5 US Social Security Secrets to Avoid Poverty

Millions of older adults in the United States depend on Social Security, a critical source of income in retirement. If you're about to claim benefits or just want to plan for the future, you'll want to know five important rules about Social Security.

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1. Your benefits are calculated on the basis of income for 35 years of operation

The pension amount is determined by your work history - your 35 years of highest earnings will be taken into account - so the more you earn at the peak of your career, the more you'll get as you get older, he says Fool.com. But if you have not worked for full 35 years (for example, you have been working with children or taking care of a sick family member), you shouldn’t retire for a while to increase financial advantages.

Imagine a situation: you officially worked only 32 of the year. This means that in the table for calculating the pension you will have three zeros. But if you replace these zeros of dollars with your actual salary, the total amount of the pension will increase. The same is true if you now earn much more than before. Replacing a three-year salary of 20 000 US dollars with a three-year income of 120 000 dollars can increase the total amount of your pension, resulting in a higher income.

2. The earliest age to qualify for retirement is 62 of the year.

The eight-year window for claiming Social Security benefits opens at age 62. This is the most popular age for benefit claims, although it has one major drawback: reduced monthly benefits. Social Security benefits are calculated based on your earnings record. But you are entitled to receive your full monthly benefit when you reach what's called full retirement age, or FRA. The FRA depends on your year of birth, as follows:

Thus, applying for a pension in 62 will result in the maximum possible reduction of the amount. For example, if by year of birth you are supposed to retire in 67 years, by doing this in 62 years, you will receive 30% less (!).

3. You will not win anything if you postpone receiving a pension until 70 years

Yes, early retirement will certainly affect the amount to a lesser extent, but late retirement cannot be said to mean that you will be able to win something. The monthly income incentive ends at 70. You'll lose 30% if you retire early, and gain 32% if your age is 66 and you retire at 70. But that's it.

4. You can receive social benefits even if you did not work

Because social security benefits are based on income, you can assume that people who have never worked will not receive anything. But in fact, social security is designed for the spouses of those who have worked all their lives and contributed money to the system. Therefore, as soon as your spouse applies for his allowance, you can receive up to 50% of his monthly payments.

In addition, you can receive spousal benefits even if you have your own service. Social Security will pay either your monthly pension or half of your spouse's pension, whichever is greater. This means that if you are entitled to $750 per month in your own pension, but your spouse receives $1800 per month, you will get $900.

5. Social Security was not created as a single source of income.

Although a pension can be the main source of income for the elderly, it has never been intended for the survival of a person alone. Most pensioners need 70-80% of their pre-retirement income to pay bills, while pension assistance will replace only 40% of the average income of a working person. This means that pension payments will not replace personal savings or additional sources of income.

The more you know about social security, the more chances you have to retire at the most appropriate age for this and make the most of your advantages. Even if there are several decades left until retirement, having studied the question in advance, you will find yourself in the most advantageous position.

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