Social Security Planning

When planning for retirement, you have many decisions to make about what sources will generate your retirement income and when to access those sources. There is no one "best age" for everyone when it comes to claiming social security benefits. Ultimately, it is your choice. You should make an informed decision about when to apply for benefits based on your personal situation. It is important to remember that your monthly benefit amount can differ significantly based on the age when you start receiving benefits.

Social Security was established in 1935 to alleviate poverty among the elderly during the Great Depression. It was created as a self-financing program that would collect payroll taxes from workers which would immediately be paid out in benefits to retirees.

Millions of Americans depend on Social Security. For many, it is their primary source of retirement income. For others, it is an important supplement to pensions and personal savings.

Unlike other sources of retirement income, Social Security offers a unique combination of benefits.

• A predetermined amount of income. By the time you come to the end of a long working career, the amount of Social Security income you will be entitled to is pretty well known. The benefit is based on your earnings history as it is applied to a formula. While the amount may vary depending on when you apply for benefits (delaying benefits results in a larger amount), the relative accuracy of the estimate makes it easy to build the rest of your retirement income plan around it.
• Steady income. Once you have qualified for Social Security benefits, the amount of income you'll receive is set. Some people worry that benefits may be cut in the future, but that is highly unlikely that benefits paid to current retirees will be significantly affected by proposals to reform the Social Security system.
• Lifetime income. Social Security is one of the few sources of income that can be assured of never running out. Ida Mae Fuller, the first recipient of monthly Social Security benefits, continued to receive checks until her death at age 100.
• Inflation-adjusted income. Social Security benefits are usually increased each year based on the previous year's increase in the Consumer Price Index. These cost of living adjustments (COLAs) help retirees keep up with the rising cost of living.
• Survivor benefits. Although Social Security checks stop at death, benefits are paid to surviving spouses and dependents.

There are three ways to apply for Social Security:

• Online at www.SSA.gov -for retirement, disability, and spousal benefits only.
  
• By phone at 800-772-1213
  
• In person at a local Social Security office. Use the Social Security office locator at www.SSA.gov for the address, hours, and driving directions.
  

Information and documents you will need to provide

Have ready the following when you make your application:

• Social Security number
  
• Name at birth
  
• Date and place of birth
  
• Citizenship status
  
• The beginning and ending dates of each period of active duty service, if service occurred before 1968
  
• Whether you receive, or expect to receive, a pension or annuity based on employment with the federal government or one of its state or local subdivisions
  
• Current marital status and spouse's name, date of birth, and Social Security number
  
• The names, dates of birth, and Social Security numbers (if known) of any other spouses
  
• The dates and places of each marriage and, for marriages that have ended, how and when they ended
  
• Names of any unmarried children under age 18
  
• The name and address of each employer for the last two years
  
• Information about self-employment
  
• Estimated earnings for last year and this year (and next year, if application is made between September and December)
  
• If you are within three months of turning 65, whether you want to enroll in Medicare Part B
  
• Bank account numbers for direct deposit