Social security is largely considered the best social program that the country has to offer. Although Medicare has its merits to be sure, social security furnishes upwards of 66 million Americans with the monthly payments that they need to remain financially independent well into retirement.
For some, social security is a welcome complement to their dwindling paychecks or retirement accounts while for others social security is a standalone retirement account of sorts.
The strange thing about social security, though, is that few Americans realize all of the benefits or even comprehend exactly how their paychecks today can translate into social security payouts tomorrow. Recent articles help to clear up some of the confusion and put Americans on the right path.
For instance, did you know that it only takes 10 years of part-time work throughout your life to qualify for social security benefits upon retirement. Surprising but true. The program works by assigning lifetime work credits, and you can attain a max of four of these work credits annually. Just over $1,300 next year (accounting for inflation) results in one work credit. This means that four times that amount, or around $5,000, is the most amount of credits that you can rack up in a year’s time.
In fact, working more can have big payoffs in your golden years since it behooves future social security recipients to work for many decades and earn as much as they can over that timeframe.
There are some on the political right who threaten to do away with social security altogether or curtail some of its benefits, but those possibilities are a long way from happening. That’s because social security is classified as mandatory (as opposed to discretionary) spending. That means that the government has to make the payouts to social security recipients.
Another reason not to despair about picking up your social security payments is that payroll taxes and earned income will continue to buoy social security in spite of the specter of supposed insolvency by 2034. Social security will be there to provide disability insurance and lift the third of seniors out of poverty who rely on social security to get by.
The great thing about social security is that it gives more weighting to your most productive 35 years of employment so that you receive the maximum payout. You can start collecting at 62 or wait longer for higher payouts.