Brush Stroke

Top 10 Tricks to Maximize Your Social Security Benefits

By: Sahil Luthra

Social Security Benefits

Social Security benefits are payments made to qualified retired adults and people with disabilities, and to their spouses, children, and survivors.

Key Points

Social Security benefits provide partial replacement income for qualified retired adults and individuals with disabillities, as well as for their spouses, children, and survivors.

Key Points

An individual must pay into the Social Security program during their working years and accrue 40 credits in order to qualify for benefits.

Key Points

The benefit amount someone receives is based on their earnings history, the year they were born, and the age when they start to claim Social Security.

Key Points

Spouses who don't work or haven't amassed the requisite number of credits can receive benefits based on their spouse's work record.

Key Points

Benefits may be taxed depending on one's income and tax filing status.

Qualify for Social Security Benefits

You qualify for Social Security old age (or retirement) benefits by paying into the program during your working years. Full insurance is based on accumulating 40 quarters or "credits" from covered wages, and a worker can earn up to four credits a year.

Spousal Benefits

Spouses who didn’t work or who didn’t earn enough credits to qualify for Social Security on their own can receive benefits starting at age 62 based on their spouse’s work record.

Survivor Benefits

When a spouse dies, the surviving spouse is entitled to file for a survivor's benefit as early as age 60. The benefit will be reduced if they file prior to reaching their full retirement age.

Special Considerations

If an individual taxpayer's income exceeds $25,000, or a married couple filing jointly has income that's more than $32,000, they will be required to pay taxes on their Social Security benefits.

Unused Social Security Benefits

Unused Social Security benefits are kept in the Social Security trust funds and used to pay individuals receiving payments right now.

States Tax Social Security Benefits

There are 12 states that currently tax Social Security benefits—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia.

Social Security Benefits Recalculate

Social Security benefits are evaluated each year. That is, the Social Security Administration reviews benefits each year for the previous year’s income.

What Income Reduces Your Social Security Benefits?

Income that contributes to your yearly earnings limit, which can reduce your benefit amount, include wages paid to you for working and net earnings from self-employment.