Claiming Spousal Benefits. Taxes on Your Benefits. Investing Your Benefits. Timing and Your Health Coverage. The Bottom Line. Key Takeaways You can collect Social Security as early as age 62, but your benefits will be permanently reduced. The longer you can afford to wait after age 62 up to 70 , the larger the monthly benefit. Doing a breakeven analysis can help you determine when you would come out ahead by delaying benefits. Finding Your Full Retirement Age FRA Year of Birth Full Normal Retirement Age or earlier 65 65 and 2 months 65 and 4 months 65 and 6 months 65 and 8 months 65 and 10 months — 66 66 and 2 months 66 and 4 months 66 and 6 months 66 and 8 months 66 and 10 months and later Article Sources.
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This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Partner Links. Social Security benefits are payments made to qualified retirees and disabled people, and to their spouses, children, and survivors.
Full Retirement Age FRA The full retirement age is the age at which people can receive full retirement benefits upon leaving the workforce. Social Security Definition Social Security is a federally run insurance program that provides benefits to many American retirees, their survivors, and workers who become disabled. What Is Retirement Readiness?
Retirement readiness refers to the state or degree of being ready for retirement. Disability income DI insurance provides supplementary income in the event of an illness or accident that prevents the insured from working.
Investopedia is part of the Dotdash publishing family. By , with a decade of experience under the Social Security program behind them, the Congress concluded that many of the obstacles to universal coverage were not as formidable as they had appeared at the beginning.
Thus, legislation enacted in extended coverage to several major categories of workers, including regularly employed farm and domestic workers; non-farm self-employed persons except professionals ; Federal civilian workers; and, at the election of employees and employers, State and local government employees not covered under another retirement program and employees of nonprofit organizations other than ministers.
Because many of the workers newly covered under the amendments were already middle-aged or older, the principle of enabling newly covered older workers to become insured more easily and making their benefits more comparable to those of other covered workers with similar earnings was established. The amendments included a so-called new-start benefit computation that based benefit amounts on earnings after and companion provisions for measuring insured status in terms of work after Four years later in , another 10 million workers' jobs were covered; in , another million were added.
Social Security legislation enacted in and extended coverage to among others the farm self-employed, certain groups of professional self-employed generally with the exception of physicians , members of the uniformed services, and State and local government employees under a retirement system, under various conditions.
Thus, by the mid's, some 20 years after enactment of Social Security, the protection offered under the program was available to 90 percent of workers.
During the 's, the Congress also undertook lengthy consideration of another of the Advisory Council's recommendations--extension of Social Security protection to disabled workers. The House-passed version of the Social Security Amendments would have provided for a program of disability insurance along the lines recommended by the Council, but the final bill made no such provision.
Instead, the amendments provided for extension of the State-Federal public assistance program to the permanently and totally disabled, as had been urged by a minority of the Advisory Council's members. Later, in , the Congress enacted a disability "freeze" provision. No cash disability benefits were payable under this provision, but workers who were permanently and totally disabled and who also met insured status tests could have their Social Security earnings records frozen as of the date of their disability.
Through the "freeze" provision, disabled workers could prevent their retirement benefits from being diluted by many years of no earnings. Other provisions of the amendments provided for expansion of State vocational rehabilitation programs to address the difficult problem of rehabilitating the severely disabled. Eight years after the Advisory Council had recommended it, Congress in established a cash disability insurance program--with benefits first payable in with essentially the same eligibility requirements passed by the House in Because of concern about the high costs of a disability program and potential abuse, however, benefits were payable only to workers who were at least 50 years old.
These amendments established basic principles under which the disability program continues to operate today:. In , the insured status requirements for disability benefits were relaxed through elimination of the currently insured status requirement and benefits were extended to spouses and children of disabled workers. Two years later, the minimum age requirement for disabled workers was eliminated and a trial work period provision added to encourage disabled workers to return to work.
By , then, the old-age, survivors, and disability insurance OASDI programs were essentially in place as we know them today. Coverage under the program had been made nearly universal , so that virtually all people reaching retirement age in the decades to come would be able to establish benefit eligibility.
Over the 's, the OASDI programs were refined through legislation to create new categories of beneficiaries, to increase benefits so as to maintain their purchasing power, and to adjust tax rates to assure adequate program financing.
Moreover, legislation enacted in lowered the age of benefit eligibility for men. When the Social Security program was established, benefits were made available to men and women at age The Social Security Amendments of had provided benefits for women as early as age Benefits received prior to age 65 were reduced to take account of the longer period over which they would be received.
The amendments extended eligibility for reduced benefits to include men. In its examination of the adequacy of Social Security protection for the aged and the disabled, the Advisory Council came to the conclusion "that cash benefits alone are not enough.
Security in old age and during disability requires the combination of a cash benefit and insurance against a substantial part of the costs of expensive illness. The Council found in part that, while health care expenditures for the aged were twice as high as those of younger people, the great majority of the aged were neither well-off nor had adequate health insurance. Further, they found that, by the 's, the inability of the aged to meet health care costs had become the single most important reason that older people applied for public assistance.
Based on these findings, the Council recommended establishment of a program to provide, through a contributory social insurance mechanism, protection against the costs of hospital and related inpatient services for aged and disabled. In order to protect people who were already old, the Council recommended that hospital insurance protection be provided initially without regard to insured status; that is, that people at or near retirement age be grand-fathered into the new program.
Even as the Council was meeting, the Congress was actively considering proposals to provide health insurance benefits. In , the Congress passed "Medicare" legislation, which, while it essentially embodied the Advisory Council's recommendations, differed in two major respects.
First, in addition to providing protection against hospital costs through a payroll tax financed hospital insurance HI program, the plan enacted also included a voluntary program to be financed through monthly premiums and Federal general revenues. This supplementary medical insurance SMI program was designed to meet the costs of physicians' services and other outpatient care.
Second, only people aged 65 and over, rather than both the aged and disabled, would be eligible for Medicare. A few years later, in , Medicare protection was extended to people who had been receiving cash disability benefits for 24 months or more. With the advent of Medicare, the body of programs which we refer to today as "Social Security" was complete. Yet, while there have been no major additions to the system over the last 15 years or so, there has been continuing public and congressional reassessment of the ongoing role of Social Security in the Nation's income support structure.
For example, the Advisory Council on Social Security firmly endorsed the basic purposes and principles of the program, noting that:. It should be supplemented by effective private pensions, individual insurance, savings, and other investments; and it should be undergirded by effective means-tested programs. Future changes in OASDI should conform to the fundamental principles of the program: universal compulsory coverage, earnings-related benefits paid without a test of need, and contributions toward the cost of the program from covered workers and employers.
With respect to the OASDI programs, legislative considerations over these years have focused on three fundamental issues:. As noted earlier, the Congress acted to increase benefits from time to time during the 's and 's.
Nevertheless, there was concern that during the intervals between these ad hoc benefit increases, inflation eroded the purchasing power of benefits. The Advisory Council examined this issue and recommended that Social Security benefits be adjusted automatically to keep pace with increases in prices.
May 24, In three decisions, the Supreme Court validated the unemployment insurance provisions of the Social Security Act and ruled old-age pensions were constitutional, U. Davis ; Helvering v. Davis ; and Carmichael v. Southern Coal Company. The Reg. June 24, The Railroad Retirement Act of , which amended portions of the Act, was approved by the President.
The Act provided for income taxes on railroad employees and employee representatives and for excise taxes on carriers. June 30, Unemployment insurance legislation became nationwide with approved laws in all States. Illinois was the last State to pass such legislation.
July 1, The Social Security Board field offices, of which had been established, relieved the Post Office Department of the task of assigning employee account numbers. July 1, The President sent to the Senate nominations for 52 positions with the Social Security Board which required Senate confirmation.
August 3, Employment service expansion to meet the needs of the unemployment compensation program was furthered by the first grant approved under the Social Security Act to West Virginia. August 6, The Senate confirmed the appointment of George E. Bigge's appointment was for a term ending August 13, August 18, The appointment of Mary W.
She took the place formerly held by Vincent M. Miles of Arkansas, whose term of office had expired. Her appointment was to expire on August 13, August 24, The Unemployment Compensation appropriation, authorized to pay into unemployment trust funds of 15 jurisdictions amounts representing credit offset to which employers would have been entitled if these jurisdictions had had unemployment compensation laws, was approved by the Social Security Board on December 31, December 16, President Roosevelt recommended a series of technical amendments to the Social Security Act.
January 1, The Federal unemployment tax payable by employers of eight or more employees was increased to three percent of payroll. Unemployment benefits first became payable in 22 States. March 1, John J. He succeeded Leroy Hodges, who resigned as of February 28, March 2, Public Assistance grants to Oklahoma were suspended by the Social Security Board on the ground that administration of Oklahoma's State programs failed to comply with requirements of the Social Security Act as well as Oklahoma law.
May 27, Public Assistance grants to Oklahoma were resumed, effective as of April 1. It provided for minimum wages, child labor standards, and time and one-half for hours over 40 in a workweek, for workers coming under interstate commerce.
June 25, The Crosser-Wheeler Act was enacted. It was to become effective July 1, State unemployment compensation agencies were to transfer to the Railroad Retirement Board the benefit rights and contributions for workers covered by the Railroad Insurance Act.
June 29, The Wagner-Peyser Act was amended to specify that the annual Federal appropriation there under designate the amount to be apportioned among State employment systems.
July 1, John J. July , The National Health Conference was held in Washington under the auspices of the Interdepartmental Committee to Coordinate Health and Welfare Activities, to bring the problems of national health and certain recommendations for a national health program before professional groups and the public.
Powell was appointed his successor. September 14, New Zealand passed the first act to protect an entire population by a complete set of cash benefits, financed by a universal income tax.
September , At a special meeting, the American Medical Association's House of Delegates approved in principle tax-supported medicine for indigent and voluntary health insurance for those above the level of indigence. September 29, Public Assistance grants to Ohio for old-age assistance were discontinued by the Social Security Board on the grounds that Ohio's administration of the program was not in conformity with requirements of the Social Security Act.
September All 51 jurisdictions were making old age assistance payments under the Social Security Act. November 8, An initiative measure narrowly defining the term "labor dispute" for purposes of all State statutes, thereby raising serious questions of conformity with Title IX of the Social Security Act, which specified that a State may not be certified by the Social Security Board for tax credit purposes if benefits are denied an individual who refuses to accept a position vacant by reason of a labor dispute.
November 30, Public Assistance grants to Ohio for old-age assistance were resumed, retroactive to November 1, , on evidence that State operation of the program had been brought into conformity with requirements of the Social Security Act.
December 10, The Advisory Council on Social Security issued its report and recommendations on old-age insurance.
December 30, Ellen S. Dewson who resigned December 10, January 1, Unemployment benefits became payable in 26 additional States, bringing the total number of jurisdictions paying to February 1, Public hearings on the Social Security act amendments were conducted by the Committee on Ways and Means of the House of Representatives. February 28, Senator Robert Wagner introduced S. A national compulsory health insurance for almost all employees and their dependents was proposed by this bill.
Benefits were to include physician's services, hospitalization, drugs, and laboratory diagnostic services. Costs were to be covered through employer and employee contributions which were to have been deposited in a health insurance fund.
The plan was to be administered through the States. No final action was taken on the bill--although hearings were held April July The bill died in committee. March 24, All States, the District of Columbia, Alaska, and Hawaii were actively participating in the program of crippled children's services under the Social Security Act. Personal Finance. Your Practice. Popular Courses. Retirement Planning Social Security. Part Of. Getting Started.
How Social Security Is Organized. Getting Benefits. Benefits and Your Income. Benefits for Spouses. Benefits for Dependents, Survivors, After Divoce. Immigrants, Non-Citizens, Americans Abroad. Smart Benefits Strategies. Table of Contents Expand. Social Security Seen As an Annuity. Work at Least the Full 35 Years. Delay Benefits. Claim Spousal Benefits. Avoid Social Security Tax. The Bottom Line. Key Takeaways Navigating Social Security income can be complicated, but there are strategies to maximize your Social Security benefits.
Working for 35 years or more will help ensure you get the most money when your benefit amount is calculated. Earn as much as you can right up until full retirement age or past it to max out your benefit. Article Sources. Investopedia requires writers to use primary sources to support their work.
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