7 Most Frequently Asked Social Security Questions, #178
Are you approaching retirement with tons of questions about Social Security? Then don’t miss this episode! I’m going over the seven most frequently asked questions about Social Security benefits from clients and listeners alike. Hit play for the tips and tricks you have to know before you start collecting.
You will want to hear this episode if you are interested in...
When am I eligible to collect Social Security benefits? [2:30]
How much will I earn from Social Security? [5:12]
What are spousal benefits and how do they work? [7:34]
What are divorced spousal benefits? [8:36]
Can I work and collect Social Security benefits? [9:29]
Are Social Security benefits taxable? [12:10]
How do I apply for Social Security benefits? [14:49]
Understanding the pathways to Social Security benefits
There are four different pathways to gain eligibility for Social Security benefits. First, Social Security disability offers access to full retirement benefits earlier contingent on meeting specific disability criteria. If ineligible for disability benefits, there are three alternative methods for accessing Social Security benefits. Full retirement age typically spans between 66 and 67, varying with birth year. However, benefits can commence as early as age 62 with a reduction of about five-ninths of a percent per month until full retirement age, resulting in 70-75% of the total benefit.
Alternatively, delaying collection past full retirement age yields an 8% annual increase, maximizing at a 24% boost if waiting until age 70. Additionally, annual cost-of-living adjustments, averaging around 2.8%, might impact benefits, offering further considerations for individuals planning their Social Security benefits. These pathways offer flexibility, allowing individuals to strategize based on their unique circumstances and financial objectives.
Crunching the numbers
Figuring out how much you'll earn from Social Security isn't straightforward. It's a blend of your work history, timing of collection, and a formula that considers your highest 35 years of earnings. If you've got fewer than 35 years in the workforce, those years without earnings factor in. But here's the trick: working longer can swap those zeros for higher-earning years, beefing up your benefits. If your income has varied, working more years can replace low-earning ones with better ones, boosting what you receive.
Cost-of-living adjustments matter too. Your Social Security statement holds the key to what you're eligible for. Once you start collecting, there's no turning back, except for a one-time do-over within a year, but that means repaying what you've received. Many folks jump in early but armed with this knowledge, you're better equipped to make a wise decision. Listen to this episode for more of the most-asked Social Security questions!
Resources Mentioned
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