How to Determine Your Social Security Benefits

As you continue to age, it’s only natural that you start thinking more about retirement, and what that may look like for you.  

While everyone is on their own unique path towards retirement, with varying levels of assets and (hopefully) a variety of qualified and non-qualified accounts to support their life in retirement, there is one thing nearly everyone in the US has questions about. . . Social Security Benefits.  

You may be wondering how much Social Security you’ll receive, how that number is calculated, how much money you can make and still receive benefits, and what you can do (if anything) to increase your monthly benefit. 

Perhaps the simplest method to obtain answers to some of your questions is to create a my Social Security account. You can use this to view your estimated future payments, and make any necessary changes to your Social Security record.  

The main driving factors in determining your Social Security benefits are your average income and the age you begin receiving benefits.  

Make sure to talk with your Financial Planner to determine the best strategy for your unique situation. 

Here are the basics: 

• Social Security benefits are based on your 35 highest earning years (taxed Social Security earnings) 

• The age you begin receiving benefits affects the monthly benefits you’ll receive. 

• There are limits on how much earned income you can have and still receive Social Security benefits if you’re under full retirement age (67 if you were born in 1960 or later). 

There are some steps you can take to increase your Social Security income. The earlier you start planning, the better.  

• Increase your earnings. 

  • Since they use an average based on your highest earning years, each year of higher earnings will knock off the lowest earnings year, increasing your average.

  • There may be some tax implications here, so you’ll want to discuss your options with your CPA and Financial Planner. 

• Delay receiving benefits. 

  • While you’re eligible to begin receiving your SS benefits at the age of 62, your monthly benefit amount increases with every month you delay, with the maximum monthly benefit being received if you wait until age 70 (the deadline) to begin taking benefits.

  • There are certain situations in which delaying benefits may not be in your best interest. Make sure to talk to your Financial Planner to determine your best option. 

• Pay attention to earned income limitations (if planning to continue working while receiving benefits) 

  • This only applies to those under full retirement age (67 for those born in 1960 or later) – Once you reach full retirement age, there are no income limitations. 

  • While this will decrease your current benefits, it will increase your benefits once you reach full retirement age. 

Reach out to your Financial Planner for more information or if you have any questions. You can also find more information online at SSA.Gov.