The majority of American workers will eventually collect Social Security benefits. Those who understand how Social Security works may be able to qualify for bigger payments and avoid benefit reductions and withholdings. Here are the answers to some of the most frequently asked Social Security questions.
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 in 1938 to 1942 and 1955 to 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 66 and 4 months for boomers with birth dates in 1956. Those who sign up for Social Security between ages 62 and their full retirement age get smaller monthly payments, while delaying claiming can increase your benefit up until age 70. "Just because you are 62 you don't necessarily have to take it," says Rianka Dorsainvil, founder and president of Your Greatest Contribution in Lanham, Maryland. "Each year you delay taking Social Security from your full retirement age up until age 70 your benefit increases by 8 percent each year."
How do you 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 9 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 plays a big role in determining your payment amount, so take care to see how much you will receive at various claiming 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 if you continue working at your current salary until your full retirement age, age 62 and age 70. "If you look at your Social Security statement today, your estimated benefit is based on your previous year's income," says Ross Menke, a certified financial planner and founder of Lyndale Financial in Nashville, Tennessee. "If you do stop working earlier, that will have an impact on what you would be eligible to receive as a Social Security benefit." The statement also lists how much you will qualify for if you become disabled and what family members might receive if you pass away. Social Security statements are mailed to workers age 60 and older who don't have a My Social Security account.
What is the Social Security tax limit? Most workers pay 6.2 percent of their earnings into the Social Security system and employers match this amount. Self-employed workers contribute 12.4 percent of their paychecks. However, earnings that exceed $128,400 in 2018 are not taxed by Social Security or used to calculate retirement payments. Workers who earn more than $128,400 will see a bump in their paycheck when Social Security taxes stop being withheld.
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 percent 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. However, if you are younger than your full retirement age, part or all of your Social Security payments could be temporarily withheld. Social Security beneficiaries who are younger than their full retirement age can earn up to $17,040 in 2018 before they will lose one benefit dollar for each $2 earned above the limit. The earnings limit jumps to $45,360 for those who turn their full retirement age in 2018, and the penalty decreases to one dollar 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.
What is the average Social Security benefit? Social Security payments to retired workers averaged $1,410 per month in March 2018. The average spousal payment is about half that amount, or $735. Widows and widowers receive survivor's payments worth an average of $1,342 monthly.
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 2018 could be eligible for up to $2,788 per month. The maximum benefit at age 62 drops to $2,158, while someone who delays retirement until age 70 in 2018 could get as much as $3,698 monthly. In order to qualify for these large payments you need to maintain a high income throughout a career of 35 years or more. "Those who receive the maximum benefit possible are those who've earned at or above the highest taxable wage base all of the years that are used in the benefit calculation," says William Meyer, founder and managing principal of Social Security Solutions, a company that analyzes Social Security claiming strategies. "That person would have exceeded the maximum taxable earnings in each of the highest 35 years."
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 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 tenth 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, and people born late in the month get their direct deposits on the fourth Wednesday.