Social Security: Key Facts That Everyone Needs to Know
The department of Agricultural, Food, and Resource Economics at Rutgers University recently held a seminar on Social Security for university faculty and staff. Below are seven highlights shared by two presenters: Everett Lo, Deputy Regional Communication Director for the Social Security Administration-New York Region, and Gina Diouf, administrator of the New Brunswick, NJ Social Security office:
¨ Social Security affects people throughout the life cycle including their birth, first job, marriage, divorce, widowhood, and/or retirement. It is intended to replace a portion of income but not be a sole source of income.
¨ The Social Security Retirement Estimator provides benefit estimates based on your Social Security earnings record. Social Security benefits are based on a worker’s highest 35 years of earnings.
¨ Workers should check their Social Security statement annually to confirm that their earnings information is accurate. To do this, use the “My Account” feature of the Social Security web site.
¨ To qualify for Social Security retirement benefits, a person must work 10 years and be at least age 62. If you delay benefits beyond full retirement age or FRA (age 66 to 67 depending on birth year), extra credits apply.
¨ It does not make sense to wait for benefits past age 70 because no additional delayed retirement credits are available. Between age 66 and 70, there is an 8% annual increase in benefits. In an example provided at the seminar, a benefit of $1,000 at FRA of 66 would be equivalent to a $1,320 benefit at age 70.
¨ Social Security benefits may be taxable if individual or household income exceeds certain limits. Social Security can withhold federal income taxes or beneficiaries can send the IRS quarterly estimated payments.
¨ If someone is working and receiving Social Security benefits, the earnings limit ($17,640 in 2019) applies before FRA. Future work plans are a key factor in deciding when to claim Social Security.