For most people, Social Security is just something that pays out during their retirement years. But many people don’t realize the wide array of benefits this government program offers, from reduced-cost prescription drugs to assistance with long-term care expenses.
Social Security isn’t exactly the first thing people think about when they hear the term retirement plan, but it should be. Whether you’re still years away from retirement or already collecting Social Security benefits, you will likely have questions about how your Social Security benefits work and what to expect from them. This article will help answer some of your most pressing questions about this often-misunderstood program.
Read on to see what William Schantz has to suggest!
William Schantz Answers the Most Frequently Asked Questions About Social Security Plan
What Exactly is a Social Security Plan?
A social security plan is a guaranteed retirement income that workers receive from the government after paying for a certain number of years. The idea behind it is that you put money away throughout your working years, with tax breaks helping to offset some of that cost. You can then access these funds when you retire or face an economic downturn.
The Security plan involves two different programs:
- For retirees, it’s a government program that offers monthly cash benefits. Workers, retirees, and their families also contribute to Social Security with payroll taxes.
- For disabled people, Supplemental Security Income provides grants to help pay for basic living expenses. Payroll taxes support both programs, with additional funding coming from interest earned on investments held by Social Security trust funds.
Do I Have to Pay Social Security?
This is a common misconception. According to William Schantz do not have to pay into Social Security unless you work in a job that has at least $1000/year in payroll taxes deducted from your paycheck or if you are self-employed and have income over $400/year.
Regardless of whether or not you pay into it, everyone who has lived, worked, or received benefits in America is eligible for social security payment (if eligible).
Some people choose to delay their payments until they are older as a means of earning more interest on their money through inflation. The actual rate is determined by Congress and does change year-to-year depending on the economic climate and political situation.
If I Sign Up, What Benefits Will I Get?
According to William Schantz, the benefits you receive when you sign up for social security depend on several factors, including your age, how much you’ve earned in past years, and whether or not you are married.
- After signing up for social security benefits, you will receive one benefit check each month until either you or your spouse dies. When that happens, that person’s benefit is recalculated to include your spouse’s previously accrued benefit and their additional contributions since their death.
- A surviving spouse can collect these added benefits immediately at 62, wait until full retirement age (which varies depending on when a person was born), or let them compound and collect them in a lump sum after they reach full retirement age.
Is There an Age Limit on When I Can Retire?
As per William Schantz, there is no mandatory age limit on when you can retire. You must, however, be at least 62 years old to begin receiving benefits. If you retire before your full retirement age (the year in which you reach 65 years old), then a certain portion of your benefits will be withheld until you reach that year.
In other words, if you start taking Social Security payments before the full retirement age and have been working for 10 years or more, approximately one-quarter of your benefit will be withheld from each check until you turn full retirement age.
