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Tips For Social Security


How much do you know about social security and its actual “fine print”, as they say? Believe it or not, Americans have a huge misunderstanding as to how Social Security works, from how taxes are collected to overestimating the average monthly benefit.

Let’s start with a bit of history first. Social Security is 84 years old and was signed into law by President Franklin D. Roosevelt in 1935 to help seniors have an income in retirement. It is funded by individuals’ payroll tax contributions.

Today, according to the Social Security Administration, more than 68 million people collected either Social Security, Supplemental Security Income, or both.

Here’s how it works – the longer a person is in the workforce, the larger their monthly benefit will be. And, you only need 10 working years to qualify for the program. That said, there is a big funding problem on the horizon. Program payouts will exceed program income during 2020.

According to a FOX Business article, this year’s Social Security and Medicare Trustees Report showed that in 2035, reserve funds will be extinguished, which is bad news for retirees relying on Social Security for their primary income. At that time, retirees will only get 80% of their benefits.

Trustees are also worried about Medicaid, which is a government program that provides insurance to seniors below the poverty level.


Full retirement age is generally between 65 and 67, but when a person turns 62, they become eligible to receive benefits. However, if you elect to take Social Security income earlier than the full retirement age, what most people don’t realize is that a reduction in benefits occurs by as much as 25 percent.

Here are the numbers:

Also, people tend to think they’ll get more income from Social Security than what they’ll actually receive. The average monthly check is $1,408, but according to a reputable insurance institute’s report, the expectation is 28 percent larger, at $1,805.

That’s not too encouraging when the US Bureau of Labor Statistics estimates that Americans age 65 and older spend at least $46,000 a year in retirement – and that’s just for basic living expenses. They’ll get up to 40% of that amount from Social Security. The rest needs to come from retirement savings.


Obviously, you want to start saving as early as possible during your working years and put those savings in a retirement account. But first, it’s best to figure out how much you’ll need during retirement and work backwards to achieve that amount.

So, develop a budget, pay off any debt, look into traditional and Roth IRA’s, contribute to a 401K plan, seek out Crash Proof investments and consider a long-term care strategy.

Plan correctly and wait to take Social Security until your full retirement age. You’ll have more of a chance to enjoy retirement in the same lifestyle as you did in your working years.

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