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The Scoop: Social Security

by Lisa Jennings July 10, 2015, 10:38 am 1.4k Views

Let’s discuss a few of the questions that tripped people up.

Retirement Age: About 70% taking the quiz thought the full retirement age is 65 (meaning when you receive full Social Security benefits). That was changed more than 30 years ago. It really depends on when you were born, but if you were born between 1943 and 1954 it is 66, for those born after 1960 the age is 67. You can start to receive benefits as early as 62, but those benefits will be greatly reduced for the rest of your life.
Working while receiving Social Security: More than half (55%) wrongly thought they could continue to work with no impact on the payments they receive, regardless of the age they retired. You can work and receive Social Security. If, however, you are under the full retirement age some or all of the payments will be withheld if you make over a certain amount. You will lose $1 of benefits for every $2 you make if you earn over $15,720 in 2015. But you do get the withheld payments back once you reach full retirement age.
Benefits if little or no earnings history: Many spouses choose to stay at home with children instead of working. They may be eligible for a spousal benefit, receiving as much as 50% of the higher earning spouses full retirement age benefit. Again, it depends on the age you are when you begin to receive Social Security.
Ex-Spouse Benefit: About half did not know they could collect Social Security based on their ex-spouse’s earnings. There are criteria you have to meet to get these benefits, such as having been married for at least 10 years and being currently unmarried, among others.
U.S. Citizen to collect Social Security: False. Three-quarters of people got this one wrong. Legal resident aliens who have permission to work in the U.S. and pay into Social Security can receive benefits.

Whether you are of retirement age, close to it, or it is many years away, you should know how the system works. You may even have a parent or grandparent who needs guidance. Brush up on Social Security and prepare yourself for the future.

Sources: CNN Money Most Americans Are Clueless About Social Security; Kiplinger Three Social Security Facts That Are Key to Bigger Benefits; Yahoo Finance Take the Social Security quiz that 72% of Americans failed

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Written by Lisa Jennings

Lisa has been helping people create budgets and get their bank accounts in order for over 15 years. As a conference speaker and presenter at financial events, Lisa enjoys helping people get their finances under control. You can reach her at lisa@bankscoop.com.