Social Security: Everything You Need to Know in 8 Simple Slides

1. How to Get Your Social Security Card.

• Otherwise, you’ll need to visit a Social Security office and provide: - Form SS-5- Proof of child’s citizenship, age, and identity- Proof of parent’s identity

Applying at the hospital when your child is born is the simplest way.

Source: SSA Office of the Inspector General.

2. How to Qualify for Social Security Benefits.

• For every $1,220 you earn in 2015, you’ll earn a credit, up to a maximum of 4 credits per year.

• Most people need 40 credits to get retirement benefits.

• Spouses can get a spousal benefit if they’re married to a qualifying worker.

Workers can get Social Security retirement benefits through work credits.

Source: DavidYork71 and Mike Gravel, via Wikimedia Commons.

3. How Social Security Calculates Your Check.

• Start by calculating your average indexed monthly earnings in your career.

• Apply the primary insurance amount formula:90% of first $826 + 28% of next $4,154 + 15% of rest

• Then apply any age-based addition or subtraction based on when you apply.

Source: Author based on SSA figures.

4. When You Claim Benefits Affects Your Check.

Compared to full retirement age, benefits can be up to 25% less if you claim early at 62 or 32% higher if you claim at 70.

5. What Social Security Pays Your Spouse.

• A spouse can’t file until the worker files for benefits.

• However, the worker can file and suspend and still allow a spouse to file.

• Spousal benefits are generally limited to any excess over the spouse’s own retirement benefit.

Spouses are entitled to 50% of the worker’s primary insurance amount, adjusted for when they file.

Source: SSA.

6. What Social Security Pays Your Survivors.

• Widows and widowers can get 100% of the worker’s benefit amount if they claim at their full retirement age, or 71.5% to 99% if they file after age 60.

• Surviving spouses caring for a child under 16 get 75% of the worker’s benefit regardless of age.

• Children under 18 or disabled also can get 75%.• Dependent parents can get 82.5% of the worker’s benefit, or 75% each if both parents

survive.

Source: SSA.

Note well: total family benefits are subject to a maximum of about 150% to 185% of the worker’s benefit amount.

7. How Your Benefits Can Get Taxed.

Source: SSA.

Depending on your income, Social Security benefits can be subject to income tax.

• Take half your Social Security benefits.• Add in your other income, including tax-

exempt municipal bond interest.• For single filers, if that amount is over

$25,000, then up to 50% of your benefits can be taxable.

• If the amount is over $34,000, then up to 85% of your benefits can get taxed.

• For joint filers, the 50% threshold is $32,000, and the 85% threshold is $44,000.

To avoid the tax, be smart about your other income!

8. How Working Can Take Away Benefits.

• In general, if you earn more than $15,720 in a year, you’ll lose $1 in annual benefits for every $2 in extra earnings you have.

• If you reach full retirement age this year, you can earn up to $41,880, and you’ll forfeit $1 for every $3 in extra earnings.

But there’s a silver lining: Forfeited monthly checks lead to higher benefits once you reach full retirement age.

If you haven’t reached full retirement age, currently 66, then work can take away some of your early Social Security benefits.

Source: TheeErin via Flickr.

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