Long-term care insurance (LTC) article
Ok, now you're ready to retire. . .but, what Social Security benefits are you entitled to? For most people, Social Security provides only a base level of income. The maximum annual benefit for a person who retires in 2002 at the age of 65 is $19,920; the benefit for a non-working spouse is only 50% of that amount. These benefits will most likely fall short of meeting all of your retirement needs. As you develop a retirement plan that includes additional sources of income, such as benefits from employer-sponsored plans and personal savings, it is important to understand what you can expect from Social Security.
The most important factor in determining how much you will receive is the amount you (and your spouse) have contributed to the Social Security system during your working years. The benefits you receive are based on the income you have earned, subject to a maximum amount. You can find out how much you can expect to receive by contacting the Social Security Administration (SSA) or visiting their website at www.ssa.gov. Here's a brief overview of the circumstances that determine your eligibility to receive Social Security benefits.
Your Own Benefits.
If you've made your own contributions to the Social Security system over the years, you can start receiving partial benefits at age 62 or full benefits when you reach full retirement age (subject to certain limitations). Your benefit will be based on your primary insurance amount (PIA), which is determined by the amount and duration of your contributions to the system. Social Security's full retirement age is age 65 for participants born prior to 1938; for participants born from 1938 through 1959, the age for receiving full benefits rises incrementally until, for those born in 1960 and later, the full retirement age is 67.
Spouse or Divorced Spouse.
You may be eligible for receiving partial benefits based on your spouse's contributions to the Social Security system. A spouse, or divorced spouse, of a participant worker may receive benefits that are equal to half of the benefits of the working spouse (provided the working spouse is alive) if certain requirements are met. Benefits are based on your spouse's age 65 Social Security benefit regardless of when benefits are taken. If you are eligible, you will receive a reduced benefit if it's taken after age 61 and before age 65. Generally, divorced spouses must have been married to the participant spouse for at least ten years to be entitled to benefits. In addition, benefits cease for a divorced spouse upon remarriage.
Widow or Widower.
If you are a widow or widower, you are entitled to a benefit that equals your deceased working spouse's primary insurance amount when you reach full retirement age. A reduced benefit will be received if you start receiving benefits before full retirement age.
Surviving Divorced Spouse.
If you are divorced, and your former spouse dies, you may also be entitled to the same benefits as a widow or widower as long as you were married to the deceased working spouse for at least ten years. In addition, if you remarry after you become eligible to receive benefits (including remarriage to someone who is also entitled to receive benefits as a surviving spouse), you will not lose the ability to receive benefits.
For many individuals, Social Security benefits play an integral role in providing for a secure retirement. With a thorough assessment of all of your income resources, you can best plan for the retirement you desire.
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