Social Security Explanation of Benefits, Seeking financial assistance to maintain your own economic security is vital, especially when you are living somewhere with no one to provide security to you. But if you are residing in the USA, there is nothing to worry about. There is a solution named Social Security, which is a little program in the USA by the US government. This policy has committed to offering monetary security to its citizens.
In order to claim its benefits, you need to understand its rules and regulations.
Social Security Explanation of Benefits
Is Social Security a reliable program?
Social Security is aimed to provide retirement support in the form of economic security for American employees who pay into the system. It is subsidized through FICA (Federal Insurance Contributions Act) taxes. The SSA imposes a 12.4% tax on earnings to fund benefits from Social Security. No need to get confused with this program regarding its working and benefits.
Make sure you know the very basics of this program. Due to its easy-to-claim process, it has been touted as a reliable choice among American citizens because they feel secure with this financial assistance.
How does it function?
Knowing its functioning is a great deal that you should not miss at all. Social Security functions by pooling compulsory contributions from employees into a large pot and then giving those benefits to those citizens who are qualified for them. When you are in a job period, you pay into this system by possessing a portion of your earnings taxed and reserved for Social Security.
The maximum payable earnings limit is $127,200. In the final step, when you show your eligibility to claim for those benefits, at that time, you can go up to gather them rather than paying the benefit of others.
It is also reported that the SSA demands to pay from American citizens and $0.85 of every Social Security levy dollar gets deposited to a trust fund that disburses monthly benefits to those who are retired and also to their family members, and also surviving spouses.
Even children of those eligible recipients who have expired also get those monthly benefits. The outstanding $01.5 goes towards Social Security benefits for people who are disabled and their family members.
Are you eligible to collect Social Security?
Before proceeding with any process to claim these benefits, you should know whether or not you are qualified to get them. You can collect benefits from Social Security once you reach a certain age limit or deals with disability and meets the requirement of SS disability conditions.
If you are disabled and want to get these benefits, then you need to go through a severe disability determination procedure. You may also be capable of collecting survivor benefits if you are a child of a recipient or spouse who has died.
To prove your worthiness for these benefits, it is important that you have ‘credits’ that you have earned during your employment years. In the year of 2017, you will get one credit for every 1300 dollars in earnings and can make up to 4 credits per year.
It is good to know that these credits will count toward your future admissibility no matter whether you take a break from a job or change your job. The dollar amount required to earn 1 credit is usually increased yearly. If your birth year is 1929 or later, then you need to have 40 credits or ten years of work.
This is the condition that you must meet to get eligibility. You typically require fewer credits to get disability benefits. When it comes to the eligibility for a survivor benefit, then you will be going to get a percentage of the original Social Security benefit of a beneficiary. The amount you get as a beneficiary benefit falls into the range of 75-100%.
What is the right time to claim your SS benefits?
If you have gathered your 40 credits, you are unable to begin claiming retirement benefits until you have an age of 62 years or older. It means that the longer you keep waiting to begin collecting those benefits, the higher the payout will be. It would be very good if you can wait to reach the full retirement age set by the Social Security Administration.
If you do this thing, then you will become eligible to receive the primary benefit amount that is the full monthly benefit you are permitted to get according to the record of your earnings. It is only possible if you are 67 years old with a date of the year 1960 or later.
The earlier you want to receive your Social Security benefits, the lower the payment will be. For instance, if the full retirement age is 67, then if you claim benefits when you are in 62 age, at that time, you will get 70 percent of your primary insurance amount.
But if you have made up your mind to claim benefits at 65, then you will be going to take 86.7% of the monthly benefit from Social Security. On the other hand, if you will be able to earn delayed retirement credits if you keep up waiting for previous your full retirement age.
For every additional year you keep on waiting to claim these benefits, you will get a payout that is increased by 8%. You would be happy to know that your Social Security benefits are going to max out at the age of 70 years. If you delay benefits after 70, then it would be a foolish idea.
If you are getting disability benefits from Social Security at the time you reach the normal retirement age, then your SS disability benefits will get automatically converted to retirement benefits. But you need to keep in mind that the amount would not alter at any cost.
Hence, if you are willing to go for SS benefits claiming process, then you need to check your SS benefits. For that reason, you can sign up with the SSA and create your account, where you can check your Social Security benefits.