Social Security & Medicare Benefits
Both Social Security and Medicare benefits are handled through the Social Security Administration, founded in 1935 by President Franklin D. Roosevelt. Social Security and Medicare are intended to provide a financial safety net for senior citizens and people who become injured. Workers pay into the Social Security system and are eligible for benefits when reaching retirement age. Most U.S. citizens and permanent residents can receive basic Medicare when they turn 65.
Retirement Benefits
The primary purpose of Social Security is providing retirement benefits. Workers pay taxes into the Social Security system through automatic deductions from their paychecks, earning credits for each quarter they work. Workers born after 1929 must have at least 40 credits, or 10 years of employment, to receive monthly Social Security retirement checks.
A worker's birth year determines when he can receive full retirement benefits; as of 2010, full retirement age ranges from 65 to 67. For instance, someone born in 1954 is eligible for full retirement benefits when she turns 66. The retirement age increases by two months for each birth year up to 1960. So, someone born in 1955 must be 66 years and 2 months old to qualify for full benefits. Those born in 1960 and reach full retirement age at 67.
Workers can begin receiving monthly Social Security checks when they turn 62, but benefits are reduced a half-percent for each month the person retires before his full retirement age. For those who work past full retirement age, monthly benefits increase according to an age formula that caps out at age 70.
Disability Benefits
Social Security disability benefits are intended to help pay for living needs when a person is injured and cannot work. To qualify for these benefits, the person must have an injury or condition that is expected to prevent employment for at least one year. Terminal illnesses qualify under this requirement, while short-term disabilities do not.
Eligibility for disability benefits is based on work experience, adjusted for age. For example, a worker under 28 can qualify for disability benefits after only 1 1/2 years of work, while a 60-year-old worker must have more than nine years of employment. Exceptions are possible for certain disabilities, such as blindness.
In some cases, family members of a disabled person also can receive Social Security benefits. A spouse who is 62 or older, or parenting your underage child, is eligible. Unmarried children under the age of 18 and adult children with severe disabilities also receive benefits.
Survivor Benefits
Social Security also pays survivor benefits as a way to fill the income void left when a wage-earning family member dies. Spouses and children are the primary beneficiaries of these benefits. To be eligible, a surviving spouse must be older than 60, or disabled and older than 50. There are no age limits if the surviving relative is the guardian for a child under 16.
Children can receive survivor benefits directly they are minors, or are 19 and attending elementary or secondary school full time. Severely disabled children, regardless of age, also are eligible.
The amount of the survivor's benefit will vary, but it typically is 75 percent to 100 percent of the retirement benefit the deceased person would have received.
Medicare Benefits
Medicare provides health insurance coverage for most U.S. residents over 65. According to the Social Security Administration, Medicare doesn't cover all medical expenses, or pay for long-term care. The program is used to reduce the overall cost burden of health care. Funding for Medicare comes from a combination of payroll taxes and a deduction taken from Social Security checks.
Medicare benefits are divided into four areas. Hospital insurance, known as "Medicare Part A," pays for care in a hospital or nursing home. "Medicare Part B" is medical insurance that covers outpatient doctor visits and supplies. "Medicare Part C" is used if care involves both inpatient hospital visits and outpatient physician visits. Medicare Part D" helps beneficiaries pay for prescription medications.
The hospital insurance included in Medicare Part A usually is free for those over 65 who are receiving Social Security retirement benefits. However, Parts B, C and D typically require payment of an out-of-pocket premium.
People receiving Social Security retirement or disability benefits are automatically enrolled in Medicare; those over 65 who aren't retired or on disability must apply for Medicare themselves.
Tags: Social Security, full retirement, Medicare Part, Security Medicare, Social Security Medicare, disability benefits, Medicare Benefits
