Social Security always is a hot topic, both with politicians and taxpayers.
Established in 1935, the program is sustained by contributions from income-earners and their employers during their working lifetimes. Benefits can be received starting at age 62.
Still, as long as it has been around, even some of the most basic aspects of Social Security pass many people by. CNBC recently compiled a list of 10 things you should know about Social Security. The following 10 points are based on best practices recommended by the U.S. Social Security Administration of policy website:
- How much you will get. Benefits are calculated on your earnings during your 35 highest-earning years.
- Benefits may be taxed. If your annual post-retirement income is over $25,000 ($32,000 for couples), the IRS expects a cut. Some states also tax benefits as income.
- Start later for bigger benefits. You can claim benefits as early as 62, but if you wait until 65, you will get higher benefits. Waiting even a single year beyond 62 will increase what you get.
- Waiting past 65. If you can delay claiming benefits until after 65, you will get even more money, up to 8% more annually.
- There’s a benefit ceiling. No matter how long you wait, the maximum monthly payment is currently $2,513 per month.
- You can receive Social Security and unemployment benefits together. Unemployment insurance payments don’t affect your social security benefits, but the reverse might not be true, depending where you live.
- You can receive benefits while living abroad. U.S. citizens are entitled to benefits regardless of where they reside.
- Military Service is covered. Any income earned while a member of the military is included in benefit calculations, including special earnings for training or active duty.
- Marriage has benefits. You can collect half of your spouse’s benefits, if higher than yours, even if you wouldn’t qualify for that level based on your own lifetime earnings.
- Your Social Security Number Says Something. The first three numbers are based on geography, with higher numbers going to people in western states and lower numbers for those back East.
For more detailed explanations, see CNBC’s full list by clicking here.