Social Security Benefits Explained

January 08,2013
imgpsh_fullsize (15)

Most workers who are approaching middle or retirement age have questions about Social Security and how the system is going to work for them after they have been paying into it. You may want to talk with New York disability attorneys about how you can expect Social Security to work.

In general, Social Security is intended to provide financial support for retirees so that they are not completely without a safety net in their later years when they are unable to work. The typical amount is intended only to cover basic living expenses, though the actual amount varies from person to person, as New York disability attorneys can explain.

Funded by Tax Dollars

Any worker has noticed that a certain amount is deducted from their regular paycheck for Social Security by their employer. (The employer also provides a matching contribution.) This rule applies to the first $106,800 of income you earn in a given year. In order to eventually qualify for benefits at retirement, New York disability lawyers will explain that you must have worked for at least 10 years. Your benefit amount will be calculated using your highest-earning 35 years and taking the average income from those years.

As of 2012, Social Security payments ranged from an average of about $1,200 to a maximum of $2,500. However, these amounts are expected to increase annually due to inflation. Talk with your New York disability attorneys to find out the expected amount when you retire.

Why Delay Retirement?

As of 2012, early retirement age under Social Security regulations is 62. (Early retirement means you will not receive the full benefits amount, so your New York disability attorneys might advise you to try waiting.) If you instead choose to wait until full retirement age (67 in 2012), you will receive more. The prospect of raising the retirement age has been politically debated for several years. It is possible that retirement age will be raised at some point in the near future. If you choose to keep working after 62, your earnings will be taken into account and your benefits from SS will be reduced.

Self-employment Factors

Those who are self-employed must pay employment tax equal to the sum of what employee and employer contributions to tax would be if the person were employed by a company. In 2012, self-employment was 12.4 percent. Some New York disability lawyers might recommend that you incorporate in order to take some of your compensation as dividends, although this will have the effect of reducing your retirement benefits, so choose your course of action wisely.

The regulations of Social Security are complex and cumbersome. Find out what you need to know by contacting New York disability attorneys at Hermann Law Group, PLLC. Call 1-877-773-3030 for your free consultation.