Learning Social Security basics can improve your retirement planning - Let's Get Down to Business

The Social Security program has expanded beyond retirement benefits to disability income, insurance for surviving spouses and children and Medicare. 54 million Americans receive some benefit from the Social Security program.

Benefits are wage driven. Currently 6.2% for Social Security are deducted from wages up to an income threshold, while Medicare deducts 1.45% against all wages. The wage earner must work 40 quarters and not necessarily consecutive quarters to qualify for benefits. The benefits calculation is based on the average of the 35 highest years of earnings. The are three basic entry levels into the program: early retirement with reduced benefits (generally age 62), full retirement age (currently at 65 or 66 (depending upon your birth date) and delayed retirement credits at age 70.