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Why Social Insurance is Important To Teens

If you think that Social Security is just for old people, think again, there are a couple of important considerations that Teenagers need to think about when it comes to Social Security.

flag of the United States Social Security Administration

In today’s article, Vicillo will be explaining what these things are and how you can estimate your social security benefits. 

Let’s talk about what the United States Social Security system actually entails because it’s so much more than just retirement benefits and it doesn’t only affect your old age. 

What is Social Security?

In the US, it is commonly referred to as welfare or a social security net, particularly when it comes to Canada and EU nations. Social security is any scheme of Government that offers financial help to individuals with insufficient or no incomes.

As young people, one of your biggest assets is your health and therefore earnings potentials, opportunities, and options are also assets. But what would happen if one day, unfortunately, an accident befall us and we are unable to work? 

Here is why young people should care about Social Security first, so if you become disabled and are unable to work you may be eligible to receive Social Security disability benefits. If you are eligible for disability or retirement benefits your spouse and your children could also receive benefits. 
When you pass away, your spouse and/or children may be eligible for benefits as well.

In America, we also have Medicare which is a separate program run by the government that covers things like patient hospital care, nursing care, drugs the legal kind of course, doctors fees, and other medical supplies and services to people who are age 65 or older, or those who have been on disability for at least two years. 

What do all of these benefits have in common is that your Social Security covered earnings qualify you for both of these programs as you may already know.

If you have a job, your employer withholds 6.2% of your wage for Social Security taxes and 1.45% for Medicare taxes and those taxes together are also known as your FICA taxes, and your employer also pays on their end an equivalent amount of Social Security and Medicare tax.

If you are self-employed you pay both the employer and employee portion of the Social Security and Medicare tax for a total of 12.4% for Social Security and 2.9% for Medicare. 

It is important to note that there is a limit on the amount of wages that are taxed for Social Security and that limit is around One hundred and twenty-eight thousand four hundred dollars ($128,400)

Checking your social security statement on annual basis shows your estimated disability benefits and if you were to become disabled today, it benefits for your potential spouse and children, it also shows you a record of your earnings history year over year and it shows the amount of taxes that have been paid for Social Security and Medicare.

In addition, it shows how many work credits you have toward becoming qualified for retirement benefits.

What is work credit?

Work credits are the building blocks that the Social Security Administration uses to find out whether you have enough covered work to qualify for different types of Social Security benefits. 
When you work and pay Social Security taxes, you earn up to a maximum of four credits per year, credits are based on your total wages and/or self-employment income for the year and the amount of earnings that it takes to earn one credit varies from year to year. 

In 2019, you must earn One thousand three hundred and sixty dollars ($1,360) to earn one Social Security or Medicare worth credit, so you need to earn Five thousand four hundred and forty dollars ($5,440) to get four work credits for that year. 

In order to qualify for retirement benefits, you need at least 40 work credits which means it is going to take you a minimum of ten years to qualify for retirement benefits, the amount of credits needed for disability depends on the age when you become disabled. 

If you are under 24, you only need six work credits so that’s the equivalent of about a year and some change of work. From there the credit requirement increases gradually with age for example if you are between the ages of 31 and 42 you need 20 work credits.

When checking your statement there are a couple of things that you should be on the lookout for:

Annual Earnings: First and foremost, look at your earnings records, these records show how much money you have earned over the years that were subject to Social Security and Medicare taxes. 

You want to make sure you check this every year because it is much easier to remember how much money you made two years ago than a decade ago, and you don't want mistakes like that following you into your retirement years and messing up your benefits 

Date of birth: Another very important piece of information you will want to check on your statement is your date of birth, make sure that the Social Security Administration has that right information. 
I have come across a few people, who when they have gone to look at their social security statement, realize that their birth date is incorrect and that will mess with your benefits.

How do you access your Social Security Statement?

The best way is to create an online account with the Social Security Administration called My Social Security, it is quite an easy and straight forward process and only takes a few minutes to do.

Once you create your account, the Social Security Administration will send you an email reminding you to check your Social Security Statement. 

So what should you do if you look at your statement and you recognize errors whether in your earnings report or with your date of birth or any other biographical information, you should contact the Social Security Administration as soon as you recognize the error. 

It is important to note that if you are looking at your earnings report, your most recent year of earnings might not be updated yet. 

It is common occurrence so if you see that don’t be alarmed, it just takes the Social Security Administration a little bit of time to update things and make sure your earnings are accurate for the prior year, but for any other errors you definitely want to get in contact with the Social Security Administration as soon as you discover the error, because that will affect you and possibly your family’s benefits in the future.

I hope this Article Enlightened Our readers about Social Security and Why it is Important to get one at an early age. 
If you find this Article useful, why not share it on your social media Timeline and help others get the awareness about Social Security.

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