Social Security is a controversial topic in the United States. You know it’s a retirement product, but every armchair economist is quick to tell you that you’ll never see a dime of those deductions from your paycheck. With all of these discussions, it’s hard to find the truth about America’s retirement program.
Thankfully, we’ve compiled a list of Social Security facts to help you discover the truth of the situation. Read on to learn what you need to know about Social Security!
1. Social Security Helps Disabled People Make Ends Meet
When you think of Social Security, you probably only think about it as a way to help retired people make ends meet. In reality, it helps tons of people well-below retirement age.
Social Security provides monthly payments to people who are disabled and unable to work. They have to go through the disability hearing process first to ensure that they qualify. Once qualified, disabled people receive monthly payments to help support them.
If you’re struggling with a disability, consider talking to an attorney to help you through the hearing process.
2. Social Security Is a Credit-Based System
Not every person who applies for Social Security payments will qualify for them. That’s because you have to have a certain number of credits in order to draw on it.
Americans need to earn at least 40 credits in their lifetime to draw on their Social Security benefits at retirement. As of 2022, every $1,510 in income is equivalent to one credit. That means that you need to have earned at least $60,400 throughout your life to retire, a fairly low bar.
Social Security then creates a work record of how much you’ve earned each year to calculate your benefit. Your benefit is based on your 35 highest-paid years in the workforce, up to the maximum amount of $147,000 per year.
3. Don’t Plan on Living on Social Security Alone
Don’t expect your Social Security income to cover everything when you retire. It’s likely that your benefit will be significantly lower than you were used to making before you retired.
In general, it’s smart to have at least three sources of income for your retirement. If you haven’t already started planning for retirement, then you should absolutely get started right away!
4. Your Social Security Benefit Changes Over Time
If you’ve been listening to the news, you’ve probably heard a lot of discussions about how inflation is wreaking havoc on the economy. The government knows that inflation is a major impact on a person’s ability to make ends meet. For that reason, expect to receive a cost of living increase in your Social Security benefit every few years.
Did You Love Learning About These Social Security Facts?
When it comes to Social Security, there are a ton of rumors floating around out there. Thankfully, these Social Security facts can help you determine the truth about the rumors. Keep doing your research, and you’ll be well on your way to a happy and healthy retired life!
If you loved reading these facts about Social Security, then you’re probably looking for more great financial tips. You’ve come to the right place. Check out the rest of our blog to stay on the cutting edge of all things personal finance!