Understanding Social Security

Social Security is a pay-as-you-go program that taxes working Americans and helps supplement the income of the elderly, disabled and families in which a parent or spouse dies. Today, roughly 60 million people receive monthly Social Security benefits.

Will Social Security cover all of my bills?

According to the Social Security Administration, Social Security was never meant to be the only source of income for people when they retire. And it’s not — retirees generally need between 70 and 80 percent of pre-retirement earnings to live comfortably. That means additional sources of income such as private pensions, savings and investments are needed.

But the money I pay towards Social Security is mine, right?

No. When you are working, you pay taxes into Social Security. That money is then used to pay benefits to current retirees, the disabled and dependents of beneficiaries. The money you pay in taxes is NOT held in a personal account for you to use when you are ready to collect benefits.

So how much Social Security income can I expect?

When you retire, become disabled or die, Social Security benefit payments are distributed based on how much you earned during your working career. Of course, the higher your career earnings, the higher your benefit amount will be. If you were unemployed or underemployed during your career, your benefit amount will be lower.

How old do I have to be to collect Social Security?

You can choose to start receiving benefits as early as age 62. Your benefit increases if you delay and is reduced if paid early. A little planning may be necessary to maximize benefits.

Depending on your circumstances, you may be eligible for Social Security at ANY age. In fact, children receive more benefits from Social Security than from any other government program.

Do I have to retire to collect Social Security?

No. You may continue to work while receiving retirement benefits. Expect to pay income taxes and some Social Security if you exceed certain limits


For more information, visit www.socialsecurity.gov or call 1-800-772-1213. If you would like to discuss all of your financial opportunities for a comfortable retirement, visit (link to personal insure) or call Northwest at 1-877-300-3454 to schedule an appointment with a Northwest financial advisor.