Deciding when to claim Social Security is a big decision with a potentially big impact. While each person’s situation is different, the decision to claim or delay benefits should be carefully considered. It’s usually a decision you (and your spouse if married) will have to live with for the rest of your life.
As a first step, you may want to familiarize yourself with the Social Security lingo. The Social Security “language” is heavy in the use of acronyms, an abbreviation of the first letters of words in a phrase. Becoming familiar with a few of these terms can help you fine-tune your Social Security conversations.
When talking about Social Security, most people are referring to OASDI (Old-Age, Survivors, and Disability Insurance). The program’s goal is to partially replace income that is lost due to old age, the death of a spouse (or qualifying ex-spouse), or disability.
The program is funded by the federal OASDI tax, noted on your paycheck as FICA (Federal Insurance Contribution Act). The SSA (Social Security Administration) produces a statement that shows how much you have paid in Social Security and Medicare taxes along with your FRA (Full Retirement Age) and your PIA (Primary Income Amount). This statement is available to view online by opening a “my Social Security account”.
Be sure to include DRCs (Delayed Retirement Credits), which can be earned by deferring your Social Security benefits past your FRA. Once you receive benefits, most years you’ll get a COLA (Cost of Living Adjustment), which will usually mean a little extra money in your monthly payment.
These are just a few of the acronyms to get you thinking about your Social Security strategy. If you are approaching social security benefit age and would like learn more about the decisions you’ll need to make, join us at our Social Security and Medicare seminar in January 2024, click here to learn more.
Whether you’re applying for Social Security in the future or currently receiving benefits, there are some important changes to earnings limits, Medicare premiums, and other differences to keep in mind. Click here to read more: “What’s New for Social Security”.