Here is what I learned about Social Security: (check everything out with your Social Security agent)
- There is a national number at Social Security that you can call and ask questions: 800 772-1213.
- Your town probably has a Social Security office. If you go there, and take a number, you can talk to a SS expert. Go late in the month, as there is a long line the first 2 weeks of the month. You can also ask for their local phone number and call and get an appointment, and get right in.
- To be eligible for Social Security, you have to earn 40 credits. Typically, you earn 4 credits a year, and if you work ten years, you are in!
- SS averages the 35 best earning years of your life. As you earn more in your 60’s, then one of those low paying years in your 20’s drops off. Therefore, the amount of the benefit that you receive increases each year.
- You and your employer have put equal amounts into the Social Security pot. Usually this is in excess of $200,000 for a life time of work. Sorry, I have no idea what a really well paid person puts in. No experience! Also, I don’t know about self-employed folks.
- If you wait until you are full retirement age (66 for those of us who are born after 1937), then several good things happen: your spouse can receive one half of what you receive. This is good if the spouse didn’t work much, and her SS benefit is less than one half yours. Another plus to waiting, is that there is no penalty for any wage earnings after age 66. I will say this another way: there is no limit on what you can earn after 66. You still pay regular taxes on what you earn after 66, but there isn’t that penalty where the IRS takes every third dollar that you make.
- The SS sends you an estimate of your benefits and your spouses’ benefits once a year. It comes in July for me. Look at this and see what you have earned.
- This was confusing to me: every person has 2 accounts with the Social Security: your own individual account and your spousal benefit account. My wife didn’t work as much outside the home, and therefore it is to our advantage to have her start taking her individual benefits when she turned 62. Then when she turns 66, she will switch to her spousal benefit which is one half of my benefit (if I waited till I was 66 to take my benefits).
- You can take your spousal benefit at any point before 66, but it is reduced 1/12 of one percent for each month before the month that you turn 66. Talk to your SS agent about this.
- When one of the spouses dies, the other spouse gets the higher of the two SS benefits. If I die first, then Robin gets my SS benefit, which is twice what she is getting.
The best way to learn more is to talk to other people who are approaching retirement, and to talk to your Social Security agent. I hope this has helped. Feel free to comment below on anything that you have learned or any corrections to my findings.