Below are some of the frequently asked questions (FAQ) about the US Social Security system:
What is Social Security?
Social Security is a government program in the US that provides benefits to eligible individuals and families.
- Retirement benefits
- Disability benefits
- Survivor benefits
The funding is from payroll taxes collected from employees and employers.
Who is eligible for Social Security benefits?
Below are the factors to consider for Social Security benefits eligibility.
- Work history
- Age
- Disability status
Earn sufficient Social Security credits to be eligible for benefits. Spouses and dependent children may qualify for benefits.
What age can I claim my retirement benefits?
Get Social Security retirement payments as early as age 62. Early claims result to decreased monthly payouts. Full retirement age is between the ages of 66 and 67. It depends on your birth year. There is an option to defer collecting benefits after reaching full retirement age. This increases your monthly benefit amount up to the age of 70.
How do the calculate my benefits?
Social Security benefits are calculated based on your lifetime earnings. Average indexed monthly earnings (AIME) determine your primary insurance amount (PIA). This is the base amount you would get at full retirement age. The actual amount depends on the start date of collecting benefits. Cost-of-living adjustments (COLAs) are considered as well.
Can I work and receive Social Security benefits?
Yes, you can work and get Social Security benefits. Exceeding earning limits result to decreased monthly payouts.
It is not the case after reaching full retirement age. You can work and earn any amount. It will not affect your Social Security benefits.
What is the maximum Social Security benefit?
The maximum Social Security benefit depends on two things.
- The year you reach full retirement age
- Your earnings history
The maximum monthly benefit in 2022 for someone retiring at full retirement age is $3,345. It is rare that someone gets the maximum monthly benefit amount. There are different factors to consider.
Is Social Security taxable?
- Your total income determines your tax obligations.
- Your combined income that exceeds the limits may be subject to federal income tax.
- Social Security benefits are taxable in some states.
Call the US Social Security Administration or consult with a financial advisor for more FAQ or inquiries about your eligibility or benefits payment schedule.