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.
Workers approaching retirement age generally have a lot of questions about beginning Social Security payments.
Here are the answers to some of the most frequently asked Social Security questions.
U.S. News & World Report
How to apply for Social Security
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 age 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% each year."
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.
When can I apply for social security?
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.
How much social security will I get?
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 $137,700 in 2020 are not taxed by Social Security or used to calculate retirement payments. Workers who earn more than $137,700 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 tax limit?
You can work and collect Social Security benefits at the same time. However, if you haven't reached 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 $18,240 in 2020 before they will lose one benefit dollar for each $2 earned above the limit.
The earnings limit jumps to $48,600 for those who turn their full retirement age in 2020, 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.
What is the social security wage limit?
Social Security payments to retired workers averaged $1,478 per month in November 2019. The average spousal payment is about half that amount, or $773. Widows and widowers receive survivor's payments worth an average of $1,199 monthly.
What is the average 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 2020 could be eligible for up to $3,011 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.
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."
What is the maximum social security benefit?
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 get a new social security card?
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.
How does social security work?
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.
How do I qualify for social security disability?
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.
When will I receive my social security check?
Last year, flows into U.S. sustainable funds more than tripled, marking the fourth year of record flows, according to Morningstar. Talking about sustainability “is a way to build better relationships with clients. And it’s material to returns,” says Catherine Banat, managing director of responsible investing at RBC Global Asset Management. One beneficiary will be impact investing strategies—where people seek specific outcomes from their portfolios—many of which are aligned with the U.N. Sustainable Development Goals.
In 2019, according to the Global Impact Investing Network, assets in this market totaled around $500 billion, based on surveys with 1,300 impact investors. That will happen in mutual funds too: According to Morningstar, the largest impact funds include the $4.8 billion TIAA-CREF Social Choice Bond (TSBBX), the $2.4 billion Community Reinvestment Act Qualified Investment (CRAIX), the $1.2 billion Domini Impact International Equity (DOMIX), and the $1.2 billion AB Sustainable Global Thematic (ALTFX).
12. Flows will keep surging
Particularly of people who are great at building computer models and handling large data sets, and who are thick-skinned when dealing with corporate executives and officers. “There’s a global hiring war in ESG right now,” says Manulife’s Chew.
13. Expect more hiring in the sustainability industry...
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.