Visit our website
Our website,www.socialsecurity.gov,
is a valuable resource for information about all of Social Security’s
programs. At our website you also can:
Call our 1-800 number
In addition to using our website, you also can call us toll-free at 1-800-772-1213.
We can answer specific questions from 7 a.m. to 7 p.m., Monday through Friday.
We can provide information by automated phone service 24 hours a day. If you
are deaf or hard of hearing, you may call our TTY number, 1-800-325-0778.
We treat all calls confidentially. We also want to make sure you receive accurate
and courteous service. That is why we have a second Social Security representative
monitor some telephone calls.
A message from the Commissioner of Social Security
Social Security reaches almost every family, and at some point will touch
the lives of nearly all Americans.
Social Security helps not only older Americans, but also workers who become
disabled, and families in which a spouse or parent dies. Today, more than
157 million people work and pay Social Security taxes and more than 48 million
people receive monthly Social Security benefits.
Most of our beneficiaries are retirees and their families—about 33
million people.
But Social Security was never meant to be the only source of income for
people when they retire. Social Security replaces about 40 percent of an
average wage earner’s income after retiring, and most financial advisors
say retirees will need about 70–80 percent of their work income to
live comfortably in retirement. To have a comfortable retirement, Americans
need much more than just Social Security. They also need private pensions,
savings and investments.
The Social Security Administration wants you to understand what Social Security
can mean to you and your family’s financial future. This publication,
Understanding The Benefits, explains the basics of the Social Security retirement,
disability and survivors insurance programs.
I also urge you to learn more about the financial issues that Social Security
faces in the future. Today’s retirees and those who will be retiring
soon should not worry—their benefits will not be affected. We need
to take steps to ensure that Social Security will provide a foundation of
protection for future generations as it has done in the past.
The current Social Security system works like this: when you
work, you pay taxes into Social Security. The tax money is used to pay benefits
to:
People who already have retired;
People who are disabled;
Survivors of workers who have died; and
Dependents of beneficiaries.
The money you pay in taxes is not held in a personal account for you to use
when you get benefits. Your taxes are being used right now to pay people who
now are getting benefits. Any unused money goes to the Social Security trust
funds, not a personal account with your name on it.
The future of Social Security
Social Security is a compact between generations. For more than 70 years, America
has kept the promise of security for its workers and their families. But now,
the Social Security system is facing financial problems, and action is needed
to make sure that the system is sound when today’s younger workers are
ready for retirement.
Here is why the level of benefits that Social Security will be able to pay
in the future is uncertain. Today there are about 36 million Americans age
65 or older. Their Social Security retirement benefits are funded by today’s
workers and their employers, who jointly pay Social Security taxes—just
as the money they paid into Social Security was used to pay benefits to those
who retired before them. Unless action is taken to strengthen Social Security,
in just 11 years we will begin paying more in benefits than we collect in
taxes. Without changes, by 2040 the Social Security trust funds will be exhausted.
By then, the number of Americans 65 or older is expected to have doubled.
There will not be enough younger people working to pay all of the benefits
scheduled for those who are retiring. At that point, there will be enough
money to pay only about 74 cents for each dollar of benefits that retirees
are scheduled to receive. We will need to resolve these issues to make sure
Social Security will provide a foundation of protection for future generations
as it has done in the past.
Social Security is more than retirement
Many people think of Social Security as just a retirement program. Although
it is true that most of the people receiving Social Security receive retirement
benefits, many others get Social Security because they are:
Disabled; or
A spouse or child of someone who gets Social
Security; or
A spouse or child of a worker who died; or
A dependent parent of a worker who died.
Depending on your circumstances, you may be eligible for Social Security
at any age. In fact, Social Security pays more benefits
to children than any other government program. Today, more than
48 million
people,
about one
out of every six Americans, collect some kind of
Social Security benefit.
Your Social Security taxes
The Social Security taxes you and other workers pay into the system are used
to pay for Social Security benefits.
You pay Social Security taxes on your earnings up to a certain amount. That
amount increases each year to keep pace with wages. In 2006, that amount
is $94,200.
Medicare taxes
You pay Medicare taxes on all of your wages or net earnings from self-employment.
These taxes are used for Medicare coverage.
If you work for somone else
Social Security tax
Medicare tax
You pay
6.2%
1.45%
Your employer pays
6.2%
1.45%
If you are self-employed
You pay
12.4%
2.9%
Where your Social Security tax dollars go
When you work, 85 cents of every Social Security tax dollar
you pay goes to a trust fund that pays monthly benefits to current retirees
and their families and to surviving spouses and children of workers who have
died. The other 15 cents goes to a trust fund that pays benefits to people
with disabilities and their families.
From these trust funds, Social Security also pays the costs of managing
the Social Security programs. The Social Security Administration is one of
the most efficient agencies in the federal government, and we are working
to make it better every day. Of each Social Security tax dollar you pay,
we spend less than one penny to manage the program.
The entire amount of taxes you pay for Medicare goes to a trust fund that
pays for some of the costs of hospital and related care of all Medicare
beneficiaries. Medicare is managed by the Centers
for Medicare & Medicaid Services, not Social Security.
What you need to know about Social Security while
you are working
Your Social Security number
Your link with Social Security is your Social Security number. You will
need it to get a job and to pay taxes. We use your Social Security number
to track your earnings while you are working and to track your benefits after
you are getting Social Security.
Do not carry your Social Security card unless you need to show it to your
employer. You should be careful about giving someone your Social Security
number. Identity theft is one of the fastest growing crimes today. Most of
the time identity thieves use your Social Security number and your good credit
to apply for more credit in your name. Then they use the credit cards to
buy things for themselves, and they do not pay the bills.
Your Social Security number and our records are confidential. If someone
else asks us for information we have about you, we will not give any information
without your written consent, unless the law requires or permits it.
Contact us if you need a Social Security number, if you lose your card and
need another one or if you need
to change your name on your current card.
We will ask you to fill out a simple one-page form and ask to see certain
documents. We need to see originals or copies certified by the issuing office.
We cannot accept photocopies or notarized copies of documents.
To get a Social Security number or a replacement card, you must prove your
U.S. citizenship or immigration status, age and identity. For a replacement
card, proof of your U.S. citizenship and age are not required if they are
already in our records. Only certain documents can be accepted as proof of
U.S. citizenship. These include your U.S. birth certificate, a U.S. passport,
a Certificate of Naturalization or a Certificate of Citizenship. If you are
not a U.S. citizen, different rules apply for proving your immigration status.
Acceptable proofs of identity would include current documents showing your
name, identifying information and, preferably, a recent photograph, such
as a driver's license or a state-issued nondriver identification card.
To apply for a change of name on your Social Security card, you must show
a recently issued document that proves your name has been legally changed.
Be sure to safeguard your Social Security card. You are limited to three
replacement cards in a year and 10 during your lifetime. Legal name changes
and other exceptions do not count toward these limits. For example, changes
in noncitizen status that require card updates may not count toward these
limits. Also, you may not be affected by these limits if you can prove you
need the card to prevent a significant hardship.
All of our services are free. Social Security never charges for the services
we provide.
How you become eligible for Social Security
As you work and pay taxes, you earn Social Security “credits.” In
2006, you earn one credit for each $970 in earnings—up to a maximum
of four credits per year. (The amount of money needed to earn one credit
goes up every year.)
Most people need 40 credits (10 years of work) to qualify for benefits.
Younger people need fewer credits to be eligible for disability benefits
or for family members to be eligible for survivors benefits when the worker
dies.
What you need to know about benefits
Social Security benefits replace a percentage of your earnings when you
retire, become disabled or die. Each year, we will send you a Social Security
Statement showing your earnings history and an estimate of the retirement,
disability and survivors benefits you and your family may receive based on
those earnings.
When you receive your Statement, check your earnings history carefully.
Make sure all of your earnings are accurate. Be sure to report any errors
to us. That is important because your benefits will be based on your lifetime
earnings. Your Statement also is useful in helping you plan your financial
future.
Retirement benefits
Choosing when to retire is one of the most important decisions you will make
in your lifetime. If you choose to retire when you reach full
retirement age, you will receive your full retirement benefits. But if you retire
before reaching full retirement age, you will receive reduced benefits
for the rest of your life.
Full retirement age
If you were born before 1938, you were eligible for your full Social Security
benefit on your 65th birthday. In 2003, the age at which full benefits
are payable began to increase gradually. The following chart will guide
you in determining your full retirement age:
Full retirement
age
Year of birth
Year of birth Full retirement age
1937 or earlier 65
65
1938
65 and 2 months
1939
65 and 4 months
1940
65 and 6 months
1941
65 and 8 months
1942
65 and 10 months
1943-1954
66
1955
66 and 2 months
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 8 months
1959
66 and 10 months
1960
67
NOTE: Although the full retirement age is rising, you should still apply
for Medicare benefits within three months of your 65th birthday. If you
wait longer, your Medicare medical insurance (Part B) may cost you more
money.
Delayed retirement
If you choose to delay receiving benefits beyond your full retirement age,
your benefit will be increased by a certain percentage, depending on the
year you were born. The increase will be added in automatically from the
time you reach full retirement age until you start taking benefits or reach
age 70, whichever comes first. If, for example, you were born in 1940, your
benefit would increase 7 percent for each year, between your full retirement
age and age 70, that you do not get retirement benefits.
Early retirement
You may start receiving benefits as early as age 62. However, if you start
your benefits early, your benefits are reduced permanently. Your benefit
is reduced about one-half of one percent for each month you start your
Social Security before your full retirement age. For example, if your full
retirement age is 65 and 8 months and you sign up for Social Security when
you are 62, you would only get 76.7 percent of your full benefit.
NOTE: The reduction will be greater in future years as the full retirement
age increases.
If you work and get benefits
You can continue to work and still receive retirement benefits. Your earnings
in (or after) the month you reach full retirement age will not reduce your
Social Security benefits. However, your benefits will be reduced if your
earnings exceed certain limits for the months before you reach your full
retirement age.
If you work but start receiving benefits before full retirement age, $1
in benefits will be deducted for each $2 in earnings you have above the annual
limit. In 2006, the limit is $12,480.
In the year you reach your full retirement age, your benefits will be reduced
$1 for every $3 you earn over a different annual limit ($33,240 in 2006)
until the month you reach full retirement age.
Once you reach full retirement age, you can keep working, and your Social
Security benefit will not be reduced no matter how much you earn.
For more information about how work affects your benefits contact us and
ask for How Work Affects Your Benefits (Publication No. 05-10069).
NOTE: People who work and receive disability or Supplemental Security Income
payments have different earnings rules. They must report all of their earnings
to Social Security no matter what they earn.
Retirement benefits for widows and widowers
If you are receiving widow’s or widower’s benefits, you can switch
to your own retirement benefits as early as age 62, assuming your retirement
benefit is more than the amount you receive on your deceased spouse’s
earnings. In many cases, you can begin receiving one benefit at a reduced
rate and then switch to the other benefit at the full rate when you reach
full retirement age. The rules are complicated and vary depending on your
situation, so talk to a Social Security representative about the options
available to you.
Disability benefits
If you cannot work because of a physical or mental condition that is expected
to last at least one year or result in death, you may be eligible for Social
Security disability benefits.
Our disability rules are different from those of private plans or other
government agencies. The fact that you qualify for disability from another
agency or program does not mean you will be eligible for disability benefits
from us. And having a statement from your doctor indicating you are disabled
does not mean you will automatically be eligible for Social Security disability
benefits.
People with disabilities, including children, who have little income and
few resources, also may be eligible for disability payments through the Supplemental
Security Income (SSI) program. For more information about SSI, contact us
to ask for Supplemental Security Income (SSI) (Publication No. 05-11000).
If you become disabled, you should file for disability benefits as soon
as possible, because it usually takes several months to process a disability
claim. We may be able to process your claim more quickly if you have the
following when you apply:
Medical records from your doctors, therapists, hospitals, clinics and caseworkers;
Your laboratory and other test results;
The names, addresses and phone and fax numbers of your doctors, clinics and
hospitals;
The names of all medications you are taking; and
The names of your employers and job duties for the last 15 years.
When you start receiving Social Security retirement or disability benefits,
other family members also may be eligible for payments. For example, benefits
can be paid to your husband or wife:
If he or she is age 62 or older; or
At any age if he or she is caring for your child (the child must be younger
than 16 or disabled and receiving Social Security benefits on your record).
Benefits also can be paid to your unmarried children if they are:
Younger than 18;
Between 18 and 19 years old, but in elementary or secondary school as full-time
students; or
Age 18 or older and severely disabled (the disability must have started before
age 22).
If you become the parent of a child (including an adopted child) after you
begin receiving benefits, let us know about the child, so we can decide if
the child is eligible for benefits.
How much can family members get?
Each family member may be eligible for a monthly benefit that is up to half
of your retirement or disability benefit amount. However, there is a limit
to the total amount of money that can be paid to your family. The limit
varies, but is generally equal to about 150 to 180 percent of your retirement
benefit.
If you are divorced
If you are divorced, your ex-spouse may qualify for benefits on your earnings.
In some situations, he or she may get benefits even if you are not receiving
them. To qualify, a divorced spouse must:
Have been married to you for at least 10 years;
Have been divorced at least two years;
Be at least 62 years old;
Be unmarried; and
Not be eligible for an equal or higher benefit based on his or her own work
or someone else’s work.
Survivors benefits
When you die, your family may be eligible for benefits based on your work.
Family members who can collect benefits include a widow or widower who is:
60 or older; or
50 or older and disabled; or
Any age if he or she is caring for your child
who is younger than 16 or disabled and receiving Social Security benefits.
Your children can receive benefits, too, if they
are unmarried and:
Younger than 18 years old; or
Between 18 and 19 years old, but in an elementary or secondary school as
full-time students; or
Age 18 or older and severely disabled (the disability must have started
before age 22).
Additionally, your parents can receive benefits on your earnings
if they were dependent on you for at least half of their support.
Payment after death
If you had enough credits, a one-time payment of $255 also will be made after
your death. This benefit may be paid to your spouse or minor children if
they meet certain requirements.
If you are divorced
If you are divorced, your ex-spouse may be eligible for survivors benefits
on your record when you die. He or she must:
Be at least age 60 years old (or 50 if disabled) and have been married to
you for at least 10 years; or
Be any age if he or she is caring for a child who is eligible for benefits
based on your work; and
Not be eligible for an equal or higher benefit based on his or her
own work; and
Not be currently married, unless the remarriage occurred after age
60 or after age 50 if disabled.
NOTE: If your ex-spouse
remarries after 60, he or she may be eligible for Social Security benefits
based both
on your work and the new spouse’s
work, whichever is higher.
How much will your survivors get?
Your survivors receive a percentage of your basic Social Security benefit—usually
in a range from 75 to 100 percent each. However, there is a limit to the
amount of money that can be paid each month to a family. The limit varies,
but is generally equal to about 150 to 180 percent of your benefit rate.
Your benefits may be taxable
Some people who get Social Security will have to pay taxes on their benefits.
Less than one-third of our current beneficiaries pay taxes on their benefits.
You will have to pay taxes on your benefits if you file a federal tax return
as an “individual” and your total income is more than $25,000.
If you file a joint return, you will have to pay taxes if you and your spouse
have a total income that is more than $32,000. For more information call
the Internal Revenue Service’s toll-free number, 1-800-829-3676.
Contact us when you are ready to file for benefits. If you are just thinking
about filing for retirement benefits, we suggest you talk with a Social Security
representative a few months before the year you plan to retire. To file for
disability or survivors benefits, you should apply as soon as you are eligible.
When you apply for benefits, we will ask you to provide certain documents.
The documents we will ask for depend on the type of benefits you are filing
for. Providing these documents to us quickly will help us pay your benefits
faster. You must submit original documents or copies certified by the issuing
office—we cannot accept photocopies.
Do not delay filing an application just because you do not have all of the
documents you need. We will help you get them.
Here is a list of some documents you may need when you sign up for Social
Security:
Your Social Security card (or a record of your number);
Your birth certificate;
Your children’s birth certificates (if you are applying for them);
Proof of U.S. citizenship or lawful immigration status if you (or a child)
were not born in the United States;
Your spouse’s birth certificate and Social Security number
if he or she is applying for benefits based on your earnings;
Marriage certificate (if signing up on a spouse’s earnings);
Your military discharge papers if you had military service; and
Your most recent W-2 form, or your tax return, if you are self-employed.
We will let you know if other documents are needed when you apply.
How benefits are paid
Social Security benefits generally are paid by direct deposit. Direct deposit
is a simple, safe and secure way to receive your benefits. Be sure to have
your checkbook or account statement with you when you apply. We will need
that information to make sure your monthly benefit is correctly deposited
into your account.
If you do not want direct deposit, we will make other arrangements to pay
your monthly benefits.
If you get Social Security benefits, but have limited income and resources
(things you own), SSI may be able to help. SSI is financed from general revenues,
not Social Security taxes.
SSI makes monthly payments to people who are age 65 or older or who are
blind or disabled. We do not count some of your income and some of your resources
when we decide whether you are eligible for SSI. Your house and your car,
for example, usually are not counted as resources.
If you disagree with a decision made on your claim, you can appeal it.
The steps you can take are explained in The
Appeals Process (Publication
No. 05-10041), which is available from Social Security.
You have the right to be represented by an attorney or other qualified person
of your choice. More information is in Your
Right To Representation (Publication
No. 05-10075), which is also available from Social Security.
Medicare is our country’s basic health insurance program for people
age 65 or older and many people with disabilities.
You should not confuse Medicare and Medicaid. Medicaid is a health care
program for people with low income and limited resources. It is usually run
by state welfare or social services agencies. Some people qualify for one
or the other, while some people qualify for both Medicare and Medicaid.
Medicare has four parts
Hospital insurance (Part A) that helps pay for inpatient hospital care and
certain follow-up services.
Medical insurance (Part B) that helps pay for doctors’ services,
outpatient hospital care and other medical services.
Medicare Advantage plans (Part C), formerly
known as Medicare + Choice plans, are available in many areas. People
with Medicare
Parts A and B can choose
to receive all of their health care services through
one of these provider organizations under Part C.
Prescription drug coverage
(Part D) that helps pay for medications doctors prescribe for medical
treatment.
Who is eligible for hospital insurance (Part A)?
Most people get hospital insurance when they turn 65. You qualify
for it automatically if you are eligible for Social Security or
Railroad Retirement
benefits.
Or you may qualify based on a spouse’s (including divorced spouse’s)
work. Others qualify because they are government employees not covered by
Social Security who paid the Medicare tax.
If you get Social Security disability benefits for 24 months, you will qualify
for hospital insurance.
Also, people who have permanent kidney failure that requires maintenance
dialysis or a kidney replacement or who have amyotrophic lateral sclerosis
(Lou Gehrig’s disease) qualify for hospital insurance if they have
worked long enough or if they are the spouse or child of a worker who qualifies.
Who can get medical insurance (Part B)?
Almost anyone who is eligible for hospital insurance can sign up for medical
insurance. Part B is an optional program. It is not free. In 2006, the
monthly premium is $88.50 per month. Most people sign up for this part
of Medicare.
Who can get Medicare Advantage plans (Part C)?
Anyone who has Medicare hospital insurance (Part A) and medical insurance
(Part B) can join a Medicare Advantage (formerly Medicare + Choice) plan.
Medicare Advantage plans include:
A Medicare Advantage plan takes the place of a Medigap policy, so you might
have to pay a monthly premium because of the extra benefits it offers.
Who can get Medicare prescription drug coverage (Part D)?
Anyone who has Medicare hospital insurance (Part A) or medical insurance
(Part B) or a Medicare Advantage plan (Part C) is eligible for prescription
drug coverage (Part D). Prescription insurance is optional, and you pay
an additional monthly premium for the coverage.
For more information, contact us and ask for Medicare (Publication No. 05-10043).
Help with Medicare expenses for people with low income
If you have a low income and few resources, your state may pay your Medicare
premiums and, in some cases, other “out-of-pocket” medical
expenses, such as deductibles and coinsurance.
Only your state can decide whether you qualify for help under this program.
If you think you qualify, contact your state or local medical assistance
(Medicaid) agency, social services or welfare office. You can get more information
about this program from the publication, You could save in Medicare expenses
(Publication CMS-10126). To get a copy, call the Medicare toll-free number,
1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048.
“Extra help” with Medicare prescription costs
If you have limited income and resources, you may qualify for extra help
to pay for your prescription drugs under Medicare Part D. Social Security’s
role is to help you understand how you may qualify and to process your
application for extra help. To see if you qualify or to apply, call Social
Security’s toll-free number or visit our website.
Some facts about Social Security
2006 Social Security taxes
You and your employer each pay 6.2 percent
If you are self-employed, you pay 12.4 percent
You do not pay Social Security taxes on any earnings above $94,200
2006 Medicare taxes
You and your employer each pay 1.45 percent
If you are self-employed, you pay 2.9 percent
Medicare taxes are paid on all of your earnings;
there is no limit
Work credits in 2006
For each $970 you earn, you receive one Social
Security “credit,” up
to four per year
Most people need 40 credits to be eligible for retirement benefits
Younger people need fewer credits to qualify for disability and survivors
benefits
Average 2006 monthly Social Security benefits
Retired worker: $1,002
Retired couple: $1,648
Disabled worker: $939
Disabled worker with a spouse and child: $1,571
Young widow or widower with two children: $2,074
2006 monthly SSI payment rates (does not include state supplement, if any)
Understanding The Benefits
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