Social Security is the general term that describes a number of related programs: retirement, disability, dependents and survivors benefits. These programs together provide workers and their families with some money when their normal flow of income shrinks because of retirement, disability or death.

Unfortunately, the government's original goal of providing financial security through these programs is becoming increasingly remote. The combination of rapidly rising living costs, stagnating benefit amounts and penalties for older people who continue to work make the amount of support offered by Social Security less adequate with each passing year. This shrinking of the Social Security safety net makes it that much more important that you know how to get the maximum benefits to which you are entitled.

How much can I expect to get in Social Security benefits?
The amount of benefits to which you are entitled under any Social Security program is not related to need, but is based on the income you have earned through years of working. In most jobs, both you and your employer have paid Social Security taxes on the amounts you earned. Since 1951, Social Security taxes have also been paid on reported self-employment income. Social Security keeps a record of these earnings over your working lifetime, and pays benefits based upon the average amount earned.

In 1999, more than 30 million people will receive Social Security retirement benefits that average about $750 per month. Over 6 million widows and widowers receive survivors benefits; these average about $700 per month. And over 3 million spouses of retired or disabled workers receive dependents benefits that average about $380 per month.

Who is eligible to collect benefits?
The specific requirements vary depending on the type of benefits, the age of the person filing the claim and, if you are claiming as a dependent or survivor, the age of the worker. There is a general requirement, however, that everyone must meet to receive one of these Social Security benefits: the worker on whose earnings record the benefit is to be paid must have worked in "covered employment" for a sufficient number of years -- that is, earned what Social Security calls work credits -- by the time he or she claims retirement benefits, becomes disabled or dies. To find out about your eligibility, call the Social Security Administration, 800-772-1213.

Note that Social Security eligibility rules have recently changed for some specific types of workers including federal, state and local government workers, workers for nonprofit organizations, members of the military, household workers and farm workers. If you have been employed for some time as one of these types of workers, check with the Social Security Administration for special rules that may affect your eligibility.

How are my benefit amounts calculated?
The amount of any benefit is determined by a formula based on the average of your yearly reported earnings in covered employment since you began working. To further complicate matters, Social Security computes the average of earnings differently depending on your age. If you reached age 62 or became disabled on or before Dec. 31, 1978, the computation is simple: Social Security averages the actual dollar value of your total past earnings -- and bases the amount of your monthly benefits on that amount.

If you turn 62 or become disabled on or after Jan. 1, 1979, Social Security divides your earnings into two categories: earnings from before 1951 are credited with their actual dollar amount, up to a maximum of $3,000 per year; and from 1951 on, yearly limits are placed on earnings credits, no matter how much you actually earned in those years.

Can I collect more than one type of benefit at a time?
No. You may qualify for more than one type of Social Security benefit, but you can collect just one. For example, you might be eligible for both retirement and disability, or you might be entitled to benefits based on your own retirement as well as on that of your retired spouse. You can collect whichever one of these benefits is higher, but not both.

Can I claim spousal benefits if I'm divorced?
You are eligible for dependents benefits if both you and your former spouse have reached age 62, your marriage lasted at least ten years and you have been divorced for at least two years. This two-year waiting period does not apply if your former spouse was already collecting retirement benefits before the divorce.

You can collect benefits as soon as your former spouse is eligible for retirement benefits. He or she does not actually have to be collecting those benefits for you to collect your dependents benefits.

If you are collecting dependents benefits on your former spouse's work record and then marry someone else, you lose your right to those benefits. You may, however, be eligible to collect dependents benefits based on your new spouse's work record. If you divorce again, you can return to collecting benefits on your first spouse's record, or on your second spouse's record if you were married for at least ten years the second time around.

Can I keep a job even after I start collecting retirement benefits?
Yes -- and many people do just that. But if you plan on working after retirement, be aware that the money you earn may cause a reduction in the amount of your Social Security benefits. Until you reach age 70, Social Security will subtract money from your retirement check if you exceed a specific amount of earned income for the year.

The amount of earned income you are permitted without loss of Social Security retirement benefits depends on your age -- and the amount also changes each year. In 1999, for example, the limits on earned income were $9,600 per year if you were age 62 to 64; $15,500 if you were age 65 to 69. Once you turn age 70, there is no limit at all on the amount you can earn and still receive your full Social Security retirement benefit.

If you are age 62 to 64 and you earn income over the year's limit, your Social Security retirement benefits are reduced by one dollar for every two dollars over the limit. If you are 65 to 69, you lose one dollar in benefits for every three dollars of earned income over the limit.

Copyright © 1999 Inc.