How Are Social Security Benefits Paid Out?
Social Security benefits are offered to both retirees who qualify based on age and disabled persons who have a medical or psychological impairment. In order to receive payments, you must apply through the federal government.
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Qualifying for Social Security
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To qualify for Social Security, a person has to be of retiring age (62 or older) or be disabled physically or mentally to the extent that it restricts employment.
Payments
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Once the federal government has approved an application for Social Security, payments can be made in two ways: direct deposit or paper check.
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Direct Deposit
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The federal government strongly encourages Social Security recipients to receive payments via direct deposit, a secure method of transferring money straight to a bank account.
Benefits of Direct Deposit
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Direct deposit is convenient for both the government and the recipient. The government saves money on postage and check processing, and the recipient has almost immediate access to the funds.
Checks
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If receiving a paper check through the mail, the federal government requests that it be cashed as soon as possible. Government checks are invalid after 12 months.
Considerations
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If opting to receive payments via check, be sure to report a change of address as soon as possible. Failure to report a change of address is the leading cause for lost or late checks.
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