Ten Things You Might Not Have Known About Social Security
by Ken Morris
Social Security is a lot like the ozone layer--we all know it's
there now and we count on it being there in the future. Yet most
people don't know much more about it than that. Here's a short
list of interesting facts about Social Security.
(1) Social Security benefits do not automatically start coming
in the mail the first day of Normal Retirement Age. They must be
applied for. The easiest way is to set up an appointment with
the local Social Security office or call 1-800-772-1213.
(2) To get an official statement of all the earnings recorded in
your Social Security account, an estimate of your current
disability and death benefits, and an estimate of future
retirement benefits, fill out a Form #7004 Request for Social
Security Statement, obtainable at your local office.
(3) If you do not find and correct errors in your Social
Security record within 3 years, they become part of your
permanent record. Therefore, you might want to check on them
every 3 years or so.
(4) You can work during retirement, but if you earn too much it
will reduce the size of the benefits you are receiving from age
62 up to your Normal Retirement Age. The limits on such earnings
are currently $12,480 for 2006. Benefits are reduced by $1 for
every $2 that you earn over this amount. After you attain your
Normal Retirement Age, you may work as much as you want with no
reduction in benefits, although they may become taxable if you
earn too much.
(5) You can increase the size of your retirement benefit by
delaying collecting your benefits and by remaining on the job
past full retirement age. This higher benefit comes from extra
earnings toward your account and a credit awarded for this
patience, ranging from 3% to 8% of your benefit depending on
your date of birth.
(6) For people born after 1937, Normal Retirement Age will
increase. For example, if you were born in 1940, full retirement
age is 65 and 6 months; born in 1950, it is 66. Anybody born in
1960 or later will be eligible at age 67.
(7) Social Security disability benefits do not continue past
Normal Retirement Age. The month before you attain normal
retirement age the disability benefits are automatically
converted to retirement benefits.
(8) There is a limit to the amount of benefits that can be paid
on each Social Security record called the Maximum Family
Benefit, generally around 150 to 180 percent of the worker's
benefit. If this limit is exceeded, the family benefits are
(9) Ex-spouses, widows and divorced widows may all be eligible
for benefits on a spouse's record. Provided the requirements are
met, they may even all be collecting on the same worker's record.
(10) There are two Social Security trust funds: one used to
finance retirement and survivors benefits and the other used to
finance the disability program. Money not used to pay current
benefits is invested only in U. S. Government Treasury bonds.
Social Security is a significant resource for many retired
individuals. Spend some time with your financial planner
learning about what part these benefits should play in your
retirement planning future.
About the author:
"Can somebody please help me watch, manage, invest or oversee my
401k" is the question Mr. Morris hears most often that causes
him the most concern. Fearing the American worker is being left
in the dark, Mr. Morris, a fee based Investment Advisor
Representative, based in Central Ohio, with Raymond James
Financial Services, Inc., helps 401k participants get the
most out of their retirement plan.