Claiming your Social Security payments is a retirement milestone. But not everyone receives their Social Security check on the same date. Benefits are paid out on Wednesdays, and those with a date of birth early in the month receive Social Security payments before those who were born later in the month. Understanding the timing of your Social Security direct deposits can help you manage your retirement finances.
Consider these factors to know more about Social Security checks:
— When Social Security is paid.
— How Social Security checks are paid.
— What time frame the amount covers.
— When Social Security amounts will start.
— Understand Social Security benefits and taxes.
[Related:Average Social Security Benefit by Age]
When Social Security Is Paid
Social Security checks are normally paid on the second, third and fourth Wednesdays of each month. “The exact arrival date for Social Security checks depends on the recipient’s day of birth,” says William Lipovsky, CEO of First Quarter Finance in Dallas.
If you were born:
— On the 1st through the 10th: Expect a check to be paid on the second Wednesday of the month.
— On the 11th through the 20th: Expect a check to be paid on the third Wednesday of the month.
— On the 21st through the 31st: Expect a check to be paid on the fourth Wednesday of the month.
There is a slight change for holidays. If your scheduled payment falls on a legal public holiday, you can expect to be paid the business day before the due date. You can view the schedule for payments at ssa.gov.
How Social Security Checks Are Paid
Social Security checks are no longer mailed to most beneficiaries. You can receive your payment in two ways:
— Direct deposit. You can choose to have the Social Security check deposited directly into your bank or credit union account.
— Direct Express debit card. You can have the Social Security check loaded onto a debit card through the Direct Express card program. You don’t need a bank account for this setup. The card works for making purchases, paying bills or getting cash. However, there may be fees associated with some transactions.
What Time Frame the Amount Covers
Social Security benefits are sent out the month after they are due. “Social Security checks are paid in arrears, so any check received is for the month prior,” says Adam Beaty, a financial planner at Bullogic Wealth Management in Pearland, Texas. For example, your July payment is distributed in August.
Once you start receiving benefits, you might notice that your payment amount is different at the beginning of the year. The Social Security Administration adjusts payments each year to keep pace with inflation. As prices in the U.S. fluctuate, the benefits you receive could change to help cover the rising costs. The annual cost-of-living adjustment is calculated each October and paid out beginning in January.
[Related:What Will the Social Security COLA Raise Be for 2024?]
When Social Security Payments Will Start
Some of the decision regarding when to start Social Security payments is up to you, but your payments could change depending on the age you sign up. “Currently, the earliest you can start taking Social Security retirement benefits is at age 62,” says Logan Allec, a certified public accountant and founder of Money Done Right and Choice Tax Relief in Los Angeles. However, if you choose to start payments at age 62, you will receive a reduced benefit.
To receive your full benefit, you’ll need to wait until you reach full retirement age. Your full retirement age depends on when you were born. If you were born between 1943 and 1954, for instance, your full retirement age is 66. If you were born in 1960 or later, your full retirement age is 67.
Whether you should take Social Security benefits early will depend on your situation. If you need to stop working earlier than your full retirement age due to health reasons, you might decide to start taking Social Security to help cover your bills. However, if you have a large amount set aside for retirement, you could choose to draw from those funds and wait until your full retirement age or up until age 70 to start Social Security payments.
“This is why it’s essential that you budget for different scenarios,” Allec says. You can sit down with a financial advisor to look at your current plan and create backup strategies.
How to Start Your Benefit
To begin receiving Social Security, you’ll need to fill out an application. You can apply for Social Security online at ssa.gov or make an appointment at your local Social Security office. To avoid any surprises, it’s best to start this process early.
“Don’t do it at the last minute,” says Tim Sullivan, a national Social Security advisor and owner of Strategic Wealth Advisors Group in Utica, Michigan. You might begin the process three or four months before you want to start receiving checks. This will give you enough time to make sure you have all the right forms and aren’t missing out on potential benefits.
[READ: How Much You Will Get From Social Security.]
Understand Social Security Benefits and Taxes
Depending on your financial situation, you may have to pay taxes on your Social Security benefit in retirement. “Many soon-to-be retirees assume that Social Security benefits are not taxable since, after all, they already paid taxes on the income they contributed to Social Security over their working years,” Allec says. “Unfortunately, that is not how the system works, and the method for determining the taxability of your Social Security benefits is not so simple.”
The amount of taxes you pay will depend on your combined income, which is found by adding your adjusted gross income plus nontaxable interest and half of your Social Security benefits. If you file taxes as a single person and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefit. If you make more than $34,000, up to 85% of your benefits could be taxed as income. For those who file jointly and have a combined income of between $32,000 and $44,000, up to 50% of benefits could be taxed. Married couples with a combined income of more than $44,000 could be taxed on up to 85% of the benefits.
If you plan to continue working in retirement or aren’t sure how taxes will work, it might be helpful to sit down with a Social Security advisor before retiring. You can go over your expected taxable income during the coming years, and then determine the right time to start taking Social Security payments in retirement. Research the Social Security process now to avoid any surprises in retirement.
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When to Expect Your Social Security Checks originally appeared on usnews.com
Update 10/06/23: This story was published at an earlier date and has been updated with new information.
