10 Things Everyone Should Know About Social Security

Every working American should understand these important facts about Social Security.

Extreme close-up macro image of a US Social Security card.
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Insurance benefits for younger people. Social Security isn't just for retirees. Working-age people who become disabled and are no longer able to work can qualify for Social Security payments. And when a worker dies, his or her spouse and children are often eligible for monthly payments.

Electronic payments are now required. Your Social Security check probably won't come via mail. New Social Security recipients have been required to select an electronic payment option since May 2011, and approximately 93 percent of Social Security and Supplemental Security Income payments are already directly deposited into a bank or credit union account or loaded onto a prepaid debit card. "It costs the government and ultimately taxpayers a little over a dollar for paper checks and about 10 cents for each electronic transaction," says Walt Henderson, director of the electronic fund transfer strategy division at the Treasury Department.

You can view your Social Security statement online. The Social Security Administration has stopped mailing paper Social Security statements to most workers to cut costs. If you want to view your complete earnings history, taxes paid into the system, and get a personalized estimate of your expected payments, you'll need to create a Social Security online account and log in to view your statement. It's a good idea to periodically check your statement to make sure your information is being recorded correctly and to make decisions about when to claim Social Security. "I recommend that everyone get in the habit of checking their online statement each year, around their birthday, for example," says Michael Astrue, the former Commissioner of Social Security. You can also now sign up to receive benefits, change your direct-deposit information, and access a benefit verification letter online.

[Read: Social Security Statements Now Available Online.]

The trust fund has a projected deficit. The assets in the Social Security trust funds are expected to be exhausted in 2033, according to the Social Security Board of Trustees' annual report. After that, incoming tax revenue will provide enough income to pay out about three-quarters of promised benefits. "If nothing else is done, certainly payments would be reduced dramatically to just what the tax rolls were bringing in each year, but we can always increase the Social Security tax," says Blankenship. Possible changes that might correct the problem include tax increases, benefit cuts, or a combination of the two approaches. The trustees found that an immediate payroll tax increase of about 1.3 percent for workers and employers or an immediate benefit reduction of 16.2 percent would both correct the projected deficit and restore the program to solvency for the next 75 years.