Understanding Social Security: A Guide to Retirement Benefits
Published March 1, 2025

THE ONE MINUTE TAKEAWAY

Understanding Social Security is essential for making informed retirement decisions. This webinar covers key topics such as eligibility, benefit calculations, claiming strategies, and how Social Security fits into a broader retirement plan. Watch the full session to learn how to maximize your benefits and secure your financial future.

Planning for retirement requires a solid understanding of Social Security benefits and how they fit into your overall financial strategy. In our webinar, “Social Security Basics,” we break down the key components of the Social Security program, eligibility requirements, and strategies for maximizing your benefits. Below is a summary of the main takeaways. Be sure to watch the full webinar for a detailed explanation and expert guidance.

What Is Social Security and How Does It Work?

Social Security is a federal program designed to provide financial support to retirees, disabled individuals, and survivors of deceased workers. The benefits are funded through payroll taxes collected under the Federal Insurance Contributions Act (FICA). Your lifetime earnings and the age at which you claim benefits impact the amount you receive in retirement.

Eligibility and Benefit Calculation

  • To qualify for Social Security retirement benefits, you must accumulate at least 40 work credits (typically earned over ten years of work).

  • Your Primary Insurance Amount (PIA) is based on your highest 35 years of earnings, adjusted for inflation.

  • The age at which you start collecting benefits significantly affects the monthly amount you receive.

When Should You Start Collecting Benefits?

One of the biggest decisions retirees face is when to start collecting Social Security. Here are the key age milestones to consider:

  • Early Retirement (Age 62): You can begin collecting benefits as early as 62, but your monthly payment will be permanently reduced.

  • Full Retirement Age (FRA): Depending on your birth year, FRA ranges from 66 to 67. Claiming at this age ensures you receive 100% of your earned benefit.

  • Delayed Retirement (Up to Age 70): Each year you delay collecting beyond FRA, your benefit increases by approximately 8% until age 70.

Spousal and Survivor Benefits

  • Spousal Benefits: A spouse may be eligible to receive up to 50% of the higher-earning spouse’s benefit if claimed at FRA.

  • Survivor Benefits: Widows and widowers can receive benefits based on the deceased spouse’s earnings record, often starting as early as age 60 (or 50 if disabled).

How Social Security Fits Into Your Retirement Plan

While Social Security is a valuable income source, it was never intended to fully replace your pre-retirement earnings. Most retirees will need additional savings through employer-sponsored retirement plans, IRAs, or personal investments.

Key Takeaways and Next Steps

  • Know your Full Retirement Age (FRA) and how your claiming decision impacts your lifetime benefits.

  • Consider delaying benefits if possible to maximize your monthly payout.

  • Explore spousal and survivor benefits to optimize household income.

  • Factor in additional retirement savings to supplement Social Security.

Understanding Social Security can help you make informed decisions and maximize your retirement income.

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