3 Things That Will Make You Feel Better About Social Security – Motley's Fool

Although social security continues to provide essential retirement benefits to millions of older people, the program is sometimes difficult. Once its trust funds are exhausted, beneficiaries risk cutting their benefits by 21% starting in 2034. It's a shame for the elderly today, who rely on this income to stay afloat. . This also explains why most American workers do not think the program will be intended for them once they are ready to retire.

However, despite the sadness and gloom surrounding social security, there is also much to celebrate. Here are three positive things about social security to remember for the next time you start to deplore its weaknesses.

1. The program does not go bankrupt

Even if a potential reduction in benefits is hardly a thing to celebrate, let's not forget the whole situation: according to all forecasts, social security will still exist for many years. The program derives the bulk of its income from payroll taxes. So, as long as we have a workforce, social security will continue to raise money and beneficiaries will continue to receive some form of benefit.

In addition, because of the number of people who depend on social security as the main source of income, Congress is reasonably investing to avoid a future reduction in benefits. And although we do not have a solution to the program's imminent deficit at the moment, many more are in the works.

2. You have the power to increase your profits

First, the bad news: Social security is designed to replace only about 40% of the average worker's early retirement income, assuming that there is no reduction in benefits. Since most people need about double to live comfortably in retirement, the end result is that you can not rely solely on Social Security to pay for your living expenses.

The good news: you have the opportunity to significantly increase your benefits, ensuring a higher monthly income for life. All you have to do is not to claim benefits after your retirement age and to accumulate deferred retirement credits for as long as you can (keeping in mind that these credits cease to accumulate at age 70).

Imagine that your retirement age is 67 years old. You are entitled to a monthly benefit of $ 1,500 and you do not file a pension application with Social Security before your 70th birthday. In the meantime, you will increase your monthly income. pay $ 1,860, which will give you $ 4,320 more per year to work. Better still, this increase is permanent.

3. You could get benefits even if you've never worked a day in your life

To qualify for Social Security in retirement, you must have accumulated 40 credits for life, the dollar value of which varies from year to year. In 2018, a credit can be earned per $ 1,320 of earnings. Next year, the value of an individual credit will be $ 1,360 in earnings. It goes without saying that if you have never worked, you will not see any benefits when you are older.

But this is not necessarily true. If you are or were married to a person eligible for social security, you may be entitled to spousal benefits. These are based on the work history of your current or former spouse. But in a nutshell, you could get up to half of your spouse's benefits at retirement age. This means that if your spouse's work history translates into a monthly benefit of $ 1,500, you could receive $ 750 yourself.

When social security is in the news, the details are often depressing. But instead of falling into despair, know that social security still has a lot to do. Not only can it continue without its trust funds, but it also allows you to actively develop your benefits while covering you, even if you have never been successful in making money. And these are all reasons for a positive view of social security.