Social Security Tips for Retirees

Social Security is a payment you receive from the federal government because you have worked for at least 10 years and contributed to the Social Security system. Even if you never worked (or didn't work enough to get benefits based on your own earnings), you may still be entitled to benefits because your spouse or former spouse worked. There are many ins and outs to Social Security. Here you'll get an overview of Social Security so that you can dovetail it into your other retirement income.
If you worked your whole adult life, there's no question that you're eligible for benefits. In fact, you're eligible if you worked for at least 10 years earning 40 quarters of credit. You're fully insured for life. You're a covered worker.

Your benefits are based on your earnings as an employee or as a self-employed person. So you're entitled to get benefits. But how much will that be? If you begin to collect at age 65, you get your PIA (your primary insurance amount, which is your full benefits). (Baby boomers beware: After the year 2000, the normal retirement age is going up gradually to 66 and, after 2017, gradually to 67.) If you begin to collect early (between age 62 and 65), you receive a percentage of your PIA.

Figuring out exactly what your benefits could be is very complicated. Luckily, the Social Security Administration makes it easy; it does it for you.

If you've never worked (or your earnings are less than the benefit you collect because of your spouse or former spouse), but your spouse or former spouse is eligible for benefits, you too may be entitled to benefits. The Social Security Administration will figure benefits you may be entitled to because of your own earnings and those you may be entitled to because of your marital status. Whichever way it works out, you'll get the higher benefits. Eligibility to benefits is based on your spouse's or former spouse's. Every year, Social Security recipients get a raise. Their monthly benefit is increased for a cost-of-living adjustment. Don't get carried away and spend your raise all in one place. The increases have been rather modest, especially in recent years. So, the average monthly benefit amount for all retired workers increased from $749 in 1997 to $765 in 1998.

Benefits don't begin automatically; you must apply for them. But the application process is simple. You don't have to fill out any lengthy forms. You just give certain information to a Social Security claims representative over the phone or at a local Social Security office. Then you may be required to submit proof of eligibility (copies of a birth certificate, marriage license, decree of divorce, or death certificate of a spouse). To find your local office, just call the central Social Security Administration number at 800-772-1213.

If you're not already collecting benefits, you can file in the month when you become eligible. Even better, file within the three months before your birthday so that benefits will begin promptly. You're not penalized if you file late.