Social Security: Beyond the Numbers

The only thing many people know about Social Security are those nine numbers on that card they got in the mail years ago.

Oh, and that the agency gets a chunk of their paycheck.

That money goes to three kinds of benefits: retirement, disability and survivors.

You’ve already paid for those benefits, which are based on your job earnings.  And those earnings are reported using the nine numbers assigned to your name and printed on your Social Security card. The numbers must match up with what’s in your employment records, or the payroll deduction doesn’t go to the right place.

Yes, it’s a tax. But if you put it in political-speak, it’s a part of investing for your future, based on a percentage of your average lifetime earnings. A worker with average earnings can expect a retirement benefit that replaces about 40 percent of his or her average earnings.

As you keep paying, or investing, you earn credits that count toward your eligibility for those Social Security benefits. Depending on your income, you can earn up to four credits every year, and 40 credits are needed to qualify.  Do the math … 10 years of work, 40 credits.

Everybody get that?

Now, how do you get that money back in your pocket?  If plan to retire early, you can get a portion of that savings at age 62. Full retirement is 65 for those born before 1938 and gradually reaches 67 for those born in 1960 or later. It gets better … a special credit waits for those who delay retirement. Whenever you want to retreat from the working world, it’s best to apply for retirement benefits three months before you want to receive them.

No matter when you retire, you can get health care benefits through Medicare when you turn 65. That is also the age requirement for Supplemental Security Income, which goes to blind or disabled people who have low income and few resources. A key difference is SSI is financed through general tax revenue and not Social Security taxes.

Getting benefits before retirement is more of a necessity than supplemental income. If sickness or injury keeps you from working for a year or more, you can collect disability benefits.

And if you die before certain members of your family, some of them may be eligible for survivor benefits.

And about your Social Security card.  Eventually you’ll have memorized your number and you won’t need to carry your card in your wallet. That’s a good thing. Carrying your card wherever you go makes you vulnerable to identity theft and similar crimes. Keep your card in a safe place.

Now that you have the basics, contact the Social Security Administration and find out your next step.