Don’t wait until the age of 62 to find out what Social Security is and how to use it. The earlier you take steps to put sound financial planning in place, the greater your chances of having a financially stable retirement.
What is Social Security?
The Social Security Act of 1935 covers senior citizens. To fund the program, a Social Security tax is taken out of your salary while you are working. The government uses this tax to provide an income to people after the age of 62.
You can delay applying for Social Security benefits until the age of 70; doing so provides an increase benefit amount for every year you wait. An estate planning attorney can help you calculate the best age to apply for benefits, depending upon your individual needs. This professional can also help you to minimize the taxes you may need to pay on your benefits, as well as offer you other advice.
For example, some laws decrease Social Security benefits if you have other income and a pension plan. Your attorney can help you manage these other funds without losing out on Social Security benefits.
Under certain circumstances, your Social Security benefits could also go to your spouse, an adult child who becomes disabled before the age of 22, or your survivors. Also, the more you earn during your working years, the higher your Social Security benefits.
You have to work for at least ten years to be eligible for Social Security benefits, but in any case you can only start receiving benefits after you turn 62.
The Social Security Administration sends a statement of your benefit earnings every yearusually three months before your birth date. Or you can call 800-772-1213 to request a statement and fill out form SSA-7004. Be sure to check your Social Security statement carefully.
A Medicare tax is also taken out of your wages. Most people think Medicare is part of Social Security, but Medicare is a separate program. You are eligible for Medicare benefits once you reach the age of 65.