Royal Legal Solutions can help you invest whether you are currently working or not. While your 401(K) or Individual Retirement Account (IRA) is a great way to save for your future, your social security benefits will help too. Franklin D. Roosevelt signed the “Social Security Act” into law. This Act, which set up a trust fund, created a systematic benefits program that would support retirees and their survivors. This Act was amended in 1956 to also include disability benefits. But there is more to Social Security than that. Below are five facts you may not know about social security.
1. The Social Security Trust Fund is Massive
In 2017, the Social Security Administration (SSA) reported that the Social Security Trust fund had a total reserve of $2.85 trillion. With the exception of the seven largest countries, this reserve exceeds the gross domestic product (GDP) of every other country in the world.
2. Social Security Supports Millions of Americans Every Year
The trust fund may seem massive, but it is all a matter of perspective. The number of Americans who are reliant on Social Security benefits at the end of 2016 may shock you. According to the SSA, 61 million Americans collected benefits from the Social Security trust fund. That equates to $911 billion in benefit payments in 2016 alone.
3. Social Security Benefits are Subject to Income Taxes
While Social Security benefits are indeed subject to income taxes, that was not always the case. An amendment in 1983 to the Social Security Act made benefits taxable. Today, different thresholds dictate what percentage of benefits are eligible for taxation. For those with incomes between $25,000 individually or $32,000 as a couple annually, 50% of these benefits are subject to income taxes. For households that earn more than $34,000 alone or $44,000 together each year, 85% is treated as taxable income.
4. The 35 Highest Paying Years of Your Career Dictate Your Benefits Paycheck
Your benefits are directly determined by the average of your highest earnings over a 35-year period. That means that minimum wage job you held bussing tables in high school likely will not affect how much you qualify for when it comes to your retirement benefits. Royal Legal Solutions wants to help you make the most of your golden years. When you invest with us, our experts can help make sure you can retire with more than just a social security check.
5. Benefit Adjustments No Longer Take a Congressional Act
For many years, benefits were only increased after an act of congress determined they would. That changed in 1975, however. Increases now occur automatically at an administrative level. (Thank goodness for that! Now you do not have to wait for Congress to hear, debate and rule on benefit increases.)
Social Security Payouts
Claiming your Social Security benefits early may seem like a great idea. After all, 73% of beneficiaries opt to receive their benefits starting around the age of 62. However, waiting until later may be better in the long run and increase your benefit payouts. Our professionals want to help you maximize your benefits. After all, we here at Royal Legal Solutions understand just how hard you worked to earn those benefits.