Our nation has struggled with finding humane and sound economic approaches. Notably, helping the elderly, widows, orphans, and the less fortunate. President Roosevelt signed the Social Security Act into law on August 14, 1935. As a result, there was a turning point in the government helping its aging population.
Developed on the cusp of the Great Depression (1929–1935), Social Security promised relief to millions of elderly and retired Americans. As a result, benefits were provided for retirement, in addition to aid for dependent children, and insurance for the disabled and/or unemployed.
Today, Social Security benefits represent about a third of retirees’ income. For instance, nearly 90% of Americans 65 and older receive some type of Social Security benefits. In addition, about half of married couples and 70% of unmarried people on Social Security rely on benefits for about half of their income. Furthermore, twenty-one percent of married couples and about 45% of unmarried people rely on Social Security for at least 90% of their income.
Loopholes allowed some married people to begin receiving spousal benefits at their full retirement age. By the same token, their own Social Security benefits continued to grow because they delayed filing for it. For this reason the Bipartisan Budget Act of 2015 closed two complex filing loopholes available to married couples.
The law requires applicants to file for both benefits. Called “deemed filing,” the revisions are extended to those who have at least reached their full retirement age. Deemed filing means you were “deemed” to file for both benefits.
What You Need to Know
While there are many different aspects of Social Security, there are 4 critical Social Security facts retirees must know. First, the Social Security Administration (SSA) attempts to match benefits to inflation. As a result, Social Security recipients received a 1.3% increase in payments in 2021. Second, you should know the maximum taxable earnings limit rose to $142,800 (from $137,700 in 2020). Therefore, earnings above that limit are not taxed. Workers’ Social Security tax remains at 6.2%. Next, the full retirement age continues to rise. Ultimately, it is scheduled to increase by two months each year until 2022. Eventually, the full retirement age will be 67. Finally, earning limits are expected to increase. Social Security recipients who work will find their benefits temporarily reduced.