Social Security Benefits

Via the Social Security Administration (SSA), Americans expect to receive Social Security benefits with they retire. You can also get Social Security benefits if you can prove you can no longer work from a disability, and in some cases, the death of a spouse. The official term isn’t so attractive, so you never hear it: the Old-Age, Survivors, and Disability Insurance (OASDI). Yeah.

So how do you get some of these benefits? Well, if you’re like most people, you’ll have to wait for retirement...age 62 right now is when you can start collecting Social Security benefits. Or you can wait til you’re 70, and you’ll get 8% more money per year.

As long as you’re paying into the system via taxes for 40 credits (payroll taxes: the ones that are withheld from you paycheck), you’ll get some retirement income back later. The more you put in, the more you’ll get paid later. If you’re working a normal job, you’ll get four credits a year (so, ten years). For spouses who aren't working, they can get benefits from their spouse’s work record. Well, that’s the promise for now, anyway.

This system was set up in 1935 with the idea that the larger working class is paying into the Social Security treasure trove that covers a smaller group of people retiring (and orphans and the disabled). But today, people have slowed having kids. Plus, after WWII, a lot of people had a lot of kids (i.e. the Baby Boomers). Well, now that huge group of post-war babies are headed into retirement, and the working class to support them is...kinda small. So Social Security is running out of money, with more money going out than is coming in.

And the problem doesn’t look any better in the future, since the U.S. population isn’t getting bigger at the same rate it was before. This is no small problem; the SSA is about 15% of government spending, and that number is set to double in the near future.

And you thought you had money management problems.