Recently, Social Security has been in the news. The program's trustees predict a shortfall. They believe the Social Security fund won't cover all benefits by 2033. This situation will arise unless definitive steps are instituted to reduce payments or if revenue is amplified.
The situation highlighted Social Security's importance. President Franklin D. Roosevelt signed it into law in 1935. Social Security emerged as an anti-poverty program and presented a retirement plan for workers. It is now seen as the most successful program in U.S. history. The initial lump-sum payments were made in 1937. In 1939, Congress introduced benefits for workers' survivors. Then, in 1956, disability benefits were added to the package.
Who Benefits from Social Security?
Workers today pay taxes into the program. This fund is distributed monthly to beneficiaries, maintaining the "pay-as-you-go" system. A noticeable one in every five Americans receives benefits from the program today.
Applying for Social Security
To file for benefits, applicants must be:
- Applicants must meet the minimum age requirement of 61 years and nine months.
- They should wish for their benefits to start within four months.
Are benefits taxable? It depends on your income. Here's how it breaks down:
- Singles earning between $25,000 and $34,000 face a tax of up to 50% on benefits.
- Married couples filing jointly with incomes from $32,000 to $44,000 pay up to 50% tax.
- A higher 85% tax applies to singles over $34,000 in income.
- The exact 85% tax hits married couples above the $44,000 income level.
What if you lose your Social Security Card?
If an individual misplaces their Social Security card, there is no immediate need for a replacement. Simply knowing your Social Security number suffices. In case of a needed replacement, applications can be made online or in person. This process can only be completed via a visit to a local Social Security office if certain documents are required for verification.
The Case of Two Social Security Checks
Instances occur where beneficiaries might receive a double payment in a month. Such a situation may occur due to the entity owed back payments or if the recipient is on retirement or disability benefits but simultaneously qualifies for Supplemental Security Income (SSI) as their incomes fall below specific thresholds.
Social Security Pay - What to Expect?
The Social Security Administration (SSA) calculates the beneficiary's benefit using the average monthly earnings across 35 of the highest-earning years. The first pension is payable only once a worker turns 62. However, opting for this early retirement reduces payments by up to 30%. Inversely, delaying retirement past the full retirement age (66 or 67 for most) sees an 8% increase in benefits for each year deferred until the age of 70.
The Process to Apply for Disability
Eligibility for disability benefits under Social Security Disability Insurance is subject to a medical condition that baffles one's ability to work. The condition should either be fatal or be anticipated to last for a minimum of a year. Once a disability kicks in, a minimum wait of five months is needed before benefits are received.
Applications for benefits are processed online or via calls. Following this, these are forwarded to a state agency that exercises the discretion of decisions based on information provided by doctors. Initial application denials are common, faced by a rough 70% of applicants. Appealable opportunities do arise post-denial, with more significant successful rates. Often, people hire attorneys to assist with appeals. Furthermore, those with disabilities may qualify for the Supplemental Security Income program subject to their financial need.
