| Published: August 24, 2023

Social Security Benefits

Social Security Benefits

When we talk about social security benefits, the subject is often met with a lot of negative thoughts.  Generally, most people don’t look it as much of a benefit for retirement and many don’t believe it will even be there when they reach retirement age. 

The truth is, we have been talking about making changes to the social security system for decades, but no major changes have happened yet.  If and when our security system is overhauled, it will have to be done gradually, with older taxpayers grandfathered into the system.

While it is true that we cannot count on social security to cover our living expenses in retirement, for most of us it still will provide the basis for our income in our senior years.  Here are a few things we should keep in mind as we plan and build for our retirement years.

How do you qualify for social security?

To qualify for social security, an individual needs 40 credits of earnings.  A person’s benefit is determined by their top 35 earning years adjusted for inflation.  In 2022, an individual needed to earn $1,510 to receive one credit with a maximum of four per year. In other words, to qualify, a person needs 10 years of work. 

It’s important to note that special rules apply to self-employed farmers.  If a farmer does not earn enough for the year to receive his four credits, the farmer can take the optional social security method, pay the resulting self-employment tax, and get credits for that year.  This step is very important for farmers to make sure they get their 10 years of earnings in.  When we are young, we don’t really think about our mortality and our retirement years.  However, social security benefits are there in case one becomes disabled or, in case of death, would provide survivor benefits for our children.  This makes it essential we build that history as soon as possible.

What is full retirement age?

Full retirement age for those born in 1960 or later is 67.  For those born between 1943-1960, the age gradually increases from 65 to 67.

How does early retirement effect social security benefits?

A person can start receiving retirement at age 62, but there will be a decrease in monthly benefits until they reach full retirement age.  The monthly benefit you start with will be your monthly benefit forever, only changing with increases for inflation.  For the person taking social security at age 62, the reduction is about 30% from the amount they would receive at full retirement.  Additionally, there is an annual limit on earnings until a person reaches their full retirement age.  This year (2023) 2023, the limit is $21,240.  Social security will deduct $1 for every $2 dollars earned above that amount.  Before taking social security early, these considerations need to be taken into account.

How does delaying benefits effect social security benefits?

On the other side of this, a person can always delay taking their benefits until age 70.  A person’s monthly benefit will increase about 8% a year until they reach age 70.  After age 70, this will not change, nor will delaying it raise the monthly payment.  Consequently, there is no reason to delay taking benefits after age 70.

What do these benefits mean for spouses?

A spouse receives one half of the retired workers’ benefit at full retirement age.  If an individual has both benefits from their spouse as well their own, the individual always gets their own first.  The individual may receive more if the spouse’s benefit is higher.  In the event of the death of an individual, the surviving spouse then receives the benefit that is highest.

Are social security benefits taxed?

Up to 85% of social security benefits are taxable, depending on other income.  For a taxpayer that is filing married, if their other income is over $44,000, they could pay tax on up to 85% of their social security income.


In summary, the decision of when to start receiving social security is one that should not be taken lightly. Everyone’s financial situation and life expectancy is different, so it not a one size fits all decision.  The first step is to check out your earnings and projected social security income at: This website replaces the yearly benefit letter that we all used to receive.  This will help you start the retirement process.  It is always a good idea to consult a retirement specialist or consultant to help you through this process. 

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