit is the partial benefit recovery period. This recovery period begins with the first day of the month after the date of your application and it runs through the last day of the month that precedes your retirement age. Full recovery period benefits are paid for the full length of time that you are alive and do not begin until the end of the benefit’s completion date. The definition of full recovery period is two years.
Social Security offers five different payment options for individuals reaching the legal age for retirement benefits. Two payment options are based on income: Old-age and Full. In old-age payments, the monthly benefit amount scales according to your current monthly income. Full payment options are scheduled for the entire lifetime of your dependents.
Some seniors mistakenly believe they have an option of delayed receipt of Social Security benefit. This is not true. Once you reach the legal retirement age, you no longer have an option of deferring receipt of your benefits. If you do decide to claim these benefits, the denied benefits will be added to your Medicare benefits.