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Image of close up social security card for Quotacy blog Social Security Benefits 101

Social Security 101: Understanding the Basics

By Jeanna Simonson | Expert reviewed by Natasha Cornelius, CLU
March 03, 2023
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

For many Americans, Social Security benefits are an extremely important source of retirement income. It’s one of the few sources of income that is predictable and guaranteed to last for as long as you live. While many people may not rely solely on Social Security to fund retirement, the benefits may make up a large portion of your income.

Social Security was designed to help America’s workers in retirement. Social Security benefits replace 40% of an average worker’s income after retiring. The main values include:

  1. The monthly payments continue for life
  2. Benefit payments can’t be reduced (due to economic downturns)
  3. Benefits are usually increased annually for inflation
  4. There are spousal and survivorship benefits

In order to qualify to receive your retirement benefits you have to meet certain criteria:

  1. You’ve earned 40 total Social Security credits (one credit is earned for every $1,640 in earnings with a maximum of 4 credits per year).
  2. You’ve reached Full Retirement Age (FRA).


Age to receive full Social Security benefits
Year of birthFull retirement age
195566 and 2 months
195666 and 4 months
195766 and 6 months
195866 and 8 months
195966 and 10 months
1960 and later67
*People born on January 1 of any year, refer to previous year

The age you retire affects your Social Security benefits. Early retirement is an option as early as the age of 62. In this case, your Social Security benefits are reduced by by as much as 30% compared to what they would be at FRA. On the other hand, if you retire after FRA, your benefit increases by 3-8% each year you delay (no credit given after age 65, however.) You can find more information on Social Security benefits and how they are determined by visiting the Social Security Administration website.

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Social Security benefits are fairly simple for single individuals. Your benefits are solely based on your personal work record.

Married couples have a few more options and flexibility in their benefits. Spousal benefits allow a husband or wife to receive up to 50% of a spouse’s Social Security Benefits.

For married couples, you must meet the following criteria:

  1. The person claiming spousal benefits must be age 62 or older.
  2. Your spouse must be eligible to receive Social Security retirement benefits.
  3. Your spouse must have already filed to receive those benefits.

There are different ways to maximize your benefits in retirement. It may be a good idea to sit down with a financial professional to evaluate your situation and find the best path for you.

Something you can’t ignore is the fact that death is certain and we don’t know when that day will come. When you or your spouse die, your total Social Security income is reduced.

The surviving spouse is then facing two major losses: the emotional loss of their partner and the financial loss of their spouse’s Social Security benefits. The surviving spouse has the option to choose between their personal Social Security benefits or to receive the deceased spouse’s benefits that they were receiving at the time of death.

One way to adjust for this drop in dependable income is to supplement Social Security income with life insurance. Term life insurance can be a useful tool when planning for the unexpected and even retirement. It provides a death benefit for your spouse to retire on if you pass away before saving enough for a comfortable retirement or to help bridge that gap of the loss of Social Security benefits.

Age and health play a major role in calculating premium costs and whether or not you quality for term life insurance, so start planning early on before you are faced with health issues.

Example: Joe Smith purchased a $250,000 term life insurance policy with a 30-year term at the age of 40 for $35 per month.

At age 67, he dies suddenly from a heart attack. Because his term policy is still inforce, his wife, who is his beneficiary, receives $250,000 which not only helps replace his lost Social Security benefits, but also covers funeral expenses, medical bills, the remainder of their mortgage loan, and allows her to contribute money to their grandchildren’s trust for college tuition.

If you’re interested in life-long coverage, rather than temporary, permanent insurance could be beneficial to you. With permanent life insurance your beneficiaries are guaranteed to receive a death benefit when you die. While term insurance is great for all of the “what ifs”, there is the possibility that you will live past your policy’s expiration date.

Here at Quotacy, we are happy to help you on your life insurance journey. We have in-house life insurance agents that can assist you with questions or concerns. Use our free quoting tool to see how little life term insurance could cost you to protect your loved ones. Or, contact us directly if you feel permanent is better for your situation.

Note: Life insurance quotes used in this article are accurate as of March 3, 2023. These are only estimates and your life insurance costs may be higher or lower.


  1. Panda

    Something never mentioned is that if you take your SS early, as I did, at 62, you can live tax free for 8 years until 70. At 70 you will need to take your RMD from your IRSs which will increase your income and subject al your SS to taxes. This works because SS is not taxed as long as your other income is below a certain amount. Which many times you can engineer.

    Your other income will be high when you have the RMD at 70. Why wait until then to take SS thus assuring you will be getting more monthly but you will be paying much more in taxes? Not to mention missing out on 8 years of SS money and the uncertainty of the future.

  2. Dane LaVigne

    I work with a lot of seniors. This will help! Thank you.


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