A Guide to Social Security for Seniors
For over 80 years, Social Security has been a vital financial resource for older adults in the United States. Approximately 65 million Americans receive Social Security payments annually. Retired adults are the largest percentage of individuals claiming Social Security benefits. However, these benefits aren’t just for retirees. Benefits may be available to spouses, ex-spouses, the disabled, survivors of deceased workers, and other beneficiaries. In this guide, we’ll cover everything you need to know about Social Security, from signing up to choosing when to take your benefits and more!
Table of Contents
- What Is Social Security?
- When Should I Take Social Security?
- What Is the Full Retirement Age for Social Security?
- How Does the Social Security Administration Calculate Benefits?
- What Is the Average Income for Seniors on Social Security?
- How to Sign Up for Social Security
- Social Security Benefits
- What Are the Rules for Working While Collecting Social Security?
- Supplemental Security Income
- More Social-Security Related Resources
What Is Social Security?
Regulated by the Social Security Administration (SSA), Social Security provides benefits based on pre-retirement earnings. During your years of employment, Social Security taxes are deducted from your paycheck.
Both employees and employers pay 6.2 percent of wages up to the taxable maximum of $147,000. Self-employed individuals pay 12.4 percent. These payroll taxes go into the federal Social Security trust fund.1 When it’s time for you to claim Social Security, that money comes back to you in the form of a monthly benefit.
Did You Know? The standard American worker pays significantly more in payroll taxes (funding Social Security and Medicare) than they do in federal income taxes. Find out where your state falls in average Social Security tax-payer contributions.
When Should I Take Social Security?
Neal Stern, CPA, and member of the American Institute of Certified Public Accountants' (AICPA) National CPA Financial Literacy Commission, says, “The best time to start collecting Social Security benefits is a personal decision, based on individual circumstances.”
As you move toward retirement, it’s essential to have a clear understanding of how much Social Security you’ll receive based on the age when you initiate your claim. Before pulling the trigger on monthly Social Security benefits, Stern shares, “If you can manage it, consider waiting to claim your benefits after reaching your full retirement age (FRA). Your monthly benefit will continue to increase as long as you delay collecting benefits, until age 70,” said Stern. “For example, your monthly payment can be as much as 32 percent more starting at age 70 than what you would have collected at age 66.”
Did You Know? The Social Security Administration offers benefit calculators to estimate your monthly Social Security payment.
Unfortunately, not everyone can delay their benefit claim. Many older adults live on a fixed income and rely heavily on Social Security. “If you’re no longer working and need the income to make ends meet, think of Social Security as the safety net it was intended to be,” says Stern.
Your health also plays an essential role. “If you’re in poor health and have a reduced life expectancy, it might make sense to start enjoying Social Security benefits earlier,” Stern said. Be sure to consider survivorship benefits for your spouse, which may be affected by your reduced benefit.”
What Is the Full Retirement Age for Social Security?
Eligibility for full retirement benefits is based on your birth date. People born between 1943 and 1955 reach full retirement age (FRA) at 66 years. Those born between 1955 and 1959 earn 100 percent Social Security benefits at 66 years plus a specific number of months. For example, if you were born in 1955, your FRA is 66 years and two months. Individuals born in 1960 or later will have to wait until 67 years of age to reach their FRA.
How Does the Social Security Administration Calculate Benefits?
The total Social Security benefit payment varies by individual, as it is based on your personal situation. Four key factors affect how your monthly Social Security benefit is calculated: Your birth year, claiming age, earnings history, and work history.
Your earnings history and overall Social Security benefit may be impacted if you were away from the workforce for one or more years. For example, if you were out of work raising a family or caring for a parent or spouse, your total earnings record may be recalculated.
What Is the Average Income for Seniors on Social Security?
Social Security plays an important retirement income role for older adults. “Social Security is intended to replace about 40 percent of pre-retirement income, on average,” said Stern. “However, the monthly benefits represent the largest source of income for many seniors, and it’s been estimated that about one-third of all retirees look to Social Security for nearly all of their income.”
According to the SSA, the average estimated monthly Social Security payment in 2023 after the 5.9 percent cost-of-living (COLA) increase is*:
|Retiree Type||Average estimated monthly benefit|
|All retired workers||$1,657|
|Aged couple, both of whom are receiving benefits||$2,753|
|Widowed mother and two children||$3,187|
|Aged widow(er) alone||$1,553|
|Disabled worker, spouse, and one or more children||$2,383|
|All disabled workers||$1,358|
*Data for this table is based on the 2023 Social Security Fact Sheet.2
While the table above provides a snapshot of the average Social Security monthly benefits, it is possible for retirees to receive larger monthly payments. However, the requirements are demanding. To receive the maximum Social Security retirement benefit, you’ll need to have worked at least 35 years while earning (or surpassing) the SSA’s maximum taxable earnings each year.3 The maximum earnings for 2022 is $147,000.
The amount you’ll receive in maximum benefits depends on when you retire and begin claiming Social Security. The longer you wait to retire, the greater the maximum benefit amount becomes. In 2022, if you retire early at age 62, your maximum benefit would be $2,364. If you reach FRA in 2022, your maximum benefit would be $3,345. If you continue working until age 70, your maximum benefit would be $4,194.
How to Sign Up for Social Security
Ready to claim your Social Security benefits? Your first step is to gather all the necessary information before filing.
Information Needed to Apply for Social Security
The SSA needs specific details and documents to review and process your benefits application. According to the SSA, this information includes:
- Your Social Security number
- Dates of current and previous marriages, along with marriage location(s)
- Employer names and dates of employment for the past two years
- Self-employed business specifics and income
- Bank account information (if you choose direct deposit)
- U.S. military service dates and branches
- List of eligible family members who may receive your SSA benefits; for example, your spouse or child
- Your original birth certificate or other proof of age
- Proof of U.S. citizenship if you were not born in the United States
- Your W-2 tax form(s) and/or self-employment tax return from the previous year
- Your U.S. military service papers if you served prior to 1968
Filing Your Social Security Claim
Once the required data and documents have been collected, create a free my Social Security account with the SSA. We recommend creating this account as soon as possible. Not only will this give you an estimate of your future earnings, but it prevents identity thieves from getting hold of your account before you do. You can also apply for your benefits by phone at the SSA’s toll-free number: 800-772-1213. If you have hearing loss, call their toll-free TTY number: 800-325-0778.
How Long Will It Take to Apply for Social Security Benefits?
Applying online by creating a my Social Security account is the fastest option. According to the SSA, the application will take between 10 to 30 minutes to complete, depending on your situation.
No need to stress about completing the application all in one sitting! If you need to gather additional information or simply take a break, your SSA application can be saved and retrieved when you’re ready.
How Far in Advance Should I Apply for Social Security Benefits?
The earliest you can apply for Social Security retirement benefits is when you are at least 61 years and nine months of age. Whether you decide to claim as soon as you’re eligible or opt to delay your benefits, the SSA advises seniors to apply for Social Security four months before you want your benefits to start.2
How Will My Social Security Benefits Be Paid?
If you’d like to avoid waiting to receive your monthly Social Security check in the mail, the SSA offers two options for easy access to your benefits.3
- Direct deposit: Your Social Security payments will be deposited into your bank account electronically. This can be a checking, savings, or prepaid bank card account.
- Direct Express: If you don’t have a bank account, your benefits can be electronically deposited onto a prepaid debit card. The SSA’s Direct Express does not charge an enrollment fee, and you don’t need to meet a minimum balance to open and access the account. For more information, visit the Direct Express website.
Did You Know? Setting up your Social Security to be direct deposited is simple when you follow our step-by-step Social Security direct deposit guide.
Social Security Benefits
There are several different Social Security benefits, and it’s important to understand which ones you and your family may be eligible to receive. We’ll take a closer look at each benefit below.
Social Security Spousal Benefits
“A spouse who didn’t work long enough to earn Social Security benefits on his or her own record may qualify for benefits based on the earnings of the longer-working spouse,” said Stern. The SSA states benefits for spouses can be as much as 50 percent of the worker’s Social Security benefit. This is based upon their spouse’s FRA. Keep in mind, there will be a decrease in spousal benefits should the working spouse claim Social Security before reaching their FRA.
These benefits can be claimed once the earning spouse files for retirement benefits. “If the spouse who earned the benefits is able to delay collecting until full retirement age or later, this can result in a greater benefit for both spouses,” said Stern. Social Security retirement can be claimed as early as age 62; however, the Social Security benefits will be reduced. Using the SSA’s Benefits for Spouses calculator can provide a rough estimate of qualifying benefits.
Even if both spouses have worked enough to be eligible for Social Security, it’s important to take time to assess the benefit breakdown. Stern shared, “If both spouses have earned Social Security benefits on each of their own work records, it might pay for one spouse to begin collecting benefits before the other. A little homework, using estimates of your benefits that you can get from the Social Security Administration can help you find the best strategy for your situation.”
Divorced Spouse Social Security Benefits
You may qualify for Social Security’s Divorced Spouse Benefits if you are divorced. According to Benefits.gov, Social Security benefits are paid to divorced spouses of workers who receive (or are eligible to receive) Social Security benefits.4 Eligibility requirements include:
- You’re at least 62 years of age.
- You’re not currently married.
- You were married to your ex-spouse for at least 10 years.
- You’re not entitled to an equal or higher retirement benefit on your own work record.
The maximum amount that can be claimed by a divorced spouse is 50 percent of their ex-spouse’s FRA amount.5 This applies to both living and deceased ex-spouses.
For more information on how the Social Security spousal and divorced spousal benefits work, watch Part 2 of our Maximizing Your Social Security Benefits three-part series.
Social Security Survivors Benefits
Widows, widowers, and dependents of eligible workers are eligible for Social Security Survivors Benefits based on the deceased’s earnings. According to the SSA, eligible family members include:6
- A widow or widower age 60 years or older (age 50 or older if the widow or widower is disabled)
- A surviving divorced spouse (the marriage must have been for at least 10 years)
- A widow or widower at any age who is caring for the deceased’s child who is under age 16 or disabled and receiving child’s benefits
In addition to spouses and ex-spouses, unmarried children are eligible to claim survivors Social Security benefits if they are:
- Under the age of 18 (or up to age 19 if they are a full-time student in an elementary or secondary school)
- Age 18 or older with a disability that began before age 22
The SSA’s Survivors Benefits are complex. Under certain situations, other family members may be eligible. Learn more about Survivors Benefits here.
Social Security Disability Insurance Benefits
The Social Security Disability Insurance (SSDI) program provides assistance to individuals with disabilities who cannot work. To qualify for disability benefits, you need to meet the following criteria:
- You have a medical condition that meets the Social Security’s definition of disability.
- You have contributed enough Social Security “work credits” through your work history. Work credits are obtained based on your annual earnings. The number of credits needed is based upon your age.
Should you qualify for SSDI benefits, some family members may be eligible to receive benefits based on your work history.7 These individuals may include:
- Your spouse
- A divorced spouse
- Your child
- Your adult child disabled before age 22
What Are the Rules for Working While Collecting Social Security?
It is possible to work and collect Social Security retirement benefits. However, if you claim Social Security prior to your FRA, there is a limit on annual earnings. Your benefits may be adjusted from full to partial based upon your reported wages. Earnings will be reduced should you exceed these limits:10
- If you are under the FRA and claiming Social Security benefits, the annual earnings limit is $19,560 ($1,630 per month). If you earn more than this limit, the government will withhold $1 of Social Security benefits for every $2 you earn.
- If you reach your full retirement age in 2022, the annual limit on your earnings before you reach FRA is $51,960 ($4,330 per month). If you exceed the annual limit, the SSA will withhold $1 for every $3 you earn.
The month you reach full retirement age, there will no longer be a limit on your earnings or a reduction in your benefits.
Pro Tip: Using the SSA’s Earnings Test Calculator can help with your decision on collecting Social Security while working.
Supplemental Security Income
What is Supplemental Security Income?
Over 8 million people have received federally administered Supplemental Security Income (SSI) payments. The SSI program is administered by the Social Security Administration and was formed to assist older adults, those who are blind, and those who have a disability and have little or no income.
The monthly maximum Federal SSI payment amounts for 2022 are $841 for an eligible individual, $1,261 for a qualified individual with an eligible spouse, and $421 for an essential person.11
It’s important to note, while Social Security is paid from Social Security taxes and is based on the number of years worked, SSI is financed by general funds of the U.S. Treasury. This means SSI benefits are not based on your (or your family member’s) work history.
Who Is Eligible for Supplemental Security Income?
SSI eligibility requirements are based on medical and financial need. To qualify for SSI benefits, individuals must meet the following criteria:8
- Be at least 65 years or older, or be blind or have a disability
- Have limited income and resources
- Be a citizen or a national of the U.S., or an alien who meets certain applicable requirements
- Reside in one of the 50 States, District of Columbia, or the Northern Mariana Islands
An individual’s monthly income from work, bank balance, and marital status may also affect eligibility for SSI.
Did You Know? Social Security does not have an SSI online application for adults age 65 or older. You’ll need to apply by phone or through your local Social Security office.
Can You Collect Social Security and Supplemental Security Income?
It may be possible to collect SSI and Social Security benefits. Keep in mind, one of the qualifying factors for SSI is income. Any Social Security benefits you receive counts toward your income total.
Your best plan of action is to speak with a Social Security representative. Contact Social Security at 800-772-1213. If you have hearing loss, call TTY 800-325-0778.
IRS. (2022). Topic No. 751 Social Security and Medicare Withholding Rates
Social Security Administration. (2022). Fact Sheet.
Social Security Administration. (2022). Program Operations Manual System (POMS).
Social Security Administration. (2022). How far in advance can I apply for Social Security retirement benefits?
Social Security Administration. (2022). What are direct deposit and Direct Express®?
Benefits.gov. (2022). Social Security Divorced Spouse Benefits.
Social Security Administration. (2018). Ex-Spouse Benefits And How They Affect You.
Social Security Administration. (2022). If You Are The Survivor.
Social Security Administration. (2022). Disability Benefits | Family Benefits.
Social Security Administration. (2022). Special Earnings Limit Rule.
Social Security Administration. (2022). SSI Federal Payment Amounts For 2022.
Benefits.gov. (2021). Supplemental Security Income (SSI).