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The most misunderstood part of social security – Motley Fool



Millions of people rely on social security to make ends meet in retirement. For many of them, it is important to get as much as possible from social security, and it is natural to try to maximize the benefits of as many different benefits as possible.

But many people get confused about coordinating different social security schemes. Often, what common sense says should be the answer turns out to be wrong – and if you make plans based on these erroneous assumptions, it can hurt you at a time when you least can afford it.

  Social security card embedded in a scattered pile of money.

Image Source: Getty Images.

Different Benefits You Can Receive

Most people think of social security as paying workers who have retired, and that is by far the most common benefit paid by the federal government. According to the latest available statistics, out of 63 million Americans collecting social security, 44 million are retired workers.

But there are many other benefits you can receive from social security. They include the following:

  • Spousal benefits paid to spouses of employees. About 2.4 million people receive these benefits.
  • Survival benefits to spouses, children and other family members of deceased workers. Almost 6 million people get such benefits.
  • Disabled for workers and their families. More than 10 million people receive benefits either as disabled workers or as spouses or children with disabled workers.

Typical benefits vary depending on the particular benefit. The average retirement benefit is about $ 1 465 per month, while the typical spousal benefit was $ 765 per month. Survival benefits on average nearly $ 1,200 per month, and disability benefits pay about $ 1,100 on average.

Why You Can't Double With Social Security

The natural assumption that many people make is that if they are entitled to two different social security benefits, they will be able to keep both. It's not just desirable thinking; It actually has the basis for how the program works.

To understand why double-dipping can theoretically make sense, consider a married couple where both spouses work and are retired. Both can receive social benefits on their own duties, and they therefore receive two payments from the federal government each month.

When a spouse dies, the other is received by surviving benefits, which is based on the amount received by the deceased spouse in retirement benefits. Many people mistakenly believe that the surviving spouse will continue to receive two separate payments from the national insurance, one for retirement pensions on the survivor's own work history, and one for survivor benefit on the deceased spouse's work record.

That's not how it works. In fact, in almost every situation, you are not allowed to double on social security. Instead, you are allowed to receive which amount is larger than just putting the two together. It includes the following:

  • Required a pension benefit and a retirement pension at the same time.
  • At the same time, pension and hospital benefits require.
  • Required disability and compliance benefits together.
  • Required divorce from spouse or survivor based on more than one former spouse's work record.

Expect the Right Advantage

Some think it is not possible to double with Social Security is unfair because it essentially makes some of the added benefits that the program makes meaningless. Nevertheless, it is important to remember that social security was primarily intended as a social insurance program, and so ensuring a basic minimum income for as many people as possible is more important in determining the rules than maximizing benefits.

Understanding how multiple social security benefit coordinates can be counterintuitive, but it is crucial to determine how much you should expect from the program. Failure to do so may cause you to make unrealistic predictions of what Social Security will pay you – potentially not causing you to save enough in additional pension savings to cover the difference.


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