Do you plan to retire someday? Then you should really understand how Social Security works—not Social Security Disability, which we talk about a lot in this space, but the regular old Social Security for retired people. Turns out, there’s more to it than just retiring and then getting paid. You have to do the right things at the right times, or you might only receive a fraction of the amount you’re expecting.
Here’s a helpful quiz from MassMutual, and insurance and investment company, about the basics of Social Security. After you answer each question, the quiz tells you how many people get that one right—not lots. People are not doing really well on this quiz. This means one of two things. Either people who take Social Security quizzes are less informed than most (I know, this can’t be true! I mean, I just did it…and you just did it…nah. Clearly taking online quizzes is a mark of genius.) or, most people don’t know as much as they think they do about Social Security. This is pretty likely, because even regular old retire-and-get-paid Social Security is a little more confusing than we’d all like to think.
So go take the quiz. I’ll wait.
Back? How’d it go? Yeah, turns out it’s more confusing than we all thought.
Social Security Can Be Surprisingly Confusing
Where are we all getting turned around here?
1) Retirement age. It’s 67. This is confusing because Medicare kicks in at age 65, and so that’s what we think of. But Medicare and Social Security are separate. So, you pay a penalty, as in receive a smaller monthly benefit check, if you start collecting Social Security early. If you wait a few years, you can get more money in your check, up to age 70. There’s nothing extra to gain by waiting past age 70. Here’s a newsletter from SSA about how this works.
2) Spouses. Your Social Security is for you, while you’re retired. So it goes away when you die. Your spouse will not continue to receive your Social Security checks after you pass away. Your spouse may have their own Social Security benefits, which will continue throughout their life. If your spouse worked a lot, they may have earned their own Social Security benefits. If your spouse didn’t work much and spent a lot of years taking care of family members or doing other unpaid work, they may qualify for a spousal benefit on your record, up to half of your benefit. SSA has a helpful explanation of how all this works too.
3) Citizenship. It’s not required. If you’re a legal permanent resident in the US or you’re here on certain types of work visas, you too can collect Social Security. Here’s some more information.
4) Minor children. If you retire and you still have minor children at home, they may be entitled to receive Social Security benefits on your work record until they reach a certain age. Here’s more information.
5) Ex-spouses. Depending on how long you were married and if your ex has not remarried, your ex-spouse may be entitled to Social Security benefits on your record, if they haven’t worked a lot on their own record, even if you haven’t retired yet. This won’t affect your own benefit. Here’s some more information.
Set Up Your Social Security Account Online
What should you do now? Check, or more importantly, set up, your online account with SSA. You can keep track of your work records and get errors fixed, help protect your identity, and check back regularly to have a clear picture of your retirement planning. Errors in people’s work records are very common, so being able to check this and get problems fixed is important. Start here, and stay on top of your own retirement.