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5 Social Security Rules to Know By Mind

There are many rules that we need to know by heart, such as "always say thank you," "don't write and drive," and "remember to eat lots of vegetables." There are rules that relate to many aspects of our lives, including our finances, and the better we know – and to comply with them, the more secure our lives are, especially in the future.

Here, then, are five social security rules you need to know. See if any of them are new to you, and keep them in your care when you work on your retirement plan or when you need to make social security decisions.

  We see the phrase know the rules printed on scrap of white paper and nailed to a cork board.

Image Source: Getty Images.

No. 1: When you start collecting benefits, it affects the size of your checks

First, know that there is no one-size-fits-all benefit check. Those who earn more in their working lives are likely to receive thicker retirement checks. However, you are not only paying your salary – you can also influence the size of your checks at the age you begin to collect Social Security.

You can claim your retirement benefits at the age of 62 and at the age of 70, and your checks will be larger (or smaller) if you start later (or earlier) than your full retirement age. This is the age at which you are entitled to your full benefits and for most of us it is 66 or 67 or somewhere in between. The table below shows the effect of waiting or requesting early. For example, if your full retirement age is 67 and you start collecting at the age of 62, your checks will be about 30% smaller – though, of course, you'll collect more of them than if you delayed. Wait until you reach the age of 70 and your checks will be 24% higher than if you started at 67.

Start collecting at:

Full retirement age at 66

Full retirement age by 67 [19659011] 62










] 93.3% [19659012] 86.7%
















Source: Social Security Administration.

No. 2: You Can Make Your Benefit Checks Even Greater

Then know that there are other ways to increase your checks. For example, the formula used to determine benefits is based on your (inflation-adjusted) earnings in the 35 years in which you have earned the most. If you planned to stop working after only 30 years, your benefits will be less, since five years worth of zero will be taken into account. Aim for at least 35 years of work. And if you can work more years with above average incomes, know that each of those years will replace one year with a lower income, thus increasing your benefits checks.

Another way to get the most out of Social Security is to coordinate with your spouse if you are married. For example, one of you may start collecting early so that you both get some social security income while the other is delayed as long as possible. Ideally, a higher earner will be delayed to complete the largest possible checks. Then, if one partner dies, the surviving spouse who can collect or (but not both) of the two benefits can receive the one who is maximized.

  We see benefits labeled with the needle pointing to the max.

Image Source: Getty Image.

No. 3: Benefits may be available, even if you have little or no profit

Another rule of social security that you need to know is that even if you have little or no income, you may be able to collect some benefit checks . Generally, you should be married (or have been married for at least 10 years in the event of a divorce) with someone who is eligible for social security benefits, so you can apply for spousal benefits amounting to up to 50% of those the spouse benefits for full retirement age. Spousal benefits rules are a little tricky, so read them – it's well worth it if you are earning some unexpected income! (There are special rules, for example, if dependent children under the age of 16 are participating.)

No. 4: Social Security Benefits Can be Taxed

Next, do not assume that you will be able to save every single dollar of your Social Security benefits – some Social Security benefits may be taxed. They become taxable if you retire and earn more than a certain threshold. Depending on how much you earn, up to 50% or 85% (but never more than 85%) of your benefits can be taxed. Your "combined income" is used to determine if there is a tax. This is your adjusted gross income (AGI) plus non-taxable interest plus half of your social security benefits. The following table provides details:

Filing as

Combined income

Percentage of benefits payable

Single individual

Between $ 25,000 and $ 34,000

Up to 50%

Married, filing jointly

Between $ 32,000 and $ 44,000

Up to 50%

Single individual

More than $ 34,000

Up to 85%

Married, filing jointly Filing

More than $ 44,000

Up to 85%

Source: Social Security Administration.

If you are thinking of retiring or trying to decide when to start collecting your benefits, it is a good idea to keep in mind the information above and to shorten a few numbers.

many countries do not.

No. 5: Social Security is only intended to provide part of your retirement income

Finally, understand that Social Security will never completely replace your regular working income. The program is designed to replace about 40% of a retiree's average income before retirement. (You are likely to provide less than 40% for high-income people and more than 40% for low-income people.)

To be more specific, the average monthly retirement benefit recently was $ 1475, or about $ 17,700 a year. Of course, if you have earned above average income during your working life, you will get more and many will get less. But no one will get, say, $ 50,000 or $ 60,000 a year from Social Security.

To best plan your own Social Security solutions, go to the Social Security website (SSA) and open my Social Security account. Once you have this, you can log in at any time to see the SSA record of your earnings and estimates of your future benefits. It is wise to correct all the mistakes you see so that you get all the benefits you have actually gained.

It is vital to learn about social security and make sensible decisions about it, because social security income is a major part of most Americans' pensions. In fact, 50% of married adult Social Security beneficiaries and 70% of unmarried people receive 50% or more of their SSA income, with millions receiving 90% or more of their income from it.

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