The majority of American workers will eventually collect Social Security benefits, but those who understand how Social Security works may be able to qualify for bigger payments and avoid benefit reductions and withholdings.
Even if you’re not nearing retirement, it’s important to know the basics of Social Security, including how the age you claim benefits affects the amount you receive and what happens if you apply for Social Security and continue working. There are also multiple claiming strategies for married couples.
Here are the answers to some of the most frequently asked Social Security questions:
— What is the Social Security retirement age?
— When can I apply for Social Security?
— How much Social Security will I get?
— What is the Social Security tax limit?
— What is the Social Security wage limit?
— What is the average Social Security benefit?
— What is the maximum Social Security benefit?
— How do I get a new Social Security card?
— How does Social Security work?
— How do I qualify for Social Security disability?
— When will I receive my Social Security check?
What Is the Social Security Retirement Age?
The age when you can claim your full Social Security benefit varies depending on your birth year. The full retirement age is 65 for those born in 1937 or earlier, 66 for baby boomers born between 1943 and 1954 and 67 for people born in 1960 or later. Those born between 1938 and 1942 as well as 1955 and 1959 have an even more specific retirement age. For example, the full retirement age is 65 and 10 months for people born in 1942, and it’s 66 and four months for boomers with birth dates in 1956.
You can begin receiving Social Security benefits as early as age 62. But those who sign up for Social Security between 62 and their full retirement age get smaller monthly payments. Delaying claiming Social Security can increase your benefit up until age 70. “If you delay your retirement past your full retirement age, your benefit will increase by 8% for each year you delay up to age 70,” says John Bergquist, managing member of Lift financial in South Jordan, Utah.
He adds: “Before you delay, you should consider your finances and life expectancy. It might not make financial sense to delay your benefits.”
[READ: How Much You Will Get From Social Security.]
When Can I Apply for Social Security?
You can apply for Social Security online at ssa.gov, by calling 1-800-772-1213 or in person at your local Social Security office. You must be at least 61 years and nine months old to submit an application for retirement or spousal benefits, and payments can start as early as age 62. Your age when you enroll will play a role in determining the payment amount, so it can be helpful to compare what you will receive by claiming at different ages.
How Much Social Security Will I Get?
You can get a personalized estimate of your future Social Security benefit by creating a “my Social Security” account at ssa.gov/myaccount and viewing your Social Security statement. Your statement lists how much you are likely to receive in retirement at various potential claiming ages between 62 and 70 if you continue working at your current salary.
The statement also lists how much you will qualify for if you become disabled and what family members might receive if you die. Social Security statements are mailed to workers age 60 and older who don’t have a my Social Security account.
“Social Security is calculated based on lifetime earnings,” Bergquist says. “The Social Security Administration uses your highest 35 years of earnings, adjusted for inflation, to calculate your average indexed monthly earnings.” That figure is then used to find the benefit amount you’ll receive at your full retirement age.
What Is the Social Security Tax Limit?
Most workers pay 6.2% of their earnings into the Social Security system, and employers match this amount. Self-employed workers contribute 12.4% of their paychecks. However, earnings that exceed $160,200 in 2023 are not taxed by Social Security or used to calculate retirement payments.
Your Social Security payments might also be taxed in retirement. If the sum of your adjusted gross income, nontaxable interest and half of your Social Security benefit exceeds $25,000 ($32,000 for couples), federal income tax could be due on part of your Social Security benefit. If these income sources exceed $34,000 ($44,000 for couples), up to 85% of your Social Security payments may be taxable. There are also several states that tax Social Security benefits.
What Is the Social Security Wage Limit?
You can work and collect Social Security benefits at the same time. “If you plan on working before full retirement age, depending on how much you earn, if you file for benefits, they may be reduced,” says Eric Mangold, founder of Argosy Wealth Management in New York City.
Social Security beneficiaries who are younger than their full retirement age can earn up to $21,240 in 2023 before they will lose one benefit dollar for each $2 earned above the limit.
The earnings limit jumps to $56,520 for those who turn their full retirement age in 2023, and the penalty decreases to $1 withheld for every $3 earned above the limit. However, once you turn your full retirement age, your benefit will be recalculated to give you credit for your withheld benefit and continued earnings. You can earn any amount without being subject to Social Security withholding after you turn your full retirement age.
[READ: You May Be Getting More From Social Security Than You Think]
What Is the Average Social Security Benefit?
Social Security payments to retired workers averaged $1,831 per month in February 2023. The average spousal payment is about half that amount, or $899. Widows and widowers could be eligible for survivor benefits when a spouse dies, provided the deceased individual worked long enough to qualify for benefits. If the surviving spouse is full retirement age or older, they usually get 100% of the worker’s benefit.
What Is the Maximum Social Security Benefit?
The maximum possible Social Security benefit changes depending on the age you retire. A worker who retires at full retirement age in 2023 could be eligible for up to $3,627 per month. The maximum benefit declines if you start collecting payments before your full retirement age, while someone who delays retirement until age 70 can collect a higher monthly benefit.
“Social Security benefits are adjusted for inflation each year to help maintain their purchasing power,” says Doug Carey, founder and president of WealthTrace, a financial planning and retirement planning software company in Zionsville, Indiana. The cost-of-living adjustment, often called COLA, is typically announced in October for the upcoming year.
How Do I Get a New Social Security Card?
Many U.S. citizens with a driver’s license or state-issued identification card can use their my Social Security account to apply for a replacement Social Security card online. You can also fill out a paper application and mail it in or take it to your local Social Security office.
How Does Social Security Work?
Most Americans contribute 6.2% of their earnings to the Social Security system, and employers pay a matching amount. Those who are self-employed pay 12.4% of their income into Social Security. Workers who have sufficiently paid into the system can collect retirement benefits beginning at age 62 or older. You may also be eligible to collect benefits if you become disabled, and your family members might qualify for survivor’s payments after you pass away.
[See: 10 Ways to Increase Your Social Security Payments.]
How Do I Qualify for Social Security Disability?
If you have a medical condition that significantly limits your ability to work and perform basic activities such as walking or remembering, you might qualify for Social Security disability payments. Be prepared to provide medical records documenting your condition and why it prevents you from working. Social Security disability payments won’t start until six months after your disability began. There’s also a several-month wait time to process disability applications.
When Will I Receive My Social Security Check?
Social Security beneficiaries are required to sign up for electronic payments. Social Security benefits can be directly deposited into a bank or credit union account or loaded onto a prepaid debit card. The payment dates vary based on your date of birth. If your birthday falls on or before the 10th of the month, you will receive your payment on the second Wednesday of each month. Those born between the 11th and 20th get their payments on the third Wednesday of the month, and people born late in the month get their direct deposits on the fourth Wednesday.
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Frequently Asked Social Security Benefit Questions originally appeared on usnews.com
Update 05/22/23: This story was published at an earlier date and has been updated with new information.
