Millions of baby boomers are set to retire in the next 20 years, and most will rely on Social Security as an important source of retirement income. As they approach retirement, Americans want to understand how Social Security works.
According to the Social Security Administration, more than nine out of ten individuals age 65 and older receive Social Security benefits. But most retirees also rely on other sources of retirement income, as shown on this chart: Source:
Fast Facts & Figures About Social Security, 2014, Social Security Administration
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Understanding Social Security
Over 63 million people today receive some form of Social Security benefits. (Source: Fast Facts & Figures About Social Security, 2014) But Social Security is more than just a retirement program. Its scope has expanded to include other benefits as well, such as disability, family, and survivor's benefits.
When you think of Social Security, you probably think of retirement. However, Social Security can also provide much-needed income to your family members when you die, making their financial lives easier. Your family may be entitled to receive survivor's benefits based on your work record When you die, certain members of your family may be eligible to receive survivor's benefits (based on your earnings record)
Like most people, you probably don't expect to become disabled. However, according to the Social Security Administration (SSA), studies show that just over 1 in 4 of today's 20 year-olds will become disabled before reaching age 67. (Source: SSA Publication 05-10029, May 2014) That's why it's important to understand what disability benefits you may be entitled to under Social Security.
Every fall, the Social Security Administration (SSA) and the Centers for Medicare & Medicaid Services (CMS) announce limits and costs for the following year. This year the SSA has announced that beneficiaries will receive a 1.7% cost-of-living adjustment (COLA), and CMS has announced that the standard monthly Medicare Part B premium will remain the same for 2015.
Social Security was originally intended to provide older Americans with continuing income after retirement. Today, though the scope of Social Security has been widened to include survivor's, disability, and other benefits, retirement benefits are still the cornerstone of the program.