Too many of Americans, the Social Security Administration is shrouded within a cloak of secrecy. While much of that is warranted, given the ever-changing programs it heads as well as the political and economic lightning rod it tends to be, many components of Social Security are relatively straightforward and important to understand. To that point, there are a handful of little-known facts about Social Security you need to know as you continue down your path towards retirement.
Survivor Benefits Aren’t Just For Spouses
Although the surviving spouse is by far the most common beneficiary of survivor benefits when someone passes away, they are by no means the only people eligible to receive survivor benefits. As surprising as it might sound, ex-spouses are even eligible to receive survivor benefits under particular circumstances.
Aside from the surviving spouse, however, minor children are the most common beneficiaries to Social Security benefits. When a minor is receiving survivor benefits, the Social Security Administration typically requires a custodian to administer the account, usually in the form of a UTMA or UGMA account depending on the state the minor lives in.
Benefits for the Self-Employed
For those that don’t have the luxury of seeing a FICA tax line item on a paystub, rest assured that self employment doesn’t eliminate your eligibility for Social Security benefits. In fact, if you’re self-employed, odds are you have been paying into the Social Security system this entire time without even knowing it.
Although the name can be misleading, the dreaded self-employment tax– found on your 1040 isn’t a punitive measure from the IRS to dissuade you from running your own business but, instead, is your payment towards your own benefits. Simply put, you’re amassing the same credits you would have been through a more typical job, just in a different manner.
Applying For Social Security Disability
Applying for Social Security Disability benefits is never a given. In fact, 7 out of 10 applicants are initially rejected for a whole host of different reasons. Therefore, don’t be surprised if a few minor skirmishes are required to pursue benefits. Unfortunately, it is not uncommon for applicants to be forced to hire an attorney to fight the Social Security Administration for their disability benefits.
Don’t Shred Your Statements Before Pouring Over Them
Lastly, if you’re like many and don’t pay much attention to the Social Security statements you receive, buck that trend and start reading through them as they are full of valuable information. Whether you’re a year from retirement or a decade or more, it’s never too early or late to see where your benefits stand.
Gary Marriage Jr. is the founder and CEO of Nature Coast Financial Advisors, which educates retirees on how to protect their assets, increase their income and reduce their taxes. Marriage is a national speaker, delivering solutions for pre-retirees, business owners and seniors on the areas affecting their retirement and estates. He is an approved member of the National Ethics Bureau, and has been featured in “America’s Top Hometown Financial Advisors 2011” and was selected to contribute to a book with Steve Forbes titled “Successonomics”
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