How Social Security Works

How does Social Security work? How are Social Security benefits calculated? AARP's Social Security Resource Center presents our members with answers to questions on applying for retirement, spouse, survivor or disability benefits, the workings of the cost-of-living adjustment (COLA), and delayed retirement credits in an easy-to-understand manner. Knowing how this landmark of American government can best work for you is the aim of AARP's Social Security Resource Center.

Q: Can I direct deposit my Social Security check?

A: Direct deposit is the method of benefit payment distribution preferred by the Social Security Administration. — Read Full Answer

Q: How can I get a copy of my award letter or Social Security statement from Social Security?

A: To get a copy of your Social Security Award Letter, you should contact the Social Security Administration agency directly. — Read Full Answer

Q: How do I apply for Social Security retirement benefits?

A: To apply for Social Security retirement benefits you should contact the Social Security Administration. — Read Full Answer

Q: How do I apply for Supplemental Security Income (SSI)?

A: To apply for Supplemental Security Income (SSI) benefits you should contact the Social Security Administration. — Read Full Answer

Q: How far in advance should I sign up for Social Security benefits?

A: You should apply for Social Security benefits about 3 months before you want to receive your first payment. — Read Full Answer

Q: If I apply for Social Security benefits in the month when I turn full retirement age, when can I expect to receive my first check?

A: It can take up to three months to receive your first payment after applying. — Read Full Answer

Q: The name on my birth certificate has a different spelling than what's on my driver's license, credit cards and Social Security card. Will this cause a problem when I apply for benefits?

A: Name changes or misspellings can cause problems but these issues are fairly common. — Read Full Answer

Q: What documents do I need to have in order to file for Social Security benefits on a former spouse's record?

A: There are several documents (i.e. W-2 forms or divorce decree) you will need to file for benefits on an ex-spouse's record. — Read Full Answer

Q: Can I change my mind within the 3 month period after I sign up?

A: Social Security will allow you to withdraw your application for retirement benefits during your first 12 months of entitlement. — Read Full Answer

Q: I want to start collecting my Social Security benefits when I turn 62 on November 14, 2017. I understand that the first benefit on December will not be paid until January 2018. My question is: Should I apply for it now to start the process or am I supposed to wait until November 14 to apply?

A: The Social Security Administration recommends filing your application for benefits three months before the month you want to start your benefit. — Read Full Answer

Q: I understand I must begin collecting Social Security at 70 years old. My birthday is in November. At my 70th birthday may I wait until January before applying for Social Security benefits? What happens if a 70-year-old does not apply to collect benefits until an older age? Are benefits paid retroactively? Would some benefits be forfeited?

A: You don’t have to begin collecting Social Security at age 70 but your benefit will not increase if you delay claiming past your 70th birthday. — Read Full Answer

Q: We always hear about the benefits of waiting to collect Social Security, but no one talks about the opportunity cost of not starting at 62, i.e. how may years at the higher benefit it will take to make up for the years of benefits one did not receive from 62 to the time they start collecting. Shouldn't life expectancy enter into this calculation?

A: Life expectancy and personal health are important factors to consider in deciding when to start your Social Security benefit. — Read Full Answer

Q: Assuming I begin taking my retirement benefit at age 62 instead of age 66, at what point is the breakeven year or age? I've been told it's approximately 13 years. Is that true?

A: The breakeven age varies based on the ages compared and type of benefits received. Using this strategy may lead to a loss of additional benefits. — Read Full Answer

Q: At what age should I begin taking Social Security retirement benefits?

A: Benefits are reduced if an individual chooses to claim for early retirement rather than wait until reaching full retirement age. — Read Full Answer

Q: Can I collect two full benefits at once?

A: You cannot collect more than one monthly benefit at a time. — Read Full Answer

Q: Can I receive a civil service pension and Social Security at the same time?

A: You can receive a government pension and file for Social Security at the same time. Yet, there is a possibility that your benefits may be reduced. — Read Full Answer

Q: Can Social Security benefits be seized by creditors?

A: Federal law generally prohibits the garnishment of benefits with a few exceptions. — Read Full Answer

Q: Do my Social Security contributions go into a personal retirement account for me and earn interest?

A: FICA contributions enter a trust fund for all beneficiaries. — Read Full Answer

Q: How are Social Security benefits calculated?

A: Monthly Social Security benefits are based on your earned income over your highest paid 35 years of employment and/or self-employment. — Read Full Answer

Q: How can I get an estimation of how much I will collect when I retire?

A: Printed benefit estimate statements are mailed out to people over 60. — Read Full Answer

Q: How does the Social Security COLA work?

A: The cost of living adjustment (COLA) is based on a measure of inflation called the Consumer Price Index (CPI). — Read Full Answer

Q: How far in advance should I sign up for Social Security benefits?

A: You should apply for Social Security benefits about 3 months before you want to receive your first payment. — Read Full Answer

Q: I have already begun taking Social Security benefits. Is there any way I can get the amount increased?

A: You may be able to increase and recalculate your benefit amount if you continue to work. — Read Full Answer

Q: If I move to another state will it affect my Social Security benefit?

A: Moving to another state will not affect your Social Security benefit payment. — Read Full Answer

Q: If I retire early at 62 or 64 and begin benefits, will I get an increase when I get to 66?

A: When benefits are claimed before full retirement age they are permanently reduced. — Read Full Answer

Q: If I take benefits early, when I reach full retirement age, can I pay back what I have received and then apply for and receive full benefits?

A: There is a Do Over provision to repay benefits but you must withdraw your application within one year. — Read Full Answer

Q: If my projected Social Security benefit is larger than the maximum monthly benefit, can I still take advantage of delayed retirement credits?

A: The maximum benefit only applies to the amount at full retirement age. — Read Full Answer

Q: If you delay claiming beyond your full retirement age, do you also receive a COLA adjustment?

A: All Social Security benefits are amended for inflation using a cost of living adjustment formula. — Read Full Answer

Q: If you retire at any point after age 62, are the benefit reductions prorated by month?

A: If you file for Social Security before full retirement age, the benefit reduction is based on how many months you claimed early retirement. — Read Full Answer

Q: If Social Security miscalculated your benefits and paid you a lesser amount for several years, do you receive a back payment for the money lost?

A: Social Security will compensate you for any time you were underpaid. — Read Full Answer

Q: My Social Security earnings statements do not include all my income. How can I correct that?

A: You should contact the Social Security Administration and request corrections to any errors in your earnings history. — Read Full Answer

Q: What is my full retirement age?

A: Currently, 66 is the full retirement age for people born between 1943 and 1954. — Read Full Answer

Q: What is the impact on benefits If I claim before my Full Retirement Age?

A: Claiming early retirement at age 62, rather than age 66, will permanently reduce your monthly payment. — Read Full Answer

Q: What is the maximum full retirement benefit that someone can receive?

A: In 2018 the maximum monthly benefit at full retirement age (age 66) is $2,788. — Read Full Answer

Q: Why does my benefit increase if I delay claiming past 62, the earliest age of eligibility?

A: Benefits are calculated to increase by a certain percentage if you delay your retirement claim until full retirement age. — Read Full Answer

Q: Can my Social Security benefit be garnished for unpaid student loans?

A: Some unpaid student loans can cause benefits to be reduced. — Read Full Answer

Q: How much longer will Social Security be around?

A: Social Security's trust fund is fully solvent until 2034. — Read Full Answer

Q: I'm moving out of state. How do I change my address with Social Security?

A: Contact the Social Security Administration to report changes. — Read Full Answer

Q: Is the Full Retirement Age being raised?

A: The changes to the FRA from age 66 to age 67 were mandated by Congress in 1983. — Read Full Answer

Q: What happens to the Social Security benefits of a person who goes to jail?

A: If incarcerated, benefits are suspended for the duration of your prison sentence. — Read Full Answer

Q: Who will be impacted by any of the proposed cuts and changes to Social Security?

A: AARP feels that any Social Security reforms - cuts or changes to Social Security - will likely take place gradually. — Read Full Answer

Q: Do Social Security numbers get reassigned once a person dies?

A: Social Security numbers are not reused. — Read Full Answer

Q: How can I get a Social Security number for a new baby?

A: After the baby's birth, you can apply for a Social Security card at the hospital. — Read Full Answer

Q: How can I replace a lost Social Security card?

A: You can replace a lost Social Security card by visiting your local Social Security office in-person or online. — Read Full Answer

Q: How do I get a Social Security card?

A: You must fill out an application with the Social Security Administration. — Read Full Answer

Q: How do spousal benefits work?

A: A spouse can collect up to 50% of their partner's benefit. — Read Full Answer

Q: We're both at full retirement age in Jan 2016. I filed a restricted application in Jan 2016 and my wife has been receiving spousal benefit since then. I  decided to apply for my benefit before reaching age 70. Will my wife continue to receive her spousal benefit or will she have to switch to her own benefit?

A: It sounds like you filed and suspended on your own record and your wife then filed a restricted application for spouse’s benefits on your record. — Read Full Answer

Q: Can I collect both my own retirement benefit when I turn 62 and my widower's benefit?

A: Social Security will compare the survivor benefit with your own retirement benefit and give you the greater of the two. — Read Full Answer

Q: Can I collect my survivor benefit at 60 and delay claiming my own benefit until my full retirement age, even if my benefit would be larger?

A: There is no penalty for switching between survivor and retirement benefits. — Read Full Answer

Q: Do survivor benefits expire if you do not claim them at the first age of eligibility?

A: Survivor benefits will grow if delayed until full retirement age. — Read Full Answer

Q: How do survivor benefits work?

A: A widow/widower can receive monthly survivor benefits based on the earnings records of their deceased spouse. — Read Full Answer

Q: I am a widow. Can I collect Social Security on my own work record at 62 then switch to a widow's benefit from my late husband's record at 66?

A: Claiming a survivor benefit will not reduce your retirement benefit. — Read Full Answer

Q: I am receiving survivor benefits before I've reached full retirement age. Will this affect how much I'll receive on my own work record when I reach full retirement age?

A: Retirement benefits are not reduced for claiming survivor benefits early. — Read Full Answer

Q: My friend died at 66 and never applied for benefits. What happens to the money she contributed to Social Security? Can her children claim benefits?

A: Family members of a deceased worker may be eligible for survivor benefits. — Read Full Answer

Q: What is the Social Security death benefit?

A: The death benefit is a lump sum paid to a person's survivors upon their death. — Read Full Answer

Q: When someone dies, how does the Social Security Administration know?

A: Family members should inform the SSA within a month of a beneficiary's death. — Read Full Answer