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Social Security basics: Clients' Frequently Asked Questions

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Clients face a major decision when they decide to claim Social Security benefits. Get help answering their most often asked questions with insight from the Social Security Administration and

Q 1. How do I know if I'm eligible for Social Security?
A 1. For most people, eligibility simply means earning enough credits. You can earn up to four credits per year and you need 40 credits to qualify. In 2022, you earn one credit for each $1,510 of earnings. Once you become eligible, the Social Security Administration (SSA) will calculate your retirement benefit using a complex formula that factors in your 35 highest earning years. If you haven't earned enough credits, you may still be eligible to receive benefits based on the earnings history of your spouse or ex-spouse.

Q 2. Are all income earners covered by Social Security?
A 2. About 95 percent of all workers are eligible for Social Security benefits. Railroad employees, government employees and employees of some public-school systems should check to see if they're eligible.

Q 3. How do I find out what my benefit will be?
A 3. Create a "my Social Security" account at to review your official earnings history. (If you discover a mistake, you have just over three years to make a correction.) You can also use your earnings history to generate an estimate of your retirement benefit amount at your full retirement age (between 66 and 67, depending on your birth year). Of course, this number is only an estimate, since future earnings will affect your benefit amount, as will your age when you file for benefits.

Q 4. Once I file for benefits, will I be able to change my mind?
A 4. Choosing when to file for benefits is an important decision — more important than many people realize. Filing before your full retirement age can result in a benefit that is up to 30 percent less than if you had waited until your full retirement age. Depending on the situation, there may be options to increase your benefit amount after filing:

  • If you filed for benefits less than 12 months ago, you have one opportunity to cancel or withdraw your filing application, repay all benefits in one lump sum and then reapply later.
  • If you filed early and have now reached your full retirement age, you can suspend your benefits. For every year up to age 70 that you don't receive benefits, the benefit you now receive will increase by 8 percent. Your benefits will restart automatically at age 70 if you haven't already reclaimed them.

Exercising either of these options will affect anyone else who is receiving benefits based on your earnings history and may also change how you pay Medicare premiums.

Q 5. Do I have to file for Social Security benefits once I reach my full retirement age?
A 5. No. If you file for benefits at your full retirement age, you will receive your full benefit amount (also called the primary insurance amount or PIA). However, if you want to wait, you can secure a higher benefit by filing later. For each year you wait past your full retirement age, your benefit will increase by 8 percent. The benefit stops increasing at age 70, so there is no incentive to delay past that point. All increases you earn by waiting are permanent. This higher benefit may be especially helpful if you anticipate a long retirement. If you're married, it can also benefit your spouse. If your spouse's benefit is lower than yours and you pass away, your spouse can begin taking your increased amount as a survivor benefit.

Q 6. What happens to my benefits if I return to work after starting to receive benefits?
A 6. Your benefits will be affected by your income in a few ways.

First, remember that your benefit is based on your 35 highest-earning years. If your new earnings will be higher than your previous earnings, this will permanently increase your benefit amount.

Second, depending on how much you earn, your income may temporarily reduce your benefit amount.

  • When you are under full retirement age for the entire year, for every $2 earned over the annual limit, your benefits will be reduced by $1.
  • If you will reach full retirement age at some point during the year, for every $3 earned over a higher annual limit, benefits will be reduced by $1. This reduction only applies to income earned up to the month before your birthday, not earnings for the entire year.

Benefits withheld due to earnings are not lost. Once you reach full retirement age, earnings of any amount will no longer reduce benefits, and the SSA will recalculate your benefit to give credit for any amounts previously reduced or withheld due to excess earnings.

Finally, earning higher income makes it more likely that a portion of your benefits will be taxed.

Q 7. Do I pay tax on my Social Security benefits?
A 7. You will not owe any tax on your benefits if that is your only source of income. Many people do have additional sources of income, though. In fact, about one-third of Social Security recipients pay income tax on a portion of their benefits.

To find out if you will owe tax on your benefits, add half of your benefit amount to your total income from wages, pension, withdrawals from retirement accounts and investment income (including tax exempt interest on municipal bonds). If the total is greater than:

  • $32,000 (joint) or $25,000 (single), up to 50 percent of the benefits are taxable
  • $44,000 (joint) or $34,000 (single), up to 85 percent of the benefits are taxable

This applies to federal taxes. Keep in mind that your state may also tax Social Security benefits. If you anticipate owing tax on your benefits, you may submit Form W-4V to withhold income tax from your Social Security checks.

Q 8. How does claiming spousal benefits work? For example, what if one spouse earned less than the other (and consequently receives a lower benefit)?
A 8. The higher earning spouse needs to claim benefits before the other spouse can claim a spousal benefit based on the higher earner's history. At that point, the lower earning spouse will receive the higher of their own earned benefit or a spousal benefit, which may be up to 50 percent of the higher earning spouse's full retirement benefit.

To claim the full 50 percent, the lower earning spouse must have reached their full retirement age. If the lower earning spouse files early, the spousal benefit could drop to as low as 32.5 percent of the spouse's full benefit. However, if the lower earning spouse is caring for a child under 16 or a child who is disabled and receiving Social Security benefits, they can claim a spousal benefit early without any reduction.

Q 9. Can I claim a spousal benefit based on the income of a spouse I divorced?
A 9. Yes, and unlike spousal benefits if your divorce has been final for at least two years, your former spouse doesn't have to file for benefits before you can claim a divorced spouse benefit on their earnings history. You may file for benefits based on your former spouse's earnings record if you meet these conditions:

  • The marriage lasted at least 10 years
  • You are at least 62 when you file
  • You are unmarried (It doesn't matter if your former spouse is remarried. It also doesn't matter if you remarried at some point, if you are single when you file.)
  • Your former spouse is eligible for benefits and entitled to a higher Social Security benefit than you are

If you meet all these criteria, you may receive a benefit up to 50 percent of your former spouse's full retirement benefit. If your former spouse dies, you can claim a survivor benefit. However, if you remarry, you will no longer be able to claim anything on your former spouse's record.

Q 10. How does the "family maximum" apply if both a former spouse and a current spouse claim on the same person's income?
A 10. The Social Security family maximum restricts the total benefits that can be paid on a single person's earnings record, but benefits paid to a former spouse are not factored into this limit. The maximum amount is determined using a complicated formula, but usually equals between 150 and 180 percent of the worker's full retirement benefit.

Generally, this limit only comes into play if, say, a worker, their spouse and one or more children are eligible for and claim benefits based on the worker's income.

For these families, the worker will always receive the full benefit, while other people claiming benefits on the worker's record will have their amounts equally reduced until the total falls under the specified limit.

Q 11. Are there survivor's benefits for Social Security? What happens if the spouse earning the higher benefit dies first? How does the surviving spouse adjust their benefit amount?
A 11. If the higher earning spouse dies first, the surviving spouse can receive up to 100 percent of their benefit, assuming the marriage lasted at least nine months, or the death was caused by an accident. Therefore, if the higher earning spouse increases their benefit (by waiting until age 70 to file, for example), they will also increase the survivor benefit.

In the case of death, the surviving spouse would likely need to apply for the survivor benefit,
depending on the situation:

  • If the surviving spouse is receiving spousal benefits based on the deceased spouse's record, the SSA will automatically adjust the benefit amount after receiving a report of the death
  • If the surviving spouse is receiving benefits on their own earnings, they will need to apply for the survivor benefit
  • If the surviving spouse is not receiving benefits yet, they should apply for the survivor benefit right away. This benefit may not be retroactive, so applying promptly is important

Be prepared for more client questions:

Social Security rules and strategies for financial professionals2022 Social Security Reference Guide
Specific questions require a specific answer: make sure you have the numbers, dates and details you need. Download the Social Security Reference Guide now. You can quickly show:

  • Full Retirement Age
  • Primary Insurance Amount Calculation
  • Taxable Benefit Amounts
  • FICA Payroll Taxes
  • The Impact of Waiting

Download now


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