Social Security is a contributory program that allows senior citizens and others who are no longer able to work to receive vital funds for their living expenses. It also offers disability-based payments (SSDI) and Supplemental Security Income (SSI) for those facing significant financial challenges.
In the Depression-era 1930s, the US was the only industrial country without a national safety net. Thanks to FDR’s Social Security Act of 1935 and its subsequent amendments, people who have worked and contributed funds via FICA taxes are able to get retirement payments starting at age 62.
But what if you’re ready to retire earlier? What if you’ve been injured and need to claim disability benefits now? What if you’re still going strong and don’t plan on stopping any time soon?
Many people are counting on social security payments to supplement their retirement nest egg, but how much will you actually receive?
An experienced financial advisor will help you answer your questions, evaluate your possible Social Security or disability payments, and build a plan that will enable you to enjoy life instead of stressing about money. Let’s dive deeper into this program and what you can expect.
A Social Security Review
Now that we’re living longer than ever before, it’s crucial to start planning for retirement as early as possible. The sooner you start saving, the more funds you’ll have available when you retire, whenever you choose to do so.
The Social Security Administration has a chart that can give you an idea of how much you’ll receive, but as with most government attempts to be helpful, it’s actually mostly confusing.
Everything depends on your individual situation, and factors like whether you’re married, how long you’ve been working and paying taxes in the US, and how old you are when you retire.
Not everyone looks forward to quitting their job and playing golf, so if you hold off from claiming SSA benefits until after age 70, you’ll receive larger payments. It’s also crucial to have an estate plan in place, as your spouse and children should receive funds from this program as well.
Working with a skilled and compassionate financial planner can demystify these numbers and devise a strategy that will ensure your comfort and lifestyle as you get older.
If you suffer an accident or become chronically ill or disabled and can no longer work, you can apply for Social Security Disability Insurance. The amount you receive is calculated according to your qualified earnings before you were disabled.
An average monthly disability payment is around $1,200, which is just barely above the poverty level.
The SSA has very strict requirements for qualifying for this program — according to the law, you must be “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or is expected to last for a continuous period of at least 12 months.”
You also have to present a substantial amount of paperwork during the application process, including:
- Contact information for all of your medical providers
- Documentation about tests, prescription medications, treatments, and dates
- Tax returns for the last two years
- Documentation of your last 15 years of employment
- Personal identification for yourself, your spouse, and your children
- Banking and financial information
Collecting and submitting this massive amount of info can be overwhelming, especially when you’re also dealing with a debilitating injury or progressive disease.
The department that administers SSDI will regularly evaluate your case to determine if you are still eligible or if you’re able to perform some kind of work. The evaluation process may include a medical exam and interviews with your doctor.
That’s why investing in life and disability insurance is a smart financial move. You should always try to be prepared for the unexpected, and long-term disability insurance will give you a valuable return for minimum premiums.
Studies show that one in four people will experience a life-changing disability before they retire.
Don’t leave your family in a tenuous situation if something dreadful happens. You can protect your loved ones and your hard-earned assets with the proper insurance and the assistance of a qualified financial advisor.
The Best Defense
SSA payments are there if you need them, but creating a comprehensive money management, retirement, and estate plan is the number one thing you can do to make sure your wishes are carried out and you and your family can live in comfort.
Financial planning is for everyone, no matter how many assets you currently have.
It’s actually even more crucial for those who aren’t wealthy — but by taking the right steps now, you can reach or even exceed your financial goals.
Ready to learn more? I’m here to help. Reach out today to schedule a complimentary consultation with an expert that has your best interests at heart!