The Basics of Applying for Social Security – Ask Rusty – Community News
Social Security

The Basics of Applying for Social Security – Ask Rusty

Dear Rusty: I plan to apply for social security in May 2022 and would like to know how to apply. I’ll take it when I’m 62. Signed: ready to retire

Best Ready to Retire: Congratulations on your upcoming retirement! You need to apply for your Social Security benefits about 3 months before you want the benefits to start (you tell them which month you want the benefits to start when you apply). Since you plan to apply at age 62, be aware that you must be 62 for an entire month to be eligible for benefits – you will not be able to receive benefits for the month you 62 (unless you were born on the 1st or 2nd of the month) . Instead, you’ll be eligible the following month.

Your payment date is the 2nd, 3rd or 4th Wednesday of the month, depending on the day of the month in which you were born. Born between the 1st and the 10th of the month, your payment will be received on the 2nd Wednesday; born between the 11th and 20th of the month, the payout takes place on the 3rd Wednesday; born after the 20th of the month, you will receive your payment on the 4th Wednesday.

You can apply for benefits over the phone by calling Social Security at 1(800) 772-1213 (or by calling your local office) and making an appointment to apply. However, by far the most efficient way to apply is online at www.ssa.gov/applyforbenefits. Here is a link to a short video about applying online: https://www.ssa.gov/hlp/video/iclaim_r01.htm. To make the online application, you must first create your personal online “my social security” account, which is easy to do at www.ssa.gov/myaccount. Once you’ve created that online account, you’ll see your estimated benefit amounts at different ages. You will see that if you apply at age 62, your benefit will be 30% lower than at your full retirement age (FRA) of 67 (a permanent reduction), and you will also see that your benefit will be at age 70. would be about 75% more than your benefit at age 62.

Also, keep in mind that if you apply before full retirement age and you continue to work, Social Security has a limit on how much you can earn before they take some of your benefits. The 2022 profit cap has yet to be announced, but it will be slightly more than the 2021 cap of $18,960. If you exceed the annual limit, Social Security takes back a benefit equal to $1 for every $2 you exceed (half of what you exceed the limit). The income limit is raised more than 2.5 times in the year you reach full retirement age and disappears completely once the FRA is reached.

Finally, your Social Security benefits may be subject to income tax if your combined income is high enough from all sources. The thresholds depend on your IRS filing status – if you file as “married/joint” and your combined income (yours and your husband’s) is over $32,000, then 50% of your SS benefits for the tax year will become part of your taxable income. If your combined married couple income is over $44,000, then up to 85% of your SS benefits are taxable. The thresholds are lower if you file your taxes as a single – in that case, income over $25,000 means 50% of your SS benefits are taxable, and income over $34,000 means up to 85% of your benefits will be taxed at whatever your normal IRS tax rate is.