Social Security – A Safety Net for Retired Americans, their Survivors, and the Disabled

Author: National Care Planning Council

EldercareOur council is dedicated to helping families recognize the need for long term care planning and to help implement that planning. All elderly people, regardless of current health, should plan for the myriad of financial events and challenges they might face. Social Security retirement benefits alone will not adequately help us meet these challenges; however, the program itself, how it is funded, and how the payouts work must be understood by every retiree.

About Social Security

Social Security can act as a financial safety net for retired Americans, their survivors, and the disabled. Social Security is a term used to describe the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. In 2008, Social Security paid $615,344,000,000 to over 50 million beneficiaries and is currently estimated to keep 40% of these individuals out of poverty. As of December 2011, 19 % of all beneficiaries were disabled workers and their dependents and 11 % were survivors (such as the widowed and children). The remaining 81% are, of course, retirees.

Social Security was established in 1935 by the Social Security Act during President Roosevelt’s first term. The program functions on contributions each worker makes into the program. While employed, an individual pays / contributes into Social Security; they receive benefits later on, when they choose to retire. Contributions are withheld as taxes from paychecks under the Federal Insurance Contributions Act (FICA).

For an individual retiring in 2013 at the full retirement age of 66, the highest monthly amount available is $2,533. In December 2012, the average monthly Social Security benefit for a retired person was around $1,261.

As mentioned, disability and survivor benefits are included in the Social Security program. Contributions can provide a form of insurance in the event that a worker becomes disabled; they may also cover disabled adult children if the disability developed before their 22nd birthday. Furthermore (assuming that one has worked enough to qualify for retirement benefits), a surviving spouse and/or children may receive Social Security survivor benefits if that the worker dies, even if the death occurred before retirement.

Eligibility for Retirement Benefits

We do not automatically qualify for retirement benefits from Social Security. Instead, we (meaning those of us born in or after 1929) must work and pay a minimum level of Social Security taxes for a minimum of 40 quarters (or 10 years) during our lives. Fortunately, these 40 quarters do not need to be consecutive. As of 2012, we earn a credit for each three-month period in which we earn at least $900. Once we have worked and paid Social Security taxes for the required 10 years, we qualify to receive Social Security retirement benefits.

Even if an individual has accumulated his or her required 40 credits, they may not start getting payouts until age 62 or older. The longer we wait to start collecting after we become eligible, the higher the amount we will receive. For each year delayed, Social Security benefits increase between 7 percent and 8 percent up to age 70. If an individual is nervous about dying relatively early it would be wise to initiate payouts as soon as possible (right at age 62). However, if the individual feels like they will live to a ripe old age, the best strategy is to put off taking payments closer to age 70.

Working While on Social Security

Drawing on Social Security benefits when still working full-time is typically not a wise choice. If a worker decides to start collecting benefits before retirement, the government will cut the payouts according to an earnings based formula.

After the beneficiary reaches full retirement age (which is currently age 66 ½), there is no offset for working full time. In other words, the beneficiary can receive full social security benefits as well as any amount of earned income.

Enrolling in the Program

To sign up simply apply online - Social Security Benefit Application, visit your local office or call toll free (800) 772-1213. To collect full retirement benefits, be sure to apply to the SSA three months before you wish to receive your first payment.

If you are too young to retire and would like to know what kind of benefits to expect, the annual benefits statement sent by the Social Security Administration (SSA) will provide an estimate of how much your retirement benefits will be. You can also estimate your benefits by using the administration's online calculators.

Death and Survivor Benefits

As a side note, Social Security benefits can be received by a surviving spouse based on the earnings of their former spouse. The marriage must have been deemed valid for 10 years and the surviving spouse cannot have remarried. If the widowed remarries, the individual is eligible to claim Social Security benefits under the ex-spouse's earnings if they turn out to be higher than their own.

When someone dies, the SSA receives reports of beneficiary deaths from family members, funeral homes and other government agencies. It is highly recommended that you inform the SSA as soon as possible when a person dies.


In closing, when thinking about retirement and Social Security, be sure to plan for the long term. There is no “best age” to start receiving benefits.  Each person should make an informed decision about when to apply for benefits based on their individual and family circumstances. We hope the above information will help you understand how Social Security can fit into your retirement decisions.

Remember, “If you live to the average life expectancy for someone your age, you will receive about the same amount in lifetime benefits no matter whether you choose to start receiving benefits at age 62, full retirement age, age 70 or any age in between. However, monthly benefit amounts can differ substantially based on your retirement age. If you die before your spouse, he or she may be eligible for a survivor benefit based on your work record, particularly if you have earned more than your spouse over your lifetime. If you begin receiving Social Security benefits early, we cannot pay your surviving spouse a full benefit from your record. Also, if you wait until after the full retirement age to get benefits, your surviving spouse—if  he or she is at least full retirement age—generally will receive the same benefit amount that you would have received.” - SSA


45. Orr, D. (November – December, 2004). "Social Security Isn't Broken: So Why the Rush To 'Fix ' It? In C. Sturr & R. Vasudevan (Eds.), 2007, Current Economic Issues. Boston: Economic Affairs Bureau.

Ultimate Guide to Retirement – Money Magazine

Social Security Administration - SSA Publication No. 05-10147 ICN 480136

How Today's Social Security Works, By David C. John – The Heritage Foundation

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