Social Security provides essential financial support during retirement, disability, or after the loss of a loved one. Knowing how and when to claim benefits can help you maximize your financial security.

What is Social Security?

Social Security is a government program in the United States designed to provide financial support to individuals during retirement, disability, or in the event of the death of a family wage earner. It is primarily funded through payroll taxes collected from workers and employers. The program was established in 1935 as part of President Franklin D. Roosevelt’s New Deal, with the goal of providing a safety net for older Americans and others who are unable to work due to age or disability.

How Can Social Security Help You?

Social Security provides a source of income to help you cover your living expenses after you retire, if you become disabled, or if a family member who was supporting you passes away. This program ensures that you have a minimum level of financial security even when you are no longer able to earn a paycheck. For many retirees, Social Security benefits form a significant part of their income, helping to pay for essentials like housing, food, and healthcare.

Benefits of Social Security

You can receive Social Security retirement benefits once you reach a certain age. These benefits are based on your earnings record over your working life, and they provide a steady income during retirement.

If you are unable to work due to a severe disability, Social Security provides benefits that replace a portion of your lost income.

If you pass away, your family members—such as your spouse, children, or even dependent parents—may be eligible to receive survivors benefits to help them cope financially.

While separate from Social Security, eligibility for Medicare (health insurance for people over 65 or with certain disabilities) is closely linked to Social Security. Most people qualify for Medicare if they are eligible for Social Security benefits.

How Does Social Security Work When Turning it On at Different Ages?

If you start receiving benefits at age 62, your monthly payments will be reduced because you are claiming benefits before reaching your full retirement age. The reduction is permanent and can be as much as 30% less than if you had waited until your full retirement age.

The full retirement age varies depending on your birth year, but it generally falls between 66 and 67 years old. If you start claiming benefits at your FRA, you will receive your full, unreduced benefit amount.

If you delay claiming benefits beyond your full retirement age, your benefits will increase. For each year you wait, up to age 70, your benefit amount increases by a certain percentage (usually around 8% per year). This can significantly boost your monthly income during retirement.

No Obligation Consultation

Social Security is a vital program that provides financial support to individuals and families during retirement, disability, or after the death of a loved one. The timing of when you start receiving benefits plays a crucial role in determining the amount you will receive, offering flexibility to tailor the program to your financial needs and retirement plans.

Planning for your future means making the right choices about Social Security benefits. Whether you’re nearing retirement, facing a disability, or seeking survivors’ benefits for your family, understanding the program’s structure can help you get the most out of what you’ve earned. At Diversified Insurance Brokers, we’re here to guide you through the process and ensure you have a comprehensive financial plan in place. Contact us today to learn more about your Social Security options and how they fit into your long-term goals.

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