Claiming Social Security could completely change your retirement lifestyle, depending on how and when you do it – but it’s complicated! The Social Security Administration’s Basic Guide to Social Security Programs contains 2,728 rules! In segment 1 of 3, Joe Anderson, CFP® and Big Al Clopine, CPA answer the most commonly asked basic Social Security questions.

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Watch the full episode, Social Security Basics You Need to Know: Common Questions Answered | #SocialSecurity Your Money, Your Wealth TV – S10 | E04:

00:00 – Intro
01:07 – Reliance on Social Security in Retirement
02:17 – What Are the Different Types of Social Security Benefits?
03:40 – How Much Do I Pay into Social Security in 2024
04:52 – What is Social Security “Full Retirement Age?”
05:28 – How Are Social Security Benefits Taxed in 2024?
07:37 – Can I Work and Collect Social Security Benefits?

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CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
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CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period….(read more)

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Social Security is a federal program that provides financial assistance to retirees, the disabled, and survivors of deceased workers. While many Americans rely on Social Security benefits as a key source of income during retirement, there are often questions and uncertainties about how the program works. In this article, we will answer five common Social Security questions to help you better understand this important program.

1. When can I start receiving Social Security benefits?
You can begin receiving Social Security retirement benefits as early as age 62, but your monthly benefit amount will be reduced if you choose to start receiving benefits before your full retirement age. Your full retirement age is between 66 and 67, depending on your birth year. You can also choose to delay receiving benefits past your full retirement age, which will result in an increased monthly benefit amount.

2. How is my Social Security benefit amount calculated?
Your Social Security benefit amount is based on your earnings history and the number of years you have worked. The Social Security Administration uses the highest 35 years of earnings to calculate your average indexed monthly earnings (AIME). Your benefit amount is then based on this AIME and your full retirement age. You can estimate your Social Security benefit amount using the SSA’s online calculator.

3. Can I work while receiving Social Security benefits?
Yes, you can work while receiving Social Security benefits, but your earnings may affect your benefit amount. If you are below full retirement age, your benefits may be reduced if you earn over a certain amount. Once you reach full retirement age, there is no limit on how much you can earn while receiving Social Security benefits.

4. Are Social Security benefits taxable?
Yes, Social Security benefits may be subject to federal income tax depending on your total income. If your combined income (including half of your Social Security benefits) exceeds a certain threshold, a portion of your benefits may be taxable. Some states also tax Social Security benefits, so it’s important to consult with a tax professional to determine if you owe taxes on your benefits.

5. Can I receive Social Security benefits if I am divorced?
Yes, you may be eligible to receive Social Security benefits based on your ex-spouse’s earnings record if you meet certain requirements. You must have been married to your ex-spouse for at least 10 years, be currently unmarried, and be at least 62 years old. Your ex-spouse must also be eligible for Social Security benefits. You may be entitled to up to 50% of your ex-spouse’s full retirement benefit amount.

In conclusion, Social Security is a complex program with many rules and regulations. It’s important to educate yourself about how Social Security works and how it can impact your retirement planning. If you have specific questions about your individual situation, it’s best to contact the Social Security Administration or speak with a financial advisor. Understanding how Social Security benefits are calculated, when you can start receiving benefits, and how working or divorce may affect your benefits can help you make informed decisions about your retirement income.