The Social Security benefits program is the American government’s retirement and aid program for supporting various groups in need.
Most commonly, Social Security benefits are associated with retirees and pension plans, but persons with disability and surviving members of families who have suffered the loss of a worker or serviceman or woman can also receive benefits through this program. Understanding how the Social Security system works makes it much easier to understand eligibility criteria and eventually apply for benefits. The Social Security system and the management of benefits are overseen by the federal Social Security Administration (SSA).
There are multiple methods that potential benefit recipients can use to apply for Social Security. Many applicants prefer to submit a benefits application through their local or state assistance program, while other applicants prefer to visit a community organization or group to get help submitting their request. No matter how an applicant chooses to submit his or her application, the processing time for new requests generally lasts several months. Family members of eligible benefit recipients or qualified deceased individuals should submit their application for aid as soon as possible. Read on to learn the about the highlights of Social Security benefits in the U.S. today.
How does the Social Security system work in the U.S.?
The SSA provides benefits to certain groups of American citizens and permanent residents who have a particular need for financial assistance. Retires past a certain age benefit, as do persons with qualifying disabilities and some surviving family members of deceased persons. Social Security benefits are provided to recipients from a protected trust fund overseen by the SSA. This fund allocates over 80 percent of its expenditure to retiree benefit payments and investment in the fund and the remaining amount to living assistance for persons with disabilities and qualifying families.
The SSA is able to make benefit payments and investments due to the tax dollars it receives from almost every American’s paycheck. Most workers pay a small percentage of their wages to the SSA throughout their lives to help support the fund and ensure that retirement benefits can be available far into the future. The overall structure of the Social Security scheme has current tax payers paying the benefits of current Social Security recipients. As a result, today’s tax payers will be reliant on tomorrow’s tax payers when it comes time to receive their own Social Security benefits.
More specifically, 85 percent of every tax dollar that goes to the SSA is spent directly on current retirement beneficiaries and surviving family members of eligible deceased persons. Most of the remaining funds are spent on benefits to qualified persons with disabilities, with less than one percent of funds being used for administrative costs. Less than one percent of SSA incoming tax dollars is spent on administrative or overhead costs. Experts expect this amount to decrease in the future.
When did the modern Social Security System start out?
The U.S. Social Security system as we know it today began in 1935 under President Roosevelt. It originally provided a one-time, lump sum payment to a limited number of beneficiaries. By 1940, many benefits recipients were already receiving monthly assistance. The Social Security benefits program originally provided benefits only to workers who worked until retirement age. Within years of its foundation, the program developed to begin offering benefits to persons with disabilities and surviving family members of eligible individuals and deceased persons. Today the SSA is one of the most important federal agency and is responsible for helping hundreds of thousands of Americans every year.
What benefits are offered by Social Security?
How much financial assistance an applicant for Social Security will receive depends on several different factors. Firstly, the reason the applicant is requesting assistance will play a significant role in determining the benefits amount. Persons with severe disabilities, for example, can often receive their full benefits immediately while other applicants receive assistance on a different schedule. For many people, the amount of Social Security benefits they qualify for does not meet all of their living costs. As a result, many retirees are required to alter their usual spending habits in order to stay within their new budget. Many Social Security recipients are entitled to supplement their benefits through part-time employment when possible.
For pensioners, the two primary factors affecting the amount of benefits that will be granted by the SSA is the applicant’s age and work history. For most Americans to qualify for retirement benefits, they must have received at least 40 Social Security credits throughout their lifetime. Credits can be earned up to four times a year by workers paying a qualifying amount of taxes every annual quarter. Workers with more Social Security credits are generally eligible to earn more benefits if waiting to retire until their full retirement age. Even more, some workers may be eligible to receive a significantly higher monthly benefit amount by delaying their retirement past the minimum full retirement age.
When a person chooses to go into retirement will also affect how much he or she receives in Social Security benefits. When a worker retires early, the SSA generally provides up to 30% less in benefits annually due to their calculation that the total number of payments made to the beneficiary will be higher than for workers retiring at a later age. Workers who have received enough Social Security credits and meet the government’s other eligibility requirements can opt to begin receiving benefits as early as 62 years of age. The youngest age for full retirement varies according to when the applicant was born. Workers born before 1960 can retire at 65 or 66 years of age while Americans born on or after 1960 must wait until they are 67 years of age to enter full retirement.
Is your Social Security Number important for receiving Social Security benefits?
All American citizens should be registered with the Social Security Administration and have been issued a Social Security Number (SSN). Non-citizens can be issued numbers from the SSA equivalent to an SSN. A person’s SSN is used for important identification purposes and should be kept private at all times. If a person’s SSN falls into the wrong hands, someone can use this information to open up fraudulent accounts or commit other crimes. Individuals who have misplaced their SSN card can request a duplicate from their local SSA office.
In order to receive Social Security benefits, applicants should have a valid SSN. The SSA operates the same in all U.S. states and territories and takes into consideration work done across the country. The SSA is a part of the federal government and is therefore unaffected by state politics or decisions.