Answers to some frequently asked Social Security questions.
Question: Does Social Security offer tools for retirement planning?
Answer: Yes. Social Security offers several retirement planning tools to help you better understand your Social Security protection as you plan for your financial future. Go to www.socialsecurity.gov/planners to get started. Then choose a benefit calculator to estimate your monthly benefit amounts.
Question: My cousin and I are both retired and get Social Security. We worked for the same employer for years, but he gets a higher Social Security benefit. Why is that?
Answer: Your payments are based on your earnings over your lifetime. Unless you are both the same age, started and stopped work on the exact same dates, and earned the very same amount every year of your careers, you wouldn’t get the same benefit as your cousin. Social Security benefits are based on many years of earnings—generally your highest 35 years. To learn more about Social Security retirement benefits, visit www.socialsecurity.gov/benefits.
Question: I am nearing my full retirement age, but I plan to keep working after I apply for Social Security benefits. Will my benefits be reduced because of my income?
Answer: No. If you start receiving benefits after you’ve reached your full retirement age, you can work while you receive Social Security and your current benefit will not be reduced because of the earned income. If you keep working, it could mean a higher benefit for you in the future. Higher benefits can be important to you later in life and increase the future benefit amounts your survivors could receive. If you begin receiving benefits before your full retirement age, your earnings could reduce your monthly benefit amount. After you reach full retirement age, we recalculate your benefit amount to leave out the months when we reduced or withheld benefits due to your excess earnings. Learn more about Social Security reading our publication, How Work Affects Your Benefits, at www.socialsecurity.gov/pubs/10069.html.
Question: I’m retired and the only income I have is a monthly withdrawal from an Individual Retirement Account (IRA). Are the IRA withdrawals considered “earnings?” Could they reduce my monthly Social Security benefits?
Answer: No. We count only the wages you earn from a job or your net profit if you’re self-employed. Non-work income such as pensions, annuities, investment income, interest, capital gains, and other government benefits are not counted and will not affect your Social Security benefits. For more information, visit www.socialsecurity.gov or call us toll-free at 1-800-772-1213 (TTY 1-800-325-0778).
Question: How long does it take to complete the online application for retirement benefits?
Answer: It can take as little as 15 minutes to complete the online application. In most cases, once your application is submitted electronically, you’re done. There are no forms to sign and usually no documentation is required. Social Security will process your application and contact you if any further information is needed. There’s no need to drive to a local Social Security office or wait for an appointment with a Social Security representative. To retire online, go to www.socialsecurity.gov/retireonline.
(Erin Thompson is the public affairs specialist with the Toledo Social Security office.)