However, retirement benefits are the most widely used. Figures from the SSA show that the average monthly benefit for retired workers is $1,621.27. Spouses of retired workers usually get $836.19 on average, while children of retired workers typically get $786.70.
Awards to retired workers have increased considerably over the past four decades, but proportionately much less than awards to disabled workers. The annualized rate of increase over the period from 1971 to 2011 is 1.6% for retired workers and 2.2% for disabled workers. The annual number of awards to retired workers rose from 1.4 million in 1971 to 2.6 million in 2011, while for disabled workers it increased from 416,000 in 1971 to 1.0 million in 2011.
The percentage of persons aged 20 or older who are insured for benefits has remained the same for the past several years. To be fully insured, a worker must have at least one work credit (quarter of coverage) for each year elapsed after age 21 (but no earlier than 1950) and before the year in which he or she attains age 62, becomes disabled, or dies. The maximum number of work credits needed to be fully insured is 40. An individual is said to be permanently insured if he or she has earned 40 work credits. To be insured for disability, the worker must be fully insured and have at least 20 work credits during the last 40 calendar quarters. (Requirements for disability-insured status are somewhat different for persons younger than age 31.) Disability benefits are available up to full retirement age ( FRA ).
Eighty-five percent of SSI recipients received payments because of disability or blindness in 2011
In 2010, 88% of married couples and 85% of nonmarried persons aged 65 or older received Social Security benefits. Social Security was the major source of income (providing at least 50% of total income) for 53% of aged beneficiary couples and 74% of aged nonmarried beneficiaries. It was 90% or more of income for 23% of aged beneficiary couples and 46% of aged nonmarried beneficiaries. Total income excludes withdrawals from savings and nonannuitized IRA s or 401 (k) plans; it also excludes in-kind support, such as food stamps and housing and energy assistance.
a. Insured for disability excludes those over full retirement age.
SSA paid benefits to about 60.4 million people in 2011
About 83% of earnings in covered employment were taxable in 2011, compared with 92% in 1937. Taxable earnings as a percentage of earnings in covered employment and percentage of workers with maximum taxable earnings, selected years. SOURCE: Social Security Administration, Office of the Chief Actuary.
Delayed retirement increases the benefit amount (by a certain percentage depending on a person's date of birth) if the worker delays retirement beyond FRA. Benefit increases stop accumulating when the worker reaches age 70, even if he or she continues to delay taking benefits. Delayed retirement increases begin to apply to benefits in January of the year following the year the worker reaches FRA. The credit given for delayed retirement will gradually reach 8 percent per year (16/24 of 1 percent monthly) for those born 1943 and later. See Table 2.A20 for percentage increases.
Beneficiaries born on January 1 are deemed to have attained age 60 on December 31 of the prior year. The average wage for the indexing year is divided by the average wage in each prior year to obtain the factor for each prior year. For example, for a person attaining age 62 in 2012, the indexing year is 2010.
The formula for persons aged 62 in 2012 is 90 percent of the first $767 of AIME; plus 32 percent of the next $3,857; plus 15 percent of the AIME over $4,624. To permit early retirement. Persons can retire as early as age 62, but the monthly benefit is reduced.
The worksheet assumes that the worker had no prior period of entitlement to disability benefits and did not work after becoming entitled to retired-worker benefits. The worksheet describes the various steps used in computing a benefit.
The full PIA is payable to a worker who retires at the full retirement age ( FRA ). In 2000, incremental increases in the FRA —from age 65 for workers born 1937 and earlier to age 67 for workers born 1960 and later—began to be phased in.
The Social Security Act of 1935. D. Titles III and IX of the Social Security Act. Federal Insurance Contributions Act. Describe how OASDI and Medicare programs are financed. • Funding for OASDI and Medicare programs requires equal employer and employee contributions under the Federal Insurance Contributions Act (FICA).
True. Analysis suggests that, based on an average life expectancy, taking a lower monthly benefit sooner would lead to earning about the same total benefit over one's lifetime as an individual who put off retirement to claim a higher monthly benefit. True/False. True.