3 Things That You Should Know about Social Security

It’s not an easy time for retirees considering the fact that by 2003, the government will only be able to pay 75% of scheduled benefit. So it bodes well that retirees understand the essentials of the program so as to obtain maximum benefits.

So, here are 3 things that you should know about Social security:

#1: What your benefits depend on

The only way by which you can avail of Social Security is by earning 40 credits. For each year you work, you earn about 4 credits, and so in a matter of 10 years, one should be able to avail of Social Security when they retire.

In 2012, in order to get one credit, you must earn about $1130 while earning $4520 will get you the full four credits. However, your benefits are usually on 35 years where you earned the most money and NOT 35 years of consecutive work.

Of course, there’s a maximum benefit you can receive, and which depends on the age you retire. For the year of 2012, that figure stands at $2513.

#2: How this program benefits spouses

Being married is advantageous especially when it comes to availing the benefits of Social Security. The reason for this is that a spouse can opt for spousal benefits, which adds up to 50% of the other spouse’s benefit.

In the case where you apply for spousal benefits before retirement, you will not get the entire 50%. Also, until your spouse claims his or her benefits, you cannot avail of this option.

#3: The Cost-of-Living-Adjustment (COLA)

One of the most attractive features of the Social Security program is the fact that they adjust it to the present cost of living every year. During retirement, these COLA increases can help you keep up with rising costs. Of course, the government determines these COLA percentages based on changes on a federal consumer price index.