Social Security 101

>>> this morning on "today's money," social security 101. if you're working, you're paying into it but how much do you know what you'll get when you retire, how you're going to get a bigger check? cnbc's courtney reagan is here with some great answers. first of all, let's fine out, what are the basic guidelines as far as who gets social security and when?

>> so the government defines anyone eligible to get social security as long as you have 40 credits which for most people is about ten years of work. the earliest you can start collecting is at age 62. the latest is at age 70. the government defines your full retirement age as somewhere in between depending on the year you were born but for most folks it is at age 65, 66 or 67.

>> this is important to everybody but this is interesting. you advise women in particular to pay close attention. how come?

>> women in retirement face greater economic challenges than men. there's a couple reasons. number one, it is not that pleasant to talk about but it is the facts. women live longer than men. so right now if you're 65 years old, this year the government expects you to live to be about 85. for a 65-year-old man he's expected to live to be about 61. so right there, there's four more years that a woman needs to have that income stream that a man doesn't. but then you think about we all know that men make more money than women. per paycheck, then of course over the long haul, too. and they work less, they either take time off to be a mom, take that maternity leave, work part-time or don't go back to work. then last, but not least, if a woman has a pension it is likely to be much less than a man would have.

>> their paychecks are going to be smaller.

>> exactly and they'll have less income to draw from.

>> that's something i kind of lived through with my mom after my dad passed away . let's go through some of the guidelines. first of all, we keep hearing that social security is going to go away. they're not going to be able to pay. what's the deal?

>> there's a lot of political debate around this issue but the basics are very nonpartisan. social security says itself it will run out of money if some reform doesn't take place. the timing is a little bit uncertain. they say within a couple decades. but last year for the first time since 1983 the social security paid out more money than it took in. it's likely to do the same thing again this year.

>> that's because?

>> it's because there are simply fewer people and less money being paid in to that fund than are taking out. we've got baby boomers retiring right now so there's more folks of the retired age collecting that money than those of us that are paying in.

>> how much can you expect to collect? it depends on how old are you?

>> yeah. this is one thing, a lot of folks think the amount of money you put in is the amount of money you'll be able to get out. that's actually not true. it is very dependent on the lower income folks. it is tiered that way because the government believes if you've made less income you have less sources of retirement when you get to that point.

>> okay. then what about trying to get more money back? how do you do that?

>> right. so like we talked about earlier, there are different ages that you can begin to withdraw those benefits. the later that you wait the more money that you will get. if you wait until age 70, if you can push off past that full retirement until age 70 you could make as much as 8% more per year. the other option -- i know it is difficult to talk about in an economic environment like we have -- you could either go back to work if you've retired before that full retirement age . if you've retired after 62 but before that full retirement, you can go back and the government recalculates those benefits that you didn't collect during those years that you were eligible.

>> what if you don't apply by the age of 70? what happens?

>> then you can forfeit your benefits. it's really important that you do so. you want to make sure that before you retire at whatever age you decide is appropriate for you, that you talk to a social security advisor or financial planner .

>> you say there are good websites people can check out.

>> the social security administration website is probably the number one place you want to go. it is always going to be updated. we have the information here for you. we also have the congressional budget office because things are changing especially in this political year, there's a lot of talk about what's going on. then you've got the national academy of social insurance , last, but not least, the national committee to preserve social security and medicare, all good resources. but make sure that you keep up on the news and what's going on because this could constantly change as years go forward. bottom line -- you really don't want to depend on social security for your entire retirement savings.

>> we've got all the links to those websites on our website.