Personal Finance News Monday 2/25

Phil's Personal Finance Tip of the Day:

10 Things Everyone Should Know About Social Security

By Emily Brandon | U.S.News & World Report LP 

Nearly every working American pays into the Social Security program, but not everyone understands the benefits they qualify for due to their contributions. And most workers will no longer get paper statements that explain how much they have paid into the system and what benefits they are likely to receive in retirement. Here are 10 things everyone should know about Social Security:

You contribute 6.2 percent of your income. Workers pay 6.2 percent of their earnings into the Social Security system, up to $113,700 in 2013. Employers pay a matching 6.2 percent for each worker. Self-employed workers must contribute 12.4 percent of their income annually.

How your benefit is calculated. Social Security payments are calculated based on your 35 highest-earning years in the workforce, and are also adjusted for inflation. If you don't have 35 years of earnings, zeros are averaged in for the years you didn't pay into Social Security.

[Read: 7 New Social Security Rules for 2013.]

Your full retirement age. You can collect the full amount of Social Security you have earned at what the Social Security Administration calls your full retirement age, which varies based on your birth year. The full retirement age used to be 65 for people born in 1937 or earlier. But the full retirement age was gradually increased in two-month increments from 65 and two months for people born in 1938 to 65 and 10 months for those born in 1942. The full retirement age is 66 for baby boomers born between 1943 and 1954. It's scheduled to further increase from 66 and two months for Americans born in 1955 to 66 and 10 months for people born in 1959. And the full retirement age is 67 for everyone born in 1960 or later. Workers who begin receiving Social Security benefits before their full retirement age will receive reduced payments for the rest of their lives.

To read the entire article from Emily Brandon | U.S.News & World Report LP:http://finance.yahoo.com/news/10-things-everyone-know-social-150120348.html

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Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com