Five Questions About Social Security

Last Updated: August 20, 2012

Social security is an important aspect of your retirement equation. It is a benefit primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA), and was established in 1935 as part of President Roosevelt’s New Deal to protect working citizens from poverty. It is not intended, however, to replace 100% of your income or provide for all of your means during retirement. In this article, we’ll highlight the most common questions we receive about social security. 1. How do I qualify for benefits?  When you work, you pay Social Security taxes.  To be eligible for benefits you must
have completed 40 quarters (10 years) of work.  After becoming eligible, you do not need to do anything else until you reach retirement. 2. How much will my benefit be?  Your Social Security benefit will be based on your earnings over your entire working career.  The higher your average earnings, the higher your future benefit will be.

3. When can I start my benefit? Your full retirement age will be between 66 and 67 depending on the year you were born. 4. Can I retire early? You can retire as early as age 62, but retiring early will reduce your benefit.  For example: if your full retirement age is 67, you will receive about 30% less if you decide to retire at age 62.  Remember, this reduction is permanent.  You will not receive an increase once you reach full retirement age.  You can also choose to delay receiving your benefit. Benefits will continue to grow until you reach age 70.

5. How do I sign up? Since you get to choose when to begin receiving benefits, you must notify the Social Security Administration that you plan to begin.  This should be done two or three months before your retirement date.  You can do this in person at a local Social Security office, online at, or by calling (800) 772-1213. There are many considerations with social security benefits. A retirement consultant can guide you on a variety of strategies to help you maximize the social security benefit based on your personal circumstance. In February of 2012 the Social Security Administration stopped mailing annual benefit statements to anyone under age 60 to save money.  You can still receive a statement anytime by visiting PCI’s archived blog entries are dated, the rules and statutes referenced may have changed. The analysis or guidance within these blog entries may have become stale, dated, or no longer accurate. PCI will not update or change these entries to reflect the latest analysis or development.


Pension Consultants, Inc.



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