For the 40 million retired workers in the United States there is no social program that is more depended on than Social Security.
Sixty-two percent of retirees count Social Security as half of their monthly income.
As policies and the economy continue to reshape Social Security it is essential for all Americans to stay on top of our ever-changing social security program.
Here’s a list of some of the changes that are coming by 2020.
Increased retirement age
The Reagan Administration approved a Social Security reform that gradually increases the retirement age from 66 to 67.
This incremental increase was added to account for an increase in our longevity, how long we live.
From 2017 to 2022, then, an additional two months is attached to the retirement age each year.
By 2020 the full retirement age will be 66 and eight months. This changes when your Social Security benefits are fully vested.
What should you do? If a retiree opts to receive Social Security benefits anywhere from age 62 to a month before being fully vested, they can expect a permanent reduction in payout.
However, if you wait a full month after you’ve reached retirement age to apply, you actually receive more than 100% of your Social Security benefits.
Getting benefits gets harder
Many people would be surprised to learn that you don’t just automatically get Social Security and, in fact, many people do not qualify.
You must accumulate 40 lifetime work credits by the time you’re eligible to enroll in order to qualify.
You earn four lifetime work credits each year you work, so you’ll need to work at least 10 years to receive your full benefits.
A lifetime work credit is accrued for every $1,320 earned, which means to get your maximum work credit in a year you need to make at least $5,280.
While this amount is not difficult to earn even for those working part-time, the base number is scheduled to go up in 2020. Workers then will have to earn $5,400 or more to merit their full annual work credits.
Spousal benefits ending
It used to be that married couples could apply for a non-working spouse’s Social Security benefits upon reaching retirement age, delay their own retirement and thus allow their individual benefit to grow in value.
Additionally, a married couple could apply for spousal Social Security, where one spouse could receive payments while the other applied and then put payments on hold and still could earn regular payout increases.
New restrictions do away with both of these loopholes.
Now if you apply for spousal Social Security you will not be eligible if your individual Social Security payout is higher than your spousal Social Security benefits.
This either-or policy does not apply to Survivor Social Security benefits. Widows and widowers can still receive their spousal Social Security benefits separate from their own retirement benefits.