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10 Mostly Unknown But Important Facts About Social Security

1. When you reach full retirement age, your earnings no longer reduce your benefits, no matter how much you earn.

2. Kids get benefits, too.

Your unmarried children under age 18 — or 19 if still in high school — can receive benefits based on your work record if you're collecting Social Security retirement or disability benefits. Grandchildren also are eligible for benefits on a grandparent's record if they are dependents and receive no financial support from a parent.

3. In some cases, so do parents.

Moms and dads who rely on an adult child for at least half of their financial support can receive survivor benefits if that child dies.

4. You've got time to fix errors.

Mistakes in your earnings record could lead to reduced future benefits. Typically, you have three years, three months and 15 days after the year in which you earned the wages to fix mistakes. Social Security makes exceptions if, say, you have documentation of earnings or the error is obvious.

5. Chances of owing taxes are increasing.

Up to 85 percent of your benefits could be taxed, depending on your income. Because these income limits haven't changed for decades despite rising wages, the chances you'll owe taxes on benefits also have increased. Less than 10 percent of beneficiaries paid federal income tax on their benefits in 1984, the first year benefits were taxed. Now about 40 percent do, and, under current law, that's expected to climb to more than half in three decades.

6. You can change your mind.

Regret taking early — and reduced — benefits at 62? No problem. You have 12 months after starting benefits to withdraw your application — provided you repay all the money received so far. Miss the deadline? Don't worry, you get another chance for a do-over. Continue receiving benefits until your full retirement age, then suspend benefits without having to repay those you already received. Benefits will grow 8 percent annually until age 70, when you can restart benefits to get the maximum payout.

7. Most creditors can't touch.

Your benefits are protected from private creditors. But Uncle Sam can garnish monthly benefits to repay debts such as back alimony, child support, restitution, federal taxes and federal student loans. Be aware, if your Social Security benefits are deposited in an account with other money, the bank must protect two months' worth of benefits from creditors. The bank can freeze the rest of the money, leaving it up to a court to decide whether creditors get the cash.

8. Newlyweds may not qualify.

You generally must be married for at least nine months to qualify for survivor benefits if your spouse dies. Among the exceptions: The spouse died in an accident or in the line of duty while in a uniformed service.

9. You can get a new Social Security number

Under very limited circumstances — if, say, you're a victim of domestic violence or identity theft — you may be able to get a new Social Security number.

10. Your ID is unique to you.

Once a Social Security number is used, it's never assigned again — even if the original owner died. Social Security, which has issued more than 453 million so far, says it has enough numbers to last several more generations without changes to the system.


Rewards Card Buying Guide

Getting started

Credit-card companies are back to stuffing your mailbox with offers for new cards, and the majority of them are for rewards cards, according to Mintel, a company that tracks direct mail. Many of them feature what issuers think consumers want during uncertain economic times: more cash back and greater rewards for spending on everyday purchases like groceries.

If you're in the market for a new rewards card, you might be able to score enhanced rewards and perks, such as introductory bonuses of cash, miles, or points. The best offers are reserved for people with the highest credit scores. "We see rewards deals getting sweeter but with the caveat that they're only for people with good to excellent credit," said Bill Hardekopf, publisher of, a credit-card comparison website. "All the credit-card companies are going after the same customers." He says that a credit score in the mid-to-upper 700s would usually be needed to qualify for the best deals.

Of course, you have to read the fine print to know if any rewards card is as good as it seems. To find one that makes sense for you, weigh the rewards formulas, fees, and restrictions, along with your spending habits. But if you regularly carry a balance, rewards cards probably won't be a good fit. They tend to carry higher interest rates than standard cards, so you could pay more in interest than you'll earn in rewards.

We sifted through dozens of recent rewards-card offers to see how they stack up. Find the best reward card.

Up-front bonuses

Waiving the first year's annual fee just for signing up for a rewards card have become more common. These are typically tied to a certain level of spending within the first three to six months of receiving the card, though the amounts required aren't prohibitively high--generally about $500 to $3,000.

Travel cards are also competing for your business with introductory bonuses. The best promotion we've seen in awhile was a Capital One Venture offer in 2011 to match up to 100,000 points in an airline frequent-flyer program linked to a credit card. That offer expired after Capital One reached its goal of matching a billion miles. They revived the offer in early 2012, but this time offered new customers twice as many points as they'd spent with a competing card in the prior year. So if you'd spent $20,000 on an American Airlines card, Capital One would give you $40,000 points for signing up. This type of promotion often has a short sign-up period. If you're hoping to snag such a lucrative offer, you can learn more by monitoring websites such as

More typical are 30,000 or more points sign-up offers that major airlines like American and United might offer for opening a card account. The value of mileage deals depends on whether the card is being offered by an airline or a bank. Airline cards have historically promoted 25,000 points as the equivalent of a round-trip domestic economy ticket. But you might have a tough time booking the trip you want for 25,000 points. That will usually get you a restricted flight, meaning you're subject to blackout dates and airline-imposed limits on the number of seats allocated to rewards use, according to Tim Winship, publisher of

To get the flight you want for 25,000 points, you might need to book many months in advance. You might have to use up to 50,000 points for an unrestricted flight on the exact dates you want. And of course you can only fly on that particular airline and its partners.

With travel cards offered by banks, the rewards are easier to calculate and use. Typically, 100 miles equals $1 in rewards, so 30,000 miles will buy you a $300 ticket. You book your travel however you'd like, say, through an online ticket broker such as so you don't have to worry about blackout dates or capacity restrictions. After you make your reservation, you contact the card issuer to redeem your points to cover the expense.

There are variations on this formula. For example, the American Express Blue Sky travel card pays $100 in rewards for every 7,500 points earned, for an earn rate of 1.25 points per dollar spent.

Annual fees for added perks

A new trend in rewards cards is to offer two versions of the same card: one that carries an annual fee but earns a higher rate of rewards, and a no-fee version that pays a lower rate. The annual-fee versions generally offer a higher rate of rewards than no-fee versions do. For example, the no-fee Capital One VentureOne card pays 1.25 points per dollar spent. Another version, the Capital One Venture card, has a $59 annual fee (waived in the first year) and earns 2 points per dollar spent.

Airline cards typically charge an annual fee, but some waive it in the first year. Some airline cards provide perks like free baggage checking, that can offset the fee. And several premium travel cards, whether bank or airline, offer additional benefits, such as travel insurance, trip-delay coverage, rental-car insurance, and occasionally no foreign-transaction fees. If you travel a lot, those perks might make a premium card a better value for you, even with the annual fee.

Maximizing your rewards

Reading the terms and conditions of rewards programs can be a headache, but doing so before you sign up can steer you away from rewards cards with spending limits, expiration dates on rewards, or other quirks that can limit your cash back or points. Most cards offer 1 percent cash back or points for standard purchases, which works out to each earned point being worth about a penny. Some rewards cards, such as the Chase Freedom and Discover It cards, pay 5 percent cash back in rotating seasonal categories. But they require that you opt in to the program each quarter.

Shrinking rewards for gas

With oil prices climbing and the summer driving season just around the corner, gas prices could stay elevated for a while. Gas cards are not as rewarding as they once were, but they still might be worth a look if you drive a lot. Though several cards used to pay 5 percent back on gas, 3 percent is typically the best you can get. One holdout is the PenFed Visa Platinum Cash Rewards card, offered through the Pentagon Federal Credit Union, which still pays 5 percent back to Plus members on gas purchases. Membership in PenFed is free for military members and their families; others can join by making a one-time $14 donation to Voices for America's Troops or $15 to Voices for America's Troops, both nonprofit groups.

Rewards cards offered by oil companies might be worth having if you always purchase the same brand of gas. But watch out--the Shell, Citgo, and Phillips 66/Conoco cards carry some of the highest interest rates around at around 25 to 27 percent.

Claiming your rewards

Finding a card with a rewards formula that matches your spending habits isn't the final step in choosing one. You should also check to see how easy it is to redeem your rewards.

Cash-back cards are often the simplest, because you can redeem rewards regularly and use the money to get the best deals on things you want to buy. With points cards, particularly airline cards, it often takes a long time to accumulate a sufficient number of points for a reward. So it's more important to find out if your points will expire.

Some credit cards let you redeem points only once a year.

Also consider your payment habits. Do you always pay on time? Some banks take away a month's points if you miss a payment, and might charge you a reinstatement fee of $25 or so to get them back. That might be worth paying only in months when you've spent a lot. Setting up account alerts for due dates or arranging to have your bill automatically paid from your checking account can help you avoid losing points.

Consumer Reports On-Line (February, 2015)

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