Social Security & Government Retirement Benefits
Social security system has been initialized by the government to utilize the tax money for providing benefits to people such as retired seniors, war veterans and disabled persons, survivors of workers who have died, destitute and dependants of beneficiaries. Taxes collected under the social security system include taxes on earnings and Medicare taxes. |
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Out of every dollar collected, 85 cents are deposited into social security trust fund while the remaining 15 cents are utilized to pay the benefits to disabled people and their families. Social security trust fund pays benefits to retirees, their dependants and spouses of workers who have died.
There are multiple options of receiving retirement benefits under the social security system. If a person retires after completion of full retirement age, he is entitled to receive complete retirement benefits. Retirement age is determined based on the year of birth. Retirees can receive permanently reduced retirement benefits if they opt for early retirement. One can even delay receiving benefits by either opting to work and get full retirement benefits or else defer receiving the retirement benefits until the age of 70 and collect higher benefits after that. Retirement benefits increase by a certain percentage for each month of deferment. This percentage increase is based on the year of birth of the individual.
In order to be eligible for receiving social security retirement benefits, an individual must have 40 credit points, which is equal to 10 years of service. These credit points are awarded when a person works and pays social security taxes. Retirement benefits are determined based on the average earnings of an individual during his entire career.
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