Facts about the Social Security Income after Retired

What are the possible sources of income after retired? Although the situation varies from person to person, there are five main sources:

1) Social Security Income

2) Pension

3) 401 k or 457 plan

4) Traditional IRA or Roth IRA

5) Individual savings or other property

Social Security Income is a new measure designed to ensure that people have basic economic security in retirement during the American recession in the 1930s. After more than 80 years of change, the social security and the policies of the time have changed a lot. The current social security fund requires those who work to pay a percentage of the social security tax to the federal government every year. The social security tax rate has nothing to do with the level of wages. For example, in 2018, the social security tax rate is 12.4%, of which the employer pays half of the employee, 6.2%, the employee pays the other half, 6.2% (i.e. wage x 6.2%).

Those who work in units, enterprises (whether government or private) companies or schools, whose social security tax is deducted directly from the payroll, and which can be concealed in black and white. Self-employed, freelance or small business is a little different. If their income involves cash will not be very accurate, their social security tax may shrink.

Approximate range of social security Income 

The average post-retirement social security payment is equivalent to 40 per cent of pre-retirement salary. However, this is not the case for many people, especially the high wage income. For example, a person who paid twenty-five years of social security tax, was prepared to retire a few years ago only to learn that she might receive less than a quarter of her current salary. It is clear that social security retirement alone cannot sustain the existing standard of living and manner. I have never seen before that I am in what proportion? How much did you pay? How much social security will be received when you retire? Why didn't you find out what's so important? One is the work, family busy, another important reason is a misunderstanding: think that social security, social security, is to ensure that people are old, do not work to maintain a basic life.

What is the general range of social security benefits? For example, retirees who have worked for 35 years in 2018, such as those who retire at age 62, 65, and 70, have a monthly maximum social security of $2,158, $2,589, and $3,698, respectively; In short, the calculation of the amount of social security per person is related to the time and salary of the work.
Amount range so that there are numbers in mind.

In addition, each person is charged federal taxes and Medicare (now about $130 a month). Thus, if the monthly social security contribution is $2,000, the federal tax is 20 percent (many of them state), and the actual monthly income, excluding federal taxes and health insurance, is only about $1,470.

Conditions for receiving social security benefits

The condition for receiving social security is to pay a social security tax of 40 points (credits). It's not hard to get 40 points together, especially for people who work. In 2019, for example, you can earn a point by earning $1,360 and paying taxes. If you earn $5,440 throughout the year, you'll earn 4 points for social security taxes. As a result, it is generally possible to earn the necessary 40 points for social security in 10 years.

The importance of paying the social security tax is not only to receive a certain social income after retirement, but also to health insurance. Generally, unqualified social security, also can not enjoy health insurance (another section).

I remember more than twenty years ago, one of my neighbors was about 60 years old. Her husband is retired from General Motor and has a good pension. They look good in the financial situation. But the old lady often makes clothes with a sewing machine in the garage. I was curious and asked why the old lady still had to work. She said she would earn 40 points in social security. That way she'll have health insurance and some social security. She's not far from handing over 40 points. She later died, and she fell ill for many years and received some basic social security benefits to supplement her life. What's more, she has health insurance, or she won't be able to pay for expensive medical care.

In addition, a friend of a friend who started his own business used to pay less social security tax in various ways, and by the age of 66 his full social security was only $600. There is no pension pension and other savings, so i can't retire and just keep working.

Therefore, each person as far as possible according to their own actual situation, and strive to obtain 40 points, to ensure that to the qualified age when there is the most basic social security, health insurance. It would be terrible if you're 65 or older without health insurance.

When to receive social security Income

At three important ages, i.e. 62, 65-67 years (determined on the date of birth), and 70 years old, you can choose to receive social security. If you are 62 years of age, you can only receive a portion of the amount, or in the case of 65-67 years of age, you can receive the full amount. At these two ages, only about 3% of the annual cost-of-living adjustment (COLA) is received. But at age 70, not only does it get the full amount, but then the cola rate is 8% per year. In one case, the difference between different ages. If you reach full retirement age at age 65-67, the full social security is $1,000, which will increase by 3% a year thereafter. If you take it at age 62 in advance, it's only $750 per month, and it's 3% a year thereafter. However, if you delay taking it until you are 70, it's $1,320 a month, which will increase by 8% a year thereafter.

So many people hesitate to take at 65-67 or 70? Some financial planners recommend the former, while others recommend the latter. Personally, this is entirely determined by his own financial, health and beliefs. It is calculated that if you receive it at age 70, you will not be able to live until the age of 82. My suggestion is to take the full amount at the time of the payment, even if it is not in a hurry at that time, there is interest on deposit. Money in its own hands, no variables.

In addition, how couples arrange when to arrange an mp's kin is also worth studying. This is also determined by the family's financial situation and arrangements. If not in urgent need, the general financial planner recommends that at the age of 65-67 can lead to the full social security of the social security, and social security can be delayed to 70 years old.