Social Security is an integral part of retirement for most Americans, thus, it is crucial for them to know all the rules and secrets surrounding it. Knowing all these rules and secrets could help retirees maximize their benefits, but it is very hard to know all the rules and secrets associated with it. This article will detail a few useful Social Security secrets that everyone should know.

Social Security Secrets

It is important for taxpayers to know how Social Security works, as well as the specific rules applicable to them. This will not only help them understand the full financial impact of receiving benefits, but will also allow them to make the most of their Social Security. Following are some useful Social Security secrets that you should be aware of:

You Don’t Need To Retire

It is a myth that you actually need to retire to collect Social Security benefits. The truth is you can continue working while receiving Social Security benefits. There is, however, one drawback to that.

You can earn up to $21,240 before the SSA (Social Security Administration) starts to deduct $1 from your distributions for every $2 you earn. This deduction, however, is applicable only if you claim the benefit early. Once you reach full retirement age (FRA), you can earn up to $56,520 before the SSA deducts $1 for every $3 you earn.

You Can Claim Benefits Early

Congress recently raised the retirement age to 66 (67 for people born in 1960 and later). You, however, don’t need to wait till that age to claim the benefit. If you want, you can claim benefits as early as age 62.

There is, however, one drawback to that. Your benefit amount is reduced for each month you file before your FRA (full retirement age). By reducing the benefit amount, the SSA ensures that you collect the benefits for more years.

For instance, a retiree will collect only 70% of full benefits if they claim the benefits at 62 years (75% at 63, 80% at 64, 86.7% at 65 and 93.3% at 66).

Similarly, if you delay claiming the benefits after FRA, the SSA gives you delayed retirement credits. The SSA boosts your monthly benefit for each month you delay claiming the benefit until you turn 70. There are no delayed retirement credits after you turn 70.

Social Security Isn’t Tax Free

Yes, it is true; you may have to pay taxes on the benefits. Some states, however, do offer exemptions on taxes to low and even moderate earners.

Even if you get state-level exemptions, you may have to pay taxes on Social Security if your provisional income exceeds the threshold. The provisional income is the sum of 50% of your Social Security benefits and non-Social Security income.

Single filers need to pay taxes on up to 50% of their Social Security benefits if their provisional income is between $25,000 and $34,000. If the provisional income is over $34,000, a taxpayer could face taxes on up to 85% of those benefits.

For married couples filing jointly, the threshold income is between $32,000 and $44,000, and beyond $44,000.

Work For 35 Years At Least

Your retirement benefits depend primarily on your 35 highest-earning years. The SSA uses your best 35 years of earnings to calculate your benefits. If you work less than 35 years, it means the SSA will use zeroes for the number of years less worked to calculate your benefits.

Survivors Get More If You Hold Out Until 70

You get delayed retirement credits if you delay retirement until 70. Since widows and widowers are eligible to collect their deceased spouse’s full benefit, including delayed retirement credits, they will also benefit if the spouse waits until 70 to claim the benefit.

You Can’t Really Increase Spousal Benefits

You can boost your benefits if you delay claiming your Social Security until the FRA. The same, however, doesn’t hold when claiming a spousal benefit.

Spousal benefits equal to 50% of what your current or former spouse is eligible for at full retirement age. However, if you delay claiming spousal benefits, you won’t get any more money than what your current or former spouse is eligible for. So, it doesn’t make any sense to delay spousal benefits.

Claiming Social Security Doesn’t Disqualify You From Ssi Or Other Benefits

There is a misconception among many that if they claim Social Security, they will get automatically disqualified from collecting SSI (Supplemental Security Income). This, however, is not true.

SSI is very different from Social Security as the former offers financial assistance to the most vulnerable low-income individuals with disabilities.

Similarly, claiming or collecting Social Security doesn’t disqualify you from collecting SNAP or other federal assistance benefits, provided you meet the program’s income limits.

You Can Temporarily Pause Benefits

A lot of people might not be aware, but it is possible to start taking benefits, then stop them and restart them later. There are, however, a few rules surrounding it. You can only stop the benefits if you have reached the FRA but have not yet reached 70.

Suspending benefits could help boost your benefits when you restart them again. This is because you will “earn delayed retirement credits for each month your benefits are suspended which will result in a higher benefit payment to you,” according to the SSA.

Similarly, suspending and restarting benefits could also boost survivor benefits. It must be noted that once you suspend your benefits, it will automatically start again the month you reach age 70. However, if you want, you can restart it anytime before reaching 70.

This article originally appeared on ValueWalk

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