First of all, yes, we all hear dire-sounding news stories about whether or not Social Security will still be around when you retire. But the reality is that most people need Social Security as part of their retirement plan. That probably includes you!
But how much do you really know about Social Security? If you want to learn five awesome things about this important government program, read on!
1. It has a TIME TRAVEL MACHINE!
Okay not really, but you can go to ssa.gov and see a projection of what you will get in the future, AND you can go back in time and see how much you earned each year of your life. When I looked at my own records I found out that in my junior year of high school I earned a total of $1,059 from my part time job. Cool!
2. Your benefits are based on your highest 35 years of earnings.
Though I love knowing that I earned $1,059 when I was 15-going-on-16, I don’t love having that be one of the years that they use to calculate how much I’m going to get.
The good news is that they base your benefits on your 35 BEST years of earning, so if you are still working you can knock out some of those low earning years by having higher earnings now. In other words, increasing your income now also increases your benefits in the future!
3. If your spouse made more than you, you can get benefits based on their earnings—even if you are divorced!
If your spouse earned more money in their top-35 years than you did, you can get Social Security benefits at THEIR rate, not yours. This is true even if you are divorced—as long as you were married for at least 10 years.
There are a lot of rules about this, so make sure to read the details to find out more.
4. It is also a life insurance plan for your spouse and children – for real!
If you have children at home, or have a spouse that depends on your income, you actually should have some inexpensive (it should cost about $30 per month) term life insurance. That way if you die while they are still depending on you they will be taken care of. That being said … Social Security already gives them benefits!
- Your minor child gets 75% of your benefit amount
- Your surviving spouse, at full retirement age or older, generally gets 100%
- Your surviving spouse, between 60 and full retirement age, gets between 71% and 99%
- Your surviving spouse, at any age, if they have a child younger than age 16, gets 75%
5. You can still earn money while getting Social Security.
There are some people who actually like working in retirement. Other people need to in order to make ends meet. If you are in one of these categories you can still get Social Security benefits while you are earning money by working.
If you work while receiving Social Security:
- Up through full retirement age (67 for most people):
- They will deduct $1 from your Social Security check for every $2 you earn above the annual limit ($22,320 in 2024)
- That last year before your full retirement age they will deduct $1 from your Social Security check for every $3 you earn above the annual limit ($52,529 in 2024)
- After full retirement age (67 for most people) working does not affect your Social Security benefits at all.
Special tip for 20-somethings or those with zero-income years: you need at least 10 years to get benefits
If you go to ssa.gov and it says you are not eligible for benefits—don’t be alarmed! That probably just means that you don’t yet have the required “40 credits” (which equals about 10 years of work) for them to start calculating what your benefits will be. Be patient, you’ll get there!
Financial coaching can help you get it together now and for the future
Helping people get their financial lives together for both now and for their future is exactly what I do as a financial coach. Together we will look at your complete financial picture, then come up with strategies that work FOR YOU to help you live a better, more stress-free life while making sure you are covered for down the road.
All my coaching is over video calls so you can do them from the privacy of your own home. I offer a free 30-minute initial consultation and affordable rates. Schedule a call with me today!
