Social Security Facts You
Need To Be Aware Of!

Social Security facts are only one part of the whole retirement picture to be knowledgeable about.

Social security facts stolen social security numbers on the increase.

Here are some needed tips to be aware of.

As working Americans we watch our earnings, taken as a payroll deduction, go into a Social Security trust fund.

Most of us don’t give much thought to this deduction when we first start to work because we are many, many, years away from being able to collect from this fund.

Consequently, when we are young, we don’t give retirement a thought.

I know I didn’t, and as the years went by I would think, ok! I’ll take care of it next year.

Before you know it, it’s time to retire, and you haven’t prepared for the repercussions of not paying attention to something that can affect a major portion of your life.

Sadly, there is also no guarantee there will be a Social Security fund years from now.

Before you make any decisions about retirement, here are some Social Security facts you should be aware of.

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Social Security Facts

  • Most everyone that works 10 years or more qualifies for Social Security retirement benefits
  • You have to earn a minimum of $1000 per quarter in income.
  • You need forty quarters of employment.
  • At this time the income requirements are low enough that you could qualify just doing seasonal work.
  • If you have been hired before 1984, and are a federal employee, most are not eligible to participate.
  • Two of my relatives are employees of the railroad and their families normally receive benefits from a retirement system that is separate.

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Social Security Facts:
How Are They Determined?

  • Determining how much in Social Security benefits you are eligible to receive is done with a number of calculations.
  • The benefit you receive at full retirement is the deciding factor as to the amount of your monthly Social Security retirement check, called PIA (primary insurance amount).
  • This PIA will be based on the Average Indexed Monthly Earnings, or AIME, as applied to an inflation adjusted formula.
  • The PIA is then adjusted as to whether you take retirement before, or after the normal retirement age.

Sixty-six for those that are now reaching retirement age, but slowly changing to age 67 if born after 1954.

  • Social Security can be drawn at 62, but every month you delay after reaching the full retirement age, up to the age of 70, will increase your monthly benefits.
  • As an example; someone with an AIME of $5000.00 in 2009, their PIA will total $1971.00.
  • Lower wage earners will receive a larger proportion of their earnings than higher wage earners.

A maximum monthly benefit that would be received in 2010 is $2346.00.

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Widow Benefits And Spousal Benefits

  • Widowers and widows can receive the larger of their own, or their spouse’s monthly payment, but not both.
  • If a partner in the marriage earns much less than the other, the lower earning spouse may collect spousal benefits rather than receiving payouts based on her or his own earning history.
  • The spouse can get the larger of their own, or 50% of the other spouse’s Social Security.
  • A lower earning spouse will not be eligible until the higher earning spouse starts getting benefits, but both can start as soon as they are 62.
  • A spouse that was married for 10 years and is now divorced and hasn’t remarried can draw against the ex-spouse’s work history.
  • This is an important reason for the higher earner to delay taking benefits for as long as possible.

Social Security Facts:
Is Social Security Really Broke?

  • Studies uncovered the Social Security trust fund will be able to cover the disability and retirement responsibilities for approximately the next 30 years, give or take.
  • After this period of time there will be about a 22% shortfall.

From everything I have seen and heard, I believe all of the projections to be very optimistic.

  • An annual 2.8 inflation rate is assumed by the Social Security trustees.

Some norms historically have been in excess of 3%. Wow! This really adds up when talking in the trillions of dollars.

  • Adjustments could now be made to put it in a fully fundable status, if done promptly if delayed, it will be extremely difficult, because the shortfall will be unbelievably larger and “through the roof” in another 20 years.

Social Security Facts:
Where Do Social Security
Payroll Deductions Go To?

  • When I was a lot younger, I was under the assumption my money went into a fund and was there waiting for me to retire.

Silly Me! Many years have gone by since, and I now realize hypothetically, the money is held in trust by the government oh! oh!

  • The money doesn’t sit in this fund while it waits for you to retire.

Current beneficiaries are paid and surplus dollars are then used to buy bonds from the United States Treasury.

  • The trust has the bonds, but now that the Treasury has the money, Congress can use it for any purpose.

From what I’ve seen and heard, they have no problem siphoning from this fund.

  • The Social Security trust fund is holding paper IOUs from Congress.
  • For the very first time, Social Security had to cash in one of those bonds to meet it's payroll.

This does not bode well for people dependent on Social Security.

  • More and more of these bonds will have to be cashed in every year, and Congress will have to find a way to come up with the money.

Social Security Facts:
Resources For Retirement

  • Social Security is just one part of the wheel that comprises retirement income.

There are also 401k plans, IRA, pension plans, and savings and investment accounts.

  • It is also a good idea to research and find a good financial advisor to provide you with the information needed to make a knowledgeable, informed decision concerning your retirement.

You can never start too early to plan for retirement.

The Social Security facts speak for themselves. This is a Must Do for everyone to take seriously and start planning for, as soon as possible.

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