Social Security Benefits 101

People mostly associate Social Security with retirement income but are not aware of the other benefits that the Social Security Administration (SSA) pays out for other significant life situations. Here is an overview of all the benefits available through the SSA.

Retirement Benefits

The monthly amount you get is tied to three numbers: (1) Social Security credits earned, (2) your Full Retirement Age, and, (3) the age at which you start claiming benefits.

You become eligible for retirement benefits only after earning social security credits for 40 quarters. Full Retirement Age, determined by your birth year, is the age at which you will get unreduced retirement benefits. You may claim retirement benefits earlier but it will reduce your benefits. Or, you may delay drawing benefits up to age 70, which will increase your benefits by up to 8% for every year you delay claiming benefits.

Disability Benefits

There are two types of disability benefits:

1.      Social Security Disability Insurance (SSDI)

SSDI is available to those who have enough Social Security credits and meet the SSA’s definition of disability.

2.      Supplemental Security Income (SSI)

SSI is available to the elderly or to disabled adults and children who have limited income and resources. Social Security credits are not required to receive SSI. However, one can receive SSDI in addition to SSI if that person has enough Social Security credits to qualify.

Spousal Benefits

This is attractive if your spouse has significantly higher social security income than you. The most income you can receive under this scheme is 50% of the spouse’s full retirement income.

Survivor Benefits

Spouse, children, and parents could receive survivor benefits upon the death of a person who has enough Social Security credits to make their dependents and parents eligible for survivor benefits.

This article from The Motley Fool is a detailed write up on all the Social Security benefits mentioned above. The best way to find out full details of all the benefits available to you is to set up your account with the SSA.

Teton Pines Financial is here to help you with all your retirement and financial planning needs. Please contact us today for comprehensive answers to all your Social Security questions.