How Much Income Can You Count on from Social Security?
If you qualify for Social Security retirement benefits, the amount that you are eligible for can be dependent on a number of factors, including:- Number of work credits earned
- Your full retirement age (FRA)
- Age at the time you file for benefits
- Amount of income you earned during your working years (specifically, the 35 highest-earning years)
- Cost-of-Living Adjustments
Giving Your Social Security Income a Big Raise
Most people are eligible to file for Social Security retirement benefits at age 62. But if you begin to receive these benefits before you have reached your full retirement age, the dollar amount will be permanently reduced.Social Security Full Retirement Age
Year of Birth Minimum Retirement Age for Full Benefits
1937 or Before 65
1938 65 + 2 months
1939 65 + 4 months
1940 65 + 6 months
1941 65 + 8 months
1942 65 + 10 months
1943 to 1954 66
1955 66 + 2 months
1956 66 + 4 months
1957 66 + 6 months
1958 66 + 8 months
1959 66 + 10 months
1960 or After 67
Source: Social Security Administration
Conversely, if you wait until after you have reached your full retirement age to file for benefits, you could end up giving yourself a nice big raise. That’s because the longer you wait to receive your benefits, the more “delayed retirement credits” you will receive – until you reach age 70 (You can continue to delay the receipt of your benefits beyond age 70, but you will not be able to build up any more delayed retirement credits.) The amount of this benefit increase is 8 percent per year for anyone who was born in 1943 or later.Reducing (or Eliminating) Taxes on Your Social Security Benefits
Many people are surprised to learn that Social Security retirement income can be taxable. But if you start taking your benefits before you’ve reached full retirement age, and you also decide to work and earn more income, a portion of your benefits could be taxed. In this case, once your Social Security benefits have begun, the IRS will add up all of your “provisional income” and, based on how you file your tax return, up to 85% of your Social Security income may be subject to taxation as ordinary income. Some of the common provisional income sources include:- Wages from a job or business
- Interest from various types of bonds
- Rental income
- Distributions accessed from tax-deferred accounts, such as a traditional IRA and/or 401(k) plan
- Interest and other 1099 income that is generated from taxable investments
Joint Provisional Income for Married Couples (in 2020)
Provisional Income % of Social Security Subject to Tax
Under $32,000 0%
$32,000 to $44,000 50%
Over $44,000 85%
Individual Provisional Income for Single People (in 2020)
Provisional Income % of Social Security Subject to Tax
Under $25,000 0%
$25,000 to $34,000 50%
Over $34,000 85%
Source: Social Security Administration