Everyone has a social security number. It is not only our identification number, but also an account for taxation, retirement benefits and other purposes.
A social security number is with us for the whole life. It tracks our taxation and ensures our life when we retire. Social Security is our lifetime insurance. If you continue to pay into the program, you can have a certain amount of money monthly when you retire.
Social Security is the name of the Old-Age, Survivors, and Disability Insurance (OASDI) program, which is ran by the Social Security Administration (SSA). It not only provides retirement benefits, but also disability income and survivor benefits.
How Does Social Security Work?
Every month with your payroll, part of your money goes into two Social Security trust funds—the OASI Trust Fund for retirees and the DI Trust Fund for disability beneficiaries. A board of trustees oversees the financial operation of these two funds. Four of the six members are national departments.
Social Security Benefits
Workers who have paid into the Social Security system for at least 10 years can receive an early retirement benefits at the age of 62. However, the age you claim Social Security can impact the amount you receive each month in benefits. If you want to receive your full benefit, you’ll need to wait until your full retirement age, or an even higher one if you wait until 70.
One’s Social Security benefits are based on his/her average indexed monthly earnings during their 35 highest-earning years. Spouses can have benefits based on either their own earnings or their spouse’s. A divorced spouse who is not married can have benefits based on their ex-spouse’s earnings if their marriage lasted for ten years or more. Children can also receive benefits until they are 16.
People who have been disable for one year or more can have disability benefits. They have to meet some earning tests in order to receive the money. Family members of disabled workers can also claim the benefits.
The spouse and children of a deceased worker can receive survivor benefits based on the worker’s earning record. If the surviving spouse is unmarried and being 60 or older, or 50 or older and disabled. Children must be under the age of 18 or disabled.
According to Social Security Administration, 2037 would be the year in which the SSA estimates that it will to go bankrupt unless changes are made.
By that time, the young generation, including you and me, may be the first generation to suffer. We should prepare more for our retirement. Luckily, there are more saving accounts for retirement in the market for us to choose. We should plan earlier in order to have a good retired life with high quality.