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Social Security

Social Security is a government program that provides benefits to eligible individuals and their families. The program is designed to provide financial support to people who are retired, disabled, or have lost a loved one.

For singles

  1. Eligibility: To be eligible for social security benefits, you must have earned enough credits by working and paying social security taxes. You can earn up to four credits per year, and you need at least 40 credits to be eligible for benefits.
  2. Benefit amount: Your benefit amount is based on your earnings history. Social Security calculates your benefit by averaging your 35 highest years of earnings. The more you earn, the higher your benefit amount will be.
  3. Claiming age: You can start claiming social security benefits as early as age 62, but your benefit amount will be reduced if you claim before your full retirement age (FRA). Your FRA is based on your birth year, and it ranges from 66 to 67. If you delay claiming beyond your FRA, your benefit amount will increase by 8% per year up to age 70.
  4. Taxation: Your social security benefits may be subject to federal income tax if your total income (including social security) exceeds a certain threshold. The threshold is $25,000 for singles and $32,000 for couples filing jointly.

For couples

  1. Spousal benefits: If you're married, you may be eligible for spousal benefits based on your spouse's earnings history. You can claim up to 50% of your spouse's benefit amount if you're at least 62 years old and your spouse has started claiming benefits.
  2. Survivor benefits: If one spouse passes away, the surviving spouse may be eligible for survivor benefits. The survivor can claim 100% of the deceased spouse's benefit amount if they wait until their FRA to claim.
  3. Claiming strategies: Couples have several claiming strategies to maximize their social security benefits. For example, one spouse can claim benefits early while the other delays claiming to maximize their benefit amount. Or, the lower-earning spouse can claim spousal benefits first, then switch to their own benefit at a later age.
  4. Taxation: If you're married filing jointly, your social security benefits may be subject to federal income tax if your total income (including social security) exceeds $32,000. If you're married filing separately, your benefits may be subject to taxation regardless of your income.
  5. Coordinating benefits: If both spouses have worked and earned social security credits, they can coordinate their benefits to maximize their combined benefit amount. For example, one spouse can claim their own benefit, while the other claims a spousal benefit based on their spouse's earnings history.
  6. Divorced spouses: Divorced individuals may be eligible for social security benefits based on their ex-spouse's earnings history if they were married for at least 10 years and meet other eligibility requirements.

Additional Information

  1. Disability benefits: Social security also provides disability benefits to individuals who are unable to work due to a medical condition. To be eligible, you must have worked and earned enough credits, and your condition must be severe enough to prevent you from working for at least 12 months.
  2. Planning ahead: It's important to plan for your social security benefits and consider how they fit into your overall retirement plan. You may want to consult with a financial advisor to help you make informed decisions about when to claim your benefits and how to maximize your benefit amount.
  3. Applying for benefits: You can apply for social security benefits online, by phone, or in person at a local Social Security office. It's important to apply for benefits at least three months before you want to start receiving them.
  4. Reviewing your benefits: It's a good idea to review your social security benefits periodically to make sure they're accurate and up to date. You can review your earnings history and estimated benefit amount online through your Social Security account.
  5. Other sources of retirement income: Social security is just one source of retirement income, and it may not be enough to cover all your expenses in retirement. It's important to consider other sources of income, such as pensions, retirement savings, and investments, to ensure you have enough income to support your retirement lifestyle.
  6. Working in retirement: If you choose to work in retirement, your social security benefits may be reduced if you earn more than a certain amount. However, once you reach your FRA, there is no limit on how much you can earn without affecting your benefits.

Overall, understanding the ins and outs of social security is essential for singles and couples planning for retirement. By knowing your options and planning, you can make informed decisions about how to maximize your benefits and ensure a comfortable retirement.

In conclusion, social security is a valuable source of income for singles and couples in retirement, but it's important to understand the eligibility requirements, benefit amount, claiming age, and taxation rules. By planning and coordinating your benefits, you can maximize your social security benefits and enjoy a more secure retirement. If you need help navigating the social security system, consider scheduling a consultation with Linker Financial Group, Inc for assistance


Disclosure:  For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither LPL Financial nor any of its representatives may give legal or tax advice.