10 Things to Know About Social Security

Social Security is your money—you earned it through a lifetime of hard work. For many people, that money needs to help cover living expenses and pay bills. So it’s only natural to have questions about how Social Security works and how much money you’ve earned. When should I claim? When do I start collecting? How much will I get? Here are 10 things you need to know about your Social Security.

You can start receiving retirement benefits at age 62, but your annual payments will be
larger the longer you wait. If you are eligible for survivor benefits or Social Security
Disability Insurance (SSDI), you can start collecting earlier.

That depends on a number of factors, most crucially your lifetime earnings from work on which you paid Social Security taxes. Social Security takes your 35 highest-earning years, calculates an inflation-adjusted average, and plugs that into a formula that determines your “basic” benefit. The amount is also affected by how old you are when you claim benefits. You may not know the exact amount for sure until you file, but you can use the AARP Social Security Calculator to get an estimate.

Social Security is the only inflation-protected income most people will have in retirement. Your Social Security payment typically is adjusted annually for inflation to ensure that the purchasing power of benefits is not eroded by rising prices. This cost-of-living adjustment, or COLA, tracks inflation using a government measure of consumer prices for a variety of household goods and services.

For a worker claiming Social Security in 2023 at full retirement age, the highest monthly amount is $3,627. That’s a little less than double the average retirement benefit, which was $1,833 in March 2023. To get the maximum payment, your earnings must have exceeded Social Security’s maximum taxable income— the annually adjusted cap on how much of your income is subject to Social Security taxes—for at least 35 years of your working life.

The longer you wait to start collecting after you become eligible (up until age 70), the larger your annual payment will be.

For retirement benefits, you need to work for at least 10 years, or 40 quarters. Social Security uses a system of credits, which you collect by working and paying Social Security taxes. You can earn up to four credits a year, and you need 40 credits to qualify for retirement benefits. The credit threshold may be lower for disability benefits.

No, you can receive benefits while working. But if you are below full retirement age and earn more than a certain amount, your monthly payments will be temporarily reduced. Once you reach full retirement age, the reduction is eliminated, and your payments will be increased to make up for any previous reduction in benefits caused by earning more than the limit.

No. As of March 2023, 74% of people getting Social Security were retirees. The remainder were spouses, ex-spouses, and children of retirees (4%); disabled workers and their families (13%); and survivors of deceased beneficiaries (9%).

You can apply for retirement, spousal, or disability benefits online at ssa.gov, by phone at 800-772-1213 or in person at your local Social Security office.

Social Security will face a funding shortfall in 2034, according to the 2023 Social Security Trustees’ Report. If politicians don’t act in the next 10 years to save Social Security, your Social Security could be cut by 20%, an average of $4,000 a year. Washington needs to find a solution to protect and save Social Security, so you get the money you’ve earned.

Join AARP Utah for a Social Security conversation at the Embassy Suites in South Jordan. KUTV's Emmy award-winning anchor, Heidi Hatch, will moderate the discussion about the current state of Social Security and potential steps to ensure solvency past 2034. AARP is committed to helping enact legislation to make Social Security solvent for the long term, ensuring we can pay the benefits Utahns have worked all their lives to earn.

When: May 22 @ 10AM
Where: Embassy Suites in South Jordan
Registration Required