Thinking of your future life is one of the most important things that you should be doing now. During retirement, you will certainly understand that there is really a need for security. This is one of the considerations that you should be thinking while you are young. Majority of Americans are covered by social security. This is one way of securing yourself and your family from the negative consequences of disability or old age. Economically, we have to be prepared for the years to come. This is why social security, as the best option, should be part of your biggest decisions now.
What is Social Security
Generally, social security is a system of the government that aims to provide monetary assistance to its citizens that do not have enough income. To make it clearer, this is a program that ensures benefits for people who are retired, disabled or unemployed. Some people may think that this is something that the government provides for free to its people. However, you need to understand that the monetary assistance being provided to the qualified is coming from mandatory contributions. Simply put, a part of your earnings is taxed and placed for social security.
A lot of older Americans rely on social security as the source of majority of their income. In fact, it has been recorded in 2018 that almost 63 million Americans are benefiting from social security. Looking back, the Social Security Act became a law on August 14, 1935 courtesy of then President Franklin Roosevelt.
5 Smart Social Security Decisions You can Make Right Now:
Most people would invest and save money for retirement. This is a great move but you should also pay attention to social security. This way, you will have a better chance to increase your income when you leave the workforce. To be able to do that, here are 5 smart social security decisions you can make right now:
Check Your Earnings History
First, you need to understand why you should know your earnings history. In calculating the benefits you will get, the Social Security Administration (SSA) gets the needed information from your employers. The latter will provide a W-2 wage report. This will be the basis for the calculation. You have to know that the social security benefit you will get is based on the 35 highest paid years of your employment. With this, you will have a problem if there are miscalculations. Your amount of the benefit you will receive will be affected if there is incorrect calculation.
With this, you can always visit the Social Security office near you to verify information. You can also check your earnings record from the Social Security website. All you need to do is to create an account to be able to log in. There is a tab for “view earnings history” where you can easily view the needed information.
Consider Savings and Longevity when Timing Your Claim
The difference between your savings and social security benefits is that the former may not last forever. This is why you need to consider making good decisions for your social security. According to the policy, you may claim your Social Security starting from the age of 62 and up. If you are concerned about the amount, you should know the importance of timing.
If you are going to claim the money earlier, you may be getting smaller benefit. But if you claim a little later, it may become higher. This is why you can choose to delay your retirement and work for few more years if you can. This way, you will be able to increase your monthly Social Security benefit. This way, you will be able to enjoy your retirement because you know that you are secure.
Choose a Representative Payee
Another good thing about Social Security is they allow you to have a representative payee. This is a person who will act on your behalf if you are already incapacitated. This is another way to ensure that you will be in good condition in whatever situation. A representative payee is someone who manages your benefits for you. This person will be receiving the monthly benefit and will use it to buy your needs. The representative will take care of your food, clothing, healthcare, housing and other essential needs.
SSA allows you to choose three potential representative payees. It is guaranteed that the benefits that they will receive on your behalf will be spent for your needs. To ensure this, SSA does the review to be able to select and appoint the best representative payee for you. So, as you strategize your retirement plan, consider choosing people who will be able to take care of you.
Get Delayed Retirement Credits
This is a good strategy if you want to collect more benefits. Your Social Security retirement income will certainly increase by 25% if you are going to start collection at the age of 70. This does not mean that you have to work until the said age. All you need to do is to delay the years for your claim. If you do this, you will also be able to get delayed retirement credits.
Collect a Spousal Benefit Now
This is an option for those who have already reached full retirement age. This is no longer available for people who are born on and after January 2, 1954. For this, you can collect the benefits of your spouse and just let your accumulate. This way, you will be able to enjoy the benefits even while you are working on one more account for future use.
The Final Thought
Social Security benefits have been saving a lot of people. Disability, unemployment or retirements are realities of life. Now that you can, you should work and check your options. Make sure that you are aware of the policies of social security. This way, you will be able to make it work for your full advantage when you already need it.
Author Bio: Holly is a seasoned writer who loves to write about issues relating to retirement, Medicare, and Social Security. Holly currently works as a writer for “Social Security Office Near Me”, where she writes about Social Security benefits and issues affecting the senior citizen population.