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Retirement Rules: Social Security Basics

As the baby boom generation, which are people born after World War II between the years of 1946 and 1965, continues to age, more and more people are becoming eligible for retirement and social security benefits. Because of this trend, social security has become more and more strained since people leaving the work force is starting to actually outnumber the people entering the work force. As another effect of this trend, more and more people who are of retirement age are also finding it much harder to be able to retire and they are finding it much more difficult to leave work. So, now more than ever, it is important for people that are nearing retirement age and social security eligibility to educate themselves about the basics of social security, and how the system works.

 

In 2012, more than 56 million people will be receiving social security benefits that will amount to more than $760 billion. Both numbers are the highest they have ever been, according to the United States Social Security Administration. Of the 56 million people that are receiving social security benefits, about 22 million of them are retired workers. The rest of the 56 million are made up of dependents of retired workers, people that are disabled and can not work and their dependents and the survivors of both retired workers and disabled workers. Also, it is important to keep in mind the social security is the primary income source for the elderly in the United States. Statistics show that social security will only continue to grow for the next couple decades. By 2036, there will be more than 78 million people that will be eligible to receive social security benefits, which is almost twice as much as today, according to the United States Social Security Administration. Because of those gigantic numbers, the viability of social security- as it is formatted today- is in question, as it seems to be an unsustainable model going into the future.

 

In its basic form, social security retirement benefits are paid in monthly amounts. Only workers who have gained enough social security credits, which are based on how much and how often you worked during your lifetime. There are a maximum of four credits that can be earned in one year and most people get the maximum amount. Credits are also earned by the amount of money a person pays per year, as social security is reliant upon people paying into the system via a social security tax during their working life time. The specific amount you must pay for a credit depends entirely on how much you make during a year. The amount needed for a credit raises every year.

 

The way social security is structured, it is meant to only be part of a retired person’s income, not all of it. So, the government urges people to also save money for retirement, as social security will likely not be enough. This is also a contributing factor as to why the elderly are more likely to also be below the poverty line. As far as retirement goes, the eligible age is 62 years old. As the term of life expectancy grows, the retirement age is also likely to rise in order to counteract the glut of people that come with the baby boomer generation. The more a person made during their lifetime, the more they will receive in social security benefits in return.

 

Byline

This article was written by Danny Katsopolus for a team of highly experienced disability lawyers; they can provide assistance with the task of acquiring social security disability benefits with ease.

© 2012, Jen Carrigan. All rights reserved.

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