New to SSA


Living on a fixed income like Social Security has its pros and cons, like every other thing in our lives. Social Security pays out $90 billion a month to more than 64 million retirees, people with disabilities and their family members. It's wildly popular, supported by more than 90 percent of U.S. adults, and it's critical to older Americans’ financial health.  Given Social Security's importance, concerns about it's current and future state are understandable. Some of those concerns, and the many changes to the program in its 85-year history, have given rise to many questions about how it's funding, and how it works:

#1:  Where does the money come from?

Payroll taxes from U.S. workers and their employers provide most of the money for Social Security benefit programs. About 80 cents of each dollar you pay in Social Security taxes goes to the old-age insurance fund, the rest to disability. In 2019, those taxes - called FICA for people with wage-earning jobs and SECA for the self-employed - brought in nearly $945 billion.

#2:  Is Social Security going Broke?

As long as workers and employers pay payroll taxes, Social Security will not run out of money. It's a pay-as-you-go system: Revenue coming in from FICA (Federal Insurance Contributions Act) and SECA (Self-Employed Contributions Act) taxes largely cover the benefits going out. Social Security does face funding challenges. For decades it collected more than it paid out, building a surplus of $2.9 trillion by the end of 2019. But the system is starting to pay out more than it takes in, largely because the retiree population is growing faster than the working population, and living longer. But, without changes in how Social Security is financed, the surplus can run dry into 2035.  It will still collect tax revenue and pay benefits. But it will only have enough to pay 79% of scheduled benefits, according to the latest estimate. To avoid that outcome, Congress would need to take steps to shore up Social Security's finances, as it did in 1983.

#3:  The Congress does not pay into the fund!

A common complaint about Social Security is that members of Congress don't bother fixing the program because it doesn't cover them. Actually, it does. Members of Congress came under the Social Security umbrella in 1984, along with the rest of the federal workforce, as part of the sweeping changes to the program enacted the previous year. Before that, senators and representatives did not pay into Social Security and were instead fully covered by a pension plan called the Civil Service Retirement System (CSRS). Those in office on Jan. 1, 1984, were allowed to remain in CSRS, but only in conjunction with Social Security. (If you're curious, two senators and five House members remain from those days.) Those elected since are covered by Social Security as well as a pension program that replaced CSRS. Either way, members of Congress pay into Social Security just like most American workers.

#4:  Undocumented Immigrants collect Social Security.

So many citizens have blamed problems with Social Security's financial health on undocumented immigrants draining the system's resources. It's a popular complaint, but a false one. Noncitizens who live and work in the U.S. legally can qualify for Social Security under the same terms as native-born and naturalized Americans, but undocumented people are not allowed to claim benefits. There is evidence that undocumented workers actually improve Social Security's bottom line. Some do obtain Social Security numbers under false pretenses, and payroll taxes are withheld from their wages even though they are not eligible to later collect benefits. A report by Social Security actuaries said that undocumented immigrants made a net contribution of around $12 billion to the program in 2010 and have not collected one penny.

#5:  You paid Social Security Taxes years ago & have not paid since. Can you collect?

You must have worked and paid Social Security taxes for at least 10 years to qualify for retirement benefits. That’s how long it takes to compile the required 40 Social Security credits. You can earn up to four credits per calendar year, based on your Social Security - taxed earnings. (This year you get one credit for each $1,410 in earnings and the maximum of four if you make at least $5,640.) The 10 years need not be consecutive.

#6: You started collecting and a Great Job just landed in your lap.

Can you stop taking your Social Security Benefit and go back to work?  YES. . . Timing is key. Social Security will let you withdraw your original application for retirement benefits only once, and it must be within 12 months of the date you first claimed your benefits.  Therefore, if you are in your first year of collecting retirement benefits, you can apply to Social Security for a “withdrawal of benefits.”  Because of this new well-paying job you’re now in a position to wait until you are older and can collect a larger benefit.  If you have been receiving payments for more than a year you can only apply for a "suspension of benefits."  During a suspension, you accrue delayed retirement credits, which will increase your monthly retirement benefit when you start collecting again. You can ask Social Security to reinstate your benefits at any time until you turn 70, at which point the agency will do it for you. However, if you qualify and opt for a withdrawal, Social Security will treat it as if you never applied for benefits in the first place, and you will have to repay every dollar you’ve received. That includes:

  • Your monthly retirement payments.
  • Any family benefits collected by your spouse or children, who must consent in writing to the withdrawal.
  • Any money withheld from your payments by Social Security — for example, to pay your Medicare premium.

If you change your mind about a withdrawal of benefits, you have 60 days from the date Social Security approves your withdrawal to cancel the request. The SSA-521 includes a question asking if you “want to keep Medicare benefits.” You can if you want to. If you don’t, there are numerous implications both for any health care benefits you’ve already received and for reenrollment in Medicare at a later date. You can review these in the Social Security publication “If You Change Your Mind.”

#7:  Can I Work and Still collect Social Security?

YES. . . but your income may reduce the amount of your benefit if you start receiving Social Security before you reach full retirement age (FRA) the age when you qualify to collect 100 percent of the maximum benefit allowed from your earnings history,  So. . if you are 64, collecting a monthly retirement benefit of $1,200 and working a part-time job that pays $25,000 a year. In 2021, you lose $1 in benefits for every $2 earned over $18,960. Therefore, wages of $25,000 a year=$6,040 over the limit.  Social Security will deduct $3,020 in benefits from you as long as you continue to earn the overage in wages. When you do reach your FRA (66 years and 6 months, for those born in 1957), the earnings limit is $48,600, with $1 in benefits withheld for every $3 earned over the limit. The earnings limits are adjusted annually for national wage trends. If you are still working past your FRA, there is no earnings limit. Be sure to read the Social Security pamphlet “How Work Affects Your Benefits” for all the details.

#8:  Can my Ex Husband/Wife collect from my Social Security?

If you are divorced, your former spouse may be eligible to collect Social Security benefits on your earnings record (and vice versa). As with benefits for a current spouse, these can be up to 50% of the benefit amount you are entitled to at full retirement age. But those ex-spouse (or spouse) benefits do NOT reduce your Social Security. They are distinct payments and have no effect on what you receive each month, even if both a current and a former spouse (or multiple former spouses) are collecting them. You get the benefit you're entitled to, based on your earnings history and the age when you file for Social Security.

#9:  Will my Spouse's income affect my Social Security?

NO. . . Each spouse can claim their own retirement benefit based solely on their individual earnings history. You can both collect your full amounts at the same time.  However, your spouse’s earnings could affect the overall amount you get from Social Security, if you receive spousal benefits. These are Social Security payments you can collect on the basis of your husband’s or wife’s earnings record. For instance - you and your mate both claimed Social Security at full retirement age. Under Social Security’s “deemed filing” rule, most married people are required to file simultaneously for retirement and spousal benefits: When you claim one, you are deemed to be claiming the other. Social Security will pay you the bigger of the two amounts (never both combined). Read more on Couples SSA Filings Here!

#10:  Will the Retirement Age go up soon?

From what I've read. The answer appears to be YES. . . Full retirement age, or FRA, is currently 66. If you were born in 1954, you reach FRA in 2020. Over the next several years it will rise incrementally, and could settle at 67 for people born in 1960 and thereafter.

Everyone has different Financial needs.
Know before You Sign on the dotted line.

Be sure to contact SSA at 1-800-772-1213 or get Updated info at!

** Thanks for Visiting. This post is ForYourEdutainment (FYE).  I am not a Financial Counselor nor an Accountant - Just a woman on this life journey.  If you like it, please leave a comment & Share, Share, Share.  Don’t forget to follow me on Bloglovin  for new post updates, and on Pinterest**

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