FAQs about Social Security Retirement Benefits
People approaching retirement age often have questions about benefits they may be eligible to receive from the Social Security Administration (SSA). Here are the answers to several common inquiries.
How Soon Can I Start Collecting Retirement Benefits?
If you want to receive full retirement benefits from the SSA, you must wait until you reach the so-called full retirement age (FRA). But you may apply for benefits as early as age 62. Starting early will reduce your monthly benefits by as much as 30%, but you’ll receive benefits for more years. Your tax adviser can help figure out the exact monthly benefit reduction and help you determine if you likely will be better off waiting until your FRA to start taking benefits.
What Is My FRA?
Your FRA depends on the year in which you were born.
|Year of Birth||Full Retirement Age|
|1937 or earlier||65|
|1938||65 and 2 months|
|1939||65 and 4 months|
|1940||65 and 6 months|
|1941||65 and 8 months|
|1942||65 and 10 months|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 and later||67|
If you were born on January 1 of any year, refer to the previous year. If you were born on the first of the month, the SSA figures your benefit (and your FRA) as if your birthday were in the previous month.
How and When Do I Apply for Social Security Retirement Benefits?
Apply for retirement benefits three months before you want your payments to start. The SSA may request certain documents in order to pay benefits, and for most retirees, the easiest way to apply for benefits is by using the online application.
What Happens if I Receive Social Security Retirement Benefits While Still Working?
If you’re under FRA and earn more than the annual limit (subject to inflation indexing), your benefits will be reduced. Beginning with the month in which you reach FRA, you can receive your benefits without regard to your earnings.
Can I Collect More Benefits if I Retire After My FRA?
You can receive increased monthly benefits by applying for Social Security after reaching FRA. The benefits may increase by as much as 32% if you wait until age 70, but of course you’ll receive benefits for fewer years. After age 70, there is no further increase. Your tax adviser can help calculate the payout for waiting to collect your retirement benefits and help you determine if you likely will be better off waiting beyond your FRA to start taking benefits.
Can I Manage Retirement Benefits for an Incapacitated Person?
If a Social Security recipient needs help managing his or her retirement benefits — perhaps an elderly parent — contact your local Social Security office. You must apply to become that person’s representative payee in order to assume responsibility for using the funds for the recipient’s benefit.
Do I Qualify for Social Security Survivors Benefits?
A spouse and children of a deceased person may be eligible for benefits based on the deceased’s earnings record as follows:
A widow or widower can receive benefits:
- At age 60 or older,
- At age 50 or older if disabled, or
- At any age if she or he takes care of a child of the deceased who is younger than age 16 or disabled.
A surviving ex-spouse might also be eligible for benefits under certain circumstances. In addition, unmarried children can receive benefits if they’re:
- Younger than age 18 (or up to age 19 if they are attending elementary or secondary school full-time), or
- Any age and were disabled before age 22 and remain disabled.
Under certain circumstances, benefits also can be paid to stepchildren, grandchildren, stepgrandchildren or adopted children. In addition, dependent parents age 62 or older who received at least one-half support from the deceased may be eligible to receive benefits.
A one-time payment of $255 may be made only to a spouse or child if he or she meets certain requirements. Survivors must apply for this payment within two years of the date of death.
Are Social Security Benefits Subject to Income Tax?
You’ll be taxed on Social Security benefits if your provisional income (PI) exceeds the thresholds within a two-tier system. PI equals the sum of 1) your adjusted gross income, 2) your tax-exempt interest income, and 3) one-half of the Social Security benefits received.
If you have additional questions about receiving Social Security retirement benefits, contact one of our financial advisers. We can help you navigate the application process and understand tax issues related to receiving retirement benefits.