Josiah Grauso on Social Security and Creating a Secure Retirement

Josiah Grauso is a professional in Business Management with 20 years’ experience in the Financial Services Industry. Josiah helps educate current and prospective clients by teaching Social Security workshops and other community events geared towards those at or near retirement age. He has a passion for helping families devise and create sound financial strategies designed to lower risk and provide multiple lifetime income streams. In the following article, Josiah Grauso discusses the important information that individuals approaching retirement need to know about Social Security, addressing common misconceptions while providing insights to help individuals make informed financial decisions.

As retirement approaches, many people begin to consider their financial options and how to secure a stable income during their golden years. A significant part of this financial landscape is Social Security, a government program that provides retirement benefits to millions of Americans. Understanding how Social Security works, its eligibility criteria, and the best practices for claiming benefits is crucial for a secure retirement.

Josiah Grauso Explains More about Social Security Benefits

Social Security is a federal program established in 1935 to provide financial support to retirees, people with disabilities, and the survivors of deceased workers. It is funded through payroll taxes, known as FICA (Federal Insurance Contributions Act) taxes, which are deducted from employees’ paychecks throughout their working careers. Josiah Grauso, a Poconos resident, says that these contributions are then distributed to eligible recipients when they retire or meet other criteria.

Common Misconceptions

Despite its widespread use, there are several common misconceptions about Social Security. Understanding the facts can help you make better decisions about your retirement benefits.

1. Misconception 1: Social Security Will Run Out
   One of the most prevalent misconceptions is that Social Security is running out of funds and will not be available for future retirees of the next generation. While it’s true that the Social Security Trust Fund is facing financial challenges, it’s unlikely that the program will disappear entirely. Adjustments, such as increasing payroll taxes or changing the full retirement age, can help ensure the program’s long-term viability.
2. Misconception 2: Social Security Alone Can Support Retirement
   Many people believe that Social Security benefits are sufficient to cover all their retirement expenses. However, the average monthly benefit in 2023 was around $1,500, which may not be enough to maintain your desired lifestyle. Josiah Grauso says that Social Security should be considered as one part of a broader retirement income plan that includes savings, investments, and other sources of income.
3. Misconception 3: Claiming Early is Always Better
   Some individuals believe that claiming Social Security benefits as soon as they are eligible is the best option. While claiming early may provide immediate income, it also means receiving reduced benefits over your lifetime. Understanding the implications of early claiming is crucial for making the right decision.

Eligibility Criteria for Benefits

To qualify for Social Security retirement benefits, you must meet specific criteria related to your work history and age.

Work Credits

Josiah Grauso explains that eligibility for Social Security benefits is based on work credits. You earn work credits by paying Social Security taxes. In 2023, you earn one credit for every $1,640 in earnings, with a maximum of four credits per year. To qualify for retirement benefits, you must accumulate at least 40 work credits, equivalent to 10 years of work.

Retirement Age

The age at which you can claim full benefits, known as the “full retirement age,” depends on your birth year. For those born between 1943 and 1954, the full retirement age is 66. The full retirement age gradually increases for those born later, reaching 67 for individuals born in 1960 or later.

Early Retirement and Delayed Retirement

You can also claim benefits as early as age 62, but with a reduction in the monthly benefit. For each month you claim before your full retirement age, your benefit is reduced by a fraction of a percent. Conversely, if you delay claiming benefits past your full retirement age, your benefit increases by 8% per year until age 70. This increase is known as “delayed retirement credits.”

Best Practices for Claiming Benefits

Josiah Grauso, Poconos resident, notes that in order to maximize your benefits and ensure a secure retirement, consider the following best practices:

Determine Your Break-Even Age

The break-even age is the point at which the total amount received from claiming later exceeds the total from claiming earlier. Understanding your break-even age can help you decide when to claim benefits.

Consider Your Health and Longevity

Your health and expected lifespan should influence your decision. If you have a family history of longevity or are in good health, delaying benefits may be advantageous. If you have health issues, claiming earlier might be preferable.

Coordinate with Spousal Benefits

If you’re married, consider how spousal benefits impact your claiming strategy. A spouse can claim a benefit based on your earnings record or their own, whichever is higher. Coordinating with your spouse can help maximize overall benefits.

Seek Professional Advice

Navigating Social Security can be complex. Consider consulting with a financial advisor or Social Security expert to help you make informed decisions based on your unique situation.

Conclusion

Social Security is a crucial component of retirement planning. Understanding the system’s eligibility criteria, common misconceptions, and best practices for claiming benefits can help you make informed decisions about your financial future. By carefully evaluating your options and seeking professional guidance when needed, you can ensure a secure and comfortable retirement for yourself.