Social Security Retirement Benefits: The Basics

If you are planning for retirement, it is important that you understand how Social Security retirement benefits work. Here are the basics of Social Security retirement benefits and what you should expect from them.

Social Security

The basic idea behind this program is that the working population is going to fund the retirement for the older population. A certain amount is withdrawn from paychecks for Social Security throughout people's working careers. Then, when you reach the age of retirement, you can start collecting from the money that people are currently paying in to the system. Not everyone who works legally in the United States is required to have money withdrawn from his or her paycheck for Social Security, though. In some cases, money is deposited into another kind of retirement fund. If you contribute to Social Security, eventually, you should be able to receive benefits from it.

How Benefits Are Calculated

The actual calculation that determines how much someone receives in Social Security benefits is very complex. However, the basic idea behind it is that the Social Security Administration is going to average out the earnings over the majority of your working life. The longer that you work and the more money that you contribute to the program, the bigger your benefits are going to be when you retire. If you wait until you are 66 years old to start taking Social Security benefits, you are going to get the largest check that you possibly can from Social Security. As of May 2010, the largest monthly payment from Social Security that you can get is $2346. You could choose to retire at the age of 62 and start taking Social Security payments. If you do this, the money that you are going to receive from them will be less. This means that you need to use a Social Security benefits calculator in order to determine when you should plan on retiring. The longer that you can hold off, the more expendable income you will have once you start taking payments.


In order to start receiving Social Security retirement benefits, you are going to need to apply for them. This is done through a simple application process with the Social Security Administration. You will be able to access the application through the Social Security Administration's website. You can also call them at a toll-free number to apply or visit your local Social Security office. The process is very simple, and they will ask for only basic personal information about you.


Many senior citizens wish to continue working even after they are above the age of 62. If this is your case, you can still receive Social Security benefits even while you are still working. When you are working, your Social Security benefits are going to be reduced. However, once you reach full retirement age and stop working, the Social Security Administration is going to recalculate your monthly Social Security benefit. Because you chose to keep working longer, your Social Security benefits are going to be larger than what they would have been if you had stopped working at the age of 62. This can provide you with additional resources from Social Security. 

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