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Retirement sounds exciting, but it can actually be a difficult landscape to understand and navigate. A retirement calculator can help guide your savings goals, both with a total target you are trying to hit and a monthly amount to include in your budget. But figuring out how much you can expect to get in Social Security benefits can be a little more difficult. (You can get a personalized estimate from the Social Security Administration here.)

For many Americans, Social Security benefits are the base of their retirement income. You have been paying into this system from the time you got on a payroll at your first job. Whether you are close to retirement or years away, it’s about time you got to know the basic Social Security facts. Check out some of the most important ones to know below.

Who Gets It

If you have made at least $4,800 annually and paid into the system for 10 years (or 40 quarters), you are eligible for benefits. You can begin collecting your full retirement benefit once you reach full retirement age, between 66 and 67, depending on when you were born. If you wait until age 70, you will even receive an additional credit whereas if you claim before full retirement age, your monthly benefits will be reduced.

How Benefits Are Calculated

As indicated earlier, when you decide to start taking your benefits impacts how much you will be given monthly. Your birth year, income and marital status also affect how your benefits are calculated. The Social Security Administration takes your highest-earning 35 years of covered wages, averages them and indexes for inflation.

Zero is averaged in for every year you do not have earnings, bringing down the benefits significantly. There are also Cost of Living Adjustments, so your retirement income is protected against inflation. There is a maximum benefit, which changes every year. It is $2,663 a month for 2015. If your expenses are significantly more than this number, it’s important to focus on saving enough money to make up the difference.

Are Benefits Taxable?

At the federal level, Social Security benefits are taxed on a sliding scale. If your total annual income including Social Security benefits is below $25,000, your benefits will not be taxed at all. On the other hand, if you have a lot of income from other sources, up to 85% of your benefits could be considered taxable income. The taxes you pay on your Social Security benefits go back into funding the SSA and Medicare. Some states also tax benefits as part of income, while others don’t, or only tax a portion of them. It’s important to learn how your state treats Social Security benefits so you will know if and how much you will pay in taxes.

Is the System Stable?

The Social Security Board of Trustees’ 2014 report disclosed that the Social Security system as we know it is destined to go broke. Without any changes or additional contributions from taxpayers, the SSA will be unable to process regular payments to retirees after 2033. Social Security is essentially a storage bank for the government, but there are some changes that could ensure benefits will continue for future generations: from reducing benefits to raising the rate of taxpayer contributions and retirees taking a cut in benefits.

Even though our country’s Social Security system may be changing, it’s a good idea to know what benefits you are entitled to, how and when you will receive them. Becoming a more educated worker can help ensure you have a financially safe retirement.

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