Social Security is a Waste of Time, Right?

In a lot of ways, social security gets an undeservedly bad rap when it comes to its standing as a retirement vehicle.  People often have an extremely difficult time separating their feelings for Social Security as an institution or governmental program from their ability to evaluate the system as part of their retirement regime.  A large part of the negative association comes from the forced nature of the contributions and of the confusion associated with the particulars of the program.  While I can’t change the nature of the program, I can try and alleviate some of the confusion surrounding the nitty gritty.

When Can I get My Money and How Much am I Getting?

Rather than create a system that is easy to understand or that contains a static eligibility date, Social Security is instead based on a formula that is only slightly confusing to understand.  Basically, every time you earn $1,120 dollars, you accrue a credit in the social security system.  Once you have accrued a total of 40 credits, at a rate of 4 per year maximum, you are eligible to start withdrawing your money.

How much you can take out is a little easier to understand.  All of you have to do is take the average of your 35 highest earnings years and divide that by 12 to determine how much you can expect to earn on a monthly basis.  Obviously the major complain at this point is that inflation and cost of living is progressing at a constant rate while Social Security earnings remain static, but that is a discussion for a different article.

What Happens to my Money if I die?

Nobody wants to think about dying or about what is going to happen to their money once they are dead, but in this case, since the decrease in income can potentially affect the quality of life of the surviving spouse, it is a legitimate question.  In the case of a death, as long as the spouse is of an age eligible to collect benefits, then the surviving spouse is eligible to collect 100% of the remaining benefits.


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