Social Security General Questions

Social Security is designed to provide a solid foundation and a basic level of financial security throughout your retirement. In the past, Social Security has been thought of as an “automatic” benefit with most individuals and couples simply signing-up for retirement benefits as soon as they reached 62. In almost all cases, this is the wrong choice and could cost a couple $120,000, on average, in foregone lifetime Social Security benefits. Below are answers to some general questions most commonly asked.

  • Is Social Security secure?
    Answering broadly, yes. Social Security is a critical safety net for all Americans. Despite political positioning by both parties, what is widely acknowledged is that Social Security is not facing any imminent threat. In fact, the Social Security Reform solutions being developed today to ensure the long-term solvency of the system are almost exclusively geared toward workers under 55 years of age. What this means is that for those in or near retirement, it is safe to assume that even though the rules may change slightly, Social Security benefits will continue to be available.

    Do I qualify for retirement benefits?
    Most people qualify for Social Security retirement benefits. Social Security provides a monthly retirement benefit to individuals who meet these requirements:

    • You must have 40 credits of covered work. This generally equates to roughly 10 years of earnings that were subject to Social Security tax or self-employment tax.
    • You must be at least 62 years old.

    Additionally, you may qualify for benefits as a spouse, former spouse, dependent child, dependent parent, or as a survivor of a covered worker.

    What do I need to know before I file for benefits?
    Retirement Planning in general is a complex topic and while not intentional, the various rules and myriad of options available when it comes to Social Security benefits do not make it any easier. Actually, Social Security’s main resource for the public entitled “Online Social Security Handbook: Your Basic Guide to the Social Security Programs” contains 2,728 rules and the print edition is over 700 pages in length. Needless to say, there is more to it than simply claiming Social Security benefits at 62, 66, or 70. This is where we can help. Unless you are a speed-reader or have a passion for reading government statues and regulations, you may want to give us a call when deciding what you should do about your Social Security benefits.

    The bottom line is that your situation is unique and you need advice that is tailored to your needs and personal objectives. There are many factors that impact your Social Security benefits including, but not limited to:

    • How can I most intelligently integrate my Social Security benefits strategy into the rest of my financial planning in order to ensure that my retirement assets last as long as possible?
    • How can I claim my Social Security benefits in a tax-efficient manner?
    • Who should claim spousal benefits—the husband first, the wife first, or perhaps one spouse first followed by the other spouse later?
    • Should I explore the possibility of switching strategies by claiming spousal benefits and then later switching to benefits on my own record?
    • If you are a survivor, are you confident that you know how best to maximize your benefits by claiming benefits at the appropriate times and on the appropriate earnings record?
    • What if you have minor children?
    • How do I ensure that my survivors receive the highest benefits possible?
    • Do I qualify for benefits based on the record of my prior spouse?
    • I haven’t saved enough for retirement; how can maximizing my Social Security benefits help?


    Social Security AdvisorsSM was founded to help hard-working Americans successfully navigate the Social Security maze and maximize their benefits. Our clients can plan with confidence because our service always comes with our Maximum Social Security GuaranteeSM. Call to speak with a Social Security Advisor to get started.

    How much will my monthly benefit be?
    The answer is, it depends. Among other factors, it highly depends on what strategy you implement when it comes to your Social Security benefits. It is not as simple as signing-up when you are 62, 66, or 70 as many people think. Your monthly benefit is mainly based on a combination of your work history, level of earnings, and the age at which you file for benefits, among other factors. Your goals should be to maximize your Social Security benefits and to enhance your retirement security and lifestyle based on your specific circumstances and objectives. There are right things to do and there are wrong things to do when considering which Social Security StrategySM to implement and it is important that you weigh all of your options carefully.

    Your Social Security Statement, which is mailed to you by the Social Security Administration approximately two months before your birthday each year, can be a good starting point in estimating the benefits available to you. You can also estimate your general benefit levels on the Social Security Administration website at: www.SSA.gov/Estimator.

    As the experts in maximizing your Social Security benefits, let us help you take the guesswork out of this critical retirement decision. Contact us today and let your Social Security Advisor help you maximize your Social Security.

    What is my Primary Insurance Amount (PIA) and how do I find it?
    Your Primary Insurance Amount, or PIA, is the monthly Social Security benefit you will receive if you file for Social Security benefits at your Full Retirement Age (FRA). This is the age at which your benefit is neither reduced for early retirement nor increased for delayed retirement. Your 35 years of highest earnings play a major role in how your PIA is calculated. If you have fewer than 35 years of work history, zeros are entered for the “missing” years. Your earnings are then averaged based on Social Security’s formula to calculate your Average Indexed Monthly Earnings, or AIME.

    The PIA formula is designed to replace a larger portion of earnings for people with lower earnings than for those with larger earnings. Social Security benefits may replace 60% of pre-retirement income for someone earning minimum wage, but only 25% of income for someone earning the maximum income that is subject to Social Security taxes. If you earn twice the maximum income that is subject to Social Security taxes, then Social Security will replace roughly 12.5% of your income.

    To read more about the PIA and how it is calculated visit: More About PIA

    When do I reach Full Retirement Age (FRA) and why does it matter?
    Full Retirement Age (FRA, also known as Normal Retirement Age) is the age at which you are eligible for your full benefit, or Primary Insurance Amount (PIA). As such, knowing your FRA is very important. If you file for benefits prior to your FRA, your monthly benefit will be reduced. If you file after your FRA, your monthly benefit will generally be increased.

    Your Full Retirement Age is determined based on your year of birth:

    • If you were born in 1937 or earlier, your Full Retirement Age is 65.
    • If you were born between 1938 and 1959, your Full Retirement Age will be between ages 65 and 67 depending on the year of your birth. For all births between 1943 and 1954, Full Retirement Age is 66.
    • If you were born in 1960 or later, your Full Retirement Age is 67.

    For a complete chart of Full Retirement Ages visit: Full Retirement Age Chart

    The earliest age at which an individual can begin receiving retirement benefits remains 62 regardless of his or her Full Retirement Age. The increase in benefits received for delaying retirement past your FRA (called Delayed Retirement Credits) will cease to continue to accumulate at age 70.

    When deciding when to begin receiving your Social Security benefits, many factors must be taken into account, including, but not limited to: life expectancy, general health, marital status (and previous marital status), work status, tax status, and your overall financial circumstances and lifestyle objectives.

    According to the Center for Retirement Research at Boston College, many individuals and couples make suboptimal choices when deciding how and when to collect their Social Security benefits, resulting in over $25 billion per year in lost retirement benefits. Let us help you make sure that you are not one of them. Call us today to speak with a Social Security Advisor and ask about our Maximum Social Security GuaranteeSM.

    Can I continue to work and receive Social Security benefits?
    Yes, but you need to be aware of the Social Security Earnings Test if you are under your Full Retirement Age (FRA). If you begin or have begun receiving benefits prior to your Full Retirement Age, there are restrictions on the amount you can earn without having part or all of your benefits withheld by the Social Security Administration. The amount withheld will be $1 for every $2 over $15,720 of earnings. In other words, if you are working and earning over $15,720 during the calendar year, 50% of your benefits will be withheld once you have reached the $15,720 earnings limit. In the year that you reach your Full Retirement Age, the earnings limit increases to allow for $41,880 of earnings and the amount withheld decreases to $1 for every $3 over this higher limit until the month that you reach your Full Retirement Age.

    If you begin receiving benefits after your Full Retirement Age, the good news is that you will receive your full retirement benefit because you will not be subject to the Earnings Test and there is no limitation on how much you can earn.

    2016 Earnings Test
    At Full Retirement Age or Older No limit on earnings
    Under Full Retirement Age $15,720 (For every $2 over the limit, $1 is withheld from benefits)
    In the year you reach Full Retirement Age $41,880 (For every $3 over the limit, $1 is withheld from benefits until the month you reach Full Retirement Age)


    The Earnings Test is based on earned income which includes wages, salary, and self-employed income. It does not include interest income, dividends, capital gains, withdrawals from a 401(k), 403(b), traditional IRA, Roth IRA, Keogh and other deductible pensions, nor withdrawals from non-qualified tax-deferred annuities.

    You may be able to receive some benefits prior to your Full Retirement Age while still being eligible to receive your full benefit once you reach your FRA. To discuss your specific circumstances and the options available to you in order to maximize your Social Security, call us to speak with a Social Security Advisor.