6 Lesser-Known Social Security Facts You Should Know

Social Security

6 Lesser-Known Social Security Facts You Should Know

Posted by COTO Insurance & Financial Services
3 years ago | July 16, 2018

We’re all counting on Social Security to be there when we need it. For most of us that time will be retirement, although some will need to claim Disability benefits sooner. But because Social Security is an enormous government program, with all the usual confusing rules and red tape that you would expect, some people find themselves surprised when the time comes to claim their benefits. Since it’s important to understand how the system works, take the time to learn the facts – even these lesser-known ones.

You must accumulate work credits. Social Security isn’t just a benefits program that is automatically available to retirees and the disabled. You must actually accumulate 40 work credits before you’re eligible for the program. And since you can accumulate a maximum of 4 credits in any given year, this means at least ten years of work.

You might not be eligible for spousal benefits. In order to claim spousal benefits, on your spouse’s or ex spouse’s work record, you must have been married for at least ten years.

You can lose your spousal benefits. You can claim benefits on your ex-spouse’s work record if you were married at least ten years… But you will lose that ability if you get remarried to someone else.

Children can receive benefits, too. This situation applies to relatively few people, since our children tend to be grown when we retire. But if you’re receiving Social Security benefits and have a child under 18, or disabled, they can receive a monthly check too.

You can withdraw your application. If you claim your benefits and then regret the decision, you can withdraw your application and repay any amount you’ve received. At this point you will be treated as if you had never claimed benefits… And you can claim them again, later, when the time is right for you.

Benefits are mostly paid from incoming taxes. The idea that we all have a special account with Social Security, where our money is growing, is a myth. Most of Social Security benefits each year are paid from incoming taxes from workers (with the rest paid from a trust fund). So, Social Security is not your personal retirement fund, nor was it ever intended to be. It’s more of a social program that supplements other forms of retirement income that you establish for yourself.

That last fact underscores the importance of sound financial planning in the years leading up to retirement. You need to know what you can expect from Social Security, now and in the years to come, so that you can plan adequately for other forms of income. So, make an appointment with us, and we can help you estimate your benefits and make decisions regarding your financial future.

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