5 things you must know about social security
Personal Finance

5 things you must know about social security

Social security is the term used for federal program (OA SDI) in the United Sates. It began to make headway in1935. The prime motivation of this federal system is to provide financial support to its nation’s workers in retirement. Such an existence of a social security system is left concealed among most of the country’s workers and elderly citizens. It is an outrageous fact that only 1% of the US citizens were acquainted with the social security available as per the AARP survey conducted by financial advisors last year. The fact of the matter is that if one does not understand this basic amenity, he cannot secure the advantage of its benefits.

Here are the five things everyone should know about social security:

• Educate yourself: Educating yourself about social security will help you make the best decisions regarding your retirement. Working with a qualified planner who takes a holistic retirement planning approach that includes tax planning, risk management, and health care into consideration will also help to ensure you enjoy your stress-free retirement. So, work with an experienced retirement planner.
• Disability payments: In case you develop physical or mental impairment and want to wind up your job; you still may be qualified for disability payments. Submitting certain documents such a medical bills or diagnostic reports about your health will let your social security system list an estimation on your payments even though you may be disabled.
• The right age to sign up: Understanding your retirement age is the first step. Depending on the year of your birth, the full retirement age will be between 66 and 67. Many people will opt to take their benefits when they first become eligible at age 62. Taking your social security prior to full retirement age will result in the reduction on benefits by 25%. So, consider carefully before you decide to reap benefits from your social security prematurely.
• Security Benefit: Your social security benefit is based on the years of service you put in, the minimum recommended being 35 years where you earn the most money. If you have put in fewer years, the remaining years will be counted as zero income years. Increase your benefits by working longer.
• Offset inflation: Social Securities is one of the few income sources retirees have that increases each year to offset the erosive effects of inflation. The annual increase is based on the changes in the federal consumer price index. Increasing cost of goods and services each year results in loss of buying power. But with social security, you needn’t worry about that.