In our October Newsletter, we featured an article to answer the most common Social Security questions. While fully understanding Social Security benefits can be complex, we hope this 2 part article series can help you understand the process better. In Part 1, we answered questions on who qualifies for social security, when to start taking social security benefits, and explained how marital status affects Social Security benefits. Let’s continue with our final 3 common Social Security questions:
4. What if I continue to work and receive Social Security?
You can work and receive Social Security retirement benefits. If you are getting benefits before full retirement age (FRA), there’s a limit to how much you can earn before your benefits are reduced. Once you have reached FRA, this “earnings penalty” goes away no matter how much you earn. Your benefit amount will also be recalculated to give you credit for the months that were reduced. After that, you can work all you want with no impact on your benefits. Keep in mind, however, that you may have to pay taxes on Social Security income if you have other substantial income.
5. How can I make the most of my benefits?
Spouses can increase their benefits based on the timing as to when they receive Social Security. For example, one spouse can receive his/her benefits and then in the future apply for spousal benefits in order to increase monthly income. Also, an ex-spouse is entitled to up to half of what his/her former spouse will receive at full retirement age. There are also survivor benefits that widows/widowers can take before or after receiving benefits as an individual.
6. Will Social Security be there when I retire?
The Old-Age and Survivors Insurance Trust Fund, which pays retirement and survivors benefits, will be able to pay current benefits only until 2033. After that, the fund’s reserves and continuing tax income may pay 76% of scheduled benefits. Clients who retire after that may expect to receive less, or there may be a change to the program before then.
Still confused as to how and when to claim your Social Security benefits? Contact us at Traditions Wealth Advisors, Brien@traditionswealthadvisors.com or 979-694-9100.