Top 7 Social Security Questions & Answers

Taxability, Inflation Adjustment, Death of Spouse, and More

Top 7 Social Security Questions & Answers
February 20, 2014

The process of getting your Social Security (SS) benefits may seem overwhelming. Fortunately, there are many resources available to aid you, including a helpful website at, and many SS offices across the country – so don't hesitate to use them. Meanwhile, answers to some frequently asked questions are provided below.

1. Do I Have to Pay Taxes on My Benefits? – That depends on your combined income from all sources. Calculate your total pre-tax income, including tax-exempt income, and then add half of your SS benefit. If this number is less than $25,000 (individual) or $32,000 (joint), your benefits are not taxed. From $25,000-$34,000 as an individual or $32,000-$44,000 joint, up to 50% of your benefits are taxed. Above that, 85% of your benefits are taxed.

2. Can I Work and Draw Social Security Benefits? – Yes, but your benefits may be reduced. If you begin drawing before your full retirement age (FRA), benefits are reduced by $1 for every $2 you earn over $15,480 (2014 limits). In the year of your full retirement age, benefits are reduced $1 for every $3 earned over $41,400 (2014 limits) until the month you reach your FRA. After that point, your earnings have no effect on your benefits.

If your benefits were reduced prior to your FRA due to earnings, your benefits are increased at FRA to account for the months of reduced (or no) benefits.

3. Are My Benefits Adjusted For Inflation? – Yes. Cost-Of-Living Adjustments (COLAs) are made based on the Consumer Price Index, which is calculated by the Department of Commerce to evaluate price changes of goods and services. In recent years, the adjustments were 3.6% in 2012, 1.7% in 2013, and 1.5% in 2014.

4. What If I Draw Benefits Early or Late? – You can claim benefits as early as age 62, but your benefits will be reduced by up to 30%, based on the gap between your FRA and the time you start drawing benefits. This permanently sets your monthly benefit, and reduces the amount for your spouse's benefits and any survivor benefits.

Conversely, if you wait until age 70 to draw your benefits, the monthly benefit increases. Delayed retirement credits can increase your benefits by up to 8% per year.

5. What Are My Benefits as A Spouse? – You are eligible for spouse's benefits when your spouse begins to draw his or her benefits if you are at least 62 years old, or you are caring for a qualifying child (below age 16 or receiving SS disability benefits). Your base benefit is 50% of your spouse's benefits.

To draw full benefits, you need to wait until your full retirement age. Otherwise, the benefit is reduced by 25/36 of a percent for each month prior to retirement age up to 36 months, then 5/12 of a percent for every month thereafter. You could receive as little as 32.5% of your spouse's benefits.

If you would receive higher benefits on your own work record than with spouse's benefits, you can choose to do that instead.

6. What Survivor's Benefits Am I Entitled To if My Spouse Dies? – The reference point for money is your spouse's benefits, but the reference point for time is your full retirement age (not your spouse's). Generally, if you are at your full retirement age or older, you receive 100% of the benefits. If you are between age 60 and retirement age, or age 50 and disabled with certain qualifications, you will draw anywhere from 71-99% of your spouse's benefits. If you are caring for children below age 16, you may receive 75% of benefits, and the children may receive 75% of benefits as well.

You can choose to draw on your spouse's benefits or benefits from your own work history, whichever is higher. Check with a SS office for details.

7. What Happens to Spouse's/Survivor's Benefits with Divorce/Remarriage? – As long as you are age 62 or older and were married for at least 10 years, spouse's benefits continue after a divorce. Survivor's benefits continue after a remarriage if you are at least age 60, and at age 62, you can draw off of your new spouse's benefits instead if they are higher.

Do you still have Social Security questions that haven’t been answered above? Submit them to, and financial professionals will answer you quickly and accurately.

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