Five Facts You Should Know About Social Security

October 14, 2015


  1.  How much you are paying in. Most workers contribute 6.2 percent of their paychecks to the Social Security system, and employers match that amount. Self-employed workers pay 12.4 percent of their income into the system. The Social Security tax applies to earnings of up to $118,500 in 2015. Earnings above this amount are not subject to Social Security tax or factored into retirement payments.
  2. The age to sign up. You can sign up for retirement benefits beginning at age 62, but payments are reduced if you sign up before your full retirement age, which is 66 for most baby boomers and 67 for everyone born in 1960 or later. Your monthly payments will increase if you delay signing up past your full retirement age. However, after age 70 there is no additional boost in payments if you wait to claim Social Security. “Assuming you have normal health, try to claim Social Security as close to 70 as you can,” says Alicia Munnell, director of the Center for Retirement Research at Boston College.
  3. How much you will receive. Social Security payments are calculated using the 35 years in which you earn the most. If you don’t work for 35 years, zeros are factored into the calculation. You can get a personalized estimate of your future Social Security payments at various claiming ages by creating a My Social Security account online at and logging in to view your Social Security statement. These statements also list your earnings history and taxes paid, which you can check for errors. Paper Social Security statements are mailed to most workers who don’t have My Social Security accounts about once every five years.
  4. What happens if you become disabled. “We started off with just a retirement program, and then in 1939 we added survivors benefits and in 1956 we expanded to include people with disabilities,” says Carolyn Colvin, Acting Commissioner of the Social Security Administration. If you develop a physical or mental impairment that is expected to prevent you from working for a year or more, you may qualify for disability payments. Your Social Security statement will list an estimate of your monthly payments if you become disabled. You may need to provide documentation about your condition and why it will prevent you from working.
  5. How much your family will get if you pass away. Social Security also functions as life insurance for workers who prematurely pass away. Children ages 19 and younger who are in school, disabled children and a spouse caring for children younger than age 16 will each be eligible for monthly payments from Social Security, which are subject to a maximum amount the entire family qualifies for. Your Social Security statement will list how much your family members are likely to receive if you die. “Social Security is designed to insure against lost wages,” says Eric Kingson, a professor of social work at Syracuse University. “The premium that we pay is designed to insure against risk.”

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