10 Common Questions About Social Security

Social Security is one of the largest and most popular government programs in history, but it's also one of the most confusing. 

A University of Michigan study found that 22% of current retirees regretted taking their benefits when they did, and 21.4% underestimated what they would get from Social Security.

Determining how Social Security fits into your retirement savings plan can cause headaches. If you don't understand the rules, you could even lose money. We'll answer the most common questions about Social Security to help you sort through the confusion.  

You can sign up for Social Security benefits online through the Social Security Administration website (SSA.gov), by phone at 1-800-772-1213 (TTY 1-800-325-0778), or in person at your local Social Security office. 

When applying, be prepared to provide personal information like your Social Security number, date of birth, and work history. You may also need supporting documents such as your birth certificate or tax returns.

Full Social Security benefits start when you reach full retirement age (FRA), which is determined based on the year you were born. 

If you were born in 1955, your FRA is 66 and two months. For people born in 1960 or later, the FRA increases in two-month increments until reaching age 67.

If you're interested in an early retirement, you can start collecting Social Security anytime after age 62, but the amount you receive will be reduced by a small percentage until you reach your FRA. 

Conversely, if you wait to start collecting Social Security until you turn 70, your benefit amount will increase. However, there is no benefit increase if you wait to collect after age 70.

Credits are how you qualify for Social Security benefits. You must earn at least 40 credits throughout your working life, and you can earn no more than four credits in a year. The amount you need to earn to get one credit goes up slightly each year. 

For example, in 2024, every $1,730 in wages or self-employed earnings will get you one credit. That means you'll need to make $6,920 in one year to receive your four credits.

Your Social Security benefits will not increase if you earn more than 40 credits since benefits are calculated based on the average of the 35 years you made the most, not on how many credits you acquired over your career.

The best way to ensure you get the highest benefit is to wait to start collecting Social Security until your FRA, which is 67 for people born in 1960 or later. 

If you claim Social Security at age 62, your benefit will be reduced by 30% compared to what you would receive at FRA. Once you reach FRA, you'll receive 100% of your benefit amount.

If you delay claiming your benefits until age 70, your benefit will increase by about 8% per year until you reach age 70. However, delaying past age 70 will not increase your benefit any further.

You may have to pay taxes on your Social Security Benefits based on your combined income, which is calculated as your adjusted gross income + nontaxable interest + one-half of your Social Security benefits = combined income.

For example, if you're single and your combined income is less than $25,000 a year ,including half of your Social Security benefits — or $32,000 if married filing jointly — you may not have to pay taxes on your benefits.

If your combined income is between $25,000 and $34,000 a year as an individual or $32,000 and $44,000 as a couple, you may owe taxes on 50% of your benefits. With a combined income above $34,000 (or $44,000 for a couple), 85% of your Social Security benefits may be taxed.

If you retire at full retirement age in 2025, your maximum benefit would be $4,018. The maximum benefit depends on the age you retire.

So, if you retire at age 62 in 2025, your maximum benefit would be $2,831. If you retire at age 70 in 2025, your maximum benefit would be $5,108.

Yes, you can work while collecting Social Security, but keep the annual earnings test in mind.

If you'll reach your Full Retirement Age (FRA) after 2025, your earnings limit is $22,320. If you earn more than that, your benefits will be reduced by $1 for every $2 over the limit.

If you reach your FRA in 2025, the earnings limit is $59,520, and only applies to income earned before you reach FRA. In that case, your benefits are reduced by $1 for every $3 over the limit.

These limits apply to earned income only—not retirement account withdrawals or pension payments.

Once you reach FRA, you can earn as much as you want with no reduction in your Social Security benefits.

Social Security pays a one-time, lump-sum death benefit of $255 to a surviving spouse or child if they meet certain requirements.

In addition to the one-time death benefit, a spouse, and sometimes other family members, may also be entitled to monthly survivors benefits. 

In most cases, you can apply for survivors benefits after the death of a spouse if you are age 60 or older and have been married for at least nine months, although there are some exceptions.

The funeral home handling the arrangements generally reports a person's death to the Social Security Administration (SSA). You can also report the death of a loved one directly by calling your local Social Security office. SSA.gov instructs people to notify them immediately of a person's death.

To apply for either the one-time $255 death benefit or ongoing survivors benefits, you will have to fill out various forms and provide original documentation or certified copies.

Social Security and Supplemental Security Income (SSI) are not the same. Social Security provides benefits based on credits and earnings and is funded from two trusts — the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI)Trust Fund.

SSI is a needs-based program based on a person's limited income and resources. SSI is paid for by general tax revenue — not the Social Security Trusts — and benefit amounts are based on Federal and State laws. In some states, people receiving SSI may also be eligible for Medicaid and food assistance.

While it is possible to receive both Social Security and SSI benefits, make sure you're working with your local SSA office to help you understand your eligibility and the requirements for your specific situation under each program.

Social Security is an integral part of the financial puzzle for many retirees, keeping three in 10 older Americans above the poverty line. However, it shouldn't be your only source of income in retirement. 

Understanding the program can help you maximize your benefits and use your retirement savings effectively. Make sure you know how much to save while you're still working to enjoy a stress-free retirement.