SAN ANTONIO — Social security is a crucial source of income for seniors. Here are five facts that you may not know about retirement benefits.
1. Delaying benefits will give you a major boost
“What people don’t realize, social security goes up 8% per year when you don’t take it. Sometimes taking it at 62 versus 70 is a really bad decision. In fact, the difference between taking it at the age of 62 and age 70, is a 76% difference,” explained Karl Eggerss, senior wealth advisor and partner of Covenant. “I don’t know where most people can get a guaranteed 8% a year increase in their return, but that’s what social security gives you.”
2. You can work and collect social security
“If you are full retirement age and you have a job, you can keep 100% of your social security benefits. If you’re not at full retirement age, there may be a reduction in your social security benefits depending on your income,” said Eggerss.
3. You may have to pay taxes on your benefits
“Under a certain dollar amount for single or married folks, social security is tax free. However, as you earn more income in retirement, your social security may be taxed all the way to 85%. That doesn’t mean the tax is 85%, it means 85% of your social security benefits may be taxed above a certain income threshold,” he explained.
4. You can collect your ex-spouse’s social security
“If you have been divorced for at least 2 years and you were married for at least 10 years, you can claim your ex-spouses social security benefit. The reason that’s important is because you can do that and then, when you turn age 70, you can actually switch to your own, if it was higher,” said Eggerss.
5. Social security system isn’t solely for retirees
“It’s for widows. It’s for families that have disabled people in the household. So, social security is meant for people with all kinds of situations,” he said.