Social Security is a federal benefits program that entitles you to benefits because you've worked long enough and paid into the system. But unlike a retirement plan, there's no Social Security account in some bank with your name on it. Your contributions over the years were not saved up by the government and invested just for you. The system works by having the contributions of current workers pay the benefits for retired workers.
If you've worked for at least 10 years (or 40 quarters), you're considered fully insured. You're entitled to Social Security benefits. The amount of benefits you'll collect depends on what you earned during your working years. Earnings include your wages and any net self-employment income from being a sole proprietor (such as a consultant or independent contractor) or a partner in a business.
You may have heard about problems with the Social Security system and expectations that it will collapse. Don't panic. All doomsday predictions always fail to materialize. Before then, it's probable that there will be some changes made in the current system. If you're already collecting Social Security benefits or expect to collect soon, your benefits are secure.
Remember all those years of working and having money withheld from your paycheck? Part of the withholding was federal income taxes. Another part was the employee share of the Medicare tax. But the part that's going to give you income in retirement relates to your share of FICA (Federal Insurance Contribution Act), which is the Social Security tax.
If you owned an unincorporated business, you paid your share of the Social Security tax through self-employment tax that you included along with your federal income tax payments each year. Well now is the time to collect. Right? Not so fast. Maybe it's better to wait awhile. Or maybe it's better to start as early as possible. The one thing for sure is that you'd better know the ins and outs of Social Security so you'll be able to collect all that you're entitled to receive from Social Security.
If you've worked for at least 10 years (or 40 quarters), you're considered fully insured. You're entitled to Social Security benefits. The amount of benefits you'll collect depends on what you earned during your working years. Earnings include your wages and any net self-employment income from being a sole proprietor (such as a consultant or independent contractor) or a partner in a business.
You may have heard about problems with the Social Security system and expectations that it will collapse. Don't panic. All doomsday predictions always fail to materialize. Before then, it's probable that there will be some changes made in the current system. If you're already collecting Social Security benefits or expect to collect soon, your benefits are secure.
Remember all those years of working and having money withheld from your paycheck? Part of the withholding was federal income taxes. Another part was the employee share of the Medicare tax. But the part that's going to give you income in retirement relates to your share of FICA (Federal Insurance Contribution Act), which is the Social Security tax.
If you owned an unincorporated business, you paid your share of the Social Security tax through self-employment tax that you included along with your federal income tax payments each year. Well now is the time to collect. Right? Not so fast. Maybe it's better to wait awhile. Or maybe it's better to start as early as possible. The one thing for sure is that you'd better know the ins and outs of Social Security so you'll be able to collect all that you're entitled to receive from Social Security.
Comments
I become eligible in a little less than one year. I hope your confidence proves valid for at least that time. Thanks for the information...
Comment 1 (of 1)
|
|