16 things to know before you begin taking Social Security benefits

What you don’t know about Social Security can cost you.

 Social Security may very well be the most important social program in this country: It is tasked with providing a financial foundation for tens of millions of seniors. Yet many retirees, and probably a good portion of working Americans, don’t truly understand how the program works — and that could cost them valuable income in retirement.

There are a number of things that working Americans and pre-retirees should fully understand before they take the plunge and enroll for Social Security benefits. Here are 16 of them.

  1. The data suggests you’ll be at least partially reliant on Social Security

Chances are, you’re going to need Social Security to some degree in order to meet your monthly expenses during retirement. Current data from the Social Security Administration (SSA) shows that 61% of seniors rely on their monthly check to account for at least half of their income. Meanwhile, a separate poll from Gallup found that 79% of non-retirees expect Social Security to be a “major” or “minor” source of retirement income.

  1. Social Security was never meant to be retirement plan A

What Social Security’s founders never designed the program for was to be a sole source of income during retirement. Social Security, per the SSA, was designed to cover about 40% of the average American’s salary in retirement. For the more well-to-do this figure could be a bit lower, and for lower-income folks it might even be a bit higher than 50%. However, the key point here is that Social Security isn’t a program you should rely on to fund the bulk of your retirement income.

  1. Social Security isn’t an entitlement

Social Security also isn’t an entitlement. You have to earn retirement benefits by working. If you earn 40 lifetime work credits, you’ll qualify for Social Security benefits. A maximum of four work credits can be earned annually, with every $1,300 in earned income (as of 2017) counting as one earned work credit. In other words, 10 years of part-time work should allow you to earn enough work credits to collect a benefits check when you retire.

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Shared from USAToday.com