Social Security Figures at a Glance
Presented by Tim Weller
Benefits reduced for those who retire early
The table below shows the full retirement age (FRA) for different years of birth, beginning with 1943. Keep in mind, however, that the minimum retirement age for receiving social security benefits is 62.
|Eligible Age for Receipt of Full Social Security Benefits|
|Year of Birth||Full Retirement Age|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 and later||67|
If you retire early and begin to receive social security benefits before reaching your FRA, your benefit will be reduced 5/9 of 1 percent for each month before your FRA, up to 36 months. If the number of months exceeds 36, the benefit will be further reduced 5/12 of 1 percent per month.
Survivor benefits (widow or widower) are available as early as age 60 (or age 50 if a qualifying disability is incurred) but are reduced up to 28.5 percent if claimed before the survivor’s FRA.
|If you begin to collect benefits at age:||Your monthly benefit will be:|
|66||At least 1/3 more|
|70||At least 3/4 more|
Annual benefit increase for late retirement
If you postpone retirement beyond your FRA, your social security benefits will increase by a certain percentage, depending on your year of birth, until you reach age 70.
|Year of Birth||Yearly Increase|
|1943 or later||8.0%|
The effect on benefits if you continue to work
If you continue to work and begin to collect social security benefits before your FRA, $1 will be withheld for every:
- $2 earned over $18,240 per year (2020) in calendar years prior to FRA
- $3 earned over $48,600 per year (2020) in the year you reach FRA
Please note: No benefits are withheld when you collect benefits after your FRA—no matter how much you earn. At your FRA, your social security benefit is adjusted to reflect the months that it was eliminated because you worked.
Social security benefits and taxes
In 2020, the maximum taxable earnings for social security payroll taxes are $137,700. (Medicare payroll taxes have no earnings limit.) Based on income gained from wages paid to you, self-employment, pension and IRA distributions, interest, dividends, tax-exempt interest, and other means, you may pay federal income taxes on social security benefits.
To determine whether a portion of your benefits will be included in your taxable income, your combined income is used. Your combined income is your adjusted gross income added to your nontaxable interest income plus one-half of your social security benefits. It is a comparative number only.
We can assist you in making the necessary calculations and estimates to determine the amount of your social security benefit. We can also offer invaluable guidance as you decide the best time to begin collecting benefits.
|Tax Filing Status||Combined Income||Percentage of Benefits Taxed|
|Single or Head of Household||Between $25,000 and $34,000|
More than $34,000
|Up to 50%|
Up to 85%
|Married Filing Jointly||Between $32,000 and $44,000|
More than $44,000
|Up to 50%|
Up to 85%
|Married Filing Separately||More than $0||85%|
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Tim Weller is a financial professional with Weller Group LLC at 6206 Slocum Road, Ontario, NY 14519. He offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. He can be reached at 315-524-8000 or at email@example.com.
2020 Commonwealth Financial Network®