What you should know before taking Social Security
If you’re getting close to retirement, you’re probably thinking about when you should start your Social Security payments. You may not realize it, but determining when affects your monthly income for the rest of your life and, possibly, your spouse’s life. Learn what you need to know before you apply for Social Security benefits.
How do you find out how much Social Security you’ll receive?
How much Social Security you’ll receive is determined by your highest 35 years of earnings.1 You can estimate your personalized benefits and see the impact of starting at different ages by creating an account at ssa.gov.
Is it better to take Social Security at age 62 or 67?
The answer depends on your financial situation. Once you reach full retirement age (FRA), which varies based on the year you were born, you’re entitled to your full benefit.
Full retirement age by year
| Year of birth² | Full retirement age |
| 1943–1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
You can apply for your benefit as early as age 62, but your payment is reduced because you’ll receive four to five more years’ worth of income.3 On the other hand, you can increase your payment amount by delaying up to age 70 (there’s no benefit to waiting beyond age 70).4 Whether you start sooner or later, your payment gets locked in, so be sure of your decision.
Can you keep working and get Social Security?
You can keep working while receiving Social Security, but your payments will be reduced if you haven’t reached full retirement age and you make more than certain thresholds. If your benefit payment is reduced because you’re still working, your benefit will increase to make up for prior reductions when you reach full retirement age.5
How working can affect your Social Security benefit
| If you're ... | You can make up to ... | If you earn more, your benefit will be reduced by ... |
| Younger than full retirement age | $18,960 per year without reducing your benefit | $1 for every $2 earned above $18,960 |
| In the year you reach full retirement age but before the month you reach it | $50,250 per year without reducing your benefit | $1 for every $3 earned above $50,250 |
| In the month you reach full retirement age or older | No income limits | Nothing |
Dollar thresholds listed are for 2021.
At what age is Social Security not taxed?
Social Security doesn’t stop getting taxed because you reach a certain age; it depends on how much money you make and your tax filing status. The income that matters is your combined income—50% of your Social Security income, plus 100% of all your other income, including wages, pension income, interest, dividends, and capital gains.6
How Social Security gets taxed
| Filing status | Combined income | Social Security that's taxable |
| Single | Less than $25,000 | 0% |
| $25,000–$34,000 | 50% | |
| More than $34,000 | 85% | |
| Married filing jointly | Less than $32,000 | 0% |
| $32,000–$44,000 | 50% | |
| More than $44,000 | 85% |
Visit ssa.gov to view other filing statuses.
If you’re single and have a combined income greater than $34,000, then 85% of your Social Security income will be taxable income.
Are you getting a raise on your Social Security?
Each October, the U.S. Social Security Administration (SSA) determines if a cost-of-living adjustment—a raise—will apply for the following calendar year’s payments based on changes in the Consumer Price Index (CPI)—a way to measure inflation. There’s no guarantee that a change will occur, but if there is, it’ll apply to all 12 payments in the following calendar year. For example, the SSA recently announced a 5.9% increase to all 2022 payments, the largest increase since 1982.7
How does your decision affect your spouse’s benefit?
Spouses are entitled to the greater of their benefit or 50% of your benefit. If you decide to receive payments before reaching full retirement age, it reduces what your spouse could make. Conversely, if you delay your payment, both your and your spouse’s benefit could be increased.
A lot goes into your Social Security decision
There’s a lot to consider when deciding to start your Social Security benefits. By growing your 401(k) or other retirement accounts, you can help reduce your reliance on Social Security and give yourself some flexibility for when you start receiving benefits.
Starting your Social Security benefits is personal to you and your financial situation. But remember, once you submit your application and start getting payments, your decision is final, so consider the impact on your long-term retirement income before you do.
1 “Social Security Benefit Amounts,” U.S. Social Security Administration. 2 “Retirement Benefits,” U.S. Social Security Administration, January 2021. 3 “Benefit Reduction for Early Retirement,” U.S. Social Security Administration, 11/25/08. 4 “Delayed Retirement Credits,” U.S. Social Security Administration. 5 “How Work Affects Your Benefits,” U.S. Social Security Administration, 2021. 6 “Don’t forget, Social Security benefits may be taxable,” U.S. Internal Revenue Service, 6/25/20. 7 “Cost-Of-Living Adjustments,” U.S. Social Security Administration.
Important disclosures
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made herein.
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