The Social Security Administration (SSA) indicates that Social Security benefits represent over one-third of income for the elderly–it is important to know when it is optimal to begin payments. Unfortunately, you cannot rely on the SSA to provide the best strategy for you because they don’t know your entire financial situation. Do you know the important benefit filing ages? When should I file? What are the spousal and survivor benefits? What is the future of social security? Will Social Security even be there when I retire?
On September 6th our First Friday Networking at Noon event featured Hans Blake, CFA, CPA, founder of Intelligent Investing and Tom Theodore, CFP®, who talked about Social Security and some strategies you may want to consider.
Why was Social Security established?
Social Security was established to provide retirement, survivor and disability insurance to qualified individuals. Benefits are calculated based on the individual’s year of birth, benefits start date, and lifetime earnings. For the average worker, you and your employer both pay into the system by having a certain amount of your paycheck withheld in the form of “FICA,” or Social Security and Medicare taxes.
Am I eligible for Social Security?
Most people need to have 10 full working years–or 40 quarters–of paying into Social Security to be eligible for retirement benefits. To determine your benefit amount, the SSA will calculate your highest 35 years of earnings, with some adjustments.