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5 Things You Should Know About Social Security

By U.S. News & World Report

Social Security was initially a program that provided payments to retired workers when President Franklin D. Roosevelt signed the bill on August 14, 1935. But the 80-year-old program has since been amended to include payments for the spouses and dependent children of workers who prematurely pass away and disability benefits for those who become unable to work. Here are some of the important features of the Social Security program.

How much you are paying in. Most workers contribute 6.2 percent of their paychecks to the Social Security system, and employers match that amount. Self-employed workers pay 12.4 percent of their income into the system. The Social Security tax applies to earnings of up to $118,500 in 2015. Earnings above this amount are not subject to Social Security tax or factored into retirement payments.

The age to sign up. You can sign up for retirement benefits beginning at age 62, but payments are reduced if you sign up before your full retirement age, which is 66 for most baby boomers and 67 for everyone born in 1960 or later. Your monthly payments will increase if you delay signing up past your full retirement age. However, after age 70 there is no additional boost in payments if you wait to claim Social Security. “Assuming you have normal health, try to claim Social Security as close to 70 as you can,” says Alicia Munnell, director of the Center for Retirement Research at Boston College.

How much you will receive. Social Security payments are calculated using the 35 years in which you earn the most. If you don’t work for 35 years, zeros are factored into the calculation. You can get a personalized estimate of your future Social Security payments at various claiming ages by creating a My Social Security account online at ssa.gov/myaccount and logging in to view your Social Security statement. These statements also list your earnings history and taxes paid, which you can check for errors. Paper Social Security statements are mailed to most workers who don’t have My Social Security accounts about once every five years.

What happens if you become disabled. “We started off with just a retirement program, and then in 1939 we added survivors benefits and in 1956 we expanded to include people with disabilities,” says Carolyn Colvin, Acting Commissioner of the Social Security Administration. If you develop a physical or mental impairment that is expected to prevent you from working for a year or more, you may qualify for disability payments. Your Social Security statement will list an estimate of your monthly payments if you become disabled. You may need to provide documentation about your condition and why it will prevent you from working.

How much your family will get if you pass away. Social Security also functions as life insurance for workers who prematurely pass away. Children ages 19 and younger who are in school, disabled children and a spouse caring for children younger than age 16 will each be eligible for monthly payments from Social Security, which are subject to a maximum amount the entire family qualifies for. Your Social Security statement will list how much your family members are likely to receive if you die. “Social Security is designed to insure against lost wages,” says Eric Kingson, a professor of social work at Syracuse University. “The premium that we pay is designed to insure against risk.”

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5 Things You Should Know About Social Security originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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