Most Americans are familiar with Social Security, but few have a complete understanding of exactly how it works. In fact, some simply believe that once they retire, Social Security will kick in and cover their retirement expenses for the rest of their lives. Others feel the opposite, believing that Social Security might be nice to have but that it doesn’t contribute a significant amount of retirement income.
The truth is that for about half of beneficiaries, Social Security provides at least 50% of their retirement income. For about 1 in 4 retirees, Social Security provides at least 90% of their income. In other words, Social Security plays a significant role in the retirement security of older Americans. But without paying attention and developing a strategy, you might not be maximizing your potential benefits.
Although you can rely on tax and financial advisors, it’s important that you understand at least the basics of how Social Security operates. The earlier in your work career you can learn these facts, the better you’ll be positioned when it comes time for you to ultimately retire. For example, you’ll surely want to know how to get the highest Social Security benefit possible based on your work record, and you’ll also want to recognize how different claiming strategies can be used in conjunction with your own personal retirement savings.
To see if you understand the ins and out of Social Security, take this quick six-question quiz developed by GOBankingRates. Although far from comprehensive, if you can grasp these important primary concepts, you’ll be well on your way toward both getting all of the benefits you’re entitled to and positioning yourself in the best way possible in terms of retirement income.
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