10 Frequently Asked Questions About Social Security
When can I collect social security benefits?
The earliest you can begin collecting social security is age 62. However, if you start collecting benefits before your full retirement age (which is between 65 and 67 depending on the year you were born), your benefits will be permanently reduced by as much as 30%. There are also income limits on how much money you can earn if you are still working when you collect benefits before your full retirement age. If you wait to start collecting benefits until you are age 70, your benefits will grow by 8% for every year over your full retirement age.
How much social security income will I receive?
The social security administration uses a formula to calculate your monthly benefit based on your work history. It is a fairly complex calculation, as they index the early years of income to more current income. To determine your personal estimated income, go to ssa.gov to create an online account. There are lots of helpful tools at ssa.gov as well.
Can my spouse get benefits also?
If you are eligible and receiving benefits and your spouse is at least 62 years old, they may also be able to receive benefits, even if they have not worked long enough to qualify for benefits of their own. Your spouse may receive up to 50% of your benefit. If they are less than their full retirement age, the benefit will be reduced by up to 30% just as their own benefit would be.
What if my spouse is deceased – are their benefits lost?
If your spouse has passed away, you can decide to receive the monthly benefit they were receiving if it is larger than your own. You cannot have both, but you can choose the largest, assuming you are full retirement age.
What if I am divorced?
You may still be eligible to draw up to a 50% of your ex-spouse’s benefit if you were married for more than 10 years and are age 62 or older and not remarried. If you are younger than your full retirement age, however, that benefit will be reduced the same as your own benefit would be.
If I claim social security benefits, can I continue to work?
If you are at your full retirement age, you can continue to work with no income limits on your wages and collect 100% of your social security benefits. However, if you are below your full retirement age, there are income limits you can earn before your social security benefits start to be reduced $1 for every $2 you earn. Those limits typically change each year, so check ssa.gov for the current year’s limits.
What if I am still working when I hit full retirement age – do I have to start claiming social security benefits?
If you are still working at your full retirement age and want to delay your social security benefits, your social security benefits will grow by 8% per year up until age 70. Therefore, it might be in your best interest to not draw your social security benefits at your full retirement age, but rather wait until age 70. An RSSA® can help you determine the optimal time to start drawing your benefits.
What is an RSSA®?
An RSSA® is a Registered Social Security Analyst – a designation offered by the National Association of Registered Social Security Analysts. That designation is earned after 5 self-study courses and a proctored comprehensive exam including analyzing several social security cases. Annually there are four hours of continuing education required to continue the use of the designation.
Is my social security benefit taxable?
As much as 85% of your social security benefits could be taxable depending on the other income you have. There are many variables that determine if and how much of your benefit is subject to federal income tax, so it is best to consult with your tax preparer to know about your personal situation.
What if I have questions that are not addressed here – who can I call?
At Stonebridge, all of our advisors are familiar with the social security rules. In addition, we have an RSSA® who can answer your questions. Or you can go online to www.ssa.gov to find answers to your questions.
