The 3 Main Programs Offered by Social Security: What You Need to Know

( – Many Americans understand that the United States government pays out retirement from the Social Security Administration (SSA) after collecting taxes from workers over the years to ensure it’s there. In addition to this retirement income, the SSA also provides income for those who have incomes below the poverty line and for some people with disabilities. All in all, nearly 70 million Americans received SSA benefits in 2021.

Because there are three types of benefits, it can be tough to determine which benefits, if any, you and your family members are eligible for. Every program has its own guidelines for eligibility, but it’s confusing because the programs offer overlap. If you’re navigating this process for yourself or for a relative, it’s vital to know the basics about the three SSA programs:

  • Social Security Retirement (which we often just call “Social Security”)
  • Social Security Disability Insurance (SSDI)
  • Supplemental Security Income (SSI)

All About Social Security Retirement Benefits

Every hardworking American receives retirement benefits once they’re at least 62 years of age. While you’re working, you pay into the system — starting with your very first job. You can see this line item on your pay stub, which comes out pre-tax. If you’re self-employed, this tax happens for you when you file quarterly or annually.

The maximum you can pay into the system each year is $9,114, regardless of income level.

The amount you get when you retire is determined by a credit system. You generally need 40 credits (if born after 1929), or 10 years of work. If you were born between 1943 and 1954, you can retire at 66 to get full benefits. If you were born after 1955, you have to wait until you are 67. Generally, the later you retire, the greater your benefit. Usually your benefits are calculated based upon your highest 35 years of earnings.

Know About Social Security Disability Insurance (SSDI)

If you or your family members become disabled and you are unable to work before you reach retirement age, SSDI is there for you. This applies if you have a medical condition that prevents you from working for a year or more, or if your condition is terminal. If you’ve worked recently and for a long time, and you’ve paid your taxes, you may be able to get SSDI. If you have a temporary or partial disability, you won’t be able to qualify for SSDI.

Disability is determined by your diagnosis, onset of the condition, prognosis and test results, and specifically how your condition limits your activities such as work. The Disability Determination Services (DDA) at your state will ask specific questions regarding your ability to work to determine whether you are eligible for SSDI benefits.

The benefit amount is based on work history and age, usually using an average income in your years before disability. It maxes out at $3,345 per month.

What Is Supplemental Security Income (SSI)?

SSI is for older, blind, or otherwise disabled people who don’t have many assets and who have a very limited income. To qualify, the federal benefit rate (FBR) comes to an income of $841 per individual and $1,261 for couples if both are eligible. SSI is supplemental, meaning you could get it in addition to SSDI or retirement.

SSI is intended to help recipients meet basic needs like shelter, clothing, and food. Some states also kick in additional amounts to SSI, and the amount you get varies by income. SSI determination will include a look at your bank accounts, assets like stocks and bonds, and how much cash you have on hand.

If you qualify for SSI in particular, you may also be able to get home energy assistance help, SNAP benefits, and more. Applying for multiple programs can be confusing, but knowing the basics will set you on your path to success.

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