Social security benefits provide income for many Americans in retirement. Statistics show that social security benefits offer at least 50 percent of the income of Americans in retirement. Knowing what social benefits are all about can put you in good standing when you are making decisions regarding how to go about getting the best out of the program.
All income earners in the United States have access to social security benefits. To find out more about the importance of your retirement and social security. The three major types of social security benefits that exist include; retirement, disability, and survivor.
Qualifying for social security retirement benefits
When you are working for someone, both you and the employer will each pay 6.2 percent of what you earn to the social security system. When you are self-employed, you pay 12.4 percent into the social security system, that is to say, you pay both the share of the employer, and that of the employee as well. It is important to know that your social benefit amount at your retirement isn't determined by what you and your employer contribute to the system but rather a set of three factors;
How long you work
During your working years when you pay into the system, you gather up credit, and to qualify for the benefit, you must have 10 years where you made payments into the system, or you should have at least 40 credits.
Your highest 35 of earnings are taken into account, and they are used to calculate your retirement benefit amount. It is essential to have a complete 35 years of work in which you made payments into the social security system to stand a chance of getting more benefits.
What you earn
The way it works, the higher you earn, the higher your benefit will be although there is a limit to it. The way social security is designed, it replaces more income for people who earn lower than for people who earn higher, that way, you only make the allotted payments into the system, based on your earnings as highlighted on the Social security wage base.
The age you file for the social security benefits
To stand a better chance of claiming a higher benefit amount, you have to wait till you are aged 70, although you can claim an early benefit at 62, this comes at a more reduced age. Your full retirement age plays a role in how much you get at what age. The full retirement age varies according to birth year.
So, if we put all these three factors together, you will see that the highest social security benefit amount that you will obtain will come from you working and paying into the social security system for 35 years, earning the set social security wage base yearly, and having to wait till 70 to start collecting your benefits.
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