Basics of Social Security Retirement Benefits

Social Security provides a foundation for long-term financial support for almost every American. Most of us will depend on Social Security to live on during our later years. These years cost money, and if we are not working during our later years, then we can count on Social Security to help. Still, we have decisions to make when it comes to Social Security, and we can make better decisions when we have a working knowledge of the program’s benefits.

The most well-known of Social Security’s benefits concerns retirement. If you are age 62 or older, then you can become eligible for a monthly check if you paid into the program for at least 40 calendar quarters (ten years of work). If you stop working before you have qualified for benefits, your work history will remain on your Social Security record. If you return to work later, you can add more quarters to qualify. The Social Security Administration (SSA), which oversees the retirement benefits, will not pay any retirement benefits until you have reached the 40-quarter minimum.

To see if you have attained the 40 quarter minimum, you can look online at https://www.ssa.gov/myaccount/statement.html

The amount of benefits you receive is based on how much you earned during your working career. Higher lifetime earnings result in higher benefits. The maximum possible Social Security benefit in 2022 is $4,194 per month, or $50,328 for the year, but few Americans will reach this amount. If there were some years you did not work or had low earnings, your benefit amount may be lower than if you had worked steadily. The age at which you decide to retire also impacts the amount you receive.

As mentioned above, you can get Social Security retirement benefits as early as age 62. However, SSA reduces your benefit if you retire before your full retirement age. Some people will stop working before age 62, but if they do, the years with no earnings will probably mean a smaller Social Security benefit. Some people retire early for health reasons. If you are unable to work due to health issues, consider applying for Social Security disability insurance (SSDI). The disability benefit amount is the same as a full, unreduced retirement benefit. If you are getting Social Security disability benefits when you reach full retirement age, the payments are converted to retirement benefits.

If you work beyond your full retirement age, then you can increase your future Social Security benefits in two ways. First, each extra year you work adds more earnings to your Social Security record, which can mean higher benefits when you retire. Second, the amount of your benefit will increase by a certain percentage from the time you reach full retirement age, until you start receiving benefits, or until you reach age 70.

Surviving spouses (widows and widowers) can make elections with the SSA to maximize their Social Security retirement benefits. These elections are especially beneficial to surviving spouses who never worked or have low earnings. After a spouse dies, the survivor should remind the SSA that he or she is either receiving or not receiving benefits based on his or her own record. SSA will then check to see what amount the surviving spouse will receive.

To see how your Social Security Retirement can impact your estate planning, you can schedule an appointment at our Asheville office at 828-258-0994, Hendersonville office at 828-696-1811, or Raleigh office at 919-825-0932.