5 Things You May Not Know About Social Security
If you’re approaching retirement or already receiving Social Security benefits, it’s easy to assume you know all the basics. After all, you’ve paid into the system for decades! However, Social Security is a complex program with many rules and hidden features that often go unnoticed. Here are five things you may not know about Social Security—and how they can potentially influence your retirement strategy.
1. Your Starting Age Has a Bigger Impact Than You Think
Many people know that waiting beyond your earliest eligibility (age 62) increases your monthly benefit, but the difference can be more substantial than you realize. Benefits grow around 7% per year between age 62 and your full retirement age (FRA), and then increase by approximately 8% for each year you delay filing after FRA until age 70. On top of that, even before you start claiming, your future benefits are adjusted annually for cost-of-living adjustments (COLA) once you’ve reached 62—meaning the benefit you eventually claim will account for inflation regardless of when you file. It is important to take time to run scenarios to see how starting at different ages impacts your total lifetime income.
https://www.ssa.gov/benefits/retirement/planner/agereduction.html
2. Some Benefits Are Taxable
It’s often a shock to discover that Social Security benefits can be subject to federal income taxes—especially if you have other sources of retirement income. Depending on your combined income (which includes wages, pensions, dividends, and other taxable income), up to 85% of your Social Security benefits may be taxed. The rules vary by state, too. While some states don’t tax Social Security at all, others do.
https://www-origin.ssa.gov/benefits/retirement/planner/taxes.html
3. There Are Special Provisions for Spouses and Survivors
If you’re married, divorced, or widowed, you may have access to special benefits that aren’t always obvious. Spousal benefits can provide a significant boost if your own work history leads to a smaller monthly payment. Surviving spouses often qualify for benefits based on the higher-earning spouse’s record. Divorced spouses may qualify for benefits if the marriage lasted at least 10 years and they are currently unmarried. A surviving spouse can receive 100% of the deceased spouse’s benefit if they wait until FRA to claim. These rules can help maximize the combined income you and your family receive, so it’s worth investigating your options.
https://blog.ssa.gov/do-you-qualify-for-social-security-spouses-benefits-2/
4. Earnings in Retirement May Reduce Your Payments—Temporarily
Planning to work part-time after you start receiving benefits? If you begin Social Security before reaching your FRA and your earnings exceed a certain threshold, the Social Security Administration will withhold some benefits temporarily. However, once you hit FRA, your benefits are recalculated to give you credit for the months that were withheld, resulting in a higher payment going forward.
https://www.ssa.gov/oact/quickcalc/early_late.html
5. Your Minor Children May Qualify for Benefits, Too
If you’re receiving Social Security retirement or disability benefits and have children under age 18 (or under 19 if still in high school), they may be eligible for benefits. This includes biological children, adopted children, stepchildren, and, in some cases, grandchildren. These extra benefits can provide meaningful financial support for families with children. If you’re raising children later in life, it’s worth exploring the eligibility requirements for these benefits.
https://www.ssa.gov/pubs/EN-05-10085.pdf
Final Thoughts
When it comes to Social Security, knowledge is power. Even small adjustments—like waiting a bit longer to file or coordinating spousal benefits—can lead to thousands of extra dollars throughout your retirement. Additionally, you can monitor and manage many aspects of your benefits online by setting up a "my Social Security" account at www.ssa.gov. This online tool allows you to review your earnings record, check estimated benefits, and apply for retirement or disability benefits.
Understanding the nuances of the system can help you unlock more value from your benefits. Take the time to explore your options and consider consulting a financial professional who can guide you toward a claiming strategy tailored to your needs.
Visit [ssa.gov](https://www.ssa.gov/) to learn more, or call us to schedule a no-obligation introduction with our team to start developing a retirement strategy that optimizes your Social Security benefits and helps you retire with confidence.
Disclosure:
Fortress Financial Group LLC (“FFG") is a registered investment advisor. Advisory services are only offered to clients or prospective clients where FFG and its representatives are properly licensed or exempt from licensure. or current FFG information, please visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with FFG’s CRD# 315329
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
The information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
