Do You Understand Your Social Security Benefits?
It is acknowledged by Social security that there have been increases in wages during the past years. Accordingly, they make adjustments to your previous earnings because of inflation. For example; the salary you are earning now for a particular job is significantly higher than it would have been ten or fifteen years ago.
Questions are sometimes asked why women frequently receive, benefits that are lower than expected. This is generally the result of them not working for several years due to raising children. In the same vein, should you not have thirty five years when an income was not earned, Social Security replaces any missing figures with zeroes.
Controversially, the higher income that you earn later in your working life could be the cause of any previous amounts that are less, not be considered. Theses could include taking time away from earning wages to raise children, help an elderly parent or various other factors. However, their benefits could be added to, by them returning to work whereby their earnings each year would replace the dollar zeroes entered as previous earnings.
In general, providing you have earned the forty quarters of credit needed, it is a relatively easy process to claim Social Security. It is basically deciding at what age you want to receive your checks. The actual amount involved will be determined by the contributions you have made while working and your age when you file for benefits.
For those considering retirement at the age of sixty two, starting your retirement then would create a reduction in benefits by 25%. Comparably, if you wait until you attain the age of seventy, then you will receive an increased benefit of 32%. A significant reminder is that for every year you delay claiming Social security, you would be paid a Delayed Retirement Credit (DRC) which is a bonus of 8%.
For others starting their Social security at the Full Retirement Age (FRA) they would receive one hundred percent of the benefit earned. This sum is calculated on the average of the highest earnings over a thirty five year term.