Article - 13 Crucial Social Security Terms You Need to Know

Social Security is an important part of retirement income. is a consumer oriented financial website I enjoy checking in on.  They do a decent job of being informative without dumbing things down to the point of compromising understanding or being a shill for the Financial Manufacturing and Distribution Industrial Complex.

Because I’ve been getting a lot of questions about Social Security retirement benefits and Medicare recently I thought maybe you might enjoy this useful article that Wise Bread staff writer Damian Davila put up in October of 2016.  The rest of this article is his.

According to the Employee Benefits Research Institute, 91% of U.S. retirees and 84% of U.S. workers expect Social Security to be an important source of income during retirement. This is not surprising since about a third of Americans have less than $1,000 saved for retirement.

That’s why it is essential you understand these 13 important Social Security terms.  You may also find that you’re wondering how all of this affects you.  For that take advantage of our Second Opinion review. Learn more here.

1. Full Retirement Age

Starting at age 62, you become eligible for Social Security benefits. However, your benefits would be reduced if you were to claim then any time before your full retirement age, which for most Americans is now 65 or older.

For example, those born in 1960 or later have a full retirement age of 67. If a person with a full retirement age of 67 starts taking benefits at age 62, she would receive a retirement benefit reduced to 70%. For every month past age 62 that she waits, she earns about 0.4% more in retirement benefits until she reaches a full 100% at age 67.

2. Delayed Retirement Credits

About 19% of Americans age 65 or older were working during the first quarter of 2016. One possible reason is that working past age 65 to 67 can increase your retirement benefit from 5.5% to 8% per year, depending on your year of birth. For every month past your full retirement age that you wait to start receiving your benefit check, you earn delayed retirement credits that boost your full retirement benefit beyond 100%. Going back to the example of the individual with full retirement at age 67, she would receive a monthly increase of two-thirds of 1% for every month that she delays retirement past age 67.

3. Age 64-3/4

Even though you may decide to wait until or past full retirement age to start taking your benefits, you can still apply for Medicare within three months of age 65 (age 64-3/4) and apply for your retirement or spouse’s benefits later.

Medicare Parts A, B, C, and D

4. Medicare Part A

This hospital insurance helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay), some home health care, and hospice care.

5. Medicare Part B

Medical insurance that helps pay for doctor services and many other medical services and supplies not covered by Part A.

6. Medicare Part C

Also known as Medicare Advantage Plans, Part C plans are offered by private health carriers approved by Medicare and available to Americans enrolled in Part A and Part B with Medicare.

7. Medicare Part D

A drug coverage plan available to everyone with Medicare.

While you have a seven-month window starting age 64-3/4 to sign up for Part A, you don’t have to enroll in Part B. Depending on when you enroll for Part B and other factors, your coverage may be delayed and you may have to pay a higher monthly premium unless you qualify for a…

8. Special Enrollment Period (SEP)

Every year has an open enrollment period in which you can enroll in an insurance plan. There are certain life events that qualify you for a Special Enrollment Period. Qualifying events include losing job-based coverage and losing coverage through a family member. For the full list of life events that make you eligible for SEP, visit this section from

9. Social Security Credits

In 2016, you will earn one Social Security work credit for each $1,260 of wages or self-employment income. You can earn up to four of these credits per year. The amount of money required to earn one credit goes up every year. Most Americans need to accumulate 40 credits (about 10 years of work) to qualify for Social Security benefits. However, adults and children may require fewer credits to be eligible for other certain types of Social Security benefits, such as…

10. Disability Benefits

Those who can’t work due to a qualifying medical condition that’s expected to last at least one year or result in death can receive Social Security Disability Insurance (SSDI) benefits.

Besides meeting the Social Security Administration’s definition of disability, you must also have worked long enough and recently enough to qualify for Social Security disability benefits. Unless you’re blind or have low vision, you must have earned at least 20 of your required credits in the 10 years before you became disabled to qualify for disability benefits. For example, if you were born after 1929 and became disabled at age 50, you would require at least 28 credits to qualify for Social Security disability benefits.

Certain family members, including your spouse if he or she is age 62 or older or an unmarried child, may qualify for benefits based on your work.

11. Supplemental Security Income Benefits

The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources. Qualifying recipients of Social Security disability or retirement benefits can receive SSI as long as they meet the requirements. The online Best Eligibility Screening Tool can help you determine whether or not you or your child are eligible for SSI benefits.

12. Back Payments

Given that there are an estimated 74.9 million Baby Boomers (ages 51 to 69) in the U.S., you can expect that Social Security consistently receives a large number of enrollments. The more paperwork, the longer the time to process your application. So, you’ll receive back payments from the Social Security Administration for the months between the date that you applied for benefits and the date you were approved for benefits.

There is a mandatory five-month waiting period for SSDI benefits, so back payments only start once the waiting period ends.

13. Retroactive Benefits

Back payments are available for both SSDI and SSI benefits, but retroactive benefits are only available for SSDI benefits. Retroactive benefits are the monies that you were already eligible for due to your disability onset date but didn’t apply for earlier. Keep in mind that you’ll receive no interest on any back payments for SSDI or SSI.


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