Social Security Overview by John B. Barry, CPA, P.A.
– Full retirement age depends on when you were born. If you were born in 1960 or later your full retirement age is 67. If you were born before 1960, your full retirement age is 66 plus month(s) depending on which year you were born.
– If you start receiving retirement benefits at age 62, you will get 70% of the monthly benefit because you will be getting benefits for an additional 60 months.
– If you start receiving retirement benefits at age 65, you will get 86.7% of the monthly benefit because you will be getting benefits for an additional 24 months.
– The only way to receive 100% of the benefit you’re eligible for is to wait to claim until you reach your full retirement age.
– You can receive more than 100% of your benefit by waiting to claim until after your full retirement age. There is no additional benefit increase after you reach age 70, even if you continue to delay taking benefits.
– Even if you have never worked under Social Security, you may be able to get spousal retirement benefits if you are at least 62 and your spouse is receiving retirement or disability benefits.
– Some of your benefits may be withheld if you have excess earnings. However, after you reach full retirement age, the SSA will recalculate your benefit amount to give you credit for any months in which you did not receive some benefit because of your earnings.
– The Social Security earnings limit for people age 65 and younger will increase from $15,720 in 2016 to $16,920 in 2017. Social Security beneficiaries who earn more than this amount will have $1 in benefits withheld for every $2 in earned income over the limit.
– If you’re married and file a joint return, the 50% taxable range is $32,000 to $44,000, and the 85% threshold is combined income of $44,000 or more. Married couples with combined income of less than $32,000 don’t pay taxes on their Social Security benefits.
– If you decide to delay your retirement, be sure to sign up for just Medicare at age 65.
We are available all year to answer any tax, retirement or other general financial questions you may have.
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