Chapter Four: Six Things You Need to Know about Social Security

Most workers—about 96 percent of us these days—pay into the Social Security system through federal payroll or self-employment taxes. In return, we receive an income benefit when we retire. Social Security benefits rise with the cost of living, so inflation doesn’t shrink their value. Once you begin receiving retirement benefits, you will get them as long as you live, even if (and here’s hoping) you’re still around at age 110. (Social Security is also a disability program and a family support program if the breadwinner dies or becomes disabled. But in this chapter we’ll only be discussing the role it plays in providing retirement income benefits for older Americans.) After reading this chapter, you’ll know:

1. How you earn benefits
2. The types of benefits available
3. When they’re available
4. How much you qualify for
5. How taxes affect your benefit
6. How to apply for your benefits

Why is it important for you to know these six things? Because Social Security is the first line of defense against poverty for millions of women. Without Social Security, more than half of the older women alive today would be poor. These women are our grandmothers and mothers, our aunts, and our neighbors. And eventually, we could be those women. Consider knowing these six things about Social Security as your line of defense against poverty in retirement.