Social Security FAQs

Social Security has a wide variety of questions that surround it when we’re sitting down with folks here at Centennial Wealth Advisory. They’re coming in wondering okay, what do I do about Social Security? So I’m going to walk you through some of the more frequently asked questions and things you may want to be considering. So starting with the basic of what is Social Security retirement age. So you’ll see on your reports, full retirement age is going to be age 66 if you’re born between 1943 and 1954 and then it’s 67 if you were born in 1960 or later. And then if you were born in 1954-1959 you’re going to be in between age 66 and 67. And then you can ultimately start as early as age 62 and then the latest you can push it out is age 70. And then when can I apply for Social Security? This is the best place we found is to go directly to the ssa.gov website or you can do it in person at the Social Security office or you can call the 1-800 and hope to eventually speak to someone on the line. But 61 years and nine months is going to be the earliest that you can submit and application to begin your retirement benefits. And then how much Social Security will I get? Well the best thing for you to do again is to set up that account at ssa.gov where not only can you go ahead and confirm what that future amount is going to be, but we’ve also encouraged people to go ahead and double check what income Social Security has been reporting. So just perhaps if they misplaced a figure and you said wait a second. I thought I earned $50K that year, not $5K. Again, double check that and make sure that they have it accurate. And then your benefits are going to be based on what that income is and it’s going to be based on your current salary, but then assuming you continue to work until that age. And what is that Social Security tax limit? So most will pay 6.2% of their earnings. And if you’re self-employed it’s 12.4%. And then earnings counted for Social Security max out at $160,200 for 2023. Sometimes people ask about what is the Social Security wage limit. So if you’re drawing Social Security prior to your full retirement age, the earned income limit for 2023 is $21,240. So ultimately you want to keep your wages under that limit when drawing Social Security. Again, if you’re drawing it prior to your full retirement age, otherwise Social Security is going to start taking a dollar for every two dollars you earn above that. And what is the average Social Security benefit? It differs amongst various sources, but approximately $1,800 a month is what we’ve seen. And then the maximum Social Security benefit if say you’re a higher income earner, then Social Security would be about $3,600 a month at your full retirement age. And what about qualifying for Social Security disability? So this is something if you have a medical condition that significantly limits your abilities to work, then you might qualify for disability. And you’ll need to provide extensively medical records and it won’t start until six months after your disability begins. And then when will I receive my Social Security check? Well first, they do it through direct deposit into bank accounts or I think there’s a way that you can do it through debit cards or whatnot. If you were born on the 1st through the 10th, then it’s the second Wednesday of every month. If you are the 11th through the 20th, it’s the third Wednesday. And then it’s the 21st and after, then it’s the 4th Wednesday. How Social Security came up with this, I have no idea. I didn’t do the research on that, but that gives you an idea. So again, Social Security is going to be a key part of your overall retirement plan. And you want to make sure that you factor that in as far as when is going to be the best time to start those benefits and you don’t want to be drawing too early. You may want to be pushing out those benefits longer especially if you’re going to be continuing to work and have higher income. You don’t want to make the mistake of drawing that earlier than you should be. So again, that’s going to be a piece along with how taxes play into this and everything. A lot of different factors you want to consider for Social Security. And if you have questions about that, we welcome you to give us a call here at Centennial Wealth Advisory.