Retirement Social Security

14 Social Security Facts We Bet You Didn’t Know

You’ll want to know the secrets of Social Security to plan for the future.

financial advisor
Updated Sept. 24, 2024
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Social Security is an important part of your retirement plans, but you may not know some things about your benefits.

It may seem counterintuitive, but starting to plan for retirement when you begin working will help you throughout your adult life. You should certainly pay attention by mid-career to make the right moves for a stress-free retirement.

Understanding the ins and outs of Social Security is a good place to start. You may be surprised by some facts you don’t know about it.

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Children may be eligible for Social Security

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Social Security is an important benefit for retirees or older Americans, but some children may also be eligible for benefits.

A child under age 18 whose parent is deceased or has a disability or a child whose parents are retired and eligible for Social Security may be entitled to benefits.

Some children over age 18 may be able to continue receiving benefits. Check with Social Security if you think you may be eligible.

You can create a Social Security account at 18

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You can start to track your Social Security benefits as soon as you’re 18 years old by creating a “MySocial Security” account.

You need to be 18 years old and have an email address and a Social Security number to keep an eye on your Social Security benefits. 

Through the account, you can confirm how much you’ve paid into Social Security and estimate how much your benefits may be at various retirement ages.

You can receive benefits after a spouse dies

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If your spouse passes away and you decide to remarry before you turn 60, you won’t be able to collect additional benefits.

However, if you're 60 years or older, you still may be eligible for spousal benefits whether you remarry or not.

If you plan to remarry, it’s important to review your Social Security and retirement benefits to see how that can affect your retirement income.

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Full retirement age may be higher than you think

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The full retirement age (FRA) isn’t the same for all retirees so it’s important to know when you can receive your full retirement benefit.

Your full retirement age is 67 if you were born in 1960 or later, but FRA is lower for retirees born before 1960. 

While you can choose to receive benefits starting at age 62, the monthly payment could be as much as 30% less than if you wait to collect at full retirement age.

You can ask someone to manage your benefits

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As you age, you may find that you need someone else to represent you in financial matters, including your Social Security benefits.

Just as you name a health representative through an Advance Health Care Directive, you can choose up to three people for Advance Designation with Social Security. If you can no longer manage benefits yourself, this person may be your representative payee.

Some workers aren’t eligible for Social Security

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Most workers are covered by Social Security, but some workers don’t get Social Security benefits.

Government employees might not qualify for Social Security benefits because they get retirement benefits through other programs. So it’s important to check on your retirement benefits if you’re a government employee.

Benefits don’t change much

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Choosing at what age to collect Social Security benefits will determine how much you receive each month for the rest of your life. 

If you collect as soon as you’re eligible at age 62, your benefit will be considerably less than if you wait until the maximum age of 70. And that amount will stay about the same.

You may, however, get a boost from the annual cost of living adjustment (COLA) each year. This is a percentage increase meant to keep up with inflation.

Millions of people collect Social Security

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Social Security benefits are mainly for Americans starting at age 62 as well as dependent survivors or disabled persons.

In 2022, the Social Security Administration paid benefits to more than 70 million people through various programs. That means more than 20% of Americans receive benefits from the Social Security fund.

It’s probably not as much as you think

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You may be surprised by how little you’ll receive per month in Social Security benefits even if you decide not to start collecting benefits until you reach full retirement age.

Social Security wasn’t meant to be your sole income in retirement. You need to save money for retirement now so that you have additional cash to supplement your Social Security payments later on.

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It still pulls Americans out of poverty

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While the payments may not be as much as you expect, Social Security can still be an important benefit as you get older.

Around 10% of adults over the age of 65 are considered to be living below the poverty line, but that percentage would balloon to 39% if Social Security wasn’t available to workers.

Women benefit more than men

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Women tend to live longer than men, which means they’re more likely to collect Social Security.

An estimated 54% of Social Security beneficiaries are women in the 60- to 69-year-old age bracket. Of beneficiaries between the ages of 90 and 99, 67% are women.

Your Social Security number used to represent a state

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Social Security numbers used to begin with an area number as the first three digits of your Social Security number. The numbers were assigned to the area or state where you applied for a Social Security number.

The rules changed in 1972, but if you got a Social Security number before that year, the first three digits probably reflect the state or area you lived in when you received it.

Revenue comes from current workers

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People who are currently in the workforce pay employment taxes that help fund benefits for current recipients.

More than 90% of the $1.22 trillion in revenue for Social Security comes from payroll taxes for current workers.

Don’t forget income taxes

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You may be surprised that you may have to pay federal income tax on your Social Security benefits when you collect them. You may be subject to taxes on your benefits if you have other income from wages, dividends, interest, and other taxable income.

Ten states also tax your Social Security income, so it’s important to check your state laws.

Bottom line

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When you check your Social Security account, you may be surprised by how much you already have coming to you. If it’s lower than you think, you may need to consider ways to supplement your income.

As you approach retirement age, you'll need to create a budget that reflects your lifestyle when you finally retire. No matter what, knowing how Social Security benefits help you is the bedrock of your planning.

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Jenny Cohen

Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.