The Social Security pension system pays out a variety of kinds of benefits to millions of retirees, spouses, survivors, children, needy and disabled persons every month. Here is a breakdown of the different types of Social Security benefits and for whom each is intended. Have questions about Social Security benefits? Click here. Perhaps the most common type of benefit paid out by the Social Security Administration today is the retirement benefit. This benefit is paid to retirees who meet certain requirements relating to citizenship, work history and age. This benefit is designed to replace part or all of the income that the recipient earned during their working years. Those who qualify receive a monthly lifetime benefit that is dependent upon the worker's earnings and the age at which the worker begins collecting benefits. Retirees who earned more during their working years will receive a higher income benefit. Those who apply for Social Security early will receive a lower benefit, while those who wait until they reach their full retirement age or later will receive a higher benefit. Survivor's benefits are also available to the spouses, ex-spouses (in some cases), dependent children and dependent parents of deceased workers. The worker must have died while receiving Social Security retirement benefits. The survivor's benefit is equal to a percentage (such as 50%) of the worker's former monthly retirement benefit. From its humble origins during the Great Depression, Social Security has grown to become a major factor for most retirees when they plan for their retirements. It is often the primary source of income for many retirees, particularly those who have little or no retirement savings. The Social Security Disability Insurance (SSDI) program pays disability benefits to workers and certain family members who become disabled and qualify for benefits based on their earnings history. Recipients must have worked a sufficient number of qualifying quarters of employment and paid Social Security taxes on their earnings in order to qualify. Those who qualify based on the non-medical criteria must then meet the medical requirements to qualify for benefits. The worker must have a medical condition that is certified to either last for at least a year or end in death. It should be noted that it is very difficult to qualify for Social Security Disability benefits, and well over half of all Social Security Disability applications that are received are rejected. It is much easier to qualify for most types of privately issued disability insurance coverage than it is to qualify for Social Security disability. Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes): SSI benefits are available to those over age 65 who meet the necessary financial requirements as well as children and adults who are disabled and meet certain financial conditions. Although SSI and Disability benefits are not the same, they have the same medical requirements for disability.Types of Social Security Benefits
Retirement Benefits
Social Security Disability Insurance Benefits
Supplemental Security Income (SSI) Benefits
What Are the Different Types of Social Security Benefits? FAQs
There are four major types of Social Security benefits: retirement, survivors, disability and supplemental security income (SSI). Retirement is for people who have reached the full retirement age; survivors are for those who have lost a spouse or parent due to death; disability provides benefits to those unable to work due to a medical condition; and SSI is a needs-based program that helps low-income individuals.
Eligibility requirements vary depending on the type of benefit you are applying for. Generally, you must be age 65 or older to qualify for retirement benefits, while to receive survivors benefits, you must be a legal spouse or child of an individual who was covered by Social Security. To qualify for disability benefits, you must have a medical condition that prevents you from working and meets the requirements set out by the SSA. Finally, to receive SSI benefits, you must be under 65 years old with limited income and resources.
You can apply online using the Social Security Administration’s website or by visiting your local SSA office. When applying online, make sure to have all necessary documents ready such as birth certificates and proof of identity before starting the application process. If applying in person at an SSA office, bring your documents with you.
The length of time for processing a claim and receiving benefits depends on the type of benefit you are applying for. Generally, retirement and survivors benefits can take up to 2 months to process, while disability and SSI may take several months due to medical evaluations that may be required.
While both programs provide assistance to people with disabilities, there are some key differences between the two. SSDI provides monthly cash benefits based on an individual’s work history, whereas SSI provides assistance based on financial need, regardless of work history. Additionally, SSDI is intended for those with long-term disabilities, while SSI is intended for those with temporary or short-term disabilities.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
