How Do I Work and Collect Social Security?

[{"selector":"#anim-e77702c4-cd35-4a4e-bb89-07c1f45b9a39","keyframes":{"opacity":[0,1]},"delay":250,"duration":2000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-fea06edf-e25d-4765-b591-56b87f806548","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-5e2af7cf-40c8-4e4b-8ba2-4c076f21644a","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

Signed into law in 1935 as part of the New Deal, the original purpose of Social Security was as a retirement plan for workers aged 65 or older. The program allowed individuals to have continuing income after retirement, and for many, to have a retirement.

[{"selector":"#anim-707cb533-1c2e-4f8e-a8b4-ee6fb0502087","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-917836fb-0d83-4b7f-bbc6-c0bf32e319d9","keyframes":{"transform":["translate3d(-107.01299%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-9378c08f-c9c7-4bc2-9f62-68b06eca7f1c","keyframes":{"opacity":[0,1]},"delay":0,"duration":3000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-38e398d6-b7c1-4e0d-8060-7b8c0c1d3bb2","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-91ef84a9-7cf5-4242-9c79-baf0b0276eee","keyframes":{"transform":["translate3d(107.30224%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

Social Security is one of the more confusing areas of personal finance for people, and it can be challenging to determine how to handle the decision of claiming your benefits.

[{"selector":"#anim-b23f99a5-e961-4aa9-9f3e-3d07090372ea","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-98a752df-d491-40a7-9f57-bf02912f1568","keyframes":{"transform":["translate3d(106.83230%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d9a5eb01-23cb-4937-8934-b1b67974c3f0","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-15377ff3-345d-452e-a467-fa3220a0f2c5","keyframes":{"transform":["translate3d(-110.38961%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5670576b-6a8d-45b7-9abf-d9dcabc0a50b","keyframes":{"opacity":[0,1]},"delay":0,"duration":3000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d5969fca-4d52-4cb5-af68-8094298f55aa","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-71812e65-dfaa-40d8-b69a-32ef07710fe4","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

For most, Social Security benefits will come in the form of income for retirement. For those not on disability, you can begin drawing Social Security benefits at age 62 at the earliest (age 60 if a widow or widower).

[{"selector":"#anim-3f72fc0f-8b72-4dde-b80b-fdb93441400b","keyframes":{"opacity":[0,1]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-899445a4-4804-4f44-a40c-0de1d8b95efd","keyframes":{"transform":["translate3d(115.92356%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0d7de959-0d90-4fd6-b105-9d5cc0cb5361","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-c25a9e0b-a008-44dd-b3e9-d4bdeccd405a","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

However, if you decide to start receiving benefits early, they will be reduced by a small percentage for each month before your full retirement age you take them.

[{"selector":"#anim-e3bea9e1-5372-48eb-bc7c-bc3fdbbabaf6","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-fd7e4863-fbcd-4504-ac12-cbf5f09d20e2","keyframes":{"transform":["translate3d(106.62526%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-67a6c4ec-d46d-4fa7-a281-0fbc0b876f6b","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-40488175-4486-4770-9cb8-ec593b82d0f4","keyframes":{"transform":["translate3d(-107.01299%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-61dfde62-eca5-4ae5-aec4-d0bfc566639f","keyframes":{"opacity":[0,1]},"delay":0,"duration":3000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] Learn more

Social Security calculates benefits using two factors: 1) The amount you earned during your working career, and; 2) The age you begin taking benefits.

[{"selector":"#anim-d25b7337-8961-4ecf-9f85-22a94e800b5d","keyframes":{"opacity":[0,1]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-51ec1289-9ff7-4077-9910-b046988e0bf0","keyframes":{"transform":["translate3d(115.92356%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-73bbbdaf-d5f4-4f5b-8804-2a3429a18076","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-0483f1ef-3a70-4ad9-8238-23b778d81bc0","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

In calculating your benefits, SSA uses the highest 35 earning years of your working career. This calculation yields your Average Indexed Monthly Earnings (AIME), which they use to calculate your benefits.

[{"selector":"#anim-698ac20b-c062-49b2-bd46-1626335e8059","keyframes":{"opacity":[0,1]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-40ce3400-12d7-4a4f-a48e-713b1e19f6e6","keyframes":{"transform":["translate3d(115.28663%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":400,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

The AIME is then divided into three “bend” points plugged into a formula that yields your monthly benefits at full retirement age or your Primary Insurance Amount (PIA).

[{"selector":"#anim-67235df1-66c9-4d33-87b1-24cf12f418a0","keyframes":{"opacity":[0,1]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c4a31051-8f6e-42a5-9ea3-4a2ceaf575f6","keyframes":{"transform":["translate3d(-107.01299%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":1500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bb34867b-12d3-47c0-a20c-61e87aa36f22","keyframes":{"opacity":[0,1]},"delay":0,"duration":3000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-c4c2f6cd-d1c1-4385-890a-fc7245a1856a","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-81e165cf-161a-45f8-9790-2aa24fb33213","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

Swipe Up

[{"selector":"#anim-7e30e6c5-f109-452f-ac00-1a0eedad83a6","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0c45d9f1-68cf-4d80-a151-1a764d2eeba7","keyframes":{"transform":["translate3d(0px, -289.76616%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a9a723f0-7f18-4cb6-b721-bdd151dc3edf","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-8e44e06f-2166-4ab9-beba-3f46a8f54362","keyframes":{"transform":["translate3d(0px, 181.56378%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more