Social Security is not a well understood program. In fact, a 2022 survey found that about half of respondents thought if they filed for benefits early, their payment amount would automatically go up when they reached their full retirement age. That’s way, way wrong.
The confusion’s a shame, given how many of us will need this money badly in old age. Around 21% of couples collecting Social Security benefits and about 45% of those who are unmarried rely on Social Security for 90% or more of their income.
It’s a shame, too, because knowing the rules puts the most money possible in your monthly benefit payments.
The following are a few key rules for Social Security.
1. Your benefit is based on your 35 highest-earning years
The Social Security Administration (SSA) calculates your monthly benefit with a formula that uses your 35 best-earning years — that is, the 35 years during which your income was highest. If your earnings record doesn’t include 35 years, missing years are replaced with zeros, lowering your potential benefit.
So it’s worth staying in the workforce at least 35 years if you can. The more peak-earning years in your formula, the bigger your monthly benefit payment can be.
Check your earnings record once yearly to confirm that the SSA has recorded your earnings correctly so you get credit for all your earnings. Do this by logging into or signing up for your online Social Security account.
2. Your benefit might be taxed
Are you surprised to learn that your Social Security income may be taxed? About half of retirees pay federal taxes on their income from the program.
As we detail in “5 Ways to Avoid Taxes on Social Security Income,” up to 85% of your benefits could be considered taxable income by Uncle Sam.
That’s not all. Some states also tax at least some residents’ Social Security income. If you’re looking forward to a low-tax retirement, consider moving to one of the states that do not tax benefits.
3. You can claim benefits as early as 62
The earliest age at which you can start receiving Social Security retirement benefits is 62 for most people, and 60 for those who claim survivor’s benefits.
The largest share of Americans — about 31% — claim at age 62.
If that’s your plan, understand that claiming early means you’ll receive smaller monthly payments for the rest of your life. Check your online Social Security account to compare what you’d receive in monthly payments at age 62 with what you’d get from waiting until you are older.
Despite all that, there are circumstances when you have few choices — you need the money to live, for instance, or you don’t expect to have a long life — and claiming early makes sense.
4. Your full benefit amount is tied to your full retirement age
“Full retirement age,” or FRA, is a technical term used in the context of Social Security. It refers to the age at which you are eligible to receive the full amount of your monthly benefit — meaning without any penalty applied for claiming early or any bonus applied for delaying claiming.
In other words, claiming benefits before reaching full retirement age means your monthly benefit will be reduced — by as much as 30%. Claiming after you reach FRA means your monthly benefit will be increased by as much as 8% for each year you wait past FRA to claim, up until age 70.
So, what exactly is your full retirement age? That depends on the year you were born, but for most people now it’s between age 66 and 67.
5. Your spouse’s work history can help you too
Understanding your options can really pay off with Social Security. For example, if your spouse or ex-spouse earned more money than you, it may be better for you to claim spousal benefits — which are based on your spouse’s or ex’s earnings record — instead of claiming based on your own work history.
If you’ve been a stay-at-home spouse, earned low wages or didn’t work for very many years, you may be able to receive up to half the amount of your spouse’s or ex-spouse’s monthly benefit. (In the case of an ex, you generally must have been married to the person for at least 10 years, as well as meet other conditions, to claim spousal benefits based on that person’s earnings record.)
It’s one more case where doing research and planning your Social Security claiming strategy is an investment in your future.
6. When you claim typically won’t affect your total, lifetime payment amount
As you now know, starting benefits at age 62 makes your monthly payments smaller than if you’d waited. But whether you start early (and get smaller monthly payments) or later (and get bigger payments), you should receive roughly the same total payout over the course of your retirement — assuming that you have an average life expectancy.
The Social Security system was designed to work that way — “actuarially neutral” is the technical term.
That doesn’t mean there isn’t a powerful reason to wait — ideally, even to age 70 if you can. If Social Security is going to be a big part of your retirement income, the bigger monthly benefit payments you’ll get from waiting will be valuable to your quality of life in old age.
7. You may be able to collect survivor’s benefits even after remarrying
The rules for remarriage and survivor’s benefits sometimes throw people off, probably because your age when you remarry is a big part of the equation.
Survivor’s benefits — sometimes known as widow’s or widower’s benefits — let a surviving spouse collect up to 100% of their late spouse’s Social Security benefit amount. You generally can claim this type of benefit as early as age 60, but the benefit will be reduced if you claim it before reaching your full retirement age. (Social Security has a pamphlet with the details.)
But what if you remarry? Again, that depends on the age at which you remarry. The Social Security Administration explains:
“Usually, you can’t get widow’s or widower’s benefits if you remarry before age 60 (or age 50 if you’re disabled). But remarriage after age 60 (or age 50 if you’re disabled) won’t prevent you from getting benefit payments based on your former spouse’s work. And at age 62 or older, you can get benefits on your new spouse’s work, if those benefits would be higher.”