What You Can Expect From Social Security

62 million Americans receive a check from Social Security, and for over 65% of those beneficiaries of the program are reliant on those checks for over half their monthly income. 

For those still a long way off from collecting SS, most (over 80% of millennials) don't expect to receive a dime of it back.  That's because estimates by current funding levels, Social Security will begin paying out more than it takes in by 2021- and by 2034, benefits could be cut an estimated 23% to keep SS solvent. 

Of course Congress would not let the largest voting block get clipped like that.  Their most likely course of action will be to uncap the wage cap on SS taxes so all wages are taxed.  Currently, only the first $128,400 of earnings are exposed to the SS tax of 12.5% (6.2% by the employee, the balance paid by the employer). 

Another likely change would be to increase the retirement age from 67 years old.  

Some Social Security facts to remember:

  • Employee pays 6.2% and employers pay the other 6.2%.  Self-employed individuals must pay the full 12.4%

  • Social Security benefits are calculated based on the 35 years in which you earn the most. If you don't work for at least 35 years, zeros are factored into the calculation, which decreases your payout.

  • Earnings of up to $128,700 in 2018 are used to calculate your retirement payments.

  • You need to claim Social Security at your full retirement age, which is 66 or 67 for most current workers, to get your full payments. Monthly payments are permanently reduced for people who sign up for SS before their full retirement age.

  • Americans who will turn 62 in 2018 (born in 1956) will need to wait until age 66 and four months to claim their full Social Security retirement benefit. (The full retirement age will continue to increase in two-month increments each year until it hits 67 for everyone born in 1960 or later)

  • After your full retirement age, payments will increase by about 8 percent for each year you delay claiming Social Security up until age 70. After age 70 there is no additional benefit for waiting to sign up.

  • Spouses may claim benefits based on their own work record or up to 50 percent of the higher earner’s benefit, whichever is higher. 

  • Social Security beneficiaries under their full retirement age who earn more than $17,040 in 2018 will have $1 withheld for every $2 they earn above the limit. The year you turn your full retirement age the earnings limit jumps to $45,360, and the penalty decreases to $1 withheld for every $3 earned above the limit.

  • If the sum of your AGI, nontaxable interest, and half of your Social Security benefit is more than $25,000 for individuals and $32,000 for couples, up to 50 percent of your SS benefit could be taxable. If these income sources top $34,000 ($44,000 for couples), income tax could be due on as much as 85 percent of your SS benefit.

  • When one member of a married couples dies, the surviving spouse can inherit the deceased spouse’s benefit payment, if it’s more than his or her current benefit.

(Source: US News & World Report)

Social Security Age Chart


To see your retirement age, you can refer to the chart below.  For those born in 1960 and after, your retirement age is 67.  To retire at 62 (the earliest allowed), you would take a 30% haircut on your payment. You can retire at any time after age 62 and your payout will be reduced a fraction of a percent for each month before your full retirement age. 

Are you ready for social security?  This page can help with all your questions on how to apply and what documents are needed. 

Also, you can sign up at the SS website and see your progress and current benefit.  If you haven't, you should register and keep track to make sure your information is correct.  https://secure.ssa.gov/

(Source:  Social Security Administration)