Social Security De-mystified

Social Security began by the suggestion of President Franklin D. Roosevelt in 1934, and the Social Security Act was signed into law on August 14, 1935. It was created with the intention to pay retired workers, age 65 or older, a continuous income.

Today’s Social Security benefits are broken down into two categories: Title II or Retirement Survivors Disability Insurance (RSDI) and Title XVI or Supplemental Security Income (commonly known as SSI).

Dealing with any government agency is enough to make any sane person a crazed lunatic, and imagine being disabled, old, or both. Having worked with Social Security and Medicare over the years, I will make this as painless as possible. Hopefully you will walk away with a better understanding of Social Security’s benefits, and quite possibly the ability to help a friend or family member through the process.

The easier of the two benefits is RSDI, so we’ll start with this one first. This stands for Retirement Survivors Disability Insurance. This benefit can be received as RETIREMENT, for persons age 62 or older; as SURVIVORS benefits by either a widow/widower or unmarried child under the age of 18; or as DISABILITY, for those persons under the age of 62 who can no longer work a regular job and earn a living.

RSDI, or Title II, is strictly based upon a person’s work history. You know those Social Security statements that you get quarterly in the mail? If you retired by such-a-such date, this is how much you would receive? Well, that’s true. You have to have worked 5 out of the last 10 years; each person typically earns 4 credits a year (one per quarter) and must have at least 20 credits to be eligible. For example, a woman who’s been a housewife for most her life would not qualify for the RSDI benefit, because she has no work credits. You basically have to have recently paid into the system in order to draw benefits from it.