Free Guide to Social Security and Stimulus Payments

Understanding Social Security Benefits Basics

Social Security is a federal insurance program that provides monthly payments to workers who retire, become disabled, or pass away. The program began in 1935 during the Great Depression and has helped millions of Americans since then. Today, about 67 million people receive Social Security payments each month, according to the Social Security Administration.

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The program works through a payroll tax system. When you work, you and your employer each pay 6.2% of your wages into Social Security. Self-employed workers pay 12.4%. This money goes into a trust fund that pays benefits to current recipients. You earn "credits" based on how much you earn and pay in taxes. Most people need 40 credits (roughly 10 years of work) to receive retirement benefits.

Social Security provides three main types of benefits. Retirement benefits go to workers age 62 or older who have enough work credits. Disability benefits go to workers under full retirement age who cannot work due to a serious medical condition expected to last at least 12 months or result in death. Survivor benefits go to family members of workers who have died, including spouses, children, and parents in some cases.

The amount you receive depends on several factors. Your primary insurance amount (PIA) is calculated based on your 35 highest-earning years. Workers who delay claiming until age 70 receive larger monthly payments than those who claim at 62. For someone born in 1943 or later, full retirement age ranges from 66 to 67 depending on birth year.

The average monthly Social Security benefit in 2024 is approximately $1,907 for a retired worker, $1,550 for a disabled worker, and $1,674 for a widow or widower at full retirement age. These amounts change yearly based on a cost-of-living adjustment (COLA).

Practical takeaway: Understand that Social Security is not one-size-fits-all. Your benefit amount depends on your work history, age when you claim, and which type of benefit applies to your situation. Learning how the calculation works helps you understand what to expect.

When You Can Claim Social Security

Age is the primary factor determining when you can claim Social Security retirement benefits. The earliest age is 62, though claiming this early means a permanently reduced benefit amount. For example, if your full retirement age benefit would be $1,200, claiming at 62 might give you only $840 per month for life. This is a reduction of about 30% for someone born between 1943 and 1954.

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Full retirement age—when you can receive your complete benefit amount without reduction—varies based on your birth year. People born in 1943-1954 have a full retirement age of 66. Those born between 1955 and 1959 have a full retirement age that increases gradually from 66 and 2 months to 66 and 10 months. Anyone born in 1960 or later has a full retirement age of 67.

You can continue working past your full retirement age and delay claiming benefits. For each year you delay between full retirement age and 70, your benefit increases by about 8% per year through delayed retirement credits. This means someone waiting until 70 could receive about 24-32% more per month than they would at full retirement age. Waiting until 70 is the latest age at which benefits increase; there is no additional benefit for waiting past age 70.

Family members can also receive benefits based on your work record. Spouses may claim at age 62 or at full retirement age (depending on when they were born), and children under 19 (or 19 if still in high school) may receive benefits. Ex-spouses may also be able to claim based on your record if the marriage lasted at least 10 years.

People who become disabled can claim benefits before retirement age. The Social Security Administration has a specific definition of disability: you must be unable to work for at least 12 months or have a condition resulting in death. You do not need to reach any particular age to claim disability benefits if you meet the medical requirements.

Practical takeaway: Your claiming age significantly impacts your lifetime benefits. Someone claiming at 62 receives smaller monthly payments but collects for more years. Someone claiming at 70 receives larger payments but for fewer years. Understanding your personal situation—including life expectancy, other income sources, and family circumstances—helps inform when might work best for you.

Understanding Federal Stimulus Payments

The United States has issued major stimulus payments to residents during economic crises. The most recent stimulus program occurred in response to the COVID-19 pandemic, which began in 2020. Congress passed three relief packages that included direct payments to individual Americans: the CARES Act (2020), the Consolidated Appropriations Act (2020-2021), and the American Rescue Plan (2021).

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The first stimulus payment in 2020 sent $1,200 to most adults and $500 per child under 17. The second payment in late 2020 sent $600 per adult and $600 per child. The third payment in 2021 sent $1,400 per person regardless of age. Eligibility was based primarily on adjusted gross income reported on tax returns, with higher-income earners receiving reduced or no payments.

These payments were distributed through multiple methods. The Internal Revenue Service (IRS) sent direct deposits to people's bank accounts using information from recent tax returns. Payments also went to people receiving Social Security, Supplemental Security Income, Veterans benefits, and Railroad Retirement benefits. The IRS mailed paper checks to people without direct deposit information on file. Prepaid debit cards were issued in some cases when mailing addresses were unavailable.

The total amount distributed across all three payments exceeded $800 billion. Approximately 160 million households received at least one payment. The IRS created a tracking tool on its website where people could check payment status and update their banking information if their first payment was mailed or sent to an old account.

Stimulus payments were considered advance payments of a tax credit for the tax year in which they were sent. This meant that when people filed their 2020 or 2021 tax returns, they had to account for payments already received. People who received more than they were entitled to had the difference subtracted from their tax refund. People who received less than they were entitled to could claim the additional amount as a credit when filing their return.

Practical takeaway: Stimulus payments from 2020-2021 were tied to tax filing information and benefit recipient records. If you did not receive a payment you thought you were owed, you could claim it on your tax return. No future stimulus payments have been announced, though Congress could pass additional relief legislation if economic conditions warrant it.

How to Find Your Social Security Information

The Social Security Administration maintains a website at www.ssa.gov where you can learn about benefits and programs. The site includes information about retirement planning, disability benefits, survivors benefits, supplemental security income (SSI), and Medicare. You can also call the Social Security Administration at 1-800-772-1213 (TTY 1-800-325-0778) to speak with a representative during business hours Monday through Friday.

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Creating a my Social Security account online allows you to view your earnings record, estimate your retirement benefits, and manage your account. To create an account, you need to provide your Social Security number, date of birth, email address, and answer security questions. The account shows your annual earnings history, which is the basis for calculating your benefit amount. You can verify that your earnings record is correct, since errors could reduce your future benefits. If you find errors, you should contact Social Security to correct them.

Your Social Security Statement is a document showing your earnings history and estimated benefits. Anyone age 60 or older with a my Social Security account can view this statement online. The statement includes your estimated retirement benefits at different claiming ages (62, full retirement age, and 70), estimated disability benefits, and estimated survivor benefits for your family.

Local Social Security field offices can provide in-person assistance. You can find your nearest office by visiting www.ssa.gov and using the office locator tool, or by calling the main number. Many offices accept appointments, which can reduce wait times. Some offices offer limited services by phone or video appointment, particularly during periods of high demand.

The Social Security Administration also sends benefit statements by mail to people who do not have online accounts