Social Security serves as a key source of income for countless seniors, yet there's a lot of mystery surrounding the program. Here are some of the questions you'll typically hear about Social Security so that you can get your facts straight.

1. When can I file for benefits?

Eligible retirees can begin collecting Social Security as early as age 62. But that doesn't mean that 62 is the best age to start taking benefits. That's because if you file then, the payments you're entitled to will be reduced on a permanent basis. On the other hand, if you wait until you reach full retirement age to file for benefits, you'll get to collect the full amount you're eligible for based on your earnings record. You can consult the following table to see when you'll reach full retirement age:

If You Were Born in:

Your Full Retirement Age Is:




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months




Keep in mind that you're not required to take benefits upon reaching full retirement age. In fact, if you hold off until age 70, you'll get an 8% boost for every year you delay. And though you technically don't need to file for benefits at 70, there's really no reason not to.

Social Security cards

Image source: Getty Images.

2. How much income will Social Security provide?

Your Social Security benefits are based on your top 35 years of earnings. But as we just learned, the age at which you first claim them will determine whether they'll go up, go down, or stay the same. You can use the Social Security Administration's retirement estimator to get a sense of how much income you might be looking at. That said, you should also know that the average recipient today collects roughly $1,360 a month, or $16,320 a year, in benefits.

3. Can I live off Social Security alone?

This is an easy one: absolutely not. For the current year, the maximum monthly Social Security payout at full retirement age is $2,687 per month. Even if we factor four years of delayed retirement credits into the mix (meaning that you were eligible for the maximum benefit but held off until age 70), your monthly payments still cap out at $3,538. This means that in a best-case scenario, you'd be looking at $42,456 a year in income. But if we go back to the average, that number gets a lot lower at $16,320.

One thing to keep in mind about Social Security is that it's only designed to replace about 40% of the typical worker's pre-retirement income. Most people, however, need more like 70% to 80% of their former earnings (sometimes more) to pay the bills in retirement, which is why it's crucial to save independently and use those benefits as a supplement.

4. Will I pay taxes on my benefits?

Unfortunately, Social Security income isn't exempt from taxes. While low earners typically get to keep their payments in full, those with moderate income can expect to face some taxes at the federal level.

To determine whether your benefits will be taxed, you'll need to calculate your provisional income. That figure is arrived at by taking your gross income (including tax-free income you're collecting, such as municipal bond interest) and adding in 50% of your Social Security benefits. Then, based on that number, you can use the following table to see whether your benefits will take a tax hit:

Tax Filing Status

Provisional Income

Social Security Taxation

Single or head of household

Less than $25,000



Up to 50%

More than $34,000

Up to 85%

Joint filers

Less than $32,000



Up to 50%

More than $44,000

Up to 85%

Data source: IRS.

In addition to federal taxes on your benefits, you should know that there are 13 states that tax Social Security to varying degrees. That list reads as follows:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

Keep in mind, however, that most of these states offer some form of exemption where you won't pay taxes if your income is low to moderate. Only Minnesota, North Dakota, Vermont, and West Virginia offer no exemption whatsoever.

5. Will Social Security go broke before I retire?

You may have heard a rumor that Social Security is going bankrupt, so here's the scoop: Though the program is not in great shape, it's also not running out of money anytime soon. The problem with Social Security is that in the coming years, it's projected to pay out more in benefits than it will collect in taxes. Now, the program does have a trust fund that it can tap when it faces this type of shortfall, but based on recent projections, come 2034, that trust fund will run out of money.

But that doesn't mean you won't see any benefits if you retire past that date. Remember, Social Security will continue to impose taxes on workers, so right now, the worst-case scenario looks like a 23% reduction in scheduled benefits. In other words, if you were otherwise entitled to $2,000 a month, you'd collect just $1,540 instead.

Is that situation ideal? No, of course not. But it's far better than getting nothing. Also, keep in mind that Congress still has a decade and a half to step in and fix this problem, so there's no need to give up on Social Security just yet.

Getting educated about Social Security will help you retire more securely. It pays to read up on how Social Security works and learn how to make the most of your benefits, no matter when you expect to start collecting them.