Social Security Benefits

Social Security benefits provide supplemental income to qualified retired workers and disabled people as well as their spouses, children and survivors. Approximately 70 million Americans are expected to receive Social Security benefits in 2021.

The decision of when to begin claiming Social Security benefits is an extremely important part of your retirement plan. That’s because it determines the amount you will receive every month for your entire time in the program.

There are several free online calculators designed to help you make this decision. The Social Security Administration has a retirement estimator to give you an idea of your Social Security benefits.

What Determines Social Security Benefits?

Social Security is designed to replace about 40 percent of employment income, on average.

However, that is not the same with every worker. Social Security will replace a higher percentage of the income of lower-income workers and a lower percentage of the income of higher-earning workers.

You can begin receiving Social Security at age 62. However, starting at that age means those benefits will be about 30 percent less each month than what you receive if you delay benefits until you reach what the government considers your full retirement age.

Financial expert John Clark explains what impact taking Social Security early — or delaying it — has on your retirement.
Full retirement age depends on the year in which you were born:
  • If you were born in 1937 or earlier, you reached full retirement age at 65.
  • Anyone born in 1960 or later will not reach full retirement age until 67.
Age to Receive Full Social Security Benefits
Year of BirthFull Social Security Retirement Age
1937 or earlier65
193865 and 2 months
193965 and 4 months
194065 and 6 months
194165 and 8 months
194265 and 10 months
1943 to 195466
195566 and 2 months
195666 and 4 months
195766 and 6 months
195866 and 8 months
195966 and 10 months
1960 and later67
The Social Security Administration’s Benefits Planner allows you to estimate benefit amounts and find more information to help you decide when to start receiving retirement benefits.
Source: Social Security Administration

Social Security Benefits If You’re Married

Determining Social Security calculations is a bit more complicated if you are married because you have the option to base benefits on your spouse’s salary history.

If the lesser earning spouse’s benefits are based on the higher earning spouse’s, then the limit of those earnings will be 50 percent of the higher earning spouse’s benefit amount.

To illustrate this, let’s talk about A and B, a married couple.
  • A makes significantly more money than B.
  • A makes so much more money that A’s monthly Social Security benefits are going to be more than twice of B’s, based on B’s salary history.
  • The good news for B is that they can choose to have their Social Security benefits based on A’s salary history and can receive as much as 50 percent of A’s monthly benefit. This is the case even if B didn’t hold a job outside the home.

On the other hand, if B’s monthly benefit would have been more than half of A’s, based on B’s salary history, then B can claim that amount.

In short, B can claim the higher of these two possibilities: B’s own Social Security earnings or half of A’s.

This all assumes that B doesn’t begin claiming benefits until B reaches full retirement age. If B begins claiming earlier, then B’s benefits will be less. In addition, if B is claiming benefits based on A’s earnings, then B does not benefit by waiting later than full retirement age.

B will not be given more monthly benefits if B waits until age 70, for example, based on A’s earnings.

Social Security Benefits for Surviving Spouses

If your spouse was receiving Social Security benefits upon their death, you must report the death as soon as possible. You can call the Social Security Administration at 1-800-772-1213 between 7 a.m. and 7 p.m. on weekdays or visit your local Social Security office in person.

You are eligible for a one-time, lump-sum death benefit of $255 from Social Security if:
  • You were receiving benefits on your spouse’s record at the time of death, or
  • If you were living in the same household as your spouse at the time of death.

Any benefits received in the name of your spouse during the month of death or later must be returned to the Social Security Administration as soon as possible.

If your spouse worked long enough under Social Security, you may be eligible for Social Security benefits. You must be age 60 or older or disabled and 50 or older to qualify.

How much you’ll receive depends on the percentage of your spouse’s benefit as well as your age and the type of benefit you’re eligible for.

You must apply for survivor benefits in person. You can call Social Security at 1-800-772-1213 to request an appointment.

Will Social Security Run out of Money?

Social Security is expected to run out of cash reserves in 2034, according to the Old-Age and Survivors Insurance Trust Fund, the retirement benefits account managed by the Social Security Administration.

However, this doesn’t mean the program would be bankrupt and unable to pay out benefits. If Congress does nothing to reform the system by 2034, Social Security would still be able to pay 79 percent of promised benefits until 2090.

Social Security has run out of cash reserves before. Congress reformed the program in the 1980s by taxing benefits based on income levels and by gradually increasing the full retirement age from 65 to 67.

Last Modified: July 6, 2021

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