Important Social Security topics now include the increasing demographic demands placed on the program and rising financial demands placed on the program. The Social Security Act originally provided retirement benefits for wage or salary earning citizens of the United States. As the U.S. climbed out of the Depression years, the government added spousal benefits. Most Social Security amendments expanded benefits and Social Security’s scope after 1939. Coverage was extended to additional persons by increasing Social Security benefits or by expanding the earner’s wage base for tax and/or benefits purposes.
In rank order, most Americans request Social Security benefits under Federal Old Age/Retirement; Survivors/Disability Insurance [OASDI]; Temporary Assistance for Needy Families [TANF]; Health Insurance for Aged/Disabled [MEDICARE], Grants/States for Medical Assistance Programs [for low income persons/Medicaid]; State-administered Health Insurance Programs for Children/Low-Income Citizens [SCHIP], and Social Security Supplemental Security Income [SSI].
Important Social Security Topics Now
Although the Social Security Act was originally written in the 1930s, Social Security rules change frequently. Many are complex. Important topics today include same-sex couples’ ability to draw Social Security benefits after the passage of the 2015 Bipartisan Budget Act.
In addition, people approaching Social Security age for retirement have questions about when to request their benefits, taxation of Social Security benefits, and how claiming Social Security benefits impacts financial planning. Let’s review some of these important Social Security topics below.
Topic 1: Who is eligible for Social Security?
Most people who work in the United States can receive Social Security benefits if they’ve worked long enough or become disabled. However, some people aren’t covered by Social Security. For example:
If you worked for the U.S. government prior to 1984, you aren’t covered by Social Security—unless you opted to transfer to Social Security during the 1987 transition. If you aren’t covered by Social Security because you didn’t request it during the transition period, you’re most likely covered by the U.S. Civil Service Retirement System.
In addition, some people who worked in the railway industry aren’t covered by Social Security. These workers receive retirement benefits from the Railroad Retirement System, an entity that’s administered under the U.S. Railroad Retirement Act.
In other situations, individuals aren’t covered by Social Security because of the work they did. If they or an employer didn’t pay Social Security taxes, such as a domestic worker or farm worker, the individual can’t claim Social Security benefits today.
These facts may lead you to ask more questions about drawing Social Security benefits.
Topic 2: Who can draw Social Security benefits?
Social Security benefits are accessible to many people in various circumstances. In general, the following types of individuals can draw Social Security benefits:
If you’re a retired worked and at least 62 years old, and you paid Social Security taxes to earn at least 40 work credits over your lifetime, you can claim Social Security retirement benefits.
If you’re disabled and under the age of 65 and you paid Social Security taxes at least five years out of the last decade, you may qualify for Social Security Disability Insurance (SSDI).
If you’re the husband or wife of a retired/disabled worker who is eligible for Social Security benefits, and you’re at least 62 years old or you have a child less than 16 years old or a disabled child older than 16 years, you may be able to draw benefits on your spouse’s Social Security earnings record.
If you’re the divorced husband or wife of a retired/disabled Social Security benefits-eligible individual and you’re 62 years old or more and you were married to the eligible worker for a minimum of 10 years, you may request benefits on his or her record.
If you’re a dependent and unmarried child of the Social Security benefits-eligible disabled or retired worker (or deceased insured worker if less than 18 years old, or less than 19 years old and still in elementary/secondary school full-time, or more than 18 years old with a disability that started prior to age 22), you may be able to claim Social Security benefits on a parent’s record.
If you’re a survivor spouse (even if you are divorced from him or her and were married at least 10 years) and you’re age 60 or more, you may be able to claim benefits based on the deceased insured worker.
If you’re disabled and a surviving spouse (even a divorced husband or wife in some instances) of a deceased worker who paid Social Security taxes and earned enough credits over his or her work life, and if you’re between the ages of 50 to 59 who became disabled under certain conditions, you may be able to claim Social Security benefits earned by a former (and now deceased) spouse.
If you’re a surviving husband or wife, even if you’re a surviving divorced husband or wife of a Social Security benefits-eligible worker and you care for the deceased entitled child (less than 16 years old or disabled prior to 22 years of age), you may qualify for Social Security benefits regardless of your age.
If you’re a dependent parent or parents of a benefits-eligible deceased worker and 62 years old or more, you may be able to claim Social Security benefits based on your son or daughter’s work record.
In some circumstances, lump sum death payment may be payable to you [in addition to survivor benefits received each month] if you’re claiming benefits upon the death of the benefits-eligible worker.
Topic 3: What is “normal retirement age” and “full retirement age” according to Social Security?
In Social Security terms, normal retirement age [NRA] used to mean the age at which you were eligible for Social Security and that you weren’t claiming reduced benefits for early retirement. In recent years, financial planners use NRA to mean the age at which many persons usually apply for benefits (when they’re first eligible to do so) at age 62.
The NRA term contrasts with Social Security Full Retirement Age [FRA]. FRA is the age when the eligible individual qualifies for full, unreduced Social Security retirement benefits. FRA is calculated according to the individual’s birth year. For individuals born in 1960 or later, FRA is sixty-seven years.
Social Security representatives may use both terms and, if you’re considering the question of when to retire, the simultaneous use may be confusing. SSA may use both terms to discuss the age at which your full (unreduced) retirement benefits may be claimed.
In “Social Security & Medicare Facts,” (2016 ed.) normal retirement age is used instead of full retirement age to detail the age at which your unreduced Social Security benefits may be requested.
If you’re discussing Social Security retirement benefits with a financial planner or a SSA representative and you’re in doubt about what level of benefits are being discussed, just ask. It’s important to understand how much money you can count on from Social Security retirement.
Topic 4: What about same-sex couples and Social Security benefits?
A decision issued by the U.S. Supreme Court (Obergefell v. Hodges) in 2015 holds that same-sex couples possess the constitutional right to marry in any U.S. state of their choice. The decision paves the way for same-sex couples’ ability to gain recognition as married persons for the purpose of calculating entitlement and eligibility Social Security insurance benefits as well as Social Security Supplemental Security Income (SSI) distributions.
The law regarding Social Security payments and same-sex couples has changed over the past few years. The Supreme Court ruled (United States v. Windsor, 2013) that individuals in same-sex marriages are eligible for benefits provided to a spouse, e.g. the Social Security spousal survivor benefit, lump sum death benefit, or retirement benefit.
In light of the Supreme Court decision, SSA reviewed existing policies about same-sex couples and determined that couples married in one U.S. state are still married if they move to another state for tax purposes. Today, SSA recognizes same-sex marriages that were conducted abroad as well.
SSA’s position on same-sex unions is one of the most important Social Security topics now. Today, SSA says that a spouse in a same-sex marriage (including a divorced or survivor spouse) should apply for benefits as required. Making an application preserves the individual’s filing date and, since some SSA decisions require months or years to conclude, lump-sum or backpay benefits.