Key Takeaways
- If you have a job where you pay into Social Security, you may wonder what those benefits entail.
- Social Security benefits aren’t just for retirement – there are also benefits available should you become disabled.
- You must earn a certain number of credits to qualify for benefits.
Did you know that Ida Fuller was the first person to start receiving ongoing Social Security benefits? She received her first check on January 31st, 1940, and it was for $24.54. This came after FDR signed the Social Security Act in 1935.
It may seem that this was a small amount of money, but the bigger picture is that she only paid about $25 into Social Security and, by the time she passed away in 1975, she had received $22,000 in benefits.
Now, this may cause you to think “That’s why Social Security’s going broke! You don’t pay anything in, but you get a ton of money out.” Well, that’s not really the case. In fact, there are only a few things Congress needs to do to keep Social Security going.
But let’s look at where things are with Social Security today. Let’s say you’ve been paying into Social Security for ten years. Do you have any benefits as a result of this? There are five key points we’ll consider when it comes to your benefits.
1. All you need is to pay in roughly $5,800 each year for 10 years to get 40 credits (in other words, four credits per year), allowing you to qualify for Social Security when you reach the full retirement age of 67. You’d receive at least the current minimum benefit, which is $600 per month. The maximum is currently around $3,900.
2. If you have at least 20 credits in the last 10 years, or five out of 10 years of credits in Social Security, you qualify for disability benefits. You probably want to hire an attorney if you’re in this situation, but the benefits generally start paying out after a year, and they can be substantial.
3. If you have dependents, the disability benefits increase. It will vary, but it may be another $1,300 – $1,800 in addition to your own disability benefits. If you’re permanently disabled, this is an important benefit to be aware of.
4. In case you’re wondering how your benefit is calculated, the Social Security Administration looks at 35 years of your highest working years’ earnings to determine your benefit. They use a formula to calculate what you’ll receive.
5. If you’re married for at least 10 years (and it really must be at least 10 years, not a day less), get divorced, and don’t remarry, you can receive your ex-spouse’s Social Security when you reach retirement age. This isn’t a very well-known aspect of Social Security, but it is another benefit that exists.
If you’ve been working for at least ten years, these aspects of your Social Security benefits are already in place. They may be important factors for you to understand when looking at your overall financial picture, so make sure you take them into consideration. Until next time, enjoy.
Gary
If you’d like to read more on this topic, here are a few of Gary’s previous posts that you might enjoy:
