Below are five key things you need to know about collecting social security retirement benefits; things like how working affects your benefits, if you will have to pay taxes on social security benefits, and how collecting benefits early affects you and your spouse.
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Full retirement age (FRA) is based on your year and day of birth. It determines when you are eligible for full benefits, reduced benefits, or delayed retirement credits. It's also important to note that there is a different FRA schedule for your own benefits than for widow/widower benefits. All of this is covered in the article at the link above.
Wondering if you should start taking Social Security at age 62? It's only natural to ask this question. After all, age 62 is the earliest age you can begin drawing on Social Security benefits, and like many people, you are probably inclined to start drawing benefits as soon as you can. This article lays out a detailed analysis of different claiming ages and the cumulative results; 62 isn't always as good as you may think.
If you take Social Security benefits before full retirement age, and you earn income in excess of the annual earnings limit, your Social Security benefit will be reduced. (Keep in mind, investment income does not count toward the annual earnings limit; the only income that counts is income you earn by working.) You'll find details on how the earnings reduction works in this article.
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If you have sources of income in addition to Social Security, then you may have to pay taxes on your Social Security benefits. Those additional sources of income include items such as wages, self employment income, interest and dividends, or pension income. There is a formula that is used that takes all of this into account to determine how much of your Social Security may be subject to income taxes. Find details at the link above.
A Social Security spouse benefit is called a “spousal benefit”. Below are some key things you need to know about the spousal benefit. It is especially important to understand how a spouse benefit is affected when taking Social Security benefits early, and what happens upon the death of a spouse. Too many couples make their claiming decision independently of one another and miss out by not understanding these benefits,