5 Facts You Should Know About Social Security Retirement Benefits

5 Facts You Should Know About Social Security Retirement Benefits

Posted

by Katherine Edwards

on Jun 29, 2023

Social Security can be a confusing topic and everyone’s social security strategy is specific to their circumstances, life expectancy, financial situation, etc. The decision you make about when to file will impact the rest of your life and can make a difference worth thousands of dollars over your lifetime. Here are a few helpful facts, tips, and resources that can help you better understand Social Security benefits. 

1. Your Full Retirement Age (FRA) is when you are eligible to receive unreduced benefits and is based on the year in which you were born – it has gradually increased over time as people are living longer.

Source: SmartAsset

 

2. If you’re still working your SS benefits can be reduced

• If you are under your FRA and still working, $1 is deducted from your benefit for every $2 over the combined income limit
• If it is the calendar year of your FRA, $1 is deducted from your benefit for every $3 over the combined income limit
• Upon the month of your FRA, there is no longer a deduction from your benefit****

3. You can take Social Security benefits as early as 62 years old – however, you will receive a slightly lower benefit amount for each month before your FRA. This chart can help inform how much lower your benefits maybe if you decide to take them early.
4. You still may pay income taxes on your SS benefits –

• These income limits can adjust each year – for 2023 it is:
  • Up to 50% for individual filers with a Combined Income between $25k-$34k and up to 85% for combined income above $34k
  • For Joint filers – up to 50% for combined income between $32k-$44k and up to 85% for income above $44k
• Income Taxes and SS Benefits

5. You can take benefits based on your spouse’s earnings record –
   • You can file for both your own SS benefits as well as spousal benefits and you will receive whichever is higher. Spousal benefits are normally around 50% of the spouse’s FRA benefit
   • You are also able to take benefits on an ex-spouses earnings record if you were married for at least 10 years and you are 62 years or older

You can create a free account online where you can keep track of your wage history to ensure accuracy, review your projected benefit amounts as well apply for benefits.

When you are ready to file for benefits you have 3 filing options:

Here are a few additional resources and helpful articles to check out:

When to take Social Security can vary from person to person depending on an individual’s needs, goals, financial situation, and life expectancy. If you need help deciding on the best strategy for you when filing for Social Security – reach out to us at MainStreet Financial Planning and we would be happy to help make sure you get the most out of your Social Security benefits!