To many Americans, the Social Security Administration is shrouded within a cloak of secrecy. While much of that is warranted, given the ever-changing programs it heads as well as the political and economic lightning rod it tends to be, many components of Social Security are relatively straightforward and important to understand. To that point, there are a handful of little-known facts about Social Security you need to know as you continue down your path towards retirement.
Survivor Benefits Aren’t Just for Spouses
Although the surviving spouse is by far the most common beneficiary of survivor benefits when someone passes away, they are by no means the only people eligible to receive survivor benefits. As surprising as it might sound, ex-spouses are even eligible to receive survivor benefits under some circumstances.
Aside from the surviving spouse, however, minor children are the most common beneficiaries to Social Security benefits. When a minor is receiving survivor benefits, the Social Security Administration typically requires a custodian to administer the account, usually in the form of a UTMA or UGMA account depending on the state the minor lives in.
Benefits for the Self-Employed
For those that don’t have the luxury of seeing a FICA tax line item on a paystub, rest assured that self-employment doesn’t eliminate your eligibility for Social Security benefits. In fact, if you’re self-employed, odds are you have been paying into the Social Security system this entire time without even knowing it.
Although the name can be misleading, the dreaded self-employment tax found on your 1040 isn’t a punitive measure from the IRS to dissuade you from running your own business but, instead, is your payment towards your own benefits. Simply put, you’re amassing the same credits you would have been through a more typical job, just in a different manner.
Applying for Social Security Disability
Applying for Social Security Disability benefits is never a given. In fact, 7 out of 10 applicants are initially rejected for a whole host of different reasons. Therefore, don’t be surprised if a few minor skirmishes are required to pursue benefits. Unfortunately, more often than not, applicants are forced to hire help in order to fight the Social Security Administration for their disability benefits. A number of law firms throughout the country specialize in the service.
Don’t Shred Your Statements Before Pouring Over Them
Lastly, if you’re like most and don’t pay much attention to the Social Security statements you receive, buck that trend and start reading through them as they are full of valuable information. Whether you’re a year from retirement or four decades, it’s never too early or late to see where your benefits stand.
Jeremy Wallace is founder and chief investment officer at Wallace Hart Capital Management, an independent financial services firm committed to offering comprehensive advice and customized services. Jeremy has 20 years of experience in the financial industry and is passionate about helping clients preserve and enhance their wealth so they can pursue their passions. Jeremy graduated from Emory University with a degree in international economics and a certificate in financial planning. Outside of the office, Jeremy spends most of his free time with his wife, Julie, and their three children, Isabel, Lincoln, and Reid. He is an avid Chicago Cubs baseball fan, and he enjoys golfing with his wife and traveling with his family. Learn more about Jeremy by connecting with him on LinkedIn.