While politicians often view the United States’ Social Security system as a kind of third rail of politics and numerous pundits often refer to the Social Security system as a sort of Ponzi scheme, the reality is that many American senior citizens rely upon Social Security to meet their basic needs after they retire from the workforce.
One of the tools that the Social Security Administration provides on their web site is a retirement estimator. While those who are retired will derive little benefit from the estimator, those people in the workforce who are assessing their work-life plans and those who are drawing unemployment benefits but are eligible to retire may want to use it to better define their options.
In order to use the estimator for its full advantage it is necessary to be enrolled in the Social Security system and agree to read and abide by their rules of conduct. Then personal info is used and finally the previous year’s income is entered. From here the Social Security Retirement Estimator provides an estimate of retirement benefits provided by Social Security.
What the average person will find is three different income levels from Social Security. The first is the amount for a “full” retirement age which is between 65 and 67 depending on the year of birth. The second is for the reduced retirement age of 62 and this amount will be about 66 percent of the amount for a full retirement age pension. The last will be the enhanced pension for those who decide to work past their full retirement age until 72.
One aspect of the retirement estimator is the ability to prepare different scenarios for retirement. It is possible, using the Create Different Scenarios” button to set up several different retirement ages and to see the social security benefit payment amounts for each age. This allows a person to better plan for the type of retirement they envision.
Social Security is a wonderful system that may have problems if the politicians cannot devise a fair and efficient way to fund it for the future. Proposals to include all wages as subject to social security tax promise the best future for America’s retirement system but some factions oppose this idea. The retirement of millions of Americans is possible because of Social Security and the support of basic needs is possible for many senior citizens only because of Social Security. Using the tools to plan for retirement only makes sense.