10 Facts About Social Security You Might Not Know

Generally speaking, most people are at least somewhat familiar with Social Security. Since FDR signed the Social Security Act of 1935 as part of his New Deal millions of people have benefitted from the social insurance program receiving retirement, disability, and survivors benefits. YRA would like to take this opportunity to tell our readers a little more about some less known facts about Social Security.

If you receive retirement benefits before you reach age 65, you will be automatically enrolled in Medicare.

Medicare Part A (hospital insurance) covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery, home health care. Medicare Part B (medical insurance) helps to cover services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventative services. When you’re already receiving retirement benefits, you’re automatically signed up for Medicare Parts A and B (when you turn age 65). You can then decline Part B if you choose, since it requires a monthly premium. If you are not receiving retirement benefits as you approach age 65, you should contact Social Security three months before your 65th birthday to sign up for Medicare Part A and B. Even if you don’t want to retire at 65, you should still sign up for Medicare only.

Social Security can pay benefits to parents.

When a worker dies, benefits can be paid to surviving spouses and children. Under certain circumstances, benefits can also be paid to a surviving parent.

Social Security pays benefits to children.

Social Security pays benefits to unmarried children whose parents are deceased, disabled, or retired.

If a spouse draws reduced retirement benefits before starting spouse’s benefits (meaning if his or her spouse is younger), the spouse will not receive 50 percent of the worker’s benefit amount.

Your full spouse’s benefit could be up to 50 percent of your spouse’s full retirement age amount if you are full retirement age when you take it. If you qualify for your own retirement benefit and a spouse’s benefit, we always pay your own benefit first. (For example, you are eligible for $300 from your own retirement and $100 as a spouse for a total of $4000.) The reduction rates for retirement and spouses benefits are different. If your spouse is younger, you cannot receive benefits unless he or she is receiving benefits (except for divorced spouses). If you took your reduced retirement first while waiting for your spouse to reach retirement age (when you add spouse’s benefits later), your own retirement portion remains reduced which causes the total retirement and spouses benefit together to total less than 50 percent of the worker’s amount.

Social Security benefits are paid in the month following the month for which they are due.

As long as you meet all the requirements for eligibility, the benefit check you receive is payment for the prior month’s benefits.

Survivors benefits can replace a percentage of the worker’s earnings for family members.

The eligible family members of a retired or disabled beneficiary may receive a monthly payment of up to 50 percent of beneficiary’s amount. Survivors benefits usually range from about 75 percent to 100 percent of the deceased worker’s amount.

You don’t pay benefits for the month of death.

Social Security uses the same throughout-the-month rule to determine eligibility for the benefit that is due for the month of death. To be eligible for the payment you must live through the full month.

Widows’ and widowers’ payments can continue if remarriage occurs after age 60.

Remarriage ends survivor’s benefits when it occurs before age 60, but benefits can continue for marriages after age 60.

Work credits determine eligibility for benefits, but your lifetime earnings are used to calculate your monthly benefit amount.

Retired workers need 40 work credits to be eligible for benefits, but your work credits alone do not determine how much you will receive each month. When calculating retirement benefit, it’s best to use the average of your highest 35 years of earnings.

If your spouse’s retirement benefit is higher than your retirement benefit, and he or she chooses to take reduced benefits and dies first, your survivor benefit will be reduced, but may be higher than what your spouse received.

If the deceased worker started receiving reduced retirement benefits before their full retirement age, a special rule called the retirement insurance benefit limit may apply to the surviving spouse. The retirement insurance benefit limit is the maximum survivor benefit you may receive. Generally, the limit is the higher of:

• The reduced monthly retirement benefit to which the deceased spouse would have been entitled if they had lived, or
• 82.5 percent of the unreduced deceased spouse’s monthly benefit if they had started receiving benefits at their full retirement age (rather than choosing to receive a reduced retirement benefit early).

Want to know even more about Social Security? Join our email list and receive a free download of Your Retirement Advisor’s Social Security guide or check out our on-demand webinar How to Be Social Security Savvy to find out how you can maximize your Social Security benefits.

Securities and advisory services offered through cetera Advisors LLC, member FINRA, SIPC. Cetera is under separate ownership from any other named entity.