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Social Security – Why It’s Not So Black and White


When you think of social security, you probably think of the regular benefits it can provide you with. But do you take the initiative to discover how you could be maximizing social security income?


Knowing how social security benefits are calculated will only benefit you in the long run. It’s also useful to know about spousal income relation to social security, as well as what age you should really withdraw your social security.


How Social Security Benefits Are Calculated

When your social security is calculated, they use stats from 35 years of your working career where you earned the most money. The factors that help to calculate this are different for each person, but you can discover this information by using a social security calculator.

To become eligible for social security benefits you need to earn a minimum of 40 credits throughout your working career. You can earn from one to four credits in a year. The more credits you get, the more social security benefits you earn. However, as of 2022, you can only earn up to $4,194 a month.


How Spousal Income and Social Security Work

Spousal social security is when a person is able to access up to 50% of their spouse’s social security benefits. As a spouse, the same rules apply if it were your own social security benefits. These benefits can only be touched once you hit the age of 62.


Your children can also qualify for spousal social security benefits as long as they are unmarried, younger than 18, or older than 18 with a disability. The benefits your children receive doesn’t decrease your social security funds.


Wait for the Full Retirement Age

You may be excited to get your social security benefits as soon as you reach your early sixties, but did you know that you can earn so much more if you just wait a few more years? Waiting to withdraw your social security benefits adds 8% each year, until you turn 70. So why not wait to make the most of your social security benefits?


Frequently Asked Questions

Social security is relatively easy to understand, but you may have some questions that you still want answered. These are some frequently asked questions that may clarify information you’ve been wondering about.


Who Qualifies for Spousal Social Security?

You may think you only qualify for spousal social security if you currently have a spouse with social security benefits, but this isn’t necessarily the case. You’re eligible for spousal social security benefits if you had an ex-spouse or if you’re a widow to someone who had these benefits.


However, if you’re not currently with that spouse, you have to be unmarried. And if you were divorced, your marriage had to have lasted at least 10 years.


How Much Money Must I Put Toward My Social Security?

You deposit a portion of your salary or wage into your social security every month. Employees pay 6% of their income, and employers pay this same amount. However, if you’re self-employed you have to pay both of these, making your deposit 12%.


How Much Can I Get From Social Security Monthly?

The amount varies for each person, but the 2022 maximum you can achieve monthly is $4,194. However, according to AARP, the 2021 average amount earned from social security was $1,543/month.


Do I Pay Taxes for My Social Security?

Yes, you could. Whether you pay taxes on your social security depends on how much money you earn annually. If you aren’t married or you’re the sole worker in your marriage, then you can get taxed for 50% of your social security if you earn anything between $25,000 and $34,000. If you earn anything above $34,000, you will get taxed for 85%.


On the other hand, if you have a working spouse, you must look at your combined earnings annually. If you collectively make between $32,000 to $44,000 you pay taxes for 50% of it. But, if you’re collectively earning above $44,000 annually you pay taxes for 85% of it.


In Summary

Social security is not as black and white as you may have thought. Understanding the rules and regulations behind it helps you to utilize it in a way that maximizes your benefits. We urge you to further your research about social security benefits, before making any big decisions regarding it. If you ever have any questions, feel free to reach out to our one our advisors by clicking here.


Written by Matthew Delaney