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What to Consider When Applying for Social Security

What to Consider When Applying for Social Security

April 29, 2024

How delaying can be a good thing:

If you are about to become eligible to collect your social security benefits you may be in the same boat as most Americans and unaware of what you should consider. The age you collect and the type of social security benefit you receive can have major implications to a spouse, your lifetime benefits, and the amount you can earn while collecting.

Earning limits while collecting social security:

Earning an income can have an effect on the benefits you receive depending on when you are collecting social security:

1. Early Retirement: If you decide to start receiving benefits before your full retirement age (FRA) there is max you can earn before it starts to reduce your social security benefit. If you earn more than $22,320 social security will be reduced by $1 for every $2 you earn above this amount.

2. Year of full retirement: The rules for how much may earn change during the year you reach FRA. The earnings limit jumps to $59,520 without losing benefits. After this, the benefits will be reduced by $1 for every $3 over this limit.

3. Full Retirement Age: If you have reached your full retirement age, you can earn as much as you want without a reduction in benefits. Please be aware, the federal government taxes up to 85% of benefits for retirees who earn above a certain threshold.

How can Social Security affect my spouse?

Social security can have a major impact on your spouse in several ways:

1. Divorced and Spousal Benefits: Your ex-spouse may be entitled to benefits based on work history if certain conditions are met. These conditions include being married for at least 10 years and not being remarried before age 60.

2. Spousal Benefits: Your current spouse may be entitled for benefits based on your work history. Spouses who did not work can be entitled to up to 50% of your full retirement benefits but this is dependent on the age they elect to receive those benefits. A current spouse can elect to receive the higher of their own benefit or 50% of their spouses. To receive the full 50% the spouse would need to wait to receive benefits at their full retirement age which is based on their year of birth, collecting spousal benefits early could cause a reduction by up to 35% in benefits.

3. Survivor Benefits: The longer one spouse delays electing to receive benefits the greater the survivor benefits can theoretically be. The reason being the survivor benefit is based on the deceased spouses benefit amount, which goes up the longer they delay collecting.

Why Wait?

Besides the benefits such has being able to earn more from a side job and the benefits for a spouse there are several other factors to consider:

Longer Financial Security: The longer you wait to collect and if you expect to live a long life, your lifetime social security benefits could be much greater than they would be by not delaying and collecting early. By delaying, you’re also guaranteeing an increased income which can be crucial for covering expenses and protecting your spouse, if the benefit is higher than theirs. Your benefit will increase by 8% per year by waiting beginning at FRA until you reach age 70.

Each year social security recipients receive a COLA, or a cost-of-living adjustment. By delaying, you start off with a higher base amount, and thus a great COLA each year.

Tax Implications: By delaying social security, you are potentially reducing your taxable income. If you are receiving income from employment or an investment portfolio you can minimize your tax obligations by waiting to receive benefits. During these earlier years or retirement, you can also look for ways to benefit by being in a lower bracket by determining if Roth conversions could be advantageous to your situation.

 When it’s all said and done you should consult any questions you have about this with your financial advisor. Everyone’s situation is unique and each person has different goals within their financial plan. There are other factors to consider too such as health, life expectancy, other source of income. All of these play an important role and are why it is important to speak with a financial professional.


For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice. 

Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer and Registered Investment Advisor.   8391 Old Courthouse Rd. Ste. 203 Vienna, VA 22182.  (703)356-4360