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Making Sense of Social Security Retirement Benefits

Updated on September 15, 2014

Social Security Questions

As you get closer to retirement, choosing when to take your Social Security may seem like rolling the dice.

There are so many decisions to make, such as:

Should you apply for Social Security at 62 or 66?

When is full retirement age for Social Security retirement benefits?

When should your spouse start taking benefits?

What happens if you or your spouse dies?

Should you apply for benefits based on your earnings or your spouses earnings?

What if you are divorced or widowed?

If your head wasn't spinning before, it is now!

In this lens, we'll try to answer some of the most common Social Security questions and more to help you get the most out of your Social Security retirement benefits.

social security taxable
social security taxable

Many retirees are going back to work to help make ends meet.

Unfortunately, one side effect that most people aren't aware of is that part-time job could cause your Social Security to become taxable income...

2013 COLA Announced

Social Security Benefits to Increase 1.7%

Social Security recently announced that beneficiaries will receive a 1.7% benefit increase in 2013.

People collecting SSI benefits will receive their increase in December 2012; people collecting Social Security will see their increase in January 2013.

The History of Social Security

The idea for social security was first developed in Europe as response to families moving from farming to working for others as the world became industrialized. The first social security program was established in Germany in 1889.

In the United States, the Great Depression triggered an economic crisis that caused millions of seniors to become impoverished. In an attempt to provide economic security, the Social Security Act was passed in 1935 by President Franklin D. Roosevelt.

The original Social Security retirement program provided Social Security payments only to the worker, and only retirement benefits. In 1939, the act was amended to provide benefits to spouses and children for both retired and deceased workers.

The monthly retirement benefit didn't begin until 1940, and the first recipient was Ida May Fuller a retired legal secretary.

Since then the program has been amended to include COLAs (cost of living adjustments) and disability benefits. Medicare wasn't introduced until the 1960s.

Getting the Maximum Social Security Benefits

First a disclaimer: Social Security retirement benefits can be very complicated, so you should consult with a Social Security specialist before making any final decisions regarding your retirement benefits.

Having said that, here are some tips to help you get the maximum Social Security retirement benefits you are entitled to:

Maximize Your Social Security Earnings:

Your retirement benefit is based on your top 35 years of earnings so it's important to get as many "high earning" years in as possible. Because of this, working just one year longer in a high paying job could make a big difference in your retirement benefit.

Delay Taking Your Social Security Benefits

You are penalized for every month you take your Social Security before you reach your full retirement age, with the maximum penalty being 25% if you start taking benefits at age 62. While starting your benefits early might be tempting, those who are patient can increase their benefits by up to 30% (including COLA adjustments) by waiting until full retirement age.

Work Part-Time During Retirement

While you are limited in how much you can earn if you are under full retirement age and collecting Social Security, once you reach full retirement age you can earn as much as you want without your retirement benefits being reduced. Another idea is to take a part-time job after you retire so that you can delay taking SS benefits.

Collect Based On Your Spouse's Earnings

If you're married, you can withdraw Social Security retirement benefits based on your own earnings, or you can collect half of your spouse's benefit, whichever is larger. If you and your spouse aren't the same age, you may need to do some planning to make sure you maximize your benefits, but this is definitely a strategy to consider if one spouse earns significantly more than the other, or if one spouse has been out of the work force for many years.

Tap Into Your Ex's Benefits

The spousal benefit applies to ex-spouses too. If you were married to your ex-spouse for at least 10 years, and you aren't currently married to someone else, you can collect up to 50% of your ex spouse's benefits. You don't have to communicate with your ex-spouse to claim your benefits; in fact they will never know unless you tell them, and it won't affect their benefits in any way.

These are just a few tips to help you maximize your Social Security retirement benefits. Withdrawing your Social Security benefits can be a very complex decision, so please consult with a professional before you make any decisions.

Is Your Social Security Taxable?

One of the most commonly asked Social Security questions is "is Social Security taxable?"

The answer is... it depends.

Your Social Security benefits could be taxable, depending on your other income and your marital status.

Generally, if Social Security is your only income, then it is not taxable.

However, if you have other income from wages, investments or even tax exempt income, your Social Security could be taxable.

For 2008, if your total income including 1/2 of your Social Security income and any tax exempt income you have totals $25,000 (for Single, Head of Household and Qualifying Widows) or $32,000 (for married taxpayers filing jointly), then up to 50% of your Social Security benefits will be subject to tax.

However, if your income is higher, then up to 85% of your benefits could be subject to tax. If your total income (as defined above) is over $34,000 ($44,000 if you are filing married filing joint), then up to 85% of your Social Security benefits are taxable.

For more information including examples, please read Publication 915: Social Security and Equivalent Railroad Retirement Benefits.

Hands Off Social Security - Sen. Bernie Sanders on why the retirement program must not be cut.

As Social Security emerged as a target in White House budget negotiations, Sen. Bernie Sanders insisted that the retirement program must not be cut as part of any deficit reduction deal. "Let us be clear," Sanders said. "Social Security has not contributed one nickel to our deficit or our national debt." The program that benefits more than 50 million seniors and disabled has a $2.6 trillion surplus, he stressed, and will be able to provide full benefits for every eligible American for the next 25 years. "I am especially disturbed that President Obama is considering cuts in Social Security after he campaigned against cuts in 2008," Sanders added.

Social Security Turns 75

This month it will be 75 years since Social Security was signed into law...


Anita Creamer

Aug. 9, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Evelyn Sekula's widowed grandmother struggled to survive during the Depression. Like millions of other elderly people, she had no pension and no savings.

"She had no income at all except for what my father gave her," said Sekula, 90, who lives at the Atria El Camino Gardens senior residence in Carmichael. "She was always looking for a way to make money. My father probably gave her $10 a month."

Today's older adults were children and teenagers when President Franklin D. Roosevelt changed the face of aging on Aug. 14, 1935, when he signed the Social Security Act into law.

They remember the difficult years when old age took place in a bleak, Dickensian landscape of need dotted with poor houses for those whose families couldn't support them. And they remember the difference that Social Security made in ordinary people's lives.

They also remember their parents' fears that Social Security amounted to socialism. Yet on the edge of the program's 75th anniversary, most of them can't imagine retirement without the small cushion of funds and dignity that Social Security provides.

As California Budget Project executive director Jean Ross says, Social Security lifted the elderly out of poverty -- and as the most important source of income for most older Americans, it continues to do so.

social security comic book
social security comic book

Social Security Comic Book???

Did you know that Social Security used to publish a comic book?

During the 1950s and 1960s, the SSA published a series of comic books on Social Security-related topics in an effort to reach America's youth, who in those days used comic books as their hottest medium of communication.

You can learn more about this comic from 1956 by visiting the Social Security history page.

Social Security Benefits to Increase 3.6% in 2012

First Social Security COLA since 2009

Good news for the millions of Americans who rely on Social Security… they will be getting a raise in 2012, the first time since 2009.

The Social Security Administration (SSA) announced that the cost of living allowance (COLA) increase for 2012 will be 3.6%.

According to SSA, the average monthly benefit for retirees will increase from $1,186 to $1,229; for individuals who receive disability benefits the average benefit will increase from $1,072 to $1,111.

Social Security Rates 2011

What is the Social Security tax rate for 2011?

If you are an employee, you know that part of your paycheck goes towards payroll taxes. A big chunk of those taxes go towards Social Security to pay for retirement and disability benefits to people who qualify.

The Act that requires employers to withhold Social Security taxes is the Federal Insurance Contributions Act (FICA).

The Social Security tax rate was reduced by two percent in 2011 only so employees pay only 4.2% in Social Security taxes.

For many years, the Social Security tax rate has been 6.20% of your gross wages, up to the Social Security wage base. However, in 2011 the amount was reduced to 4.2% for employees (the employer share is still 6.2%).

This reduction in the Social Security tax rate will result in hundreds to thousands of dollars in tax savings in 2011, depending on how much you earn. For example, people who make $30,000 will save $600, people who earn $60,000 will save $1,200, and people who earn $100,000 will save $2,000 in Social Security taxes in 2011.

What Questions Do You Have About Social Security?

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    • Mr Criminology profile image


      5 years ago from Philippines

      Why not lower the mandatory retirement age to between 55 and 60 so that the retiree can enjoy life at a young age.

    • Scarlettohairy profile image

      Peggy Hazelwood 

      5 years ago from Desert Southwest, U.S.A.

      Thanks for this overview of Social Security. I'm several years away from being eligible to collect but it's approaching!

    • Countryluthier profile image

      E L Seaton 

      6 years ago from Virginia

      Save some social security money for me, at the current rate, I have 12-14 years, the honey pot may be empty by then. I do have a Plan B and squidoo is part b of my plan. Thanks for sharing.

    • nyclittleitaly profile image


      7 years ago

      good information. I will begin collecting in two years

    • TIRMassageStone1 profile image


      7 years ago

      Good to know.

    • profile image


      7 years ago

      In the UK retirement funding by the government is at a crisis level. I would recommend for anyone to take take their own retirement in to their own hand and start saving in to a pension or ISA earlier rather than later.

    • UKGhostwriter profile image


      7 years ago

      Excellent lens! - well done

    • aesta1 profile image

      Mary Norton 

      7 years ago from Ontario, Canada

      Good to be informed on this even before retirement so you can plan accordingly. Blessed.

    • Vipbooks LM profile image

      Vipbooks LM 

      8 years ago

      I like these two quotations about Social Security:

      "Social Security is a government program with a constituency made up of the old, the near old and those who hope or fear to grow old. After 215 years of trying, we have finally discovered a special interest that includes 100 percent of the population. Now we can vote ourselves rich."

      â P. J. O'Rourke

      "The Republican Party is a friend of Social Security the way Colonel Sanders was a friend of chickens."

      â Charles T. Manatt

      I wrote my own opinion about Social Security on my Redroom Blog called Social Security Is a Secure Way .

      Ernie J. Zelinski,

      Author of How to Retire Happy, Wild, and Free

      (Over 125,000 copies sold and published in 9 languages)

      and The Joy of Not Working

      (Over 250,000 copies sold and published in 17 languages)

    • profile image


      8 years ago

      @jsimpson121: I actually just came across a website that talks all about social security disability, check it out at, it has some great information

    • profile image


      8 years ago

      Thanks for all of the information regarding social security. Although I do wish you could have touched on social security disability. My father is applying for it, and I wanted to know a little more about it.


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