Income
SOCIAL SECURITY
Since 1940 , Social Security has been helping workers navigate retirement after their careers have ended and paychecks stopped coming in . The program is relatively straightforward : The federal government withholds a percentage of each paycheck during your career ( currently 6.2 %, plus an additional 6.2 % withholding from your employer ), and in return , you receive inflation-adjusted retirement benefits that never run out . Generally , the more you earn during your working career ( and thus the more that gets withheld ), the greater the monthly benefit in retirement .
To qualify for Social Security , you need to have been working ( and contributing to Social Security ) for at least 10 years , and your benefit is based on the 35 years in which you earned the most income . Note that the average monthly benefit is roughly $ 1,400 per month , so most people shouldn ’ t rely solely on Social Security for funding their retirement . 24 You can file for Social Security as early as age 62 ( for a reduced benefit ) or as late as age 70 ( for the maximum benefit ).
Divorce and Widowhood The spousal benefit can also apply to divorced couples , but only if certain criteria are met . If you are divorced , you can claim the spousal benefit if ( 1 ) the marriage lasted at least 10 years , ( 2 ) you haven ’ t remarried and ( 3 ) your ex-spouse is age 62 or older . You can also claim the spousal benefit even if your ex-spouse remarries or hasn ’ t filed for Social Security . In the event of widowhood , you can collect your deceased spouse ’ s full retirement benefit at age 60 . Disabled survivors can collect survivor benefits beginning at age 50 , and if the survivor is caring for children under age 16 , the benefits start immediately .
22 %
The average annual Social Security benefit collected by a 65-year-old woman is 22 % less than that collected by a 65-year-old man . 5
Strategies for Maximizing Your Social Security Benefits
• Generally , the longer you can delay filing for Social Security , the better – you would get monthly checks sooner by filing at age 62 rather than what is known as Full Retirement Age ( currently age 66 or 67 , depending on when you were born ), but those checks would be 30 % smaller . Your lifespan is the key : Someone who lives into her 80s and 90s might be better served by waiting and maximizing her Social Security benefit .
• If you choose to file early , you can suspend your monthly payments upon reaching your Full Retirement Age and earned delayed retirement credits . Those credits can boost your monthly payments by as much as 8 % per year when you resume . 22
• The Social Security program also provides spousal benefits that can be worth up to half of your spouse ’ s benefit . If your own retirement benefit would be less than half of your spouse ’ s , you would automatically get the larger amount .
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